New Standards-Related Patent Policy by IEEE

On February 8, the Board of Directors of the IEEE voted to approve a set of amendments to the organization’s patent policy. Previously, the IEEE Standards Association (“IEEE-SA”) has established new rules that must be followed in all IEEE standards development activities. Those rules require that standards be developed under procedures that incorporate due process, openness, transparency, broad consensus building, and balance without dominance to ensure that all parties are heard. IEEE strives to develop standards that can achieve universal availability and gain widespread adoption in the market. The changes largely relate to the commitment of IEEE members to license patents to users of IEEE standards on terms that are “fair, reasonable and nondiscriminatory” (FRAND).

Naturally, these commitments have been the subject of recent litigation.  IEEE’s Wi-Fi standards alone have played prominent roles in Microsoft v. Motorola, Apple v. Motorola, In re. Innovatio and Ericsson v. D-Link, among others.  In most of these cases, there has been sharp disagreement over whether the patent holder complied with its FRAND obligations.  To decide these cases, judges and juries have been required to speculate regarding the scope and intent of these obligations, choosing between the divergent views advanced by the litigants and their experts.

The IEEE amendments do several things.  Most notably they make clear that IEEE members holding patents covering IEEE standards:

• must offer to license those patents to all applicants requesting licenses, and cannot pick and choose among licensees,
• may not seek, or threaten to seek, injunctions against potential licensees who are willing to negotiate for licenses,
• may insist that licensees offer them reciprocal licenses under their own patents,
• may arbitrate disputes over FRAND terms,
• may charge a reasonable royalty that is based, among other things, on the value that the patented technology contributes to the smallest salable component of the overall product, and
• should ensure that subsequent purchasers of these patents agree to abide by the same commitments.

However, not all the skateholders were delighted about the changes. According to a statement of the Innovation Alliance, "these policy changes at the IEEE were developed and advanced not in response to any documented problems with the current policies, but rather to artificially depress the market value of patent-protected technologies. They represent an anti-competitive shift favoring the buyers of inventions at the core of Wi-Fi and other IEEE technologies, at the expense of those who invented them."

In the 36 hours since the IEEE release was first posted, it has received 1,106 page views. Some selected reflections in the media are listed in the References section.

References:

Innovation Alliance Statement on the DOJ Decision and IEEE Vote on new IEEE patent policy

Patently-O: IEEE Amends its Patent (FRAND) Policy

Patently Apple: The Engineering Group Known as the IEEE has Ruled on Changing Mobile Chip licensing that will Benefit Apple & Others