Monday, March 26, 2012

Apple offers royalty-free license to nano-SIM patents, a proposed standard backed by most European carriers

Last week, the Financial Times reported that Apple is at loggerheads with Motorola Mobility, RIM and Nokia over a proposed standard called "nano-SIM", a further miniaturization of the smart cards now known as "micro-SIM" cards. SIM stands for "subscriber identity module". Nano-SIM cards would be thinner and considerably smaller than micro-SIM cards. Apple has the support of "most of the European operators", according to the FT. The two camps are heading for a showdown later this week (on Thursday and Friday) at the Smart Card Platform Plenary meeting of the European Telecommunications Standards Institute (ETSI) in Sophia Antipolis (Southern France).

A perfectly reliable source that I can't disclose has shown me a letter dated March 19, 2012 that a senior Apple lawyer sent to ETSI. The letter addresses the primary concern of critics of the proposal. The FT said that "the Apple-led proposal has caused some concern among its rivals that the US group might eventually own the patents". But Apple's letter has removed this roadblock, if it ever was any, through an unequivocal commitment to grant royalty-free licenses to any Apple patents essential to nano-SIM, provided that Apple's proposal is adopted as a standard and that all other patent holders accept the same terms in accordance with the principle of reciprocity.

This shows that Apple is serious about establishing the nano-SIM standard rather than seeking to cash in on it. Last year I reported on two different stories (1, 2) about disagreements between Apple and the World Wide Web Consortium (W3C). Let's face it: Apple is a company that values its intellectual property and rarely gives it away for free. But as far as the evolution of SIM cards is concerned, Apple is clearly being generous and absolutely pro-competitive.

Apple's smart (card) move puts a lot of pressure on other companies in the industry. They can no longer claim that Apple will control this new standard, if it does become one, with its patent rights. Instead, they should now step up to the plate and match Apple's offer. In particular, Google is an outspoken advocate of open standards at the EU level, in its own name and through such organizations as Openforum Europe. Unless Chinese regulators still block the deal, it will soon own Motorola Mobility, and for that event, Google should now declare that it will support Apple's reciprocal, royalty-free licensing proposal, in the event that the nano-SIM standard gets adopted, and that it will support royalty-free licensing even if a competing standard won the vote. Openforum Europe, which constantly makes calls on European governments in connection with royalty-free standards, might encourage its member Google to do so, just to avoid the impression of open double standards...

Apple recently lodged a formal complaint over Motorola Mobility's alleged abuse of standard-essential patents with the European Commission. I watch Apple's litigation around the globe and I don't see them assert standard-essential patents, let alone seek injunctions based on them. In fact, another Apple letter to ETSI (which I published last month) takes a clear "no injunction" position on standards-essential patents. Wherever one stands on Apple's assertions of multitouch patents and other non-standard-essential intellectual property rights, Apple's attitude toward standard-essential patents sets an example that others, particularly Google, should follow.

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