web viewthis position should be adopted because ____________. such a presumption is warranted...
TRANSCRIPT
DRAFTTo: AIPLA Board of Directors
From: Standards & Open Source Committee
Date: DRAFT
Subject: Paper on Standard Essential Patents (SEPs)
This paper presents a review of AIPLA’s past positions concerning standard essential patents and also considers new positions or a change in prior positions. The past prior position papers considered in the instant paper include: [LIST HERE OR PUT THE LIST IN AN APPENDIX]
Table of Contents
I. IPR Policies of Standard Setting Organizations.....................................................................................
Position 1. Options A and C...........................................................................................................Position 2. ......................................................................................................................................Position 3. Options A and C...........................................................................................................Position 4. Options A, B and C [Combine with Position above?].................................................Position 5. Option B.......................................................................................................................Position 6. Option B.......................................................................................................................Position 7. Options A and B...........................................................................................................Position 8. Options A and C...........................................................................................................Position 9. ......................................................................................................................................Position 10. ......................................................................................................................................Position 11. ......................................................................................................................................Position 12. Options B and C.........................................................................................................Position 13. Options B and C (Combine with Position above?)....................................................Position 14. ....................................................................................................................................Position 15. ....................................................................................................................................Position 16. Options A and B.........................................................................................................Position 17. ....................................................................................................................................Position 18. Options A and B.........................................................................................................Position 19. ....................................................................................................................................Position 20. Option C.....................................................................................................................Position 21. Options A, B and C....................................................................................................
II. The Specific Standard Setting Obligation At Issue...............................................................................
Position 22. ....................................................................................................................................Position 23. Options A and C.........................................................................................................Position 24. Options A and C.........................................................................................................Position 25. Options A and C.........................................................................................................
III. Determining Essentiality......................................................................................................................
Position 26. Options A, B and C....................................................................................................Position 27. ....................................................................................................................................
- Page 1 of 60 -
DRAFT
Position 28. Options A, B and C....................................................................................................
IV. Disclosure Obligations for SSO Participants........................................................................................
Position 29. Options A and C.........................................................................................................Position 30. Options A and C.........................................................................................................Position 31. ....................................................................................................................................Position 32. Options A and B.........................................................................................................
V. Availability of Injunctive Relief............................................................................................................
Position 33. Options A and C.........................................................................................................Position 34. Options A and C.........................................................................................................Position 35. Option A.....................................................................................................................Position 36. Option A.....................................................................................................................Position 37. Options A and C.........................................................................................................Position 38. Options A and C.........................................................................................................Position 39. Options A, B and C....................................................................................................Position 40. Option C.....................................................................................................................Position 41. Option C.....................................................................................................................Position 42. Option C.....................................................................................................................Position 43. Options A and C.........................................................................................................Position 44. Option C.....................................................................................................................
VI. Bilaterally negotiated FRAND terms may be monetary or non-monetary............................................
Position 45. Options A and C.........................................................................................................Position 46. Option A.....................................................................................................................Position 47. Options A and C.........................................................................................................Position 48. Option B.....................................................................................................................
VII. Regulation of FRAND Royalty Rates...................................................................................................
Position 49. Options A and C.........................................................................................................Position 50. Option A, B and C......................................................................................................Position 51. Option B.....................................................................................................................Position 52. Options A and C.........................................................................................................Position 53. Option B.....................................................................................................................
VIII. SSO setting FRAND licensing terms....................................................................................................
Position 54. Options A, B and C....................................................................................................Position 55. 32Position 56. Options B and C.........................................................................................................Position 57. Option C.....................................................................................................................
IX. SEPs and Competition Law.................................................................................................................
Position 58. Options B and C.........................................................................................................Position 59. Options A and C.........................................................................................................Position 60. Options A, B and C....................................................................................................
X. Patent Holdup, Holdout, Reverse Holdup/Holdout, Willing Licensee, Willing Licensor........................
Position 61. Options A, B and C....................................................................................................Position 62. Options A, B and C....................................................................................................Position 63. Option A.....................................................................................................................Position 64. Option A and C...........................................................................................................
- 2 -
DRAFT
Position 65. Option A and C...........................................................................................................Position 66. Options A, B and C....................................................................................................Position 67. ....................................................................................................................................
XI. Royalty Stacking.................................................................................................................................
Position 68. Options A, B and C....................................................................................................Position 69. ....................................................................................................................................Position 70. Options A and B.........................................................................................................Position 71. Option A.....................................................................................................................
XII. Patents are territorial rights enforceable only in issuing country or region...........................................
Position 72. Options A, B and C....................................................................................................
XIII. Royalty Base and Apportionment........................................................................................................
Position 73. Options A and C.........................................................................................................Position 74. Option B.....................................................................................................................Position 75. Option C.....................................................................................................................
XIV. Patent law guidance on “reasonable royalty”.......................................................................................
Position 76. ....................................................................................................................................
XV. Use of NDAs in negotiating SEP licenses..............................................................................................
Position 77. Option A.....................................................................................................................Position 78. Options A and C.........................................................................................................Position 79. Option C.....................................................................................................................Position 80. Options B and C.........................................................................................................Position 81. Option C.....................................................................................................................Position 82. Option C.....................................................................................................................Position 83. Options B and C.........................................................................................................
XVI. Non-discriminatory licensing of SEPs..................................................................................................
Position 84. ....................................................................................................................................Position 85. Options A and C.........................................................................................................Position 86. Option C.....................................................................................................................Position 87. ....................................................................................................................................Position 88. Options B and C.........................................................................................................
XVII. Methodology for resolving SEP licensing disputes................................................................................
Position 89. ....................................................................................................................................Position 90. Option C.....................................................................................................................Position 91. ....................................................................................................................................Position 92. Options A and C.........................................................................................................
XIII. Cross-Licensing and Patent Pools involving SEPs................................................................................
Position 93. Options A, B and C....................................................................................................Position 94. Options A, B and C....................................................................................................Position 95. Option C.....................................................................................................................Position 96. Options A and C.........................................................................................................Position 97. Options A, B and C....................................................................................................Position 98. ....................................................................................................................................Position 99. Options A, B and C....................................................................................................
- 3 -
DRAFT
Position 100. Options A and B.........................................................................................................
- 4 -
DRAFT
I. IPR Policies of Standard Setting Organizations
[This topic will discuss the purpose behind IPR policies and whether there is a need for clear and public IPR policies and SSO governance documents]
Position 1. Options A and C
Option 1A There should be sensible transparency, flexibility and incentives for broad participation in standards-setting activities by all stakeholders—i.e., users of standards and also owners of intellectual property whose technology may be included in standards based on the consensus of interested stakeholders. Consistent with this view, strong IPR protection in connection with standards-setting is important so that innovators will have the incentives to invest in the development of technologies and contribute such technologies to standards-setting efforts. To ensure that such incentives remain strong, SSO’s IPR polices should not be interpreted as imposing constraints on patent owners’ rights, except to the extent specifically set forth in a particular SSO policy.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 1B Supports Option A.
Option 1C There should be sensible transparency, flexibility and incentives for broad participation in standards-setting activities by all stakeholders—i.e., users of standards and also owners of intellectual property whose technology may be included in standards based on the consensus of interested stakeholders. Consistent with this view, strong fair IPR protection in connection with standards-setting is important so that innovators will have the incentives to invest in the development of technologies and contribute such technologies to standards-setting efforts. To ensure that such incentives remain strong fair, SSO’s IPR polices should not be interpreted as imposing constraints on patent owners’ rights, except to the extent specifically set forth in a that do not accord with the particular SSO policy.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 2. .
(New Position?) Standard setting may save costs (and allow for investment in non-standardized fields) and promote competition and growth in the standards field itself as well as associated and networked fields as the standard becomes adopted and revised to promote new products and services over time.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
- 5 -
DRAFT
Position 3. Options A and C
Option 3A (Prior AIPLA Position) Proper SSO IPR Policies generally should foster investment in R&D that creates technology used in standards and seeks a balance in sufficiently rewarding innovators who contribute their patented technology to standards while ensuring that implementers of the standard have reasonable access to such technology.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 3B Supports Option A.
Option 3C Proper SSO IPR Policies generally should foster investment in R&D that creates technology used in standards and seeks a balance in sufficiently rewarding innovators who contribute their patented technology to standards while ensuring that providing implementers of the standard have with reasonable access to such technology.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 4. Options A, B and C [Combine with Position 3above?]
Option 4A (Prior AIPLA Position) At a minimum, SSO IPR policies, however, should balance the dual goals of (1) ensuring implementers who want to practice a standard have reasonable access to SEPs on FRAND terms, and (ii) providing SEP owners the opportunity to negotiate terms that provide them with reasonable compensation that supports their investment in innovation. Accordingly, SSO IPR policies should not include terms that limit royalties or devalue SEPs or deprive SEP owners of remedies available under patent or other applicable law (DIPP nn. 147, 191).
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 6 -
DRAFT
Option 4B At a minimum, SSO IPR policies, however, should balance the dual goals of (1) ensuring implementers who want to practice a standard have reasonable access to SEPs on FRAND terms, and (ii) providing SEP owners the opportunity to negotiate terms that provide them with reasonable compensation for use of their technologies that supports their investment in innovation. Accordingly, SSO IPR policies should not include terms that limit royalties or devalue SEPs or deprive SEP owners of remedies available under patent or other applicable law.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 4C At a minimum, SSO IPR policies, however, should generally balance the dual goals of (1) ensuring implementers who want to practice a standard reasonable have access to SEPs on FRAND terms, and (ii) providing SEP owners the opportunity to negotiate terms that provide them with reasonable compensation that supports their investment in innovation. Accordingly, SSO IPR policies should not include terms that limit royalties or devalue SEPs or deprive SEP owners of remedies available under patent or other applicable law.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. This position, unless edited, conflicts with AIPLA’s position that SSOs should be free to adopt the policies their members choose, and that one-size does not fit all. It also seems to suggest that FRAND-Z SSOs such as Bluetooth – which have been widely used and successful – are inappropriate.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Position 5. Option B.
Option 5A No Direct Prior AIPLA Position.
Option 5B SSO IPR Policies, including those that seek commitments that SEPs will be licensed on FRAND terms and conditions, provide the necessary clarity to facilitate effective standards development and licensing. This is reflected by the significant number of standards that have been developed under typical SSO IPR policies and the enormous number of FRAND licenses that have been entered to implement such standards. The clarity of SSO IPR policies is further reflected by the de minimis number of disputes over the meaning of IPR policy terms relative to the number of FRAND licenses..
This proposed position is appropriate because ____________________.
Option 5C Oppose Option B.
Option B is improper because ______. This conflicts with existing AIPLA positions that SSOs should be free to adopt the policies they see fit for their group, and that “one size does not fit all”. We
- 7 -
DRAFT
should not be making value judgments about different SSO policies, or implicitly wading into debates over particularly SSOs such as IEEE that have decided to provide additional clarity. This also could be taken as a positioning AIPLA as at-odds with the USDOJ and FTC, each of whom have recommended added clarity in SSO policies, and at odds with the US Federal Courts that have recognized that FRAND policies can be problematically ambiguous.
Position 6. Option B.
Option 6A No Direct Prior AIPLA Position.
Option 6B Disputes over FRAND terms do not reflect a lack of clarity of SSO IPR policies. Such disputes are commercial disagreements over the amount of royalties or license fees and not ambiguity regarding the meaning of FRAND. FRAND is a meaningful legal standard and terms such as “reasonable” and “non-discriminatory” have meaningful definitions; many areas of law afford analogies.
This proposed position is appropriate because ____________________.
Option 6C Opposes Option B.
Option B is improper because ______ the same reasons given for Option 5C above.
Position 7. Options A and B.
Option 7A (Prior AIPLA Position) SSOs should make their IPR Policies clear and publicly available to clearly define the metes and bounds of IPR obligations for innovators contributing their patented technology and for implementers of such technology.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
Option 7B SSOs should make their IPR Policies clear and publicly available so as to clarify the to clearly define the metes and bounds of IPR obligations for innovators contributing their patented technology and for implementers of such technology.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Option 7C Supports Option A.
Position 8. Options A and C
Option 8A (Prior AIPLA Position) There is no one-size-fits all IPR policy for all SSOs. Diversity of SSO IPR Policies has benefited standards and each SSO should adopt IPR policies that fit its particular circumstances.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
- 8 -
DRAFT
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 8B Supports Option A.
Option 8C There is no one-size-fits all IPR policy for all SSOs. Diversity of SSO IPR Policies has benefited standards and each SSO should adopt IPR policies that fit its particular circumstances. Depending on the criticality of the standard and to the overall product and to implementers, and depending on the availability of viable alternatives that may replace the SEP technology in the standard specification, SEP holders may have varying levels of leverage over those implementing the standard. In some instances, implementers have little choice but to incorporate SEP technologies into their product.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 9. .
(Prior AIPLA Position) FRAND should be sufficiently flexible to permit patentees and implementers to negotiate specific license terms tailored to their unique interest, relationships and business models (n. 207). Such flexibility benefits both implementers and innovators.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 10. .
(Prior AIPLA Position) SSOs should make their governance documents available to review and easy to find.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 11. .
(Prior AIPLA Position) SSOs should make readily available declarations by patent owners of whether they have patents with potentially essential patent claims, when they are required to do so by the SSO IPR policy, and any licensing commitments that the patent owner does or does not provide with same.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
- 9 -
DRAFT
Position 12. Options B and C
Option 12A No Direct Prior AIPLA Position.
Option 12B SSOs should make readily accessible all positive and negative licensing declarations submitted by patent holders.
The primary difference between this proposed position and Option C, shown in redline in Option C below, is that ______. This proposed position should be adopted because ___________.
Option 12C SSOs should make readily available accessible all positive and negative licensing declarations submitted by patent holders.
The primary difference between this proposed position C and Option B, shown in redline above, is that _____. This proposed position should be adopted because ____________.
Position 13. Options B and C (Combine with Position 12above?)
Option 13A No Direct Prior AIPLA Position.
Option 13B SSOs should make readily accessible any terms upon which patent holders have committed to make licenses of SEPs available, regardless of whether such terms are consistent with the SSO’s policy.
The primary difference between this proposed position and Option C, shown in redline in Option C below, is that ______. This proposed position should be adopted because ___________.
Option 13C SSOs should make readily available accessible any terms upon which patent holders have committed to make licenses of SEPs will be made available, regardless of whether such terms are consistent with the SSO’s policy.
The primary difference between this proposed position C and Option B, shown in redline above, is that _____. This proposed position should be adopted because ____________.
Position 14. .
(Prior AIPLA Position) SSOs generally should avoid overly-burdensome IPR disclosure requirements, which can discourage participation in developing, disclosing, and assuring licenses under critical inventions and IP.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 15. .
(Prior AIPLA Position) SSO IPR disclosure requirements generally should not require disclosing a third party’s IPR that may be essential to the standard.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
- 10 -
DRAFT
Position 16. Options A and B.
Option 16A (Prior AIPLA Position) SSOs should not examine patents or state an opinion of whether patents are essential to a standard.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 16B [Proposed alternative “softened” language?].
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. Group B appreciates the proposed position, but notes that some SSOs may also be organized as ,or otherwise incorporate, patent pools or licensing platforms that may examine patents for their essentiality. Therefore some softened language may be appropriate there.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 16C Oppose A and B?
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Position 17. .
(Prior AIPLA Position) SSO IPR policies generally should encourage licensing commitments to have language that the obligation shall survive transfer of the IPR to a new owner, and further subsequent transfers. Parties transferring SEPs should have latitude in how they achieve this.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
- 11 -
DRAFT
Position 18. Options A and B.
Option 18A AIPLA recommends that, when drafting a standard, SSOs and participants consider whether a patent holder’s declared licensing commitment includes a provision that such commitment shall be binding on itself and future owners of the patent. Further, AIPLA recommends that SSOs’ IPR policies should encourage that such obligations survive transfer to new owners (including successors in interest through bankruptcy proceedings) and include such a provision in exemplar declarations. Parties transferring SEPs should have latitude in how they achieve these desired ends.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
Option 18B AIPLA recommends that, when drafting a standard, SSOs and participants consider whether a patent holder’s declared licensing commitment includes a provision that such commitment shall be binding on itself and future owners of the patent. Further, AIPLA recommends that SSOs’ IPR policies should encourage require that such obligations survive transfer to new owners (including successors in interest through bankruptcy proceedings) and include such a provision in exemplar declarations. Parties transferring SEPs should have latitude in how they achieve these desired ends.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Option 18C Supports Option A.
Position 19. .
(Prior AIPLA Position) AIPLA does not support legislative, regulatory, judicial, or administrative action that would require all SSOs to adopt a single prescribed intellectual property rights / licensing and disclosure policy, but favors SSOs having the flexibility to formulate their own policies and procedures.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 20. Option C.
Option 20A (No Direct AIPLA Position).
Option 20B Opposes Option C.
Option C is should not be adopted because ___________.
- 12 -
DRAFT
Option 20C SSOs should seek to avoid developing a standard that cannot be implemented because a participant in the standards-development process holds a blocking IPR that it refuses to license or refuses to license on reasonable term. 1
This proposed position is appropriate because ____________. This direct quote from prior AIPLA text is accurate and fully consistent with applicable case law.
Position 21. Options A, B and C.
Option 21A (Prior AIPLA Position). SSOs should consider basic due process requirements set out in the American National Standards Institute (ANSI) Essential Requirements; Due Process Requirements for American National Standards.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 21B SSOs should consider basic due process requirements set out in the American National Standards Institute (ANSI) Essential Requirements; Due Process Requirements for American National Standards. AIPLA strongly endorses the adoption of SSO IPR policies through processes that comport with principles of balance, openness, consensus and due process such that the interests of all interested persons are respected.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 21C [Redline to Option B] AIPLA strongly endorses the adoption of SSO IPR policies through fair and representative processes that comport with principles of balance, openness, consensus and due process such that the interests of all interested persons are respected while recognizing that SSOs are private organizations and have the right to adopt their own IPR policies according to their own established rules.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
1 Canada Submission, p.3-4.- 13 -
DRAFT
II. The Specific Standard Setting Obligation At Issue
[This topic will address whether and to what extent someone considering an SEP should consider the specific wording of the standard setting obligation at issue. May list different types of obligations and different types of FRAND. May consider ad hoc consortia. Consider benefit of diversity in different SSO’s setting own IPR policies and avoiding government regulation thereof. ]
Position 22. .
(Prior AIPLA Position) Diversity among SSOs in setting IPR policies is encouraged and beneficial to ensure that an SSO develops an IPR policy that fits its particular circumstances – one size does not fit all.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 23. Options A and C.
Option 23A (Prior AIPLA Position) AIPLA supports strong IPR protection in connection with standard setting, so innovators will have the incentives to invest in the development of technologies and contribute such technologies to standard-setting efforts ( n. 3).
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 23B Supports Option A.
Option 23C AIPLA supports strong fair IPR protection in connection with standard setting, so innovators will have the incentives to invest in the development of technologies and contribute such technologies to standard-setting efforts, and so that standards participants will know that they can obtain access to the standard on fair terms.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 24. Options A and C.
Option 24A (Prior AIPLA Position) License assurances made under an SSO IPR policy generally should be considered a binding, enforceable contract subject to the terms of the SSO’s IPR policy and the license assurance, which establish the intent of the parties to the contract - i.e., the SSO and SEP owner (n . 190).
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 14 -
DRAFT
Option 24B Supports Option A.
Option 24C License assurances made under an SSO IPR policy generally should be considered a binding, enforceable contract subject to the terms of the SSO’s IPR policy and the license assurance, which establish the intent of the parties to the contract - i.e., the SSO and SEP owner.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. The suggestion that the intent of the parties is determined with reference to the policy language only is an inaccurate statement of law.
Position 25. Options A and C.
Option 25A (Prior AIPLA Position) An SEP is fundamentally a patent, imbued with all rights provided by and under the laws of the issuing jurisdiction (just like any other patent), except that it is subject to the applicable FRAND commitment. In the context of either a licensing transaction or dispute resolution, a FRAND commitment or SSO IPR policy does not impose, nor should be interpreted as imposing, constraints on patent owners’ rights, except to the extent explicitly set forth in a particular FRAND commitment or applicable IPR policy ( nn. 4; 89, 180).
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 25B Supports Option A.
Option 25C An SEP is fundamentally a patent, imbued with all rights provided by and under the laws of the issuing jurisdiction (just like any other patent), except that it is subject to the applicable FRAND commitment. In the context of either a licensing transaction or dispute resolution, a FRAND commitment or SSO IPR policy does not impose, nor should be interpreted as imposing, constraints on patent owners’ rights, except to the extent explicitly set forth in a consistent with the particular FRAND commitment or applicable IPR policy or requirements of competition law.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
III. Determining Essentiality
Position 26. Options A, B and C.
Option 26A (Prior AIPLA Position) The SSOs definition of what constitutes an essential patent to the standard controls that determination, which definition may vary among different SSOs.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
- 15 -
DRAFT
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
Option 26B The SSOs definition of what constitutes an essential patent to the standard controls that determination, which definition may vary among different SSOs, and should include patents which are necessarily infringed, on technically grounds, by a compliant implementation of the standard, but not patents which are only commercially desirable. Such definition may vary among different SSOs.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that _____. This proposed position should be adopted because ____________.
Option 26C The SSOs definition of what constitutes an essential patent to the standard controls that determination, which definition may vary among different SSOs, and typically includes patents to the extent they include patent claims which are necessarily infringed by compliant implementations of required portions of the standard.
The primary difference between this proposed position and Option A is that ______. This proposed position should be adopted because ___________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
By stating what an SSO policy “should” state in its policy, we are violating our own rule that SSOs should be left free to state their own rules. This is particularly true as many IPR policies do expressly include commercially required patents be included. If we are going to add to AIPLA’s prior text, this is a far more accurate and consistent with past AIPLA statements than the immediately preceding formulation.
Position 27. .
(Prior AIPLA Position) Essentiality determinations should be on a claim-by-claim basis of individual claims within a patent.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 28. Options A, B and C
Option 28A (Prior AIPLA Position) Essentiality should be based on a finding of a court or tribunal of competent jurisdiction.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
- 16 -
DRAFT
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 28B Where there is a dispute, AIPLA believes that essentiality should be based on can finally be decided only by a finding of a court or tribunal of competent jurisdiction.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 28C Essentiality should be based on a finding of disputes between SEP holder and implementer are typically determined by a court or tribunal of competent jurisdiction, which may include government agencies and alternative dispute resolution forums.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. This [Option C] may be unnecessary if the original AIPLA text [Option A] above is retained.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
- 17 -
DRAFT
IV. Disclosure Obligations for SSO Participants
[This topic will include different types of disclosure obligations, vel non, -- e.g., disclosure-based IPR policies verses participation-based IPR policies – and best practices in designging such policies (e.g., avoid overburdensome disclosure obligations, protect confidentiality, disclosure of third-party SEPs, SSO not examine patents, transfer of ownership).
Position 29. Options A and C
Option 29A (Prior AIPLA Position) SSOs generally should avoid overly-burdensome IPR disclosure requirements. In particular patent searches by patent holders should not be required, and only potentially essential patents and patent applications that the individual who is an active participant or contributor to the technical committee developing a standard is individually aware of should be required to be disclosed.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 29B Supports Option A.
Option 29C SSOs generally should avoid overly-burdensome IPR disclosure requirements, which can discourage participation I developing, disclosing and assuring licenses under critical inventions and IP. In particular patent searches by patent holders should not be required, and only potentially essential patents and patent applications that the individual who is an active participant or contributor to the technical committee developing a standard is individually aware of should be required to be disclosed.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. Note that this is duplicative of text above. As noted above, some SSOs, under the particular circumstances, may wish to require patent searching; is AIPLA saying it is inappropriate for them to do so?
Position 30. Options A and C
Option 30A (Prior AIPLA Position) SSOs should not require any participant to disclose a third party’s potentially essential patents.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 18 -
DRAFT
Option 30B Supports Option A.
Option 30C SSOs generally should not require any participant to disclose a third party’s potentially essential patents.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. Again, we should not be criticizing SSO’s ability to tailor their own rules. Many SSOs - e.g., ETSI – have provisions for disclosure of any known IPR, regardless of the patent holder.
Position 31. .
(Prior AIPLA Position) SSOs should generally not examine patents to determine their essentiality. The essentiality of patent claims must be examined by legal professionals and ultimately by a court of law or proper tribunal.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 32. Options A and B.
Option 32A (Prior AIPLA Position) SSO IPR disclosure requirements generally should not require disclosure of confidential information, and usually should be limited to issued patents, published patent application titles and patent application numbers.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
Option 32B SSO IPR disclosure requirements generally should not require disclosure of confidential information, and usually should be limited to issued patents, published patent applications and patent application numbers. Licensing assurances should permit limitations to specified patents, patent claims and applications. SSO’s should be free to allow for blanket license assurances.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Option 32C Supports Option A.
- 19 -
DRAFT
V. Availability of Injunctive Relief
[This topic will address the availability of injunctive or exclusionary relief for an SEP.]
Position 33. Options A and C
Option 33A (Prior AIPLA Position) A FRAND commitment is a representation of a SEP holder’s willingness to license its technology to willing licensees on FRAND terms and conditions, but it is not a blanket waiver of the right to seek injunctive relief. A FRAND commitment, unless expressly stated otherwise, does not limit SEP holders’ rights under the patent laws, including the ability to seek and obtain injunctive relief that is otherwise justified by law.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 33B Supports Option A.
Option 33C A FRAND commitment is a representation of a SEP holder’s willingness to license its technology to willing licensees on FRAND terms and conditions, but it is not a blanket waiver of the right to seek injunctive relief. A FRAND commitment, unless expressly stated otherwise, does not limit SEP holders’ rights under the patent laws, including the ability to seek and obtain injunctive relief that is otherwise justified by law. As is the case with any patent, whether an injunction should be granted in favor of a SEP owner will depend on the facts and circumstances in each case and their assessment under applicable patent law principles. See, e.g., eBay An SEP owner will not necessarily be entitled to injunctive relief in all situation (n. 103)
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 34. Options A and C
Option 34A (Prior AIPLA Position) A SEP-holder may seek an injunction if a prospective licensee is unwilling to license on FRAND terms. The patentee will not necessarily be entitled to injunctive relief in all circumstances, and a court should consider questions of equity, such as whether the patentee has honored its representations to the SSO. Injunctive relief may be appropriate where an infringer effectively refuses to negotiate in good faith, takes unreasonable positions, or prolongs negotiations for an unreasonably long time while other licensees are paying FRAND royalties, or where the infringer is unable to pay royalties.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 20 -
DRAFT
Option 34B Supports Option A.
Option 34C It may be permissible for a SEP-holder may to seek an injunction if a prospective licensee is unwilling to license on FRAND terms. The patentee will not necessarily be entitled to injunctive relief in all circumstances, and a court should consider questions of equity, such as whether the patentee has honored its representations to the SSO. Injunctive relief may be appropriate where an infringer effectively refuses to negotiate in good faith, takes unreasonable positions, or prolongs negotiations for an unreasonably long time while other licensees are paying FRAND royalties, or where the infringer is unable to pay royalties.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 35. Option A.
Option 35A (Prior AIPLA Position) A blanket prohibition on injunctive relief may not be appropriate in all circumstances, but it may be appropriate in certain circumstances, such as where the patentee has not yet offered a license on FRAND terms.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Option 35B Opposes Option A. [Is there a proposed Option B]
Option A should not be adopted because ____________.
Option 35C Supports Option A.
Position 36. Option A.
Option 36A (Prior AIPLA Position) Whether a patent owner refused to make a FRAND offer, or refuses a FRAND offer by a licensee, might be relevant to the court’s consideration of whether to grant injunctive relief, but such refusals should not limit a patent owner’s right to seek such relief when it is otherwise available under governing law. A mere allegation by a potential licensee that the SEP owner has refused to make or accept a FRAND offer should not preclude the patent owner from seeking injunctive relief and proving that injunctive relief is appropriate because its offer of a FRAND license was rejected.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 21 -
DRAFT
Option 36B Supports Option A.
Option 36C Opposes Option A [Is there proposed Option C].
Option A should not be adopted because ____________.
Position 37. Options A and C
Option 37A (Prior AIPLA Position) There are legitimate circumstances under which SEP holders may be justified in not agreeing to license terms demanded by potential licensees, such as, for example, where the potential licensee expressly or constructively refuses to accept FRAND terms. It is against good public policy to deny the availability of injunctive relief in these circumstances.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 37B Support Option A.
Option 37C There are legitimate circumstances under which SEP holders may be justified in not agreeing to license terms demanded by potential licensees, such as, for example, where the potential licensee expressly or constructively refuses to accept FRAND terms. It is against good public policy to deny the availability of injunctive relief in these circumstances.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 38. Options A and C
Option 38A (Prior AIPLA Position) Merely participating in SSO activities should not affect licensing freedom or limit the equitable remedies available to IPR holders that comply with applicable law and SSO IPR policies.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 38B Supports Option A.
Option 38C Merely Participating in SSO activities should not affect licensing freedom of non-SEPs or limit the equitable remedies available to IPR holders that comply with applicable law and SSO IPR policies.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
- 22 -
DRAFT
Position 39. Options A, B and C
Option 39A (Prior AIPLA Position) If SSO participants wish to limit the rights of holders of FRAND-committed patents to seek injunctive relief, they could clearly provide for such limitations in their policies and in the language of their licensing commitments. To the extent no such limitations are included in the relevant SSO commitments and policies it must be assumed that no such limitations are intended.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 39B If SSO participants wish to limit the rights of holders of FRAND-committed patents to seek injunctive relief, they could clearly provide for such limitations in their policies and in the language of their licensing commitments, provided that they comply with principles of balance, transparency, due process and consensus in the adoption of such policies. To the extent no such limitations are included in the relevant SSO commitments and policies it must be assumed that no such limitations are intended.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 39C If SSO participants wish to limit the rights of holders of FRAND-committed patents to seek injunctive relief, they could clearly provide for such limitations in their policies and in the language of their licensing commitments. To the extent no such limitations are included in the relevant SSO commitments and policies it must be assumed that no such limitations are intended.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
Position 40. Option C
Option 40A (No Direct Prior AIPLA Position).
Option 40B Oppose Option C.
Option C should not be adopted because ______.
- 23 -
DRAFT
Option 40C A FRAND licensing promise will generally make it difficult for a patentee to establish irreparable harm based on another’s use of the patented technology.
This proposed position should be adopted because ___________.2
Position 41. Option C
Option 41A No Direct Prior AIPLA Position.
Option 41B Opposes Option C [Any alternative proposal or simply oppose?].
Option C should not be adopted because ____________.
Option 41C Where monetary approaches are available to deter bad faith behaviors, there is little if any need for SEP injunctions.
This proposed position should be adopted because ____________.
Position 42. Option C
Option 42A No Direct Prior AIPLA Position.
Option 42B Opposes Option C [Any alternative proposal or simply oppose?].
Option C should not be adopted because ____________.
Option 42C In lieu of SEP injunctions, courts can use monetary incentives – such as interest, attorneys’ fees and enhanced damages – to deter bad faith behaviors in connection with SEP licensing.
This proposed position is appropriate because ____________.
Position 43. Options A and C
Option 43A (Prior AIPLA Position) Courts are well-equipped to weigh applicable factors in deciding whether injunctive relief should be awarded. If any harm is incurred by the infringing SEP implementer, it is not as a result of the SEP owner seeking an injunction, but rather the court’s determination that its conduct warranted granting of an injunction after the infringing implementer had the opportunity to be heard, which decision also is subject to appeal.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
2 Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1331-32 (Fed. Cir. 2014).
- 24 -
DRAFT
Option 43B Supports Option A.
Option 43C Courts are well-equipped to weigh applicable factors in deciding whether injunctive relief should be awarded. If any harm is incurred by the infringing SEP implementer, it is not as a result of the SEP owner seeking an injunction, but rather the court’s determination that its conduct warranted granting of an injunction after the infringing implementer had the opportunity to be heard, which decision also is subject to appeal.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 44. Option C
Option 44A No Direct Prior AIPLA Position.
Option 44B Opposes Option C [Any alternative proposal or simply oppose?].
Option C should not be adopted because ____________.
Option 44C The use of SEP injunctions can create competition law concerns, because the threat of exclusion from a market is a powerful weapon that can enable a patent owner to hold up implementers of a standard. The use of SEP injunctions can be a tactic for hold-up. Using standard-development leverage, the SEP holders are in a position to demand more for a license than the patented technology, had it not been adopted by the SSO, would be worth. The tactic of withholding a license unless and until a manufacturer agrees to pay an unduly high royalty rate for a SEP is referred to as “hold-up.”.
This proposed position is appropriate because ____________.3
3 Microsoft Corp. v. Motorola, Inc., 696 F.3d 872, 884 (9th Cir. 2012).
- 25 -
DRAFT
VI. Bilaterally negotiated FRAND terms may be monetary or non-monetary
[This topic will address FRAND terms being in different forms as negotiated by the parties and whether terms are permissible, such as reciprocity.]
Position 45. Options A and C
Option 45A (Prior AIPLA Position) FRAND agreements are not limited to only monetary rates, but may include substantial non-monetary terms, such as reciprocal licensing, defensive suspension provisions or any other consideration that the parties agree to exchange. Fundamentally, all licensing terms have value, whether monetary or non-monetary terms, so negotiating parties cannot consider monetary terms in isolation. In evaluating whether license terms are FRAND, all of the terms of the license agreement, including the total exchange of consideration by the parties to a specific license agreement, must be considered at the time of the transaction.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 45B Supports Option A.
Option 45C FRAND agreements are not limited to only monetary rates, but may include substantial non-monetary terms, such as reciprocal licensing, defensive suspension provisions or any other consideration that the parties agree to exchange. Fundamentally, all licensing terms have value, whether monetary or non-monetary terms, so negotiating parties cannot generally should not consider monetary terms in isolation. In evaluating whether license terms are FRAND, all of the terms of the license agreement, including the total exchange of consideration by the parties to a specific license agreement, must be considered at the time of the transaction.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 46. Option A
Option 46A (Prior AIPLA Position) There is no formula or other detailed framework that can value an SEP outside of the specific transaction at issue.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Option 46B Supports Option A.
Option 46C Opposes Option A.
Option A should not be adopted because ____________.
- 26 -
DRAFT
Position 47. Options A and C
Option 47A (Prior AIPLA Position) SSOs should not establish specific licensing terms, including monetary terms, which should be left to negotiations between the parties.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 47B Supports Option A.
Option 47C SSOs generally should not establish specific licensing terms, including monetary terms, which should be left to negotiations between the parties.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. SSOs should be free to establish the rules that their members choose because “one size does not fit all. Also, the scope of this statement is a bit unclear; are we saying that SSOs should not set rates, or that they should not require participants to disclose maximum rates?
Position 48. Option B.
Option 48A (No Direct Prior AIPLA Position).
Option 48B Where parties have engaged in arms-length FRAND negotiations and have entered into a license agreement, it should be presumed that the terms of the agreement are reasonable, and a reflection of a market-driven agreements benefitting both the licensor and licensee.
This position should be adopted because ____________. Such a presumption is warranted because continual challenges to agreed-upon FRAND terms would undermine the certainty of contracts, which in turn would diminish the confidence of SEP owners that they will receive a reasonable reward for their investment in innovation and contribution of technology to standards development, and likewise of implementers that rely upon FRAND commitment to support their investment into making and selling standard-compliant products and investing in the development of new, follow-on innovation. In addition, because FRAND commitments can provides a prospective licensee a cause of action under contract in the event that it believes that the SEP-holder has not complied with its FRAND obligation, when a licensee executes an agreement in the shadow of its contractual right to challenge the terms being offered, such terms must be viewed as reasonable given that the licensee has foregone challenging them. Licensees should not retain a perpetual right to challenge terms as not reasonable, and should be viewed as bargaining such challenges away by entering into a FRAND license.
Option 48C Oppose Option B.
Option B should not be adopted because ____________. This is highly partisan and largely incorrect and not reflective of applicable law.
- 27 -
DRAFT
VII. Regulation of FRAND Royalty Rates
[This topic will include positions on whether and to what extent there should be governmental regulation of FRAND royalty rates]
Position 49. Options A and C.
Option 49A (Prior AIPLA Position) Governments should not prescribe guidelines on setting or fixing royalties for SEPs. AIPLA supports the traditional approach of not establishing specific licensing terms, including royalties, which should be determined through bilateral, good faith negotiations between SEP owners and prospective licensees. The parties to a specific FRAND negotiation are best positioned to evaluate the myriad factors pertinent to that specific situation, and to define the contractual terms that best meet the economic reality of both parties. Such licensing freedom is key to the evolution of technology and for facilitating competition.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 49B Supports Option A.
Option 49C Governments should not prescribe guidelines on setting or fixing royalties for SEPs. AIPLA supports the traditional approach of not establishing specific licensing terms, including royalties, which should be determined through bilateral, good faith negotiations between SEP owners and prospective licensees. The parties to a specific FRAND negotiation are best positioned to evaluate the myriad factors pertinent to that specific situation, and to define the contractual terms that best meet the economic reality of both parties. Such licensing freedom is key to the evolution of technology and for facilitating competition. Governments properly may provide helpful guidelines for SEP licensing and competition law compliance. Such guidelines can assist parties and provided clarity about competition law concerns in SEP licensing.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 50. Option A, B and C.
Option 50A (Prior AIPLA Position) Governments should proceed cautiously and resist the urge to become price regulators, which would suppress incentives to innovate and adversely affect competition.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
- 28 -
DRAFT
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 50B Governments should proceed cautiously and resist the urge to become price regulators, which would suppress incentives to innovate and adversely affect competition. Indeed, AIPLA strongly opposes governmental rate setting for IP licenses, including under the antitrust or competition laws. Application of excessive pricing theories to patent licensing is inappropriate because of the complexity of the issues involved, and the significant risk that procompetitive outcomes will be challenged .
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 50C Governments should proceed cautiously and resist the applying competition law where such application is not necessary urge to become price regulators, which would suppress incentives to innovate and adversely affect competition. Indeed, AIPLA opposes governmental rate setting.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
Position 51. Option B
Option 51A (No Direct Prior AIPLA Position).
Option 51B Government regulation of FRAND royalties or license fees (or any other FRAND terms) is an unnecessary intrusion into market dynamics, and risks over- or under-valuing SEPs, and in either event the implementer or SEP owner’s ability to realize the economic benefit inherent in a FRAND contract will be lost.
This proposed position should be adopted because ___________.
Option 51C Opposes Option B.
Option B should not be adopted because ___________. Governmental regulation of market abuses is not equivalent to rate setting.)
- 29 -
DRAFT
Position 52. Options A and C.
Option 52A (Prior AIPLA Position) Attempts to place artificial limits on an SEP owner’s ability to seek reasonable royalties would upset the careful balance of the interests of all stakeholders that standard setting organizations (“SSOs”) considered in setting their intellectual property rights policies and risks redefining the patent holder’s commitment to the SSO to favor only the interests of potential licensees without giving due regard to the innovator’s interests.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 52B Supports Option A.
Option 52C Attempts to place artificial limits on an SEP owner’s ability to seek reasonable royalties would upset the careful balance of the interests of all stakeholders that standard setting organizations (“SSOs”) considered in setting their intellectual property rights policies and risks redefining the patent holder’s commitment to the SSO to favor only the interests of potential licensees without giving due regard to the innovator’s interests. IPR policies are typically carefully balanced to reflect the interest of all stakeholders and advance two equally important goals: (1) ensuring implementers who want to practice a standard have reasonable access to FRAND licenses; and (2) providing reasonable compensation through licensing of standard-essential patents on fair and reasonable terms and conditions free of any unfair discrimination.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 53. Option B
Option 53A No Direct Prior AIPLA Position.
Option 53B Regulators or competition law enforcers are ill-equipped to determine FRAND royalties or licensing fees, or any other terms of a FRAND license. Such an exercise would need to take into account the complete, and often complex, commercial relationship between the particular parties to a license (n. 152). A regulator or enforcer could not appreciate all aspects of the multifaceted commercial negotiations of FRAND terms (n. 153).
This proposed position should be adopted because ___________.
Option 53C Oppose Option B.
Option B should not be adopted because ___________.
- 30 -
DRAFT
VIII. SSO setting FRAND licensing terms
[This topic will address whether SSOs should set licensing terms or leave terms subject to bilateral negotiations].
Position 54. Options A, B and C
Option 54A (Prior AIPLA Position) AIPLA supports SSOs’ traditional approach of not establishing specific licensing terms for standard essential patents, including monetary terms, which should be left to the negotiations of the parties.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 54B AIPLA supports SSOs’ traditional approach of not establishing specific licensing terms for standard essential patents, including monetary terms, which should be left to the negotiations of the parties or, where there is a dispute, via adjudication in the courts or tribunals of competent jurisdiction.
The primary difference between this proposed position and Option A is that ______. This proposed position should be adopted because ___________. The freedom to negotiate FRAND terms bilaterally and reach agreement, in fact, mitigates against the abuse of FRAND commitments. Implementers, owning the threat of challenging the offered terms through a breach of contract claim, are able to negotiate specific terms that provide them with value specific to its specific commercial situation. If FRAND terms were set by a SSO the same risks of over- or under-valuation of SEPs would exist as would be the case if FRAND terms were set by regulation. Consummation of a freely negotiated FRAND agreement should be considered presumptively reasonable.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 54C In most cases, AIPLA supports SSOs’ traditional common approach of not establishing specific licensing terms for standard essential patents, including specific monetary terms, which usually should be left to the negotiations of the parties, or, where there is a dispute, via court processes or, if so agreed, in arbitration.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. Again, this conflicts with AIPLA’s position that SSOs should be free to choose their own policies. We are also now attacking policies, such as the NGMN policy, which require disclosure of maximum licensing rates – i.e., AIPLA could be interpreted as saying that it knows better than the mobile operators about how to structure SSOs for their industry.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because _____________.
- 31 -
DRAFT
Position 55.
(Prior AIPLA Position?) Appropriate consideration in a particular bilateral negotiation may vary; therefore SSOs generally should not limit the ability to negotiate consideration that meets the needs of both licensee and licensor.
This is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 56. Options B and C.
Option 56A No Direct Prior AIPLA Position.
Option 56B Even if a consensus of all stakeholders determines that a patented technology offers the technical solution desired, it does not mean that the SEP owner can be compelled to make licenses available absent a voluntary agreement to do so, or to forego adequate compensation for making the technology available. Doing so would be tantamount to compulsory licensing and would undermine the bargain struck by innovators in consideration for their contribution of patented technology for inclusion in standards, and disrupt the incentive scheme critical to successful standards development (nn. 219, 220).
The primary difference between this proposed position and Option C, shown in redline in Option C below, is that ______. This proposed position should be adopted because ___________.
Option 56C Even if a consensus of all stakeholders (other than the patent holder) determines that a patented technology offers the technical solution desired, it does not mean that the SEP owner can should be compelled to make licenses available absent a voluntary agreement to do so, or to forego adequate compensation for making the technology available. Doing so would may be tantamount to compulsory licensing and would undermine the bargain struck by innovators in consideration for their contribution of patented technology for inclusion in standards, and disrupt the incentive scheme critical to successful standards development.
The primary difference between this proposed position and Option B, shown in redline above, is that ______. This proposed position should be adopted because ___________. The deleted portion of this text doesn’t make sense. Where a patent holder chooses not to contribute its technology to an SSO, there is no “bargain struck” with the SSO. Also, in regard to the change from “can” to “should”, I don’t think we mean to suggest that governments are powerless to (cannot) require compulsory licensing; we are suggesting that they generally should not do so.
Position 57. Option C.
Option 57A (No Direct Prior AIPLA Position).
Option 57B Opposes Option C.
Option C should not be adopted because ___________.
- 32 -
DRAFT
Option 57C SSOs may helpfully seek to provide clarity to their FRAND policies by identifying factors or considerations that may be relevant to FRAND negotiations.
This proposed position should be adopted because ___________.
- 33 -
DRAFT
IX. SEPs and Competition Law
[This topic will address intersection between IP law and competition law regarding SEPs, such as whether contract law provides sufficient remedy].
Position 58. Options B and C.
Option 58A (No Direct Prior AIPLA Position).
Option 58B Like any patent an SEP should not, standing alone, be presumed to confer market power.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 58C Like any patent an SEP generally should not, standing alone, be presumed to confer market power.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
Position 59. Options A and C.
Option 59A (Prior AIPLA Position) A FRAND commitment is a contractual obligation in which both parties must negotiate in good faith. In the event there is a dispute, the parties may pursue resolution under either contract or patent law. Competition law should intervene only when such remedies are insufficient, and where the challenged conduct has a proscribed anticompetitive effect under applicable antitrust or competition laws.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 59B Supports Option A.
Option 59C A FRAND commitment is a contractual obligation in which both parties must negotiate in good faith. A FRAND commitment can encompass both a breach of contract and the duty of good faith and fair dealing, and a violation of competition law. In the event there is a dispute, the parties may pursue their legal remedies resolution under either contract or patent law. Competition law should intervene only when such remedies are insufficient, and where the challenged conduct has a proscribed anticompetitive effect under applicable antitrust or competition laws.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. FRAND commitments are designed specifically to mitigate a SEP owner’s dominant position, the threat of patent hold-up, and the harm that hold-up does to both consumers and to competition generally.
- 34 -
DRAFT
Position 60. Options A, B and C.
Option 60A Limiting application of competition and antitrust laws to licensing SEPs is warranted because otherwise unacceptable risks that the legitimate exercise of rights by SEP owners will be challenged, and incentives to invest in innovation will be deterred.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that _____. This proposed position should be adopted because ____________.
[Option 60B] Limiting application of competition and antitrust laws to licensing SEPs is warranted because otherwise unacceptable risks to ensure that the legitimate exercise of IP rights by SEP owners will be challenged are not chilled because of the threat of liability under such laws, thereby undermining , and incentives to invest in innovation will be deterred.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Option 60B[Option 60C] Limiting application of Applying competition and antitrust laws to address SEP abuses licensing SEPs is warranted because otherwise unacceptable risks that the legitimate exercise of rights by SEP owners will be challenged, and incentives to invest in follow-on innovation will be deterred, and implementers would face the unacceptable risks of patent hold-up.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. “[…] [O]nce a standard becomes widely adopted, SEP holders obtain substantial leverage over new product developers, who have little choice but to incorporate SEP technologies into their products. Using that standard-development leverage, the SEP holders are in a position to demand more for a license than the patented technology, had it not been adopted by the SSO, would be worth. The tactic of withholding a license unless and until a manufacturer agrees to pay an unduly high royalty rate for a SEP is referred to as ‘hold-up.’”
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
- 35 -
DRAFT
X. Patent Holdup, Holdout, Reverse Holdup/Holdout, Willing Licensee, Willing Licensor
Position 61. Options A, B and C.
Option 61A (Prior AIPLA Position) Patent hold up can expose a patent holder to significant risks, diminishing incentives to engage in such behavior.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 61B Patent hold up can expose a patent holder to significant business and legal risks, diminishing incentives to engage in such behavior.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 61C Patent hold up can expose a patent holder to significant risks competition law sanctions, diminishing incentives to engage in such behavior.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
Position 62. Options A, B and C.
Option 62A (Prior AIPLA Position). The risks that the owner of an SEP faces if it engages in patent holdup severely diminishes (if not defeats) incentives to engage in holdup. Patent holdup may be considered in a particular instance if evidence of such is presented.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 36 -
DRAFT
Option 62B To establish “hold up” in an SEP-licensing context, evidence must show that in connection with a specific transaction a SEP owner engaged in intentionally misleading or deceptive conduct, or otherwise acted opportunistically, in connection with its FRAND commitment, and thereby induced an implementer, in reliance on such conduct, to implement the standard for which the FRAND commitment was made. The mere exercise of a patent right, even where an implementer invests in implementing a standard, absent opportunistic conduct is not hold up, but is a proper exercise of a patent right, even in connection with a SEP.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 62C Patent holdup is a potential problem that could inhibit widespread adoption of a standard. Patent hold-up exists when the holder of a SEP demands excessive royalties after companies are locked into using a standard. The standards process can create substantial leverage and opportunities for patent hold up. In U.S. jury trials, some evidence of holdup should exists before a corresponding jury instruction is made, which instruction then may be required .
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. Option A is about as biased a statement as AIPLA could possibly make. It is also contrary to Federal Circuit, 9th Circuit and district court precedent, not to mention international precedent. Again, we are not peering into our crystal balls to determine which business practices will or won’t be successful “in the long run”.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________. 4 5 As noted by the U.S. Court of Appeals for the Federal Circuit in Ericsson, Inc. v. D-Link Sys., Inc.,6 “once a standard becomes widely adopted, SEP holders obtain substantial leverage over new product developers, who have little choice but to incorporate SEP technologies into their products. Using that standard-development leverage, the SEP holders are in a position to demand more for a license than the patented technology, had it not been adopted by the SSO, would be worth. The tactic of withholding a license unless and until a manufacturer agrees to pay an unduly high royalty rate for a SEP is referred to as ‘hold-up.’”7
4 Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1331-32 (Fed. Cir. 2014).5 Microsoft Corp. v. Motorola, Inc., 696 F.3d 872, 884 (9th Cir. 2012).6
7
- 37 -
DRAFT
Position 63. Option A.
Option 63A (Prior AIPLA Position) Holdout by a prospective licensee of an SEP may be more of a problem than holdup by the SEP patent owner because holdout by prospective licensees is not constrained by the reputational risks faced by SEP holders who engage in holdup.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Option 63B Supports Option A.
Option 63C Opposes Option A.
Option A should not be adopted because ____________.
Position 64. Option A and C
Option 64A (Prior AIPLA Position) Licensing transactions are complex and diverse business arrangements that may involve competitive business information and intellectual property beyond a specific SEP, the disclosure of which typically would provide little useful information in comparing one license agreement with another. One cannot not start with a premise that maintaining confidentiality on SEP licenses or cross-licenses is abusive. A demand for inapt transparency in licensing SEPs is largely unworkable, impractical, and harmful to licensing, competition, and standard participation.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 64B Opposes Option C.
Option 64C Patent holders must be willing to provide the potential licensee with information necessary to assess whether the patent holder’s license offer is FRAND-compliant. A licensor that refuses to provide such information is an unwilling licensor.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 65. Option A and C
Option 65A (Prior AIPLA Position) Insert.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
- 38 -
DRAFT
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 65B Opposes Option C.
Option 65C Where disputes regarding SEPs occur, both parties should be willing to have their disputes resolved by the courts in accordance with national laws. A licensee that refuses to participate in court processes may be deemed an unwilling licensee.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 66. Options A, B and C.
Option 66A (Prior AIPLA Position) Whether a prospective licensee is a “willing licensee” depends on a variety of facts and circumstances. Even when the prospective licensee states a willingness to take a license, determining whether a prospective licensee is a willing licensee requires objectively evaluating the prospective licensee’s conduct, including whether an infringing implementer demands unreasonable or more favorable terms, refuses to grant a reciprocal license, is unable to pay royalties, causes undue delay in FRAND negotiations while refusing to compensate the SEP owner in the interim or other relevant considerations.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 66B Whether a prospective licensee is a “willing licensee” depends on a variety of facts and circumstances. Even when the prospective licensee states a willingness to take a license, determining whether a prospective licensee is a willing licensee requires objectively evaluating the prospective licensee’s conduct, including whether an infringing implementer demands unreasonable or more favorable terms, refuses to grant a reciprocal license, is unable to pay royalties, causes undue delay in FRAND negotiations while refusing to compensate the SEP owner in the interim, fails to provide assurance and/or security to the SEP owner that FRAND compensation will be made if the SEP owner’s FRAND offer is upheld, or other relevant considerations.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. See Huawei v. ZTE
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 39 -
DRAFT
Option 66C Whether a prospective licensee is a “willing licensee” negotiating in good faith depends on a variety of facts and circumstances, including an unwillingness to grant reciprocal licenses or an inability to pay royalties. Even when the prospective licensee states a willingness to take a license, determining whether a prospective licensee is a willing licensee requires objectively evaluating the prospective licensee’s conduct, including whether an infringing implementer demands unreasonable or more favorable terms, refuses to grant a reciprocal license, is unable to pay royalties, causes undue delay in FRAND negotiations while refusing to compensate the SEP owner in the interim or other relevant considerations.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. There is no support in law or policy for Option A. It is literally just a made up legal standard.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________. AIPLA’s position is based on citation to European law??? US law is different and this is not representative of US approaches.
Position 67. .
(Prior AIPLA Position) In assessing the FRAND dynamic, the licensee’s behavior also should be considered.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
- 40 -
DRAFT
XI. Royalty Stacking
[This topic will include general royalty stacking issues, evidentiary requirements and whether there should be a royalty cap.]
Royalty stacking is a speculative, theoretical concern that is not supported by actual evidence that the possibility of royalty stacking has inhibited access to or the adoption of any standard.
Position 68. Options A, B and C.
Option 68A (Prior AIPLA Position) Royalty stacking is a speculative, theoretical concern that is not supported by actual evidence that the possibility of royalty stacking has inhibited access to or the adoption of any standard. Royalty calculations should be based on evidence, not speculation.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 68B Royalty stacking is a speculative, theoretical concern without empirical support in the real world that is not supported by actual evidence that the possibility of royalty stacking has inhibited access to or the adoption of any standard or that markets are not functioning because of the royalty claims of SEP holders. Royalty calculations should be based on evidence, not speculation.
The primary difference between this proposed position and Option A is that ______. This proposed position should be adopted because ___________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________. The problem, if any, is rather that SEP holders, acting independently, may set royalties for licenses to their patents that exceed their actual value. This wouldn’t happen if there was a single licensor that was bound by a FRAND obligation. The royalty stacking problem is avoided by appropriate court apportionment rules that ensure that the value of the patent is related to its technological contribution to the device
- 41 -
DRAFT
Option 68C Royalty stacking is a speculative, theoretical concern that is not supported by actual evidence that the possibility of royalty stacking has inhibited access to or the adoption of any standard. Royalty stacking can arise when a standard implicates numerous patents, perhaps hundreds, if not thousands. If companies are forced to pay royalties to all SEP holders, the royalties will “stack” on top of each other and may become excessive in the aggregate. To help alleviate these potential concerns, SDOs often seek assurances from patent owners before publishing the standard. 8 Royalty stacking poses potential problems that could inhibit widespread adoption of a standard. Royalty calculations should not be based on evidence, not speculation.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.9
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
Position 69. .
Consideration of royalty stacking in establishing FRAND rates does not imply that all patents are valued the same. Rather, FRAND analysis should recognize that some patents are more valuable than others, and can adjust FRAND rates according to the value of the particular technology on a case-by-case basis.
This proposed position is proper because _________.
Position 70. Options A and B.
Option 70A (Prior AIPLA Position) FRAND generally does not establish any cap on the royalties or license fees that may be charged in connection with standards-essential IPR claims.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
Option 70B FRAND generally does not establish any cap on the royalties or license fees that may be charged in connection with standards-essential IPR claims. Royalty caps are artificial and arbitrary limitations on SEP holders’ ability to receive adequate compensation for their inventions, which risk underminine the incentives that patent holders generally, and SEP holders specifically, must have to make the risky investments necessary to create new technologies that can then be made available for standardization to the benefit of users of such technology and consumers, and thereby risk harming effective standards development.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
8
9
- 42 -
DRAFT
Option 70C Opposes Options A and B.
Option A should not be adopted because ____________.
Option B should not be adopted because _____________.
Position 71. Option A.
Option 71A (Prior AIPLA Position) Arbitrary limitations on royalties, based on concerns such as royalty stacking, inappropriately devalue patents and risk harming effective standards development. Even where there are numerous patents essential to a standard, royalty stacking concerns do not justify devaluing patents.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Option 71B Supports Option A.
Option 71C Opposes Option A.
Option A should not be adopted because ____________.
- 43 -
DRAFT
XII. Patents are territorial rights enforceable only in issuing country or region
Position 72. Options A, B and C.
Option 72A (Prior AIPLA Position) Patents rights are territorial. As a result of the territorial limitation of patent rights, governments should not infringe on the rights of other sovereign governments’ to determine the exercise of IPR or attempt to regulate the use of IPRs beyond their borders.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 72B As patent rights are territorial in scope, governments and courts of one jurisdiction should not interfere in the ability of patent holders to exercise their patent rights in other jurisdictions according to the laws of such jurisdictions . As a result of the territorial limitation of patent rights, governments should not infringe on the rights of other sovereign governments’ to determine the exercise of IPR or attempt to regulate the use of IPRs beyond their borders.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 72C Patents rights are territorial. Patents are rights granted by a jurisdiction under its laws. As a result of the territorial limitation of patent rights, governments should not infringe on the rights of other sovereign governments’ to determine the exercise of IPR or attempt to regulate the use of IPRs beyond their borders that do not affect their national jurisdiction.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
- 44 -
DRAFT
XIII. Royalty Base and Apportionment
[This topic will concern whether and to what extent the smallest saleable patent practicing unit should be the royalty base for establishing a FRAND royalty, including consideration of the context – e.g., bilateral negotiation versus U.S. jury trial.]
Position 73. Options A and C.
Option 73A (Prior AIPLA Position) AIPLA cautions against setting a fixed requirement for a royalty base, such as requiring the royalty to be based on the end product, on the smallest saleable patent practicing unit or other set criteria. The parties should be free to use whatever combination royalty rate and royalty base fits their circumstances as long as the ultimate royalty—i.e., combination of royalty rate and royalty rate—is based on the value that the patented technology adds to the licensed product.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 73B Supports Option A.
Option 73C Royalties usually should be calculated with reference to the smallest salable patent practicing unit and not on downstream technologies that are outside the patent’s scope. AIPLA cautions against setting a fixed requirement for a royalty base, such as requiring the royalty to be based on the end product, on the smallest saleable patent practicing unit or other set criteria. The parties should be free to use whatever combination royalty rate and royalty base fits their circumstances as long as The ultimate royalty—i.e., combination of royalty rate and royalty rate—is based on the value that the patented technology adds to the licensed product and not to value that the patent holder did not invent, did not claim in its patent, derived from standardization or the lock-in value thereof .
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________. Where small elements of multi-component products are accused of infringement, calculating a royalty on the entire product carries a considerable risk that the patentee will be improperly compensated for non-infringing components of that product. Thus, it is generally required that royalties be based not on the entire product, but instead on the smallest salable patent-practicing unit.
In the context of collaborative industry standards, calculating royalties based upon the entire market value of downstream products makes very little practical sense. It is difficult if not impossible to imagine a realistic scenario where a single patented technology alone is responsible for the entire market value of a device implementing a complex, industry-developed standard. Standardized technologies may require many hundreds of pages of technical specifications. Use of the entire market value of a downstream product as the basis for establishing royalties would be appropriate only where a single patent – among the thousands or even tens of thousands of declared patents applicable to a particular standard –alone motivates consumers to purchase a downstream product.
- 45 -
DRAFT
If a patentee wishes to claim a royalty based on the entire market value of a product, it is not enough to merely show that the patented technology is viewed as valuable, important, or even essential to the use of the product. Nor is it enough to show that a product without the patented technology would be commercially unviable. Rather, the entire market value rule must not be applied absent evidence that the infringing feature alone motivates consumers to purchase the downstream product.10
Position 74. Option B
Option 74A No Direct Prior AIPLA Position.
Option 74B Because a FRAND commitment is voluntary and establishes contractual obligations only as defined by the SSO’s IPR policy in which the standard is being developed, the FRAND commitment does not require licensing at the smallest saleable patent practicing unit (SSPPU) level unless the IPR policy directly requires such licensing and the patent holder voluntarily agreed to it.
This proposed position should be adopted because ___________.
Option 74C Opposes Option B.
Option B should not be adopted because ___________.
Position 75. Option C
Option 75A No Direct Prior AIPLA Position.
Option 75B Oppose Option C.
Option C should not be adopted because ___________.
Option 75C Where the smallest salable unit is, in fact, a multi-component product containing several non-infringing features with no relation to the patented feature, the patentee must do more to estimate what portion of the value of that product is attributable to the patented technology. A patentee’s obligation to apportion damages only to the patented features does not end with the identification of the smallest salable unit if that unit still contains significant unpatented features.
This proposed position should be adopted because ___________.11
10
11
- 46 -
DRAFT
XIV. Patent law guidance on “reasonable royalty”
Position 76. .
(Prior AIPLA Position) Patent law provides guidance for evaluating a FRAND royalty. This includes consideration of applicable Georgia Pacific factors (which may not be all inclusive,12 consideration of comparable licenses and other factor relevant for determining the incremental value contributed by a patent to a product. Put differently, as with any patent, licensing of SEPs involves a myriad of considerations and patent law provides guidance for accommodating all such relevant considerations..
This proposed position is proper because _________.
12
- 47 -
DRAFT
XV. Use of NDAs in negotiating SEP licenses
[This topic will address whether using NDAs in negotiating SEP licenses is an abusive practice.]
Position 77. Option A.
Option 77A (Prior AIPLA Position) Barring proof of actual competitive harm based on the particular facts of concern, the practice of requesting NDAs in licensing SEPs should not be viewed as an abusive practice..
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________. AIPLA is concerned that, without NDAs, patent holders may face undue scrutiny whenever two licensees have different rates or terms. Justifying such rates may require disclosure of sensitive business information and undermines patent holders’ as well as the licensee’s basic rights of licensing and negotiating.
Option 77B Supports Option A.
Option 77C Opposes Option A.
Option A should not be adopted because ____________. Requiring the implementer to accept discriminatory royalties and terms in licenses for SEPs, tying access to SEPs to prospective licensees’ agreement to mandatory non-disclosure terms while refusing to disclose license terms provided to competitors (to hide discriminatory pricing) can harm competition and innovation.
Position 78. Options A and C.
Option 78A Given the many different forms that license agreements can take, and the different monetary and non-monetary consideration that can be exchanged, AIPLA recommends against attempting to define what it means for contracts to be non-discriminatory or prohibiting use of NDAs in a quest to address non-discrimination that may yield limited benefit given the potential differences among licensing agreements while adversely disclosing competitively-sensitive licensing terms.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 48 -
DRAFT
Option 78B Supports Option A.
Option 78C The commitment to license SEPs on FRAND terms and conditions includes the concept of non-discrimination. If a prospective licensee requests that the SEP holder complies with its commitment and makes a FRAND offer for its impacted SEPs, then the SEP holder should not be permitted to condition access to that offer on the prospective licensee’s agreement to a non-disclosure agreement relating to that offer.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 79. Option C
Option 79A (No Direct Prior AIPLA Position).
Option 79B Opposes Option C.
Option C should not be adopted because ___________. The question is whether claim charts can be included in an NDA.
Option 79C A SEP owner’s claim charts, when provided to a potential licensee to support a FRAND licensing demand, usually do not qualify as sensitive business information.
This proposed position should be adopted because ___________.
Position 80. Options B and C
Option 80A No Direct Prior AIPLA Position.
Option 80B A SEP owner’s should be willing to share with a potential licensee the non-confidential information reasonably needed by the potential licensee to determine whether the SEP owner’s licensing offer is, or is not, compliant with its FRAND obligations, and an implementer equally should be willing to share with the SEP owner non-confidential information that supports the potential licensee’s contention that its counter-offer is consistent with FRAND.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 80C A SEP owner’s should be willing to share with a potential licensee the non-confidential information reasonably needed by the potential licensee to determine whether the SEP owner’s licensing offer is, or is not, compliant with its FRAND obligations, and an implementer equally should be willing to share with the SEP owner non-confidential information that supports the potential licensee’s contention that its counter-offer is consistent with FRAND.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
- 49 -
DRAFT
Position 81. Option C.
Option 81A No Direct Prior AIPLA Position.
Option 81B Opposes Option C.
Option C should not be adopted because ___________.
Option 81C A SEP owner should not use NDAs to enhance its bargaining power over a potential licensee that does not have access to information needed to evaluate a proposed license. Transparency in FRAND licensing is critical, and SEP owners should be careful to ensure that potential licensees are on a “level playing field” in terms of the information available to evaluate compliance with FRAND.
This proposed position should be adopted because ___________.
Position 82. Option C.
Option 82A (No Direct Prior AIPLA Position).
Option 82B Opposes Option C.
Option C should not be adopted because ___________.
Option 82C Where a prior licensee is willing to disclose the terms of its license to a potential licensee (or its outside counsel) under the terms of an NDA and to assist the potential licensee’s evaluation of whether a proposed license to the potential licensee comports with FRAND, the SEP owner should not use confidentiality provisions to interfere with a potential licensee’s ability to evaluate the SEP owner’s compliance, or non-compliance, with FRAND.
This proposed position should be adopted because ___________.
Position 83. Options B and C.
Option 83A (No Direct Prior AIPLA Position).
Option 83B The flexibility needed by all parties to IP licensing agreements should be recognized so that companies can continue to make deals that are similar for similarly-situated participants, but nevertheless take into account the unique circumstances of each, while protecting sensitive competitive business information in the parties’ negotiations and licensing agreements through NDAs.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 50 -
DRAFT
Option 83C [Redline Compare With Option B] The flexibility needed by all parties to IP licensing agreements should be recognized so that companies can continue to make deals that are similar for similarly-situated participants, but nevertheless take into account the unique circumstances of each, while protecting sensitive competitive business information in the parties’ negotiations and licensing agreements through NDAs, provided such NDAs are not used as tools to evade FRAND obligations or to prevent a prospective licensee from having access to information needed to meaningfully evaluate proposed licensing terms.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
- 51 -
DRAFT
XVI. Non-discriminatory licensing of SEPs
[This topic will address the “non-discriminatory” part of the FRAND commitment]
Position 84. .
(Prior AIPLA Position) Improper discrimination does not exist merely because an IPR owner entered agreements with different terms and conditions for different entities; such circumstances do not mean that, as a whole, the different licensees provided and received different value of consideration overall.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 85. Options A and C.
Option 85A (Prior AIPLA Position) A FRAND commitment does not necessarily mean that all licensees must be offered with the same terms. In general, non-discriminatory licensing means only that similarly-situated licensees should be offered economically similar terms. There may be significant difference between license agreements reached based on the particular facts and circumstances, and commercial needs and desires of the companies, and these differences do not violate the non-discrimination principle.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 85B Supports Option A.
Option 85C A FRAND commitment does not necessarily mean that all licensees must be offered with the same terms. In general, non-discriminatory licensing means only that Similarly-situated licensees should be offered economically similar terms. There may be significant difference between license agreements reached based on the particular facts and circumstances, and commercial needs and desires of the companies, and these differences do not violate the non-discrimination principle.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 86. Option C.
Option 86A No Direct Prior AIPLA Position.
Option 86B Opposes Option C.
Option C should not be adopted because ___________.
- 52 -
DRAFT
Option 86C FRAND commitments to grant licenses to all applicants admit of no limitation as to who or how many applicants could receive a license. SEPs have regularly and historically been licensed at multiple levels of the supply chain.
This proposed position should be adopted because ___________.13
Position 87. .
FRAND licensing, including the nondiscrimination aspect, apply only to SEP patents and licenses offered pursuant to the assurance made by the SEP holder to the SSO.
This proposed position is proper because _________.
Position 88. Options B and C.
Option 88A No Direct Prior AIPLA Position.
Option 88B The non-discrimination element of FRAND is intended to ensure that licenses are not withheld to certain implementers to achieve anticompetitive ends, and should not be viewed as requiring that all licensees receive identical terms.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 88C Opposes Option B.
This proposed position should not be adopted because ___________.
13
- 53 -
DRAFT
XVII. Methodology for resolving SEP licensing disputes
Position 89. .
(Prior AIPLA Position) Promises pursuant to SSO IPR policies to disclose patents or to license on FRAND terms should be enforceable as a matter of contract law, which in turn looks to the intent of the parties.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 90. Option C.
Option 90A No Direct Prior AIPLA Position.
Option 90B Oppose Option C.
Option C should not be adopted because ___________.
Option 90C Parties seeking to enforce FRAND obligations must not be denied access to legal recourse in accordance with national laws.
This proposed position should be adopted because ___________.
Position 91. .
(Prior AIPLA Position) A FRAND commitment generally is enforceable by those who wish to implement the standard and secure a license to the patented technology, as third-party beneficiaries to the agreements between an SEP holder and the relevant SSOs.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 92. Options A and C.
Option 92A (Prior AIPLA Position) Disputes regarding licenses of FRAND-encumbered SEPs should be adjudicated by the courts or other tribunals of competent jurisdiction rather than an administrative agency. Such disputes often involve complex issues of patent law, including whether a product is covered by the patent claims and thus subject to license fees. The courts or other competent tribunals are best suited to resolve such disputes in light of their extensive patent experience to adjudicate such complex disputes.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
- 54 -
DRAFT
Option 92B Supports Option A.
Option 92C Opposes Option A.
Option A should not be adopted because ____________.
- 55 -
DRAFT
XIII. Cross-Licensing and Patent Pools involving SEPs
Position 93. Options A, B and C.
Option 93A (Prior AIPLA Position) Cross-licensing is pro-competitive and a strong showing should be made to establish that any competition law violation has occurred based on a cross-licensing agreement.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 93B Cross-licensing is often pro-competitive and should only be held to constitute a strong showing should be made to establish that any competition law violation has occurred based on a cross-licensing agreement if there is clear evidence that it is anticompetitive in the circumstances.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 93C Cross-licensing is can be pro-competitive and a strong showing should be made to establish that any competition law violation has occurred based on a cross-licensing agreement.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
Position 94. Options A, B and C
Option 94A (Prior AIPLA Position) Parties at arm’s length will typically arrive at a fair bargain.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 56 -
DRAFT
Option 94B Parties License terms arrived at through arm’s length negotiations between sophisticated partes with access to competent legal counsel should be presumed to represent will typically arrive at a fair bargain.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 94C Parties at arm’s length will typically arrive at a fair bargain assuming there is no unfair discrepancy in each party’s bargaining power and the absence of competitive abuses or “hold up” associated with SEP abuse.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
Position 95. Option C.
Option 95A No Direct Prior AIPLA Position.
Option 95B Opposes Option C.
Option C should not be adopted because ___________.
Option 95C Parties can always jointly and voluntarily agree to a broader portfolio cross-license between the parties. Any conditions are only unreasonable if the SEP holder insists on such conditions when the implementer asks for a SEPs-only FRAND license. In that context, a licensee can question whether an SEP is infringed and enforceable (in addition to questioning whether it is valid).
This proposed position should be adopted because ___________.
Position 96. Options A and C.
Option 96A (Prior AIPLA Position) FRAND licensing involves complex business transaction that may involve monetary and non-monetary consideration, and the reasonableness of the agreement should be assessed on a case-by-case basis.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
- 57 -
DRAFT
Option 96B Supports Option A.
Option 96C FRAND licensing involves complex business transaction that may involve monetary and non-monetary consideration, and the reasonableness of the agreement generally should be assessed on a case-by-case basis, though certain types of practices may be more likely to create competitive harm than others.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Position 97. Options A, B and C.
Option 97A (Prior AIPLA Position) An SSO participant could agree to license patents essential to implement a standard in return for a reciprocal licensing commitment from the implementer of the standard.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 97B An SSO participant could agree to license patents essential to implement a standard in return for a reciprocal licensing commitment from the implementer of the standard. Unless an SSO’s IPR policy expressly states otherwise, an SEP holder may grant a license to its SEPs on the condition that the licensee grant the SEP holder a license under the licensee’s SEPs.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 97C An SSO participant could agree to license patents essential to implement a standard in return for a reciprocal licensing commitment from the implementer of the standard. Where a patent policy provide for reciprocity, an SEP holder may grant a license under SEPs on the condition that the licensee grant the SEP holder a license under the licensee’s SEPs in the same standard .
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
- 58 -
DRAFT
Position 98. .
(Prior AIPLA Position) Cross-licensing may involve confidential competitive information that should be protected from public disclosure.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
Position 99. Options A, B and C.
Option 99A (Prior AIPLA Position) Pooling in standards may be efficient and convenient for patent holders and licensees.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 99B Pooling arrangements for licenses of SEPs in standards may be efficient and convenient for patent holders and licensees.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option C is that ______. This proposed position should be adopted because ___________.
Option 99C Pooling in standards may be efficient and convenient for patent holders and licensees, provided the pools fully comply with the patent owner’s FRAND obligations.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
The primary difference between this proposed position and Option B is that ______. This proposed position should be adopted because ___________.
Position 100. Options A and B.
Option 100A (Prior AIPLA Position) If there is a question about competition and SEP patent pools, the Rule of Reason should apply.
This proposed position is based on past prior AIPLA positions __________. This existing AIPLA position remains proper because _________.
The primary difference between this proposed position and Option B is that _____. This proposed position should be adopted because ____________.
- 59 -
DRAFT
Option 100B If there is a question about competition and SEP the consistentcy of patent pools for SEPs with antitrust law, the Rule of Reason usually should apply.
The primary difference between this proposed position and Option A is that _____. This proposed position should be adopted because ____________.
Option 100C Supports Option B.
- 60 -