FRAND is not a part of patent law
It is a contractual term, voluntarily entered into by all companies that participate in the standards making process. It does not apply to those who did not participate in the standards process.
Huawei this morning lost a long-running patent lawsuit against Unwired Planet in a case that will determine global FRAND licensing rates for years to come – and also sets London as the jurisdiction of choice for squabbling telecoms multinationals. In the judgment [PDF], the Supreme Court ruled that Huawei could not use …
Yes and no. The first part is correct. Isn't part of that arrangement that anybody using the technology defined in the standard will get FRAND access to the patents required? That doesn't mean a price is set in stone, just that those who want/need to use the standard can guarantee that they will pay a fair amount for the use of the patents in the standard.
I.e. if most companies pay in the 0.25c to 1.1c per unit for a patent and somebody else comes along, I can't suddenly change the $999 per unit, just because I don't like their hair cut. I don't have to give it to them for 0.25c, but I also can't be egregious.
One of the problems with FRAND has been that companies with other patents would just cross-license each others stuff. Which is fine, but then means there's no financial value set for others to follow. But also had Apple trying to refuse to pay by claiming that their look-and-feel "patent" on rounded corners was as valuable as proper expensively researched hard science stuff on signal processing.
I thought FRAND might die a few years ago. But it looks like the courts might enforce it - which means users being made to pay up - as well as patent pool members selling at reasonable prices.
1/ they are a patent troll and infact boast about it with 16 employees and no products. What it does have is a portfolio of more than 2,000 patents, mostly acquired from Ericsson AB.
2/ I wonder if they paid for the courts time ? otherwise the UK tax payer forked out for exactly nothing...
re (2), No, there are no fees for the court's time. There are some court fees - see https://www.gov.uk/court-fees-what-they-are - but there's an underlying principle that the UK provides access to justice for all. (Lawyers can be very expensive but you don't _have_ to hire them to go to court.)
so judge is going to ignore the Non Discriminatory part of this? Huawei absolutelty deserves the favorable rates samsung got, FRAND demands they do not discriminate between Samsung and Huawei for pricing. This is seriously the point of it; since they have a patent integral to a specification (guaranteed volume), they are supposed to set a fixed reasonably low rate, not negotiate it per customer.
Non discriminatory only means they won't refuse to license their tech to someone they dislike (such as a competitor, or someone that has sued them in court...).
If the court agreed with you, patent holders of FRAND standard patents would be unable to forego their patent license fees for, say, certain non-profit or charitable organizations, during times of disaster, etc. because everyone would insist on getting free license as well.
FRAND sets a ceiling on prices, NOT a floor. Companies can still negotiate discounts, give a license for non-monetary consideration (e.g. patent cross-licensing), etc. The FRAND price was considered acceptable previous to Samsung getting a discount, no reason to consider it unfair, now.
But that ship has sailed for Huawei. No chance of a discount for them, now.
@Henry Wertz 1: I agree. This is a very strange definition of "non-discriminatory". The commenter below gives some very tortured examples of charities etc that simply don't work - Samsung and Huawei are both commercial entities making the same type of device for profit. They are directly comparable, and so to treat one differently from the other is, by definition, discriminatory. The question is, is it unfairly discriminatory, and I would say that by other definitions used in law, it certainly is.
The Supreme Court seems to have dropped the ball on this one, and made itself look infected by the "Huawei baaaaaaad" meme.
Non-discriminatory has never meant everybody has to get the exact same terms. It's a foolish argument to make.
Here's what Wikipedia says on: Non-discriminatory:
this commitment requires that licensors treat each individual licensee in a similar manner. This does not mean that the rates and payment terms can’t change dependent on the volume and creditworthiness of the licensee.
"non-discriminatory" can include time-oriented licensing terms such as an "early bird" license offered by a licensor where terms of a RAND license are better for initial licensees
I have never been comfortable that a standard deserves royalties, or even that a standard can cost you different amounts. Just imagine if different petrol stations charged you different prices per litre, based on bowser design. We also know many patents are evergreened, of submarine patents that derive out of secret patents, previously shared. I would imagine most are coming up on 20 years old, and even petrol bowsers deliver nothing innovative, just options, bling and vending machines. I imagine putting a flat screen TV on the bowser pump, and electronics that could spark an explosion would be considered patentable.
China and other countries need to introduce a royalty withholding tax on chips/inputs deemed discrimatory or standards based, and require paperwork enumerating the import tariff - and most importantly, an achievable tax refund to reverse possible double taxation (as if royalties are actually taxed). USA has kind of messed things up by imposing conditions on top of FRAND or outright saying no. This would add to discrimination, because the value-add chain is being broken. This would then mean the frand agreement split , specifying different prices, for different countries - probably in breach of WTO. Again, China could then deem and levy the higher (refundable IP withholding tax) on all products crossing the border. This would infuriate American companies, as one assumes the IRS is also not seeing any tax declared. The upshot is UK/ Irish sandwich royalty scams would move elsewhere real quick. China should explore IP withholding taxes pronto.
I have never been comfortable that a standard deserves royalties, or even that a standard can cost you different amounts. Just imagine if different petrol stations charged you different prices per litre, based on bowser design.
Petrol stations charge you based on the time of day, the prices of other stations in the area and the "brand" of fuel they are pumping already.
I agree that standards shouldn't be encumbered, but that is practically impossible these days, it would be nice if we could have that, but companies have too much invested in patent rights. It would mean scrapping the current global patent system and starting from scratch. It just ain't going to happen.
>It would mean scrapping the current global patent system and starting from scratch.
It wouldn't require changing the patent system, just the Standards based FRAND add-on.
As demonstrated by the Sewing Machine Co-operative, there is no reason why the Standards body shouldn't negotiate the FRAND rate with ALL patent holders and then act as a clearing house; anyone wanting to implement a Standard need only pay the (published) royalty rate to the Standards body who then forward appropriate amounts to patent holders.
Yes, I know companies like to have special agreements and obfuscate amounts actually paid and not pay twice for things, but they would rapidly adapt to the new system; which would also have the advantage of facilitating the implementation of an IP tax...
I think that's the better system. Where a patent pool is established as part of the standard - and then everyone gets paid at fixed rates according to that pool. Although that only works if everyone involved can agree not just whose contributed what (and what it's worth) but also what price to charge.
Biting the hand that feeds IT © 1998–2020