InterDigital Inc (IDCC)

[Paullee]

Anti-troll patent reform opposed by some corporations; InterDigital opposes IEEE policy


--- Anti-troll patent reform opposed by some corporations for being poorly written

The skirmishes between those exploiting the diminishing problems of patent trolls (which can be completely addressed with free-market solutions, requiring no more government interference) to push for legislation to further wreck the patent system for real innovators, and those saying "Leave well enough alone", well the skirmishes continue. As Law360 reports below, a panel of general counsel at the ABA's IP Law conference this week came out against the Goodlatte-like anti-troll patent reforms proposed (such as the Innovation Act proposed in the House), supporting instead the Strong Patents Act that is being proposed in the Senate.

Let me repeat - there are free market solutions to many of these problems (some to be announced in the coming months, with my colleagues at IPISC patent insurance services in Louisville). We don't need more patent laws that make the system an even more costlier, more riskier system for innovators. That neither side wants to talk about such solutions is indicative that neither side is NOT really interested in improving patent pendency, patent quality and patent litigation costs. NOT. The Law360 article article. This article is followed by an opinion piece of the CEO of InterDigital, complaining about the IEEE patent licensing policies that the DoJ recently blessed.


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Troll Bill Threatens To Weaken All Patents, GCs Say
by Ryan Davis, Law360, 27 March 2015

In-house counsel for IBM Corp., United Technologies Corp. Aerospace Systems, Juniper Networks Inc. and others said at a conference Friday that they are worried that a bill in Congress aimed at thwarting so-called patent trolls will actually weaken all patents and hurt their business.

The Innovation Act, which is under consideration in the House of Representatives, contains a number of provisions that could make it difficult for legitimate companies to enforce their patents, even though supporters say it only targets abusive litigation, according to a panel of general counsel at the American Bar Association's Section of Intellectual Property Law conference in Bethesda, Maryland.

Sean O'Brien, chief IP counsel of UTC Aerospace Systems, said that the effect of the bill as it is now written would be to undermine patent rights across the board. He said the measure should be revised during the legislative process so that it has a more balanced approach.

"There are clearly abusive tactics that need to be addressed, but I hope the solution is directed to abusive patent litigation and not patent strength in general.", he said.

An "anti-patent lobby" that wants to weaken patents seems to have the ear of some in Congress, and there is a risk that parts of the Innovation Act such as stays of lawsuits against customers could make life difficult for companies that depend on strong patent rights, said Mark Ringes, vice president and assistant general counsel at IBM. "There is concern that they will do something that tips the balance against patent strength.", he said.

The customer stay provision of the Innovation Act would mandate that patent infringement suits against customers be stayed pending any parallel litigation against companies that actually manage the infringing products.

Proponents of the measure say it would prevent suits by so-called trolls like those that target coffee shops that offer Wi-Fi rather than companies that make Wi-Fi routers. However, the general counsel on the panel said the measure could potentially bar many types of suits because it is not written clearly and supply chains in their industries are often very complex. "What I'm concerned about is that the bill won't take that into account," O'Brien said. "We could end up with legislatively mandated indemnities."

Lawmakers should be focused on litigants that abuse their patents and try to extract unjust settlements, not on making all patents harder to enforce, said Scott Coonan, senior director of IP, litigation and strategy at Juniper Networks Inc. "When I'm sitting in mediation trying to have serious dialogue about the merits of the case and the only thing I hear from plaintiff is it's going to cost you X to go through litigation, so you just pay me half of that to settle, that's abusive.", he said.

Companies that will potentially be affected by the patent reform measures need to make their voices heard by Congress, so that lawmakers understand the ramifications of their actions, said Alyssa Harvey Dawson, vice president of global intellectual property and licensing at Harman International Industries Inc.

"We are all in favor of dealing with abusive patent litigation. The big concern is that they end up doing things that hurt the value of a very great asset that this country has been built on for many years.", she said. "But I'm hopeful, since we see more voices coming into the conversation."

She cited recent hearings in Congress where the focus of lawmakers seems to have shifted from the supposed risks posed by strong patents to the problem of abusive litigation tactics. "It's definitely a wait and see type of approach," she said. "It seems like Congress intends to do something, and it is our sincere hope that what they do doesn't end up hurting more than it helps."

Ringes said he was heartened by the recent introduction of the Strong Patents Act by Sen. Chris Coons, D-Del., a patent reform measure that omits the sweeping measures in the Innovation Act and includes others that would make it harder to invalidate patents. "I can't say I agree with everything in it, but the fact that someone in Congress wants to strengthen patent is a very good sign.", he said.


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Why We [InterDigital] Disagree with the IEEE's Patent Policy
by Bill Merritt, InterDigital, EE Times, 27 March 2015

The IEEE's new patent policy could slash royalty revenues and limit ways to enforce patents, says the chief executive of InterDigital.

Last week, our company sent an open letter to the Institute of Electrical and Electronics Engineers (IEEE), the standards-setting organization that brings us Wi-Fi among other things. In that letter, we advised the group we don't agree with its new patent policy and that in the future our company won?t be submitting IEEE?s Letters of Assurance, but will provide alternative licensing assurances on a case-by-case basis. I want to explain to you -- technology people, like us -- why we chose to do that and what it means.

Our company has almost 200 engineers focused on very advanced technology. We pay to conduct research, whiteboard out advanced algorithms, fly people around the world so they can collaborate on, or argue over, mathematical formulae or interference mitigation schemes, for the benefit of everyone in the industry.

We do this work because if you're successful at it, you make money. Not crazy money -- there are a lot of bogus figures out there -- and nothing that changes the cost category of a device or makes a profitable company unprofitable. In fact, because the research is shared across the industry, the process lowers the costs of devices by allowing the companies to effectively share R&D expenses.

Wi-Fi, or IEEE 802.11 is one of the technologies that has advanced rapidly based on this system. Since 1997, standards research and innovation has driven speeds from 2 Mbits/second to almost 2 Gbits/s -- a 1,000-fold increase -- and massively extended the range of applications. These are standards-based improvements that come built into any Wi-Fi device you purchase.

Here's where patents come in. When an organization does something to improve the standard, they have to commit to negotiate licenses for any patents they have on that technology on reasonable, non-discriminatory terms. What exactly was reasonable and how royalties were to be calculated was left to individual negotiations, which occurred without fanfare for 20 years. That system worked very well and the performance of Wi-Fi grew by leaps and bounds.

This year, the IEEE voted to change its patent licensing policy. Rather than leave it to the parties to decide how royalties would be calculated, the IEEE endorses a calculation based on the value of the chip inside the device, even if many other aspects of the device benefit from or use the contributed technology.

This move could slash revenues for standards developers. The IEEE also wants to make it pretty near impossible to stop someone from shipping products even if they refuse to pay a license -- and that refusal will become more commonplace if there are limited means to enforce patents.

So in a nutshell, they don't want developers to be paid much, and they've also made it as hard as possible for them to get paid at all. It's all very one-sided, and so was the process that led to the decision.

A handful of manufacturers of devices -- the people who pay for the use of the technology -- essentially co-opted the IEEE patent committee. They got support from people at the Department of Justice who have never worked in this industry and are basing their thinking on economic theory rather than real-world practices. There were closed-door meetings involving a select few participants. Principles of due process, openness, and consensus were disregarded.

After the decision, Qualcomm stated that it would reconsider how it participates in IEEE standards development. It will continue to do research and contribute it, but make other licensing commitments.

This week, we've announced something very similar in a letter you can read here ( http://www.interdigital.com/wp-content/uploads/2015/03/Letter-to-IEEE-SA-PatCom.pdf). We advised the IEEE that our company objects to its new patent policy and, going forward, on a case-by-case basis, will provide alternative licensing assurances to those specified in the 2015 policy.

The situation is difficult for us, because we have a long and valued history with the IEEE. One of our engineers and a current member of our board of directors are IEEE Fellows, a very high honor. Our former chief scientist, Brian Kiernan, was honored with a lifetime achievement award by the IEEE, ironically for "outstanding skills and diplomacy, team facilitation and joint achievement, in the promotion of computer standards where individual aspirations, corporate competition, and organizational rivalry could otherwise be counter to society's benefit."

It is likely that other companies will soon follow suit in objecting to the new IEEE patent policy. The result is frankly a mess. Now contributions likely will be made under a myriad of licensing assurances, perhaps very different from one another.

What was once an evaluation of technical merit for proposals becomes a Rubik?s cube analysis as engineers may now have to weigh technological advantage against licensing terms and their implications. In fact, when one working group in 802.11 met a couple of weeks ago, they were forced to seek further guidance from the IEEE on the patent mess. I?m sure they would prefer to simply evaluate contributions that could be beneficial to the evolution of Wi-Fi, but now the process has been thrown into a state of uncertainty.

When developers were afforded a fair return on their innovations, the system worked. When you start to tilt the playing field in favor of implementers, as the IEEE has done, the market will collapse.

We are beginning to see the first signs already. Under the new policy, panels of engineers can?t evaluate new technology contributions solely on their merits because of a patent mess. This is no way to advance technology for humanity.

Bill Merritt is president and chief executive of InterDigital.


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Greg Aharonian
Internet Patent News Service
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