Comments on ITU-T Patent Policy

Although ITU-T has already made some implied interpretation of what constitutes reasonable and non-discriminatory, further clarification is desirable and still in need. In accordance with the Guideline, “in order to define what is fair and ‘reasonable’ in a given case, one needs to know development and manufacturing costs, profits, etc.” it appears that what constitutes RAND terms turn upon pre-standardization market situation. “The ‘development and manufacturing costs’ of an invention would presumably be unrelated to its incorporation in an industry standard. Furthermore, although the ‘profits’ from an invention could be greater if the patentee were viewed as entitled to returns from standardization, the mention of profits in the context of costs suggests that it refers to pre-standardization profits, which would reduce the post-standardization royalty required to provide the patentee with a reasonable rate of return.”[18]

A specification is, in the end, a piece of paper. According to Carl Cargill, Director of Standards for Sun Microsystems, success of a standard is measured by the number of competing implementations that build upon that standard, not in the creation of the specification itself. The success of the Recommendations now partly depends on the IPR situation in the standards, or more precisely in the hands of the patent holders. As an attorney commented that “anyone deciding among the MPEG-4, AVC licenses and Microsoft Windows Media must review and compare the licenses offered by each company very carefully, not simply from the design and engineering perspective, or even the pricing. Strategic differences between open and proprietary systems may make the crucial difference, and other licensing terms may have more impact than price.” [19] ITU-T patent policy and the common patent policy are expected to further contribute to the interests of international standards implementers worldwide.

* Professor of Peking University Law School & School of Intellectual Property. P.R.China

[1] Tuckett, Roger. (1993) ETSI’s IPR Policy: The Implications for Companies using European Telecoms Standards. Patent World, 10, 23-7.

[2] Scott Bradner, statement Submitted to the House of Representatives Sub-Committee on Technology, Environment, and Standards, by IETF, June 28, 2001, for the hearing of Standards-Setting and United States Competitiveness, source :
http://portal.etsi.org/public-interest/Documents/Ansi/United_States_standards_setting.pdf#search='StandardsSetting%20and%20United%20States%20Competitiveness'

[3] See, ISO/IEC GUIDE 59: 1994 (e) ,source:
http://www.gtwassociates.com/answers/Guide59.Excerptspdf.pdf

[4] See, ibid.

[5] Swanson, Daniel G. (2002), “Evaluating market power in technology markets when standards are selected in which private parties own intellectual property rights,” source:
http://www.ftc.gov/opp/intellect/020418danielswanson.pdf.

[6] See Mark A. Lemley (Boalt Hall, UC Berkeley) “Intellectual Property Rights and Standard-Setting Organizations,” 90 Cal. L. Rev. 1889 (2002), p 127, source:
http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1027&context=boaltwp.

[7] See, ibid.

[8] See, for example, David A. Balto and Daniel I. Prywes, Standard-Setting Disputes: The Need for Guidelines, source:
http://www.ftc.gov/os/comments/intelpropertycomments/baltoprywes.htm

[9] Testimony by Amy A. Marasco, Vice President and General Counsel, American National Standards Institute (“ANSI”) before the Federal Trade Commission and Department of Justice Standards-Setting Practices: Competition, Innovation and Consumer Welfare, p18. Source: http://ftc.gov/opp/intellect/020418marasco.pdf

[10] See, ibid.

[11] See, ITU-T Patent Statement and Licensing Declaration Database(as at May 18^th, 2006)

[12] See, MPEG-LA patent list( May 1^st , 2006), source:
http://www.mpegla.com/avc/avc-patentlist.cfm(visited May 25^th, 2006)

[13] Robert C. Lind, Anya V. Kleymenova, et al., Report on Multiparty Licensing, 22 April, 2003, Charles River Associates Ltd, p.90.

[14] Guidelines for Implementation of ITU-T Patent Policy, 1. Purpose.