I
mentioned
a couple of weeks ago the publication of an by Knut Blind and Tim Pohlmann
titled Patente und Standards: Offenlegung, Lizenzen, Patentstreitigkeiten
und rechtspolitische Diskussionen ("Patents and Standards:
Disclosure, Licenses, Patent Disputes, and Legal Policy Discussions") in
the August 2014 issue of GRUR (pp. 713-19). The paper summarizes, among other things, some of the results of a 2011 report coauthored by Professor Blind, Rudi Bekkers, Yann
Dietrich, Eric Iversen, Florian Köhler, Benoît Müller, Professor Pohlmann,
Stein Smeets, and Jurgen Verweijen, titled Study on the Interplay between Standards and Intellectual Property Rights (IPRs): Tender No ENTR/09/015
(OJEU S136 of 18/07/2009): Final Report. Some of the readers of this blog may already be familiar with this body of research, but for those who are not and who want to
read the full report (or who don't have easy access to GRUR, or don't read
German) can download the report here. According to the executive summary:
. . . the European Commission announced in the Communication COM(2008) 133 "Towards an increased contribution from standardisation to innovation” supported by Council Conclusions to “launch a fact-finding study to analyse the interplay of IPR and standards.” Consequently, the study has to produce an up to date and quantitative picture of the interplay between IPRs and standards. Starting from a literature survey, this study implemented a multidimensional approach based on an analysis of IPR databases of important international and European SSOs and consortia, interviews with various stakeholders located all over the world, and an international survey among standards producing and standards implementing companies. In addition, we investigated the IPR policies of more than 20 SSOs and reviewed case law, industry views and trends.
The report sets out a wealth of empirical information. Chapter 3 ("Quantitative Study of Essentially-claimed Patents"), for example, reports the number of total patents claimed (declared essential) as of February 1, 2010, for eleven leading SSOs (Table 3-2, p.34); total patents claimed per standard for all standard with ten or more claimed US or EPO patents (Table 3-3, pp. 36-37); total patents claimed by firms (Table 3-6, pp. 42-43); and R&D intensity and expenditure levels per company (Figures 3-9, and 3-10, pp. 48-49, which show that "companies that own essential IPR pursue a tremendous amount of R&D not only in shares of their turnover but also in total volumes").
Chapter 4 (titled "Identification and Analysis of Stakeholder Views"), "presents the findings of a series of interviews with the industry conducted on the basis of a detailed format with topics and questions . . . . In total 15 firms were interviewed," namely Alcatel-Lucent, Cisco, Ericsson, Harting, Hitachi, IBM, Infineon, Microsoft, Mitsubishi, Nanotron, Nokia, Philips, Qualcomm, Siemens, Toshiba," and one industry expert, Eric Stasik (pp. 60-61). Interviewees believe "there is a large amount of over-claiming" (p.63), for various reasons, and report typical aggregate licensing fees for mobile devices ranging from 4% (for GSM with corss-licensing) to 12% (for GSM & UMTS with no cross-licensing), "expressed as a percentage of the wholesale value of the terminal" (p.70; see also GRUR article p.714). (Note: this is considerably lower than the 30% estimated in the Armstrong, Mueller & Syrett paper I blogged about here.) Chapter 4 also reports findings from a survey of "practicioners who are experts on the subject of standards and their interplay with IPR," consisting of
Chapter 5 notes a point that I think is self-evident but nevertheless to document, namely that "Whereas especially standards implementers favour further clarifying SSO IPR policies concepts and terms such as “(F)RAND” or “essential”, others observe that in practice it is more often than not impossible to determine IPR licensing terms and conditions before a standard is sufficiently developed and implementation conditions are known" (p.115). Annex III provides summaries of statistics reported elsewhere on numbers of patent cases in the EU and the US, win rates, and so on, as of 2010, as well as an original analysis of cases to which Nokia was a party.
Altogether, this is a useful body of empirical information on SEPs.
Chapter 4 (titled "Identification and Analysis of Stakeholder Views"), "presents the findings of a series of interviews with the industry conducted on the basis of a detailed format with topics and questions . . . . In total 15 firms were interviewed," namely Alcatel-Lucent, Cisco, Ericsson, Harting, Hitachi, IBM, Infineon, Microsoft, Mitsubishi, Nanotron, Nokia, Philips, Qualcomm, Siemens, Toshiba," and one industry expert, Eric Stasik (pp. 60-61). Interviewees believe "there is a large amount of over-claiming" (p.63), for various reasons, and report typical aggregate licensing fees for mobile devices ranging from 4% (for GSM with corss-licensing) to 12% (for GSM & UMTS with no cross-licensing), "expressed as a percentage of the wholesale value of the terminal" (p.70; see also GRUR article p.714). (Note: this is considerably lower than the 30% estimated in the Armstrong, Mueller & Syrett paper I blogged about here.) Chapter 4 also reports findings from a survey of "practicioners who are experts on the subject of standards and their interplay with IPR," consisting of
more than 140 answers collected by directly addressing companies declaring essential patents identified via the database analysis (see Chapter 3) and standards implementors using membership information of international, European and various national standardisation bodies in Europe. . . . The response covers almost 30% of the top 100 essential patent owning companies ranked to the number of owned patents included in standards. Having a high share of responses from companies owning a great number of essential patents generates results that cover almost 70% of all essential patents that could be identified. Consequently, we have a representative sample of companies owning essential IPRs. The sample of the companies implementing standards, but not owning essential IPRs is a random sample of companies, but likely to be biased towards companies experiencing the relevance of IPRs in standards. Due to the rather low response to the open survey of standards implementors, the majority of companies‟ experiences obviously little relevance of IPRs in standards for their companies (p.87).Chapter 4 includes figures (some of which are reproduced and translated into German in the GRUR article) illustrating the respondents' views as to such matters as the relative importance of various reasons for owning SEPs, mechanisms for gaining access to them, the impact of SEPs on the standardization process and on R&D, and so on. Figure 4-6, which shows the respondents' "assessment of licensing rates by percentiles for patents and essential IPRs for the product market in question by percentage of respondents" (p.91), indicates that the majority believe that aggregate royalties are in the 20% or lower range--although there are some outliers, and "IPR owners are very uncertain in their estimations of license fees" (pp. 91-92 & Figure 4-7). Figure 4-13 reports that survey respondents view "the presence of third-party non-producing entities" as relatively undesirable but fairly likely to happen (pp. 97-98).
Chapter 5 notes a point that I think is self-evident but nevertheless to document, namely that "Whereas especially standards implementers favour further clarifying SSO IPR policies concepts and terms such as “(F)RAND” or “essential”, others observe that in practice it is more often than not impossible to determine IPR licensing terms and conditions before a standard is sufficiently developed and implementation conditions are known" (p.115). Annex III provides summaries of statistics reported elsewhere on numbers of patent cases in the EU and the US, win rates, and so on, as of 2010, as well as an original analysis of cases to which Nokia was a party.
Altogether, this is a useful body of empirical information on SEPs.
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