GSM Association Presentation to ETSI SOS Interop

1
GSM AssociationPresentation to ETSI SOS Interop

• IPR in Standards
• David O'Byrne

20 September 2005
2
Emerging trends in Standards

• 3GPP
• More patents declared essential
• More IPR-holding companies
• Longer to reach market equilibrium
• Higher IPR prices
• Open Mobile Alliance DRM 2.0
• No discussion of commercial model for IPR in OMA
  
• Some patent holders declaring IPR late
• Unacceptably high royalties being demanded
• Market and standard delayed
• Increased likelihood of fragmented market
• Increased likelihood of proprietary solutions
  dominating

3
Summation

• The unpredictable nature of the cost of IPR
  associated with technology standards constitutes
  an overhanging threat to the mobile
  communications industry

4
Problems

• Timely IPR Declaration
• All SDOs have as part of their membership a
  requirement for pertinent and timely IPR
  disclosure in any relevant work-stream.
• IPR Policy Policing
• Limited sanctions are available for those who
  breach IPR policy
• IPR Indemnification
• SDOs are unable to indemnify an operator if that
  operator uses a standard that contains at that
  moment undeclared IPR.

5
Problems

• FRAND Licensing.
• There is no commercial definition of FRAND (Fair
  Reasonable And Non Discriminatory) licensing
• Require an objective framework for agreeing these
  terms
• Essential IPR and Patents 
• Currently no independent examination of
  essentiality on patents that have been declared
  as essential patents
• Cumulative patent royalties / Patent stacking
• Increasing numbers of IPR holders looking for
  reasonable compensation
• Result is costs that have an adverse effect on
  market growth
•    

6
GSMA Objectives

• Identify weaknesses in the current IPR system and
  act to remedy these problems in a coordinated
  manner, including
• Examination of modification of SDO IPR Policy
• Exploring the possibility of developing a
  framework for setting and managing commercial
  terms for IPR for the benefit of the industry
  consumers
• Examining European, US law and guidelines on
  patents, patent frameworks and standards bodies

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Scope

• In Scope
• Co-ordinate an initiative to examine rules on
  IPR.
• Examine ways to simplify IPR licensing
• Explore possible regulatory changes at EU and US
  level to clearly modify IPR rules define FRAND.
• Out of Scope
• Seek to act outside of SDOs
• Seek a zero-royalty regime within SDOs
• Prevent fair and reasonable rewards for IPR

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Emerging trends in Solutions

• Vodafone suggestions to SOS-Interop
• Agree terms before standards are set
• Capped cumulative royalties
• Vigorous response to 3rd party IPR
• Cisco et al, submission to FTC
• Early disclosure of licence terms
• SDO decisions based on all the facts
• ETSI Global Standards Collaboration
• Encourage transparency, FRAND and right to
  compensation
• Oppose zero-rating and overbroad patent
  declaration obligations

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Conclusion

• Common ground for a solution emerging
• Commercial and technical issues in SDOs
• Agreement on rates of return for IPR
• Patent declaration and essentiality in
  realistic timeframe
• Acknowledgement of the issues and cooperation on
  the solution is crucial
• Continuation of excellent start on IPR in ETSI is
  very desirable

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• Thank you