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) network.

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.

Likewise, microchip 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."

Posted on: 19/10/2012

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.

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