Telecoms Patents: Jaw-Jaw not War-War?
Geneva has been the venue for
a powerhouse conference in the intellectual property world with
some of the world's leading technology companies meeting with
academics from around the world and national and international
regulators including representatives of the UN's International
Telecommunication Union (ITU).
The ITU convened the meeting
following a recent spate of high-profile and widely reported patent
disputes between makers of smartphones and tablet computers,
perhaps most notably between Apple and Samsung, and amidst concerns
that patent holders in the telecoms industry have been using their
monopoly rights to distort competition. The concern raised by
ITU has been that disputes over intellectual property rights, and
the fear of litigation, have been stifling innovation and having a
detrimental effect on consumers' interests.
The conference will be asked
to consider how best to ensure that licences to use and connect
with essential but patent-protected technologies are offered on
"reasonable" terms. These technologies are known as "standard
essential" patents and ITU hopes to promote the use of a scheme
under which once a patent is recognised as being
"standard-essential" the rights holder must allow third parties to
use the technology for a fee that is "not excessive."
An example of these "standard
essential" patents might be the technology without which it would
not be possible to connect a mobile handset to a 3G (or soon a 4G)
In the recent past, disputes
have arisen when parties have not been able to agree a "reasonable"
fee for the use of one of these technologies, and the rights-holder
has then sought to impose import bans and commercial restrictions
on the makers of devices which make use of the patent. The
infringing manufacturers have then sought to argue that the rights
holder was demanding an exorbitant royalty, often with an ulterior
motive of forcing the manufacturer to make concessions in other
areas of dispute about patented technologies which may not be
regarded as "standard essential."
Apple, Microsoft and Cisco
have reportedly all argued for a change in international laws and
treaties to prevent import bans and similar restrictions being
imposed in circumstances where a "standard-essential" patent is in
dispute. However, these proposals have met resistance from
other big players in the industry such as Nokia, who have contested
that sometimes such injunctions are the only appropriate remedy
when an infringer is refusing to recognise the need to pay any
licence fee or to submit to the jurisdiction of a competent court
or tribunal to determine what that fee should be.
manufacturer Qualcomm have argued that the proposed changes would
simply lead to different types of dispute, with technology
companies fighting hard to avoid their technologies becoming
regarded as "standard-essential." Qualcomm have also
suggested that in their view the current spate of patent litigation
in the telecoms industry is a short-lived state of affairs and that
"business as usual" will soon resume.
It is unclear what the outcome
of the conference will be, but potentially it could have
implications for smaller technology companies and innovators
seeking to develop devices or software which are intended to
connect with or make use of the patented technologies of some of
these giants of the industry. It may be worthwhile for those
interested in this area to keep an ear to the ground following this
Geneva "talking shop."
19 October 2012
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.