SMART GRID PATENTS AND STANDARDS

INTRODUCTION TO THE PANELJeff Young, Moderator

Alston & Bird LLP

• OUR GOAL:• That you leave with insights into:

– the important role patents will play in stimulating new technology and in the SGIP patent process;

– the status of the SGIP's "IPR policy" and the actions of its IPR working group;

– how lessons learned in past standards initiatives might be applied by SDOs in the Smart Grid initiative when patents are essential to best practices.

Sample Smart Grid Patents and Application Chosen Merely to Show Variety

Number Title Owner

2010/0100253 Systems and Methods for Controlling Energy Consumption

Demi Energy, Inc.

7,679,247 Lift magnet mechanism for flywheel power storage systems

Beacon Power Corporation

7,337,153 Resolving Energy Imbalance Requirements in Real-Time

Siemens Power Transmission & Distribution, Inc.

7,305,281 Management of a Bulk Electric Power Market

ISO New England Inc.

7,333,880 Aggregation of Distributed Energy Resources

EnerNOC, Inc.

7,376,491 Detection of Islanding in Power Grids

General Electric Company

2010/0114387 Electric power grid control using a market-based resource allocation system

Battelle Memorial Institute

Who is Obtaining Smart Grid Patents?

112

64

Trend{

Examples of Litigation Affecting the Grid

IPCo. v. Oncor, Reliant, Sensus, Trilliant, Tendrill, et al. No. 2:09-cv-00037-DF (filed 1.29.2009 E.D. Tex.) – US Pat Nos 7,054,271; 6,249,516 – Wireless mesh network system for optimizing communication

pathways.

EON Corp. v. Sensus Metering Systems, No. 2009cv00116 (E.D. Tex. filed March 13, 2009) – US Pat Nos. 5,388,101 5,481,546 -- Two-way interactive communication video network.

IPCO Mesh Networks7,054,271

(a) Software

(b) Not likely filed with Smart Grid in mind

Avoiding Patent Infringement• Be careful – making, selling or just using a product can be

infringement

• Before a major investment:– Have your patent attorney do a patent infringement

search – Stick to technology not covered by the patents found– Research patent disputes to see who is actively enforcing

their patents– Purchase from vendors who indemnify their customers

Leveling the Playing Field

• Obtain your own patents– Products, systems, processes, software, business methods

are patentable• Must be new and non-obvious

– Act promptly to avoid filing deadlines– Encourage employees to share their ideas for

improvements• Require employment contracts with invention

assignment provisions

• Some reasons why a patent owner would:– Accept RAND licensing:

• Collect a smaller royalty from an entire industry;• Assure that its technology is covered by the standard.

– Hold patent out of the standards process:• Prevent others from using its own implementation of the

standard;• Seek a higher royalty rate from licensees.

TRACKING RAND LICENSES

Std No.

Patent Owner Contact for License

Patent Serial No. (if indicated)

Letter Date

Assurance Received

Date record entered or revised (if known)

802.11

Motorola Inc. 1303 East Algonquin Road, Schaumburg,

Illinois 60196

Hugh C. Dunlop - European Patent Attorney, TEL: 1-708-

576-0379, FAX: 1-708-576-3750

not indicated

1-Mar-1994

yes

 

802.11

Intermec Corporation 6001 36th Avenue West, PO Box 4280, Everett, WA 98302-

9280

L. David Rish - Intellectual

Property Law Counsel, not indicated

26-Oct-1995

yes

IEEE Std 802.11 and amendments http://standards.ieee.org/db/patents/

Motorola: In the event the proposed standard is adopted and cannot be practiced without the use of patents now or hereafter owned by Motorola, Motorola agrees to license those patents on a non-discriminatory basis offering fair and commercially reasonable terms.

• PANELISTS:• Dr. George Arnold• John Caskey• Yann Dietrich• Richard Schomberg

SAFE AND EFFECTIVE STANDARDS PARTICIPATION

• ADOPT CLEAR INTERNAL POLICIES– Company will comply with SDO patent policies.– Company will not knowingly withhold IP rights in an SDO

process.– Company will make considered decisions for compliance

with SDO policies regarding disclosure of proprietary information

• Outside of Working Group sessions• In consultation with the Legal Department

– That required disclosures and licensing commitments will be made in writing by management.

Q&A

Q&A

– Adopt a fact sheet template for internal approval to join an SDO process.

• Require a description of trade secrets and patent rights likely to be involved in the standard.

• What will Company gain and lose if its technology is adopted in the standard?• What competitor tactics are expected?

– Prior to each Working Group session, have an internal meeting:

• Remind participants the SDO meeting is not under NDA.• Cover Company information that should not be disclosed.• Remind participants not to make any licensing commitment on the spot.

– Adopt a report template to be completed after Working Group meetings, copying the Legal Department

INTERNAL STANDARDS - EXAMPLES

“PATENT HOLD-UP” SAGAS• RAMBUS (DRAM and DDR SDRAM)

– Participated in JEDEC, disclosed initial patent, did not disclose subsequent applications. Sued competitors practicing standards.

– Vilified as a “patent hold-up.”– Weathered an FTC antitrust violation and verdict of fraud

• QUALCOMM (MPEG)– Intentionally hid IP from the SSO (JVT), knowing it might reasonably be

necessary to practice the standard, and that SSO participants treated the policy as imposing a duty to disclose.

– Then misled the trial court by falsely asserting that Qualcomm did not participate in the SSO.

– Patents ruled unenforceable against standard-compliant products

Q&A

2.6 Intellectual Property Upon ratification of the Bylaws, SGIP will develop an Intellectual Property policy consistent with the following principles: a. The SGIP, the SGIPGB, all committees and all working groups and subgroups function in an open working environment. The SGIP and its Members will not accept any documentary or oral disclosure of proprietary information from any Member as a part of the SGIP's conduct of business. In addition, no information of a secret or proprietary nature will be made available to the SGIP as official documents, and no such documents (or documents marked as such) will be made SGIP official documents or forwarded to the membership. b. All proprietary information which may nonetheless be publicly disclosed by any participant during any meeting of the SGIP, the SGIPGB or its committees or working groups will be deemed to have been disclosed on a non-confidential basis, without any restrictions on use by anyone, except that no valid copyright or invention right will be deemed to have been waived by such disclosure.SGIPGB and SGIP Charter March 29, 2010 1.1 25

SGIP BYLAWS May 2010 Q&A

• 2.6.1 SGIP patent policy - Inclusion of Patents in SGIP-Identified Products • Some SGIP-identified product may include the use of an essential patent claim (one

whose use would be required for compliance with that standard) if technical reasons justify this approach. If SGIP receives a notice that a proposed or an approved SGIP product may require the use of such a patent claim, the procedures in the following sections will be followed.

• 2.6.2 Statement from patent holder • The SGIP will request from the patent holder or a party authorized to make assurances

on its behalf, in written or electronic form an assurance that a license to such essential patent claim(s) will be made available to applicants desiring to utilize the license for the purpose of implementing the SGIP product either:

• a. On a non discriminatory basis and under reasonable terms and conditions; or • b. Without compensation and under reasonable terms and conditions that are

demonstrably free of any unfair discrimination.

• If the patent holder or party authorized to make assurances on its behalf does not agree to these terms, then this decision will be documented clearly. As it may pose risks to the implementation of the Smart Grid, this decision will be seriously considered by the SGIP in any related activity or vote.

• 2.6.2.1 Record of statement • A record of the patent holder’s statement will be retained in the SGIP files and posted

on-line.

• 2.6.2.2 Notice • When the SGIP receives from a patent holder the assurance set forth in 2.6.1 above,

the expected result will include a note substantially as follows: • NOTE – The user’s attention is called to the possibility that compliance with this

expected result may require use of an invention covered by patent rights. • By publication of SGIP expected results, no position is taken with respect to the

validity of any such claim(s) or of any patent rights in connection therewith. If a patent holder has filed a statement of willingness to grant a license under section 2.6.1, details may be obtained from the patent holder.

• 2.6.2.3 Responsibility for identifying patents • Neither the SGIPGB nor SGIP is responsible for identifying patents for which a license

may be required for use of an SGIP expected result or for conducting inquiries into the legal validity or scope of those patents that are brought to their attention.SGIPGB and SGIP Charter March 29, 2010 1.1 26

• 2.6.3 Copyrights • Copyright in materials produced prior to Membership in the SGIP remains the

property of the copyright owner. However, copyrighted materials offered for incorporation into SGIP outputs must be made available on a royalty-free basis. Members who contribute to SIGP outputs are requested to assign copyright to NIST so that NIST may place them in the public domain.

• Standards developers whose standards are referenced in SGIP outputs retain copyright ownership and control of the standards themselves.

• THANK YOU!