updated 07:08 pm EDT, Fri July 6, 2012
October meetings to address FRAND, innovation stifling
In response to the bevy of lawsuits involving standards-essential patents, the International Telecommunication Union (ITU), a division of the United Nations, is hosting a set of talks on the mobile patent wars in Geneva during October. The ITU says that the "innovation-stifling use of intellectual property [lawsuits]" needs to be addressed at the meeting, and vital patents such as 3G or JPEG encoding would be the meeting's focus.
Companies are supposed to license standards-essential patents on fair, reasonable, and non-discriminatory (FRAND) terms. A patent subject to FRAND licensing cannot have an excessive charge associated with it, nor can potential licensees be discriminated against, based on who they are. For example, Motorola has come under heat for FRAND abuse in the United States for demanding Microsoft pay 90x more than the industry-standard rate for the H.264 video encoding patent used in Windows and the Xbox 360. It is also under a separate EU investigation for litigating what should be FRAND patents.
The ITU said that the parties involved differ over what they believe to be a reasonable charge for FRAND patents, and whether legal injunctions should be allowed to block shipments if terms cannot be agreed to. "We are seeing an unwelcome trend in today's marketplace to use standards-essential patents to block markets," said the ITU secretary general Dr Hamadoun Torre, echoing one of Apple's key arguments. "There needs to be an urgent review of this situation: patents are meant to encourage innovation, not stifle it."
Ilya Kazi, a member of the UK's Chartered Institute of Patent Attorneys is skeptical of the commission's success in the October meetings. He said that he doesn't think there's a simple answer to competing patents and aggressive litigation, and adds "I would be surprised if they can come up with an agreed implementable conclusion."