I like the picture of the nuclear shelter.
Making the terms on which patents are licensed available for public scrutiny could help businesses, courts and regulators determine if the terms of other patent agreements are fair, reasonable and non-discriminatory (FRAND), an expert in valuing intellectual property (IP) has said. Dr Roya Ghafele, director of Oxfirst, told …
Thursday 14th April 2016 13:09 GMT thames
The problem with this idea is that it doesn't take into account all the peripheral issues that come into the negotiation. Large companies are often cross-licensing entire portfolios, rather than individual patents. Many of the patents that are included in the deals aren't FRAND. Having a database entry that says that Nokia made a deal with Samsung that says they cross-licensed 5000 patents each on terms saying they'd call it even isn't going to tell you how much an individual patent is worth.
I had the process described to me by someone who sat the patent committee of a large semi-conductor manufacturer, and he said they didn't even look at all the individual patents being offered. They were more interested in whose stack of patent papers was higher and whether everything in a particular problem domain was included. They often didn't know which patent was going to be the most valuable in the future, so putting individual values on each one was pointless. It was the collective exercise which mattered.
The analogy with selling houses is completely false. When you buy a house, you are simply buying a house. When large companies negotiate patent cross-license deals, there are many elements involved and there may not be an individual value placed on each patent. It's like valuing a house based on counting the number of bricks, without taking location, design, age, or anything else into account. You're buying the house as a collective work, not as individual bricks.
The real problem is that some people seem to have the impression that "FRAND" means "give away for free". It is nothing of the sort. It is simply an agreement that the patent will be licensed on reasonable terms to everyone in return for including the covered technology in the standard. The companies selling licenses on the patents still expect to make a return on all the money they spent on the R&D involved, otherwise they won't be sinking money into R&D.
The main complaints however seem to come from companies who think that patents on "rounded corners on rectangles" are infinitely valuable, but that patents on things like battery, chip, or display technology ought to be given away for free, or next to it.
There are problems in the patent system, but I think the issues are worse in the non-FRAND area and they won't be fixed by having a database.
Thursday 14th April 2016 20:37 GMT Anonymous Coward
The "ND" part of FRAND is easy
The "FR" part, not so much. However, most FRAND disputes center around the 'ND' non-discriminatory terms. That should be pretty clear to a court if you are charging one company $1 and another company $10 for using the same patent(s) to implement the same standard that's discriminatory. Because one is a phone that sells for $50 and another is an Airbus that sells for $500 million should be irrelevant to the value of the patent.