back to article US mulls outlawing rival product bans using standards patents

The US Congress is holding a hearing today to consider whether companies that own standards-essential patents (SEP) should be allowed to use them to get sales and import bans on their rivals' products. The Senate Judiciary Committee is meeting to hear from the Federal Trade Commission and the Department of Justice on whether …

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He who pays the piper

Sounds like someone is paying a lot of lobbyist.

We want their patents for peanuts but we don't want them to have ours.

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Facepalm

Re: He who pays the piper

Not just peanuts. They could then outright REFUSE to license any SEP patents, and still run around the market anyway (of course running the risk of "damages," which amounts apparently to ~$2mil to block sales of the Galaxy Tab, so an easy trade while the courts run circles for years beyond the life of the product...)

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Really the whole "block the competition" aspect sucks, why not limit patent litigation to deciding on a parentage of the sales revenue based on how much the patent is of the whole device?

Given that most products have thousands of patents used in them it seems ridiculous that trivial stuff can command even a few percent of the cost simply because some big corp has enough lawyer funds to bully for it..

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While I concur with your sentiment about the lawyers,

there's still a problem with your proposed solution. Some patents truly are worth more than others and the people who come up with those patents ought to be rewarded according to their merits. Especially when it is a guy who is NOT working for the big corporation.

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Go

Interesting.

From the look of it, someone over there may have grown a common sense gene. These SEP/FRAND courtroom shenanigans have been going on for far too long, and been misused by pretty-much everyone, so it's high time a lawmaker or ten got involved and put a stop to the insidious practice.

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Anonymous Coward

A common sense gene...

...in the US Congress? Nope, not gonna happen these days. Given that modern US politics is driven almost entirely by money, I can almost guarantee that this Congressional interest in SEP is the result of financial carrot-and-stick activity by the companies with big stakes in SEP mobile device patents.

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Re: Interesting.

Not my interpretation, I have to say. A product ban is so far removed from "fair and reasonable" that ISTM the law *already* bans such ploys. Therefore, the problem is not "we need a new law". The problem is "we aren't enforcing the one we've got".

Of course, I'm reading the words on the page and assuming that they mean what any normal native English speaker would infer from them. But that's a *much* deeper problem with the legal system and I don't suppose *anyone* in *any* legislature *anywhere* in the world has any intention of fixing it.

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What......

This will only be fair if there is no ban allowed for minor infringment of patents etc.

ie the slide to unlock case should not be allowed as its a minor patent.

Otherwise it would allow the likes of Apple who have few SEP patents to import without fear if they are in dispute like they are with Motorola whilst at the same time getting Motorola's kit banned on stupid patents.

There must be a requirement to proove the kit that is being requested to be banned is a major breach and that a ban is needed to protect their rights.

ie a phone that doesn't pay any fees for pateants could be banned.

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Re: What......

Wouldn't Apple be hit just the same as the rest of them, or are they waging war with a different kind of patent?

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Re: What......

It wouldn't affect Apple as they seem to have few, if any, essential patents. Most of their patents that we see in the media are pretty worthless and likely to be overturned if a patent examiner with more than half a brain actually took the time to look at them properly.

Or maybe the media are selective and never bother presenting any Apple patents of real value.

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Anonymous Coward

Re: What......

Worthless? they are often design patents and are essential to making Apple products look different and behave differently compared to rivals. If rival companies are allowed to clone the look of Apple devices then they lose their edge.

Just like Kia (for example) shouldn't be allowed to make an identical clone of a BMW Mini. The look of a car is non-essential as well, it adds nothing to the mechanicals of how it works (except maybe a little in the aerodynamics department).

FRAND type patents are different case. Without fair and reasonable licencing you would end up with huge fragmentation. An example is GSM, there would be about 5 GSM systems and all incompatible.

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Anonymous Coward

The SE patents issues are some of the smaller issues with the patent system.

Has anyone considered how companies would re-consider allowing their patents to be integrated into standards if they lose all value when they become essential. They will do whatever they can to preserve the business value of the patents.

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Unhappy

(untitled)

Has anyone considered how companies would re-consider allowing their patents to be integrated into standards if they lose all value when they become essential.

I'd imagine that companies will do exactly what they are doing at the moment, i.e. sitting on IP until it becomes part of a standard and then looking for royalties for their patents.

Dell said they had no patent rights on VESA’s proposed VL-bus standard, but, after adoption of the standard, Dell asserted its patent.

Wang Laboratories encouraged a subcommittee of the Joint Electron Device Engineering Council (JEDEC) to adopt a standard on which Wang had pending patent applications.

Rambus did something similar while they were also a member of JEDEC, creating the standard for SRAM and DDR ram and then suing everyone because rambus IP was part of the standard.

All is fair in love and war and patent trolling.

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Flame

Bullying tactics

This is like the school bully who has his mates grab a guy and hold him against the wall, helpless, while he gets seven shades of excrement kicked out of him. The bully walks away, happy that he has again shown how awesome he is.

I can hear Tim Cook now as he cock-walks the stage talking about how the competition are just not good enough to compete with Apple's 'innovation', 'originality' and 'ease of use'.

Can't Anonymous take these gits down?

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Anonymous Coward

So let me get this straight.

Patents were originally designed so that people who create a new technology or develop a new idea can use it without the risk of somebody ripping their idea off.

The groundbreaking ideas nobody would have really been able to develop on their own, they're talking about basically removing patent protection from, because lets face it, if somebody refuses to pay you your due, and your only real threat (stop of sales) is prevented you can't do anything.

But minor patents, many of which are barely enforcable (especially in europe where several of apples have recently been deemed non-patentable ideas) are still open to using this tactic.

Don't get me wrong, I'm all for them preventing these stupid cases, bout wouldn't it make more sense to prevent the piddly little patents first? Perhaps when a patent case is bought up in court the first point of call should be is the patent valid, followed by the more length proceeding of whether its infringed upon. Rather than the way it currently seems to be which seems to be (basing off of the google oracle case) are they infringing? how much are they infringing by? Okay now we have all that down, can they even patent / copyright that? no? Oh well that's 3 months wasted on a case that could have been dismissed within a week.

Maybe the patent office should start actually reading the patents they issue rather than going the old school route of "oh its more than X pages, patent approved" not to mention theduplicate patents out there.

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Anonymous Coward

Re: So let me get this straight.

"Patents were originally designed so that people who create a new technology or develop a new idea can use it without the risk of somebody ripping their idea off."

No. Patents were originally designed to reward friends of the queen (Anne, IIRC) with massive profits for little effort. In return, it was expected that some of those profits would find their way into the queen's handbag to fund smiting the French.

Started off a bad idea, and still a bad idea. We're not even smiting the French anymore.

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Re: So let me get this straight.

"Maybe the patent office should start actually reading the patents they issue rather than going the old school route of "oh its more than X pages, patent approved" not to mention theduplicate patents out there."

Got enough money to pay for the extra clerks needed to do that kind of work? The USPTO is notoriously under-budgeted and under-staffed. If trivial patents get through, it's because they can only realistically look at so many at a time. It's like expecting a task that physically requires at least six hours labor to be done in two--with half as many people as you would normally need.

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Re: So let me get this straight.

So how do you get innovation out the door without it being knocked off? Got any better ideas?

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Patents were originally monopolistic

These days patents tend to be thought of only in terms of IP, but the term and the concept goes on for much longer than that.

In the olde dayes, a patent was just a license to perform some activity. For example in the days of QEI, patents were given to privateers, Virginia tobacco farmers and such. People without the patent were subject to harsh legal penalties.

In the 1800s, the US homesteaders were given patents to their land claims. These were not titles per se, because the ownership was only granted later. Instead the patents were a conditional right to the land (you had to actually set up a house and farm it for n years before you got ownership).

Then patents were applied to ideas....

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Anonymous Coward

Re: So let me get this straight.

I'm afraid most commenting here have got what FRAND is about wrong.

When companies participate in a standards making process, they decide for themselves if they wish to participate. The collectively design a set of rules for patents put into a patent pool. Whether they participate in this process is entirely voluntary. For example, for years, Qualcomm refused to put their patents in the 3G patent pool, because they were so damned good as compared with everyone else's. They did this to obtain improved terms for their patents.

When companies put patents in the patent pool, it is a condition that they agree to the rules of the pool. Typically one of the key rules is that they must be prepared to license their patents on a FRAND bases e.g. that patent pool members must be prepared to license their patents on a Fair Reasonable and Non-Descriminatory basis. This is a requirement because all participants want to be sure they can manufacture and license kit without later finding their customers are hit with patent claims from other pool members. Everyone benefits.

Another problem FRAND addresses is that by the very nature of a standard, once it is laid defined and agreed, companies manufacturing certain kit (such as 3G mobile telephony kit) have to use the standard or their products won't be worth anything. Nobody would buy a mobile phone which doesn't use 3G, but used some other proprietary standard not supported by any of the networks. This means that even technically insignificant patents (non-essential for achieving the result) become essential simply by virtue of the fact they are accepted as part of the standard (e.g. the standard mandates the features covered by the patent should be implemented, even though there may be perfectly efficient and acceptable alternatives). If there were not FRAND licensing obligations, these patents would obtain a disproportionate value just for the fact they are part of the standard and not due to actually being essential technology for any other reason.

The way licensing works with the Patent Pool, is customers can buy kit from patent pool members and, usually each member can grant a right or license for that customer to use all the patents in the pool. Sometimes however there are additional complexities in the licensing. Sometimes, for example, the license a patent pool member provides, covers one supplied component in the device being manufactured, so the fact the vendor can grant license to all the patents in the pool is neither here nor there when judging other components in the device. There are many combination of license and it can be very complex. However, importantly, the whole point of having a patent pool is that customers shouldn't have to negotiate a license with each individual supplier of patents to the pool, but only the suppliers they get their components from. In the event they are not licensed for a component (which can easily happen even when taking care), they should be able to expect to be approached in a productive fashion and to be able to negotiate a license on Fair Reasonable and Non-Descriminatory terms.

So this covers the main elements of the Apple versus Google case. It's clear from the comments what I'm about to say is unpopular, but it's also clear from the comments there is a very great deal of ignorance over the case.

The fundamental problem is Motorola claim Apple aren't fully covered by the licenses they have. Apple claimed they are, but that they are being forced into litigation on this point by Motorola.

The truth is probably more like they failed to identify the components they have purchased from suppliers who can provide licenses for patents in the pool, covered only the supplied components, not the supplied components in conjunction with Apple supplied components. Be that as it may (and I've not read the detail on this part), if they are unlicensed they should be able to expect a productive and fair minded approach from any patent pool members who think they need an additional license.

Motorola hold what would have been non-essential patents, which, by virtue of being part of the standard are now, de-facto essential patents. Motorola are obliged to license those on a FRAND basis (remember they choose to put them in the pool on that basis and then to abide by what that means). Not doing so is a disservice to the pool, who have a common interest in ensuring all pool members play ball - or no customers will want to take supplies from them.

Motorola have gone separately to Apple and asked for royalty rates that don't reflect the fact their patents are non-essential but for the fact they have been allowed in the standard under FRAND. Apple objected to those rates and negotiations broke down. Motorola are claiming Apple didn't try seriously to negotiate and don't have a license. Apple are claiming Motorola have tried to negotiate from a wholly unfairly inflated start position and have been threatening to hold-up Apple kit with FRAND patents, which is unconscionable. The very fact they are attempting to hold-up apple kit with FRAND patents is putting a gun to Apple's head (hardly in line with FRAND obligations) because the Motorola patents are only essential thanks to being a part of the standard, not on their own merit. So Motorola is doing a disservice to the whole standards setting process because if pool participants signed up to FRAND are allowed to behave the way they are, the very concept of FRAND and point of a patent pool is undermined.

The simple reality is, this is undoubtedly true. Motorola are fighting dirty. They didn't really believe they could win the fight on the FRAND patents and their actions (or at least actions like theirs) have lead to anti-trust investigations being initiated in both the US and Europe. The Internet at large has applauded Judge Posner's ruling that both parties are behaving like bickering children and should stop litigating. However one point most Google supporters have simply not wanted to see (because it runs contrary to their world view), is that Judge Posner (who BTW is the most commonly cited Judge in history due to his acknowledged fair mindedness and ability to get to the heart of issues), in his judgement, is highly critical of Motorola and their abuse of FRAND. On this question he has sided wholly with Apple.

There is a simple reason Motorola are fighting dirty and that is because they don't have any non-FRAND patents with which to fight Apple and they were desperate to hit them back with something. IMHO, they have reasoned that in the eyes of the market analysts they are better off being seen to punch below the belt than to put up no fight at all. It is better to be seen as a dirty fighter than as someone who has no fight in him. They know many people beyond the lawyers don't really understand the detail and so their tactic has the added advantage many are going to think they probably have a reasonable argument. Judging by the comments on here, the tactic is working.

The reality however is they are now likely to fall foul of the anti-trust authorities and they will (and should) lose the current case against Apple. All this is quite separate from the question of whether Apple's own software patents are valid or whether it is right that companies like Apple should be able to assert the kind of software patents they do at all. Two wrongs don't make a right.

The patent's Apple are asserting against Motorola by contrast with Motorola's, are non-essential and, more importantly, they have never volunteered to put them in to a patent pool and have not signed to say they will license them on a FRAND basis. So they are under no obligation in that regard. Additionally, both Motorola and Google are free to change their designs to avoid Apple's patents (as has been shown by the fact the Galaxy Nexus software has been modified to avoid them), but they chose to litigate rather than do that.

The simple fact is, Apple as a general policy avoid implementing features that trample on other's patents - so for example, they have avoided Amazon's patent allowing synchronisation of page position between book reader devices (the iBooks solution of synchronising bookmarks is far inferior). They have avoided Microsoft's patents on auto-correct and Nokia's patents related to T9 text entry - which is why the auto-complete on the iPhone is a piece of s**t. There are many more instances.

Google on the other hand have a track record for trampling over the IP of other companies and individuals. But don't forget they also hold software patents, most importantly, those relating to Adwords.

If you were to come up with a great new search algorithm, try setting up an alternative search engine that uses their adwords patent in the advertising service and see how long it would be before Google sue your ass. You can be sure it wouldn't be long. Google are a business and this view that they are somehow more moral than other businesses is bullshit pure and simple. So I'm a going very much against the flow here. The folly of software patents apart - which is a pox on the whole of the tech industry - Apple are right and Googlrola are wrong.

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Silver badge

Re: So let me get this straight.

Since reading the patents and having competent people checking them is the ONLY REAL solution, yes, we have to come up with it. If that involves upping the fees for patenting things, so be it. Maybe make it a % of what the inventor makes off the patent over the time it is issued coupled with clerks being personally liable if the courts deem the issued patent invalid because the patent was for something truly trivial or obvious.

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Re: So let me get this straight.

Perhaps that's why we're seeing an increasing amount of patent "submarining": hiding the fact they actually have patents for an essential part of a standard until after the standard is formalized: thus avoiding having to license the patent under FRAND terms and being off the hook by simply saying, "No one asked US if we had patents related to that part of the standard."

I would think a solution would be to hold all parties who agree to the standard powerless to sue if it is found they have a "submarine patent". But then companies may just not agree to the standard, leading to more fragmentation again. It's a hard problem to solve.

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FAIL

let me get this straight

These companies allowed their patents to be included in a standard, and they were included on the basis FRAND. The companies then demanded a higher license fee from certain companies and complained when they didnt get it.

If you agree to allow your patent to be included in a standard on a FRAND, you should set your royalty at a certain amount and it should be the same, and remain the same for everyone who uses that standard, no matter how deep the other pockets are.

If you are not happy with that either dont allow your patent to be included or dont whine about it afterwards.

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FAIL

Re: let me get this straight

or... numerous companies spend years and millions developing technology essential for creating the standards upon which all mobile phones are built. Then along comes a maker of shiny gadgets, who has no technology required for the essential manufacture of mobile phones, and refuses to pay the same as other manufacturers.

long-standing electronics manufacturers get their equipment blocked for being rectangular and sliding to unlock, shiny toy company can sell without hindrance and not pay any royalty fees..

what a fantastic idea.

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Re: let me get this straight

I blame James Clerk Maxwell, he should have patented his equations and then everything would be FRAND.

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Linux

"Standards essential" is less powerful than "trivial" then?

Clearly trivial patents can be used to block a product, where as patents that are critical to the whole operation of a device can be safely ignored. Common sense and Law never meet

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FAIL

What's a standard

The people lobbying for this (who are probably from Cupertino, not Mountain View) seem to be distinguishing between a 'real standard' such as UMTS, written by a standards body and described in big specifications, and the obvious features that everyone expects a device to have (it's a black rectangle with a touchscreen that does things when you swipe it).

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FAIL

patent wars

This only became a problem when the US started issuing "software patents" and "Bloody obvious" patents like confetti.

Now the likes of certain gadget producers use these to stop competative products, while benefiting from the patents of other gadget producers who were fool enough to put their IPR into FRAND.

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FAIL

Re: patent wars

Personally I would be almost as disappointed if my son told me he wanted to grow up a be a patent lawyer as if he was arrest for being a drug dealer.

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Headmaster

Re: patent wars

Sorry, you can't mention confetti......... it's patented.

6669530 Multi-purpose paper disk, confetti, or fluid projecting device

6641458 Confetti blaster

6572435 Controllable confetti launcher

6450160 Confetti dispersion device

6447364 Confetti projector

6312310 Keepsake confetti

6299502 Device for scattering confetti and method of making and using same

6260989 Synchronized confetti sprayer and descending illuminated ball

6149495 Confetti and theatrical snow delivery device

D428582 Confetti

6027773 Speciality die cut confetti and a method of manufacture

5911805 Specialty die cut confetti and a method of manufacture

D410594 Confetti

D410410 Confetti

D408615 Confetti

D403986 Confetti

5823850 Confetti launching device

D397640 Confetti

5797304 Die cut confetti and a method of manufacturing

D395617 Confetti

5772491 Controllable confetti launcher

5709584 Partially wrapped confetti

D385824 Confetti

5655325 Confetti launching banners

5643042 Stacked confetti

5634840 Controllable confetti projector

5624295 Confetti launching device

5620355 Confetti launching devices

5620354 Streamers with confetti

5556319 Confetti launching device

5531628 Confetti party favor

5529527 Readily removable confetti cannons

5507680 Confetti

5419731 Confetti and method of manufacture

5403225 Confetti device

5352148 Confetti

5240452 Apparatus for tossing confetti and expressing a celebratory greeting

5199745 Confetti surprise greeting card

5149290 Confetti cannon

5015211 Confetti cannon

4955412 Apparatus for injecting confetti into a balloon

4787160 Greeting card confetti delivery system

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Bronze badge

Simples

Anyone who licenses SEPs may not levy a patent infringement claim against any company which is the holder of a Standards Essential Patent.

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Re: Simples

But what if the patent involved wasn't part of the original agreement: a "submarine" patent that is essentially essential to the standard but not formally recognized as a SEP?

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FAIL

It will always amaze me.

That people still do not get it.

"Make a law that can be exploited by the powerful in the benefit of the powerful, and the powerful will exploit it."

There is no the patents shouldn't have been guarantee, the patent office needs reform.

What needs done is to stop granting patents on software, period!

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Re: It will always amaze me.

Who's going to budget the overhaul? The USPTO is notoriously under-budgeted and under-staffed.

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Oh please...

Did I read this right?

"Incorporating patented technologies into standards has the potential to distort competition by enabling SEP owners to negotiate high royalty rates and other favourable terms, after a standard is adopted, that they could not credibly demand beforehand,"

That would mean an end to the MPEG cartel which is all about filling standards full of patents.

Yeah, right. Ain't gonna happen.

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Silver badge

hoist with his own petard

The funny thing here is that both of companies deliberately campaigned to have patent encumbered technologies included into the video standards specifically to freeze out the open source "enemy"

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