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Members of PatCom, I understand that the Board of Governors has directed PatCom to consider revisions to the current IEEE Patent Policy in response to the Department of Justice’s September 10, 2020 supplement to the DOJ’s February 2, 2015 Business Review
Letter concerning IEEE’s 2015 revision to the Policy. This is a sensible decision given the concerns raised by the DOJ with respect to the amendment process that led to the 2015 changes, and the impacts of those changes. I thought it may be useful to give
you Nokia’s input on the matter for your consideration. Nokia was strongly opposed to the 2015 changes. In Nokia’s opinion, speaking as both a patentee contributing technology to IEEE standards and as a manufacturer whose products employ IEEE standards, the IEEE Patent Policy that existed prior
to 2015 appropriately balanced the interests of both patent holders and technology implementers. That earlier version of the Patent Policy had encouraged both development and use of IEEE’s standards, creating a successful ecosystem that worked to the overall
benefit of consumers. Unfortunately, the Patent Policy changes made in 2015 – such as defining “reasonable rate” to contemplate smallest saleable patent practicing unit concepts, and restricting the availability of prohibitive orders to make them practically
unavailable – were biased in favor of implementers. The changes made then, and now partly being re-evaluated per the BoG directive, drove down the value of patented technology contributed to IEEE’s standards. Regrettably, some other changes will not be discussed
including some specifically mentioned in the DOJ 2020 supplement to the 2015 BRL. It was our position then, and remains our position now, that the 2015 revisions were unnecessary and harmful to IEEE by disincentivizing patent holders to allow use of their technology in IEEE standards. Indeed, this fear was realized
in the years after the 2015 Patent Policy revision when increasing numbers of patent holders began refusing to license their patents under the new Patent Policy requirements. To illustrate, since the 2015 Patent Policy changes were made, Nokia has filed only
“negative” Letters of Assurance for licensing accompanied by an explanation that licenses are available under the terms of the pre-2015 Patent Policy, but not under the current Patent Policy. The IEEE Patent Policy changes under review also have proven out of step with law and policy that has developed since 2015, both in the United States and abroad. In the U.S., the Federal Circuit Court of Appeals
has stated in multiple cases (CSIRO v. Cisco and Ericsson v. D-Link) that patent damages models do not require use of the smallest saleable unit concept that IEEE’s Patent Policy promotes. Indeed, numerous courts and government authorities here
and abroad have based SEP royalties on the value of a whole end user device or other criteria (e.g. a per unit price) – but not on a device’s component parts. Examples of notable decisions include the
Unwired Planet case in the UK and HTC v. Ericsson in a Texas federal district court, and Chinese regulatory authorities in their antitrust settlement agreement with Qualcomm concerning licensing practices.
Likewise, for Prohibitive Orders, the DOJ, PTO and NIST have issued revised guidance on the enforcement of standards essential patents clarifying that such patents should be treated no differently than any other
patents when it comes to a patentee seeking injunctive relief. The prohibitive order requirements in the current IEEE Patent Policy are thus unduly restrictive, as they place a higher burden on a patent holder than would otherwise be required for a non-SEP
under the U.S. Supreme Court’s eBay v. MercExchange standard. Likewise, in recent years, European and Chinese courts have also established that first instance injunctions are available to SEP holders (representative decisions include
Huawei v. ZTE from the European Court of Justice, and Iwncomm v. Sony from the Beijing IP Court). Considering the current state of the law, and in light of the supplement to the BRL, the most clean-cut and consistent course of action that IEEE could take would be to revert to the Patent Policy text that existed
immediately prior to the 2015 changes. This would be an elegant solution in its simplicity and is inherently uncontroversial. It would address the concerns raised by the DOJ and would be straightforward for IEEE to implement immediately. This course of
action would be preferred by Nokia, and also we expect by most other opponents of the 2015 policy amendments. Moreover, such a reversion would be in the best interests of IEEE and its members. The pre-2015 Patent Policy favored no particular companies or business models and allowed for the widest possible participation
in the development of IEEE standards. That, in turn, had enabled IEEE to see contributions of cutting-edge technologies that made some of its standards attractive and ubiquitous. This will not likely continue under the current Patent Policy or any modification
limited to the BoG directive, as anything less than reversion to the pre-2015 Patent Policy prevents technology contributors from obtaining through patent licensing the reasonable return they require on their research and development investments that fuel
contributions. We thank you for your willingness to consider the concerns raised by the DOJ. If there is additional input we can provide that you may find helpful, please let me know. Regards, John Kolakowski Nokia Technologies Director, Patent Licensing Head of IP Regulatory Affairs, North America To unsubscribe from the PP-DIALOG list, click the following link: https://listserv.ieee.org/cgi-bin/wa?SUBED1=PP-DIALOG&A=1 |