RE: [PP-DIALOG] Definition of Reasonable Rates
Scott,
Thank you for the questions. You are correct that
TI would like to see answers to many questions.
As far as my advice to IEEE, I represent TI and can
only advise it.
With that being said, here is how my client has asked
me to respond.
The IEEE PatCom Chairman is proposing that the IEEE
amend its IPR Policy to define a phrase in that Policy as
follows:
Reasonable rates, terms and conditions shall
mean rates, terms and conditions that a willing licensor and a willing licensee
would agree to in an arms-length negotiation before the adoption of the
standard, taking into consideration any alternative technologies and any
alternative implementation methods which eliminate the essentiality of the
patent claim(s).
TI sees no
compelling reasons for making such an
amendment.
TI sees no facts compelling this amendment. The
only facts presented are an anecdote from Cisco on a difficult licensing
situation. We do not know how this proposed amendment would have affected
that situation. We do not know the underlying facts of that situation,
thus the many questions.
TI has also faced similar difficult licensing
situations with other companies with no manufacturing base. We believe the
proposed amendment would not have changed the outcome of those situations in
TI's favor.
The "arms-length bargaining" rule comes from litigation
for determining damages after negotiations have failed. We fail to see its
application to our present "arms-length bargaining" licensing
negotiations. Our licensing negotiations occur both before and after
adoption of many standards and many of our licensing negotiations relate to
field of use, portfolio licenses. TI does not see how this proposed
amendment applies to our licensing activities.
TI believes that, even if adopted, the proposed
definition is ineffective; it is undetectable and unenforceable. Most
licensing negotiations are conducted under a non-disclosure agreement and so no
outsider can detect a company ignoring this definition. The parties will
know, but cannot say anything publicly. Even if detected, the IEEE cannot
enforce this definition against anyone, and a court is not bound to follow
it over other, established rules of damages.
This proposed amendment introduces unknown risks in our
business. TI does not know how potential licensees or courts will
interpret this new definition. Our licensing activities: protect TI's
right to do business, gain access to essential technology so TI can compete in
markets, and earn a return on our R&D expenses. TI already faces
substantial risk in our business and cannot accept additional, unknown
risks.
TI suggests that if any company or group of companies
desire, they could implement this proposal in another, smaller forum. The
results can be made public and everyone can determine if the results are
favorable. Alternatively, any company or group of companies can publicly
implement this proposal unilaterally and they can make the results public.
If favorable, then TI can re-consider its
position.
TI believes that the IEEE should not further define the
present IPR Policy phrase "reasonable rates, with reasonable
terms and conditions". The range of TI's business activities
demands the flexibility provided by the present IEEE IPR
Policy.
I trust that these comments respond to your requests
and further this discussion.
I hope to see responses to my many
questions.
Regards,
Larry Bassuk
Senior Patent
Counsel
Tele: 972-917-5458
Intellectual
Property Rights
Fax: 972-917-4418
Standards
Organizations
Cell: 214-458-5975
Texas Instruments
Incorporated
Larry --
From the two messages that you have
posted in this thread, I appreciate that you would like to see answers to many
questions. It appears that some
advice might be implied by these questions,
but it is not clear what exactly, if any, that advice might
be.
At the present, do you
have advice to offer to the IEEE as to the IEEE adopting a definition of
what it means in its bylaws by "reasonable rates, with reasonable terms and
conditions" or adopting the particular definition proposed in the email from Don
that started this thread? If so, I would
appreciate if you would offer it as a part of this
dialog.
--
Scott