Slashdot Mirror

← Back to Stories (view on slashdot.org)

Dept. of Justice Blesses IEEE Rules On Injunctions and Reasonability

Posted by samzenpus on from the keep-it-out-of-court dept.

Andy Updegrove writes During the mobile platform patent wars of recent years Apple, Microsoft, Samsung, Motorola and the rest of the major vendors sought injunctions against each other to prevent their competitor from selling their products at all. The suits were often based on claims that a vendor had to pay a reasonable royalty on a 'standards essential patent.' The resulting litigation clogged up the courts, and the regulators were not amused. Now, after almost two years of vigorous debate, the standards development organization behind WiFi and thousands of other ICT standards (IEEE-SA) has received the blessing of the U.S. Dept. of Justice to forbid members that have pledged to license such patents from seeking an injunction until all other remedies have been exhausted. Whether other standards organizations will follow suit remains to be seen.

32 comments

  1. Reasonable royalty by ArcadeMan · · Score: 1

    The problem comes from "reasonable royalty". The price list should be set by the vendor and once set they shouldn't be able to change it depending on who wants to pay for it.

    You can't ask one million or 1$ per unit from company XYZ and then turn around and ask a company that is your competitor ten times the price "just because".

    --
    Get free satoshi (Bitcoin) and Dogecoins
    1. Re:Reasonable royalty by TWX · · Score: 1

      Or, since everyone has everyone else by the balls because of the way our patent system works, we could reform it so that software patents are either extremely hard to get, or to where they have a painfully-short shelflife...

      --
      Do not look into laser with remaining eye.
    2. Re:Reasonable royalty by gnasher719 · · Score: 1

      Or, since everyone has everyone else by the balls because of the way our patent system works, we could reform it so that software patents are either extremely hard to get, or to where they have a painfully-short shelflife...

      Typical reflex post. The article doesn't mention software patents with one word. There are plenty of standard essential patents in the mobile phone area that have nothing at all to do with software.

    3. Re:Reasonable royalty by Anonymous Coward · · Score: 1

      I think the big uproar is all the other phone manufacturers had lots and lots of patents between them and offered up their 'share' of patents + peanuts for the use of the others. Apple comes along, wants to just pay peanuts, but was unwilling to share any of their stuff and then complained.

    4. Re:Reasonable royalty by mysidia · · Score: 2

      The price list should be set by the vendor and once set they shouldn't be able to change it depending on who wants to pay for it.

      I would rather go with, they can change the price at any time they want but must make it available to all: e.g. within any private negotiation, once they reach a price, before they are allowed to enter into an agreement, they must conspicuously publish a neutral non-discriminatory offer at the price in a public price, the offer must be optionally redeemable by any entity without signing any contract (Simply paying royalties is sufficient to accept), and the offer cannot be withdrawn and must be valid at least until a new offer is published, or 36 months, whichever is later.

      Once this is published it is an open offer to any member of the public (not just the party to negotiate), can avail themselves.

      No additional restrictive terms allowed, except a minimum number of units, but a price for a single unit must be offered and cannot exceed 200% of the best offered price for units sold or produced with any required minimum number of units.

    5. Re:Reasonable royalty by Anonymous Coward · · Score: 0

      Given that the spats that have hit the news headlines have mostly been software patents submarined in, the conclusion of the GP post is entirely reasonable whilst yours has fuck all going for it.

    6. Re:Reasonable royalty by samkass · · Score: 1

      The problem comes from "reasonable royalty". The price list should be set by the vendor and once set they shouldn't be able to change it depending on who wants to pay for it.

      You can't ask one million or 1$ per unit from company XYZ and then turn around and ask a company that is your competitor ten times the price "just because".

      I would add that no standards essential patent should ever be allowed to require a percentage of the final product price as a licensing fee. Your contribution to, say, a networking technology is not necessarily more valuable because someone else added a more expensive case, screen, or battery. It can hardly be "non-discriminatory" when the price is different for each product.

      --
      E pluribus unum
    7. Re:Reasonable royalty by Darinbob · · Score: 1

      But think of the profits! The snag is all that money makes people try to get some of it. So they see Google or Microsoft of Apple using these standards and they want LOTS of royalties (hurray, free money!), but then that prices out the little guys.

      To me, a reasonable access to "standards" should be in the $200-$1000 range, period, no per-unit royalties. Otherwise someone gets locked out of the system, and you may as well have some pseudo-standard from a consortium of rich companies instad. A good standard should allow students, hobbyists, small startups that are badly funded, companies that need to sell low cost devices, etc.

      Ie, there are emerging standards for some wireless stuff, and if they decide that these standards can be used at $1 per device then that may seem reasonable at first. They may assume people are using these standards for $100+ devices. But there are companies who are trying to make $2 to $10 devices who will avoid the standard, other companies with $50 devices where management routinely refuses even a $0.25 part that would improve reliability, and so forth.

      Real standards should be for everyone and usable by everyone.

    8. Re:Reasonable royalty by Anonymous Coward · · Score: 1

      What really irks me about Apple and the judgements it's won is that they can get billions of dollars for the fluff-stuff yet the holders of the patents which make the damn phones work in the first place are screwed.

    9. Re:Reasonable royalty by Altrag · · Score: 1

      "Profits".. Samsung pays Apple for rounded corners. Apple pays Samsung for rectangular screens. Total profit = $0.

      Both pay lawyers to argue about this shit. Total profit = $-a lot.

      Nobody wins except the lawyers in these stupid patent wars when all contenders hold something that the others need. And of course all that wasted time and effort just gets passed on to the consumer as part of the "R&D" justification for selling $150 worth of electronics for $700. (Not that that justification is completely bogus by any means -- but it generally includes a hell lot of useless "development" of the lawyering kind and similar money sinks that only exist because patents and other such systems are completely broken.)

    10. Re:Reasonable royalty by tlhIngan · · Score: 1

      I think the big uproar is all the other phone manufacturers had lots and lots of patents between them and offered up their 'share' of patents + peanuts for the use of the others. Apple comes along, wants to just pay peanuts, but was unwilling to share any of their stuff and then complained.

      Those "shared" patents are FRAND as well. As in those companies decided to trade patent licenses because everyone needed to license them anyhow.

      Apple had NO patents in the pool. There is nothing anyone has to license from Apple to make a phone. So Apple didn't have to share anything because there was nothing in their portfolio that was required per the standards.

      It's why Motorola, Nokia, etc., were royally pissed at the Nano-SIM standard that Apple proposed. It doesn't matter it was royalty free and all that, It meant that Apple was part of the game. Apple didn't care much about the patent, but the big names did because if Apple was on the outside, they were in a far better bargaining position.

      Technical standards committees are basically one part old boy's club (sharing favors and getting as many patents in it as possible), one part clique (can't let anyone new in), and all about the political power plays. And once in a while technical stuff gets hashed out.

      What really irks me about Apple and the judgements it's won is that they can get billions of dollars for the fluff-stuff yet the holders of the patents which make the damn phones work in the first place are screwed.

      Well, that's the business decision that every company makes.

      Get your patent in the standard, and you'll be forced to give up some rights to it. In return, since EVERYONE has to license the patent, it's a guaranteed money maker. (Though, you're also just one patent amongst many, but it means you get royalties on a regular basis).

      Exclude your patent from the standard, and you'll keep full patent rights. But the standards committees probably will work around your patent, so there's no guaranteed revenue source. You'll have to market and sell license to your patent yourself and convince others to use it (or just hold it back).

      That's the choice - you can be forced to license your patent in return for lots of people licensing it, or be a big fish in a small pond while you try to get your patent licensed, or use it to ensure people don't try to replicate your ideas.

      Attempting to use FRAND patents in the normal way really breaks the spirit of FRAND and is more of a case of trying to have your cake and eat it too. You're forced to license it, so all means should be tried to achieve licensing first.

  2. Full disclousre by Dorianny · · Score: 2

    The first step should be to require that all negotiated prices be made available publicly. As it stands the contracts are confidential and no one really knows who is paying what to license 'standards essential patent.'

    1. Re:Full disclousre by NostalgiaForInfinity · · Score: 1

      I think we'd be better off if all contracts were required to be public in order to be enforceable in a court of law.

  3. OK...but what about the courts? by xxxJonBoyxxx · · Score: 1

    The "Department of Justice" sounds nice, but it's this a fight that any one vendor could still take straight to court (since DoJ is just a wing of the administrative branch)?

    (Seriously - IANAL...or anything close to it!)

    1. Re:OK...but what about the courts? by Anonymous Coward · · Score: 0

      xxxJonBoyxxx, you are iAnal.

    2. Re:OK...but what about the courts? by Anonymous Coward · · Score: 0

      The Courts are part of the Dept. of Justice. So if someone decided to go straight to the courts, those patents would probably be invalidated by the courts, releasing them to everyone for violating the issue.

      Two things that should be included when a patent is part of a standard is

      1) include a fee schedule so everyone knows how much it will cost to use them
      2)Include the clause that any patents requesting an Injunction - unless all other options have been excersised becomes Public Domain (They givethe patent away).

    3. Re:OK...but what about the courts? by tlhIngan · · Score: 2

      The "Department of Justice" sounds nice, but it's this a fight that any one vendor could still take straight to court (since DoJ is just a wing of the administrative branch)?

      Basically, what the DoJ has done is said that the IEEE can as part of its membership rules and participating in various standards committees, ban any member who agreed to have their patents licensed FRAND from pursuing an injunction without going through other avenues of remedy first.

      Basically the rules are if your patent is required for a standard, then as part of the windfall you get for this, the patent becomes FRAND licensed. And as a holder, you cannot ask for an injunction on an FRAND license without exhausting other avenues of redress first. Do this and the IEEE can kick you off the technical standards committee and the next standard will not incorporate your patents.

      Remember in technical standards committees the goal is to get your patents in as much as possible, even doing backroom deals (I'll scratch your back if you scratch mine) as getting your patent in means everyone has to license from you. it's just in this case, FRAND patents are no longer like regular patents - because they're standards essential, you must try other forms of redress - injunctions are only allowed if the whole process falis.

      This was brought on because of Motorola and Samsung who were trying to assert FRAND patents against Microsoft and Apple respectively and to which it was decreed that it's a big violation of the FRAND spirit.

    4. Re:OK...but what about the courts? by Em+Adespoton · · Score: 1

      ...and this is why Apple was hitting Samsung with design patents, as those are never part of a standard. That's why Apple succeeded with their patent suit, yet Samsung failed with their rebuttal -- because their rebuttal was using a FRAND patent they'd already agreed to share with Apple.

      So basically, Apple lawyers noticed that any patents that were part of FRAND were no longer part of the patent war chest, and didn't have to be defended against. Samsung missed out on this subtlety, and paid the price. Now, instead of this being a by-case issue, the DoJ and IEEE are formalising it so that nobody else attempts to mix FRAND and defensive patents to the detriment of all.

    5. Re:OK...but what about the courts? by Anonymous Coward · · Score: 0

      but apple and microsoft in this case were in the bad because of their initial suits. no one liked them, so you really couldn't blame samsung and motorola using the only ammo they got. I guess the standards committess got bigger issues but still I can understand their power play.

      Whats going to happen now is less stuff will be frand imo. They will keep their patents to themselves.

    6. Re:OK...but what about the courts? by Em+Adespoton · · Score: 1

      I'd say what's going to happen now is that every company will hold back a key patent that's not directly related to the standard, and FRAND the rest. That way, they get their patents into the standards, get the revenue, but should anyone decide to play nasty, they can pull out the extra patent and hit them over the head with it.

      But that's only the big players. I can also see the big players abusing the new situation to take advantage of anyone who FRANDs their patents, which could easily suppress the number of patents included in standards that don't belong to a megacorp (but then, isn't that already the case?).

    7. Re:OK...but what about the courts? by Anonymous Coward · · Score: 0

      Problem: Apple's design patents were not infringed. The reason why they passed was because Apple is a US company and Samsung a damn foreigner.

      That's all.

      PS Apple didn't want the "non contributor to the patent pool" FRAND prices and wanted the discount for those who contributed patents BUT WITHOUT PUTTING PATENTS WORTH INCLUDING IN THE POT.

      THAT ALSO failed because, as before, Apple is a US company and the US Gov moved politically to put pressure on the foreign governments to stop Apple having to play by the rules everyone else had to, 'cos Apple is A'Merkin.

    8. Re:OK...but what about the courts? by zieroh · · Score: 1

      but apple and microsoft in this case were in the bad because of their initial suits. no one liked them, so you really couldn't blame samsung and motorola using the only ammo they got.

      Legally speaking, Apple and Microsoft were well within their rights. Whether people liked the lawsuits or not is irrelevant. And yes, we *can* blame Motorola and Samsung for using that "ammo", because doing so was clearly a violation of the well-understood FRAND principles.

      --
      People who say "sheeple" have about as much sophistication as an AOL user, and in fact are probably actually AOL users.
  4. Where's my serial port? by AndyKron · · Score: 1

    I miss the good old serial port.

    1. Re:Where's my serial port? by Em+Adespoton · · Score: 1

      I miss the good old serial port.

      It's on your universal serial bus.

    2. Re:Where's my serial port? by Darinbob · · Score: 1

      I've been thinking about a project to emulate USB over X.25 which could then run RS232.

    3. Re:Where's my serial port? by inasity_rules · · Score: 1

      http://www.moxa.com/product/nport_5110.htm

      Among other such devices... You would be surprised how many modern devices still come with RS232. In the case of Micro-Ohm resistance bridges, that would be all of them(that I have seen).

      --
      I have determined that my sig is indeterminate.
    4. Re:Where's my serial port? by serviscope_minor · · Score: 1

      I miss the good old serial port.

      Then... go and buy one? There are plenty of PCIe and PExpressCard (make sure it's not a USB one in disguise) adapters which give you real quality serial ports with proper signalling and very low latency. For everything else there's USB serial adapters.

      --
      SJW n. One who posts facts.
  5. haha by Anonymous Coward · · Score: 0

    Good luck enforcing that one dingdongs.

  6. Why the DoJ was involved... by sirwired · · Score: 2

    In case anybody was wondering why the DoJ was involved, it was most likely to ensure that the IEEE's rules passed anti-trust muster. A bunch of erstwhile competitors gathering together and deciding jointly on restraints on their conduct (and the conduct of future competitors) is subject to heightened scrutiny to make sure that the rules are not written to discourage new market entrants.

  7. The IEEE-SA rules are legally binding by sirwired · · Score: 2

    The IEEE-SA rules are legally binding, so with standards subject to the new rule, such an injunction would be relatively easy to fight off.

    The DoJ was involved to make sure the IEEE-SA was not engaging in conduct that would fall afoul of anti-trust law. They don't personally have any dog in the patent fight; they are just making sure the IEEE was not trying to discourage competition by new market entrants by working out rules designed by current competitors.

  8. Patent Law and the 2yr Product Cycle by Wrath0fb0b · · Score: 1

    Half the time these injunctions are issued they apply to some ancient product anyway, because the suit was initially brought 18 months ago. So then they fight over whether they can add new products to the suit, the defendant argues against it, and the whole thing drags another 12 months until the original product is no longer being sold and the injunction is moot anyway.

    I'm not a huge fan of patent law in general, but it strikes me as absurd that the legal system does not consolidate these sorts of claims into a general "Company X is infringing patent Y with products Z, Z2, Z2S, ZPLUS and any further evolutions of the Z-line that contain this technology. And this applies even if it's not called 'Z'"

    Otherwise it's just nominalism -- you slap a new name on it and release it for a new year and suddenly it's not part of the same controversy?

  9. Patent Law and the 2yr Product Cycle by Anonymous Coward · · Score: 0

    You can't do that, because the court system is only designed to resolve *actual* issues, not *hypothetical* ones.

    A Corp patents a method of calculating geolocation data without a GPS.
    B Corp first uses said method in products 'C', and 'C-Pro'.
    A Corp discovers the infringement, and files suit.
    The suit goes to trial, and B Corp is found to infringe.
    B Corp releases their new product 'C+' which calculates geolocation data without a GPS.
    Does 'C+' infringe? There was no evidence provided during the suit to indicate that it did, because the product did not yet exist.
    If A Corp believes that 'C+' infringes, they'll need a new trial to determine that.