Data,
What follows in italics is my layman opinion based on common sense, not law or industry standards. Is it completely out of touch with the realities of licensing in the industry? Does this mean that each successive signer in affect gets to take on a MFL based on the licenses signed to date? That there is no downside to delaying licensing? If that is the case, any company would be foolish to sign until compelled by legal action. It seems unfair to the licensor and early licensees and bad public policy because it encourages IP users to avoid licensing. As a CPA, I understand that fairness and logic have little to do with tax law, so I’m not attacking your post or trying to argue with you. I just want to clarify if this is one of those situations where fairness has nothing to do with how things work. Maybe I’ve got a bit of a rose tint to my glasses as well.
For years MENS has been resisting licensing on any terms. IDCC has declared its patents as essential agreed to license on FRAND terms. IDCC has been trying to license on FRAND terms for quite a while. So if we need to go to trial to determine FRAND, that's okay with me. Finally the infringers have motivation to get a licensing deal done, so sign them on FRAND terms now that they have an interest in coming to an agreement.
However FRAND is not an unchanging amount. Like gas prices or housing prices, the Fair and Reasonable price changes. So if patents are challenged and found essential, if your products are found to infringe on non-essential patents, then the fair value goes up.
Non-Discriminatory means that you can't charge higher rates to similar licensees. It does not mean everyone pays the exact same rate. There are volume discounts available. If you are a little guy, you pay more than the big dog. If you pay in advance, you get a discount. Similarly, if you negotiate in good faith and sign without legal action, your rate should be better than someone who's rate includes an increase for forcing IDCC to incur legal expenses and prove the validity of its IP. Those are different types of licensees and should pay different rates under FRAND.
Also, is it unheard of for companies to license each other as separate agreements instead of cross licensing, where the net licensing rate is applied? Can't IDCC go to Nokia, look at it's other licenses to none-IP holders and use that as the rate to pay for Nokia IP, then negotiate the rate of IDCC's IP from Nokia based on it's market value? That way the difference in relative volume does not skew the results?
I'd really appreciate your honest opinion about these questions. Common sense is on IDCC's side, but I want to know what the reality is in the real world.
Thanks,
Frank
AI
