Extraterritorial overreach in SEP enforcement: slide deck used in my presentation today (DG GROW webinar on standard-essential patent enforcement)

Last week I already wrote about today's European Commission webinar on standard-essential patent (SEP) enforcement. My immediate follow-up is to publish my slide deck (this post continues below the document):

21-05-19 Florian Mueller Sl... by Florian Mueller

While some speakers focused more narrowly on antisuit (and anti-antisuit) injunctions, the first part of my presentation put antisuit injunctions into the wider context of extraterritorial overreach. Patents are national rights, as Judge Edger Brinkman (The Hague) noted in his welcome speech today--but FRAND license determinations are often global. Looking at it from the angle of the practical effects, three types of extraterritorial overreach compromise another country's (or multiple other countries') jurisdiction over that jurisdiction's (or those jurisdictions') patents:

• an antisuit injunction precludes a party from enforcing patents in another jurisdiction;

• a court ordering parties to enter into a global license agreement may deprive the patent holder of the right to enforce those patents in a given other jurisdiction; and

• if a court coerces an implementer into a global license agreement (on terms set by the court or demanded by the SEP holder but effectively blessed by the court) under the threat of (the enforcement of) an injunction (i.e., sales ban).

Each of these scenarios obligates a party to do something it might not want to do voluntarily, and in each case that party will have to comply or a court will impose contempt sanctions. So the net effect as well as the nature of the leverage is materially the same in each of the three cases. The UK Supreme Court's Unwired Planet approach has already failed, as my fifth slide shows that there's been a flurry of antisuit injunction activity since that decision came down last summer.

How could we get out of this? I've asked that question before. Intergovernmental agreements are not going to happen anytime soon. Standard-setting organizations are in no better position to reach a consensus. The solution I propose can be implemented by any country seeking to preserve its jurisdiction over its patents. It can be implemented unilaterally. It's to decline to recognize in a given jurisdiction a license agreement imposed on a party by a foreign court (regardless of which of the three above-mentioned types of coercion it may be). If a SEP holder didn't want to be bound to a UK determination of the value of the German part of the portfolio, German courts could allow the enforcement of those patents, for the purpose of obtaining incremental payments up to a FRAND level. Conversely, if a UK court sets a royalty rate that is too high with respect to a major market like, for instance, China, the Chinese company might go to its local courts and seek a partial refund.

Courts could still force someone into a global license agreement, but effectively the courts in other jurisdictions would be in a position to correct those findings. A portfolio may not be all that strong in a given jurisdiction. Or the local rates may simply be lower.

In the Q&A chat, a valid question came up: what if a court tried to torpedo those further proceedings by means of an antisuit injunction? While that could theoretically happen, it would be a clearer "comity" (respect for other countries) issue than the antisuit and anti-antisuit escalation we're seeing. If, for example, a UK court did not allow a party to have a foreign court make adjustments with respect to that country's patents, it could not claim to just be seeking to defend its own jurisdiction.

Interestingly, Presiding Judge Dr. Matthias Zigann of the Seventh Civil Chamber of the Munich&I Regional Court referred to my views in his presentation on the same panel. Judge Dr. Zigann, if I didn't misinterpret him, appeared to agree in principle that it's a problem if courts in one country set royalty rates for foreign patents.

There will be a lot more debate over this topic. Some participants in the discussion focus on the issues facing only one side. For example, if someone is sympathetic to SEP holders, the focus will be on holdout and antisuit injunctions are described as pure evil (regardless of the fact that some jurisdictions such as the United States actually give a lot of thought to this and grant antisuit injunctions only judiciously, further to a multifactorial analysis). Conversely, some others are just concerned about the possibility of a court forcing them to take a license on terms that other jurisdictions would clearly consider supra-FRAND. My proposal, however, can benefit SEP holders as well as implementers.

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Next week's European Commission webinar on SEP enforcement: speakers include USPTO official (and yours truly, too)

On Wednesday (May 19, 2021), the fifth webinar of the European Commission's popular series on standard-essential patent (SEP) topics will be held. Its title is "Enforcement of Standard-Essential Patents - current bottlenecks and possible solutions." In a previous post I mentioned I was going to be among the speakers.

Meanwhile, the EC's Directorate-General for the Internal Market (DG GROW) has published the agenda. After Judge Edgar Brinkman's (The Hague) welcome speech, Mary Critharis, the Chief Policy Offier and Director for International Affairs of the United States Patent & Trademark Office originally planned to deliver a keynote address. [Update] A few hours after this post originally went live, the Commission updated the agenda, and it now lists Patent Attorney Christian Hannon in Mrs. Critharis's place. He works for her. [/Update] I'm sure many of you will be as interested as I am in listening to Mr. Hannon's speech. After a recent decision by the DOJ to downgrade an implementer-hostile policy statement by Trump's antitrust chief, many want to find out about the Biden Administration's stance on SEP enforcement. IP policy in general, and SEP policy in particular, is shaped by multiple U.S. government agencies, among them the USPTO, of course.

An interesting fact about Mrs. Critharis's biography is that she "first joined the USPTO as a patent examiner in 1992" (and worked in that position for about eight years). Many (if not most) of the people who talk about SEP policy know very little about the technical side. It's obviously not a requirement to have read and understood at least one SEP before talking about valuation, injunctive relief etc., but a former patent examiner like Mrs. Critharis obviously knows what's actually found in those patent documents. [Update] And so does Mr. Hannon, who will appear on the USPTO's behalf. [/Update]

The first panel will focus on hold-up and hold-out. Ericsson's director of IPR policy Patrick Hofkens and Kather Augenstein (the firm that just represented Ericsson against Samsung in Germany) managing partner Miriam Kiefer will lkely disagree to at least some extent with the IP chiefs of Cisco (Dan Lang) and Continental (Roman Bonn). I do not know what positions on SEP licensing negotiations CMS attorney Aleksandra Kuznicka-Cholewa is likely to take.

Thereafter, at 4:15 PM Brussels time (10:15 AM EDT, 7:15 AM PDT), the second panel discussion will address "anti-(anti)suit injunctions."

I'm proud to be on this panel with Judge Dr. Matthias Zigann (Presiding Judge of the Seventh Civil Chamber of the Munich I Regional Court), Arnold & Ruess's Cordula Schumacher (Nokia's lead counsel against Daimler; we disagree on certain SEP-related questions, but I think she's great at what she does), and King & Wood Malleson partner Xu Jing from Beijing.

I'll put antisuit injunctions into the wider context of extraterritoriality issues in SEP enforcement and will propose a solution that any jurisdiction could implement unilaterally--and which would be perfectly symmetrical, meaning that it protects SEP holders and implementers alike against coercive action in foreign jurisdictions. As I'll take a rather broad perspective, I'll get to make the first presentation on that panel.

The third will discuss international arbitration and mediation. Lord Justice Arnold (England & Wales Court of Appeal) and Judge Sam Granata of the Court of Appeal in Antwerp (Belgium) will be joined by Cleary Gottlieb's Maurits Dolmans (who also spoke at my 2019 Brussels conference), WIPO deputy director Ignacio de Castro, and David Perkins, an independent arbitrator and mediator.

A high-ranking DG GROW official, Kamil Kiljanski (Acting Director GROW C), will bookend the webinar with his closing remarks at 5:50 PM Brussels time (11:50 AM EDT, 8:50 AM PDT).

You can register here.

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Explain-away exercise: mention of antisuit injunction case in negotiations may lead to Munich anti-antisuit injunction (IP Bridge v. Huawei)

It's antisuit time again. The related case law is evolving in ever shorter intervals, and I'll give a talk about that topic on May 19 in a European Commission (specifically, DG GROW) webinar, entitled Enforcement of Standard-Essential Patents -- current bottlenecks and possible solutions. I'll be one of the three panelists on antisuit injunctions, and I'm looking forward to providing an overview of extraterritorial issues in standard-essential patent (SEP) litigation and their interdependencies. I'll talk about developments in multiple jurisdictions on three continents and make a specific proposal for a way out without having to agree on a new international treaty. Access will be free, but typically those webinars have only a limited window for sign-up. Subsequently to my little contribution to the event, I'll upload my slide deck to Scribd and post something to this blog.

Both the European Commission and the Munich I Regional Court are aware of my occasional criticism of their COVID and/or patent policies, yet I know they completely accept that I exercise (within reason, of course) my freedom of speech, and I don't feel unwelcome in those institutions.

Yesterday I was the only member of the general public with a sufficient interest in antisuit injunctions (especially so close to my upcoming presentation) to follow the IP Bridge v. Huawei anti-antisuit injunction hearing held by the Seventh Civil Chamber (Presiding Judge: Dr. Matthias Zigann; side judges: Judges Dr. Benz and Kuttenkeuler) of the Landgericht München I (Munich I Regional Court)--my first visit to that court in about nine months. Counsel and parties participated via videoconferencing, so there were only a total of four people in the 700 sq. ft. courtroom, a super low density that facilitated social distancing. Nevertheless we were all wearing N95 masks (all the time); all of us had taken a rapid test across the courthouse before the session; and there were multiple ventilation breaks during the two-hour hearing. This sense of responsibility was exemplary, and I hope the United States District Court for the Northern District of California--sort of my other "home court"--will protect judges, court staff, counsel, parties, and a press pool member at a comparably high level when the Epic Games v. Apple antitrust trial kicks off on Monday.

IP Bridge is a Japanese state-owned licensing firm (link to IAM article), or non-practicing entity (NPE), or if you'd rather have it the disparaging way, a "sovereign patent troll."

It monetizes patents for contributors such as (in this case) Panasonic. In the course of licensing negotiations with Huawei, it undisputedly so occurred in a mid-December video conference that the Chinese mobile equipment and smartphone maker dropped the caption of an already-settled dispute: Huawei v. Conversant. In that one, Huawei had obtained a Chinese antisuit injunction against the other party (an NPE just like IP Bridge).

A couple weeks later, IP Bridge electronically ran to the Munich courthouse and moved for an anti-antisuit injunction, arguing that Huawei had threatened with an antisuit injunction by way of its reference to the Conversant case. This was a clever forum choice by EIP's German lawyer, who are representing IP Bridge--and almost prescient, as the Munich court shortly thereafter handed down its InterDigital v. Xiaomi A2SI/A4SI, not without listing a litany of potential circumstances under which an A2SI/A4SI may be granted in the world's #1 venue for patent and anti-antisuit injunctions. The icing on the cake, according to an obiter dictum in InterDigital v. Xiaomi, is that when you as an implementer of a standard are hit with a Munich A2SI/A4SI, you may also be deemed an unwilling licensee.

Huawei disagreed sharply because of the specifics of its dispute with IP Bridge, and requested yesterday's hearing to discuss the ex parte preliminary injunction. While it appears more likely than not that the Munich court will uphold the PI, the fact pattern is distinguishable from a definitive threat to obtain an antisuit injunction. The question is whether it is distinguishable to the extent of a game changer. The court will have time until June 10 to reflect on the question of whether Huawei's counsel managed to explain away the alleged connection between the mentioning of Huawei v. Conversant and a thinly-veiled threat to throw a wrench in IP Bridge's German SEP enforcement works from China.

Judge Dr. Zigann clarified that his InterDigital v. Xiaomi criteria are neither exhaustive nor per se prohibitions: other circumstances may also give rise to A2SI/A4SI grants, and even if a criterion is met, there may be countervailing facts that might dissuade the court from an A2SI/A4SI.

Whatever the outcome will be here, there is a lesson to be learned, and it resembles an integral part of the Miranda warning: anything you say may be used against you in a court of law.

The Munich court explained at the start of the hearing that it would apply the same standard to alleged antisuit injunction threats as it would to threats in other fields of law: it's not about what was actually the recipient's interpretation, but the objective standard of what a reasonable person placed in the same situation would have thought. Here, between SEP licensing execs working for organizations that know this stuff, the court's inclination is to conclude that a reference to an antisuit injunction case will be understood as such even without the word "antisuit" having been uttered--unless the defendant can explain away the alleged overtone.

There are some relevant facts in this case that Huawei's counsel, Hoyng Rokh Monegier's Dr. Tobias Hessel, pointed to. The Chinese rate-setting action brought by Huawei is only about Chinese SEPs, and is meant to inform the England & Wales High Court's global rate-setting decision in a case brought by IP Bridge. As I announced further above, antisuit injunctions really must be seen as part of a wider extraterritorial-overreach issue, and this is a good example: it makes a lot of sense that Huawei did what the UK judiciary explicitly suggested, which is to seek a rate-setting decision in another jurisdiction such as China (the key jurisdiction in the Unwired Planet v. Huawei/Conversant v. ZTE pair of UK cases) and provide the results to the UK court, which may consider it as part of its global portfolio rate determination. Here, China makes even more sense considering where Huawei sells most of its smartphones.

Judge Dr. Zigann appears inclined (and rightly so, as far as I can see) to give Huawei the benefit of the doubt for the inclusive language of its Chinese motion ("including, but not limited to, royalty rate for Chinese SEPs"). Instead of interpreting this as meaning that the Chinese court may end up setting a rate including German patents, the court will take Huawei's word for it. But that's not enough for Huawei to avoid the A2SI/A4SI.

In my opinion, an implementer deserves the benefit of the doubt to an even greater extent. If it were up to me (as it obviously isn't), I would accept every plausible and reasonably convincing explanation as to why the relevant case (here, Huawei v. Conversant) was mentioned. There are multiple policy reasons for which I think so:

1. Patent licensing negotiations involve, to some extent, also a simulation of what might happen in threatened or pending litigation. In that context, negotiators shouldn't have to be Mirandized by someone else in their own company each and every time they're about to reference another case. The alternative would be cumbersome, and might dissuade parties from oral communication, which would result in slower negotiations and a lower rate of success of those efforts.

   In this case, a plausible showing of a connection between IP Bridge's UK lawsuit (which was of its own making and not Huawei's idea) and the Chinese rate-setting action on the one hand and the Huawei-Conversant history on the other hand might be exculpatory.

2. Under Germany's "loser pays" principle, the defendant would have to pay a significant amount of money after losing an A2SI/A4SI case (court and legal fees). There is also a possibility for German courts to hold that the plaintiff was entitled to the decision, but that the defendant's pre-litigation behavior didn't reasonably necessitate the action, in which case the plaintiff may prevail on the merits, but end up paying. However, in order to avoid the fee award, the defendant would have to accept the decision immediately and focus exclusively on costs, arguing that their conduct didn't warrant litigation.

3. When a "threat" of an antisuit injunction is identified on a basis that--to use U.S. evidentiary standards--is at best a substantial evidence or maybe preponderance finding but far from clear and convincing and definitely nowhere near beyond reasonable doubt, I don't think it's a sufficient basis for declaring the defendant an unwilling licensee.

Part of Huawei's problem in this case is that a sworn declaration by its IP chief Jason Ding (whom this blog mentioned last month as he announced Huawei's 5G SEP license fee) contained a passage according to which Huawei didn't rule out filing for an antisuit injunction at a later stage. The Munich court appears inclined to consider this another indicium of Huawei having meant "antisuit" when they said "Huawei v. Conversant." Were this a U.S. case, I could download at least a public redacted version of the affidavit from PACER and see the context. In Germany, I only know what I hear in the courtroom, and in this case that is just not enough to form an opinion, other than that this is another tale of caution for SEP implementers. "Anything you say..."

The IP Bridge v. Huawei case may or may not be a vehicle for a further evolution of Munich's anti-antisuit case law, depending on what the appeals court will make of it. My concern is that SEP litigations anywhere in the world (provided that the implementer might be susceptible to enforcement action in Munich) may become a very slippery slope. It's not unheard of in the technology sector for licensing negotiators to have more a business and/or technical background. One of them (working for one of the largest U.S. companies at the time) used to quip that his company didn't let him go anywhere without being accompanied by lawyers. And even those with formal legal training may increasingly prefer to just write letters rather than talk via Zoom or Microsoft Teams...

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Component-level licensing of standard-essential patents most controversial subtopic of European Commission webinar on FRAND licensing and valuation

The conflict between monetization-focused standard-essential patent (SEP) holders and implementers (the latterg group also including major SEP holders who are nevertheless primarily interested in making products) appears to be everlasting. At times it even looks like both sides are ever more deeply entrenched. But at least they're still talking to each other, and not just about each other.

Yesterday the IP policy unit of the European Commission's Directorate-General for the Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) held a webinar on "FRAND licensing & valuation" with a very balanced roster of high-profile speakers and a sizable worldwide audience. The webinar took place via Microsoft Teams and was moderated by DG GROW official Elena Kostadinova, who might have been a TV news anchor in a former life.

You can find the detailed agenda on this webpage. If time permitted, I could have done a post on each of the three parts.

A survey by the Commission crystallized what SEP holders and implementers are primarily interested in. Among implementers, "license to all" was by far the most popular subject. I know I'm a bit difficult to please with terminology, and in my recent commentary on the SEP Expert Group report I explained why I oppose the terms "access for all"/"license to all" as "access for all" paints too rosy a picture while "license to all" sounds like built-in redundancy (though it's actually about giving the implementing side the choice of the level at which to take a license). But I recognize I'm the only one out there to criticize those terms, so to my dismay they're here to stay.

The component-level licensing panel--the third and final part of yesterday's webinar--was indeed the one where the different views of the two camps became clearest, not only in the webinar itself but also in the parallel Q&A chat.

Professor Damien Geradin, founder of the Geradin Partners antitrust boutique, acknowledged that both sides of the debate make interesting arguments. In his experience, "most reasonable people" agree that license agreements shouldn't be concluded at multiple levels of a given supply chain--but there are divergent views on which level it should be.

Qualcomm licensing chief Alex Rogers accused those advocating the smallest salable patent-practicing unit (SSPPU) as the royalty base of just seeking to "devalue technology" with the effect of "disincentivizing from doing this extraordinarily important research" that enables a $4.8 trillion value of all cellular technology worldwide, while SEP royalties are on the order of just $8-13B.

His concern was well-stated, but not well-founded in my opinion. The problem is that the multi-trillion-dollar value he referred to involves gigantic investments of various sorts, and everyone else could also point to that total value and complain about being undercompensated. I'm not worried about Qualcomm or other major SEP holders laying off talented engineers anytime soon.

Bird & Bird partner Richard Vary, formerly Nokia's litigation chief and now its outside counsel in connection with automotive SEP licensing matters, equated the concept of patent exhaustion with a "windfall" for downstream members of a supply chain. In my view, the opposite is true: the reason courts around the globe adopted patent exhaustion was to avoid "double dipping"--in other words, an ill-gotten windfall for patent holders. Mr. Vary is extremely knowledgeable and persuasive, but I don't agree with his agenda in the SEP licensing context. I'll give you another example in a moment.

Marianne Frydenlund of Nordic Semiconductor discussed SEP licensing from her company's perspective, and Nordic Semi is pretty successful, but nowhere near as large as Qualcomm.

Munich University of Technology professor Joachim Henkel explained from an economic perspective why small and medium-sized IoT companies are not really equipped to deal with SEP licensing at the level of their own end products--and better off if their suppliers take care of it. Professor Henkel just published a paper on this subject, and yesterday's presentation was like a summary of that paper.

It's unfortunate that some major SEP holders just don't care about the collateral damage those IoT startups suffer from a refusal to license component makers and from the practice of privateering (providing patents to trolls, which no one does on a larger scale than Nokia and Ericsson, and some of the trolls they feed then shake down every implementer they find even some very small companies). Mr. Vary, whose opinions in this context are materially consistent with--or even 100% identical to--Nokia's, was dismissive of those concerns over IoT startups' ability to deal with the SEP licensing challenge. However, when small organizations without much of a legal department receive demand letters listing hundreds of declared-essential patents (the fewest of which are actually essential), that is a problem. Patent trolls taxing innovative startups is economically and politically undesirable.

This takes us full circle back to the official long-form name of the organizer of yesterday's conference: it's not DG Patent Monetization or DG SEP Overleveraging. It's the DG for the Internal Market, Industry, Entrepreneurship and SMEs. It's unfortunate that IoT startups aren't even 1% as active in Brussels as Nokia or Ericsson. But I hope the Commission will take their concerns in mind when shaping its policies in this field, and when crafting its input to the European Court of Justice with respect to component-level licensing of SEPs.

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European Commission's expert group report on standard-essential patents uses misnomers "license to all" and "access to all"

Yesterday evening by Central European Time, the European Commission's Directorate-General for the Internal Market (DG GROW) published (expand the part entitled "Group of experts on licensing and valuation of Standard Essential Patents") the long-awaited standard-essential patent (SEP) expert group report.

When the expert group was formed in 2018, I was extremely skeptical. It looked to me like the deck was stacked against SEP implementers. I was very vocal about that concern, but the report that has been published is all about pluralism, not a particular agenda. It reflects a diversity of views and ideas, and an Ericsson executive wrote an official dissent, which I regards as a very positive sign as I tend to disagree with Ericsson on SEP matters. Maybe I was wrong in 2018 to suspect an effort to rubberstamp pro-SEP-holder policies--or, which I can't rule out for lack of knowing what exactly happened in all those expert group meetings, the dynamic changed at some point. One way or the other, my concerns were unfounded, a fact that I simply have to acknowledge in all fairness.

On a similar note, no matter how much I may disagree with EU internal market commissioner Thierry Breton on SEP matters, I like his Digital Markets Act proposal (a bill that will hopefully be improved in the further legislative process, but which is a great starting point and tackles the most important tech policy issue at this time). I hope he'll fight for that potential game changer of historic proportions even harder than he's been fighting for Nokia and Ericsson's patent monetization interests.

That said, I had to read only one sentence of the part I'm most interested in--licensing in the value chain--to find myself in some fundamental disagreement. This is just my first post on the SEP expert group report (there'll likely be more). Part 3.2 is found on pages 35-54 of the full-length version of the report. Since the FTC v. Qualcomm and Apple v. Qualcomm complaints were filed about four years ago, that topic has come up again and again on this blog, and I even organized a conference on it in 2019.

While the expert group report is merely meant to juxtapose different schools of thought, the Licensing in the Value Chain section uses Nokia/Ericsson terminology that I reject because it serves to frame the debate. Terminology is so crucial in political and legal contexts. I call on those advocating SEP implementers' interests never to adopt the terms "license to all" and "access to all"--at least not without clarifying that you actually reject them.

In the first paragraph of Part 3.2, the expert group report actually defines the terms accurately and pragmatically:

• "license to all": "SEP holders are under an obligation to grant FRAND licences to entities at any level of the value chain requesting such licences"

• "access to all": "[SEP holders] can select the level in the value chain where they grant FRAND licences" (followed by a "while" subclause I don't endorse)

SEP holders have many shrewd policy experts working for them. They know how to frame a debate, and they understand the role terminology plays. If you win the war over terminology, you can make the fight over substance an uphill battle for your adversaries. Implementers have their strengths, too, but if they acted as strategically as their counterparts, they'd adamantly refuse those misnomers "license to all" and "access to all":

• "license to all": That term unrealistically implies that everybody--from baseband chipset maker to network access device (NAD) maker to (in the automotive industry) telematics control unit (TCU) maker to end-product maker--would conclude a license with a given SEP holder. But that's a purely theoretical outcome and won't happen in practice thanks to patent exhaustion: if a license is taken high up in the value chain, the downstream is fine (example: Huawei's license deal with Sharp, through exhaustion, covers most Mercedes cars). Those vertical supply chains are like pyramids, so it would just take a few license deals at the thin top to take care of everyone.

• "access to all": This incorrectly sounds like everyone's taken care of, without everyone having to sign a license agreement.

  In the context of value-chain licensing, the term "access" is nebulous at best and mendacious at worst. I wrote above that I rejected a "while" subclause. That one says "other actors in the value chain only have the right to access the technology." What an empty word that has no basis in patent law:

  You can access any patent by downloading the relevant document from a patent database. But once you practice a patent, such as by making a product that practices a product claim or contributes to the subsequent practicing of a method claim, "access" is simply not a legal concept. You can have a license agreement; the patent rights may have been exhausted; or there may be other contractual arrangements either between yourself and the patentee (a covenant not to sue, which in the U.S. triggers exhaustion) or yourself and a third party (in which case some jurisdictions will make it harder than others for you to enforce your rights as a third-party beneficiary).

  "Access" in this context is simply a euphemism for what is more accurately described as "significant legal uncertainty for one or more levels of the value chain." It means that you may be theoretically covered by an agreement, the terms of which may not even be known to you due to confidentiality clauses, and which you can't enforce. It means that you don't have freedom to operate.

Part 3.2 of the expert group report more or less acknowledges that if SEP holders choose the licensee, they'll go after the bottom of the value chain, and if the implementer side has the choice, the license is likely to be taken higher up in the value chain. But that's just what tends to happen, not what necessarily happens. There may be situations in which an end-product maker considers it efficient to take a license at the end-product level, and others in which a SEP holder would rather manage fewer license deals with chipset makers than many more deals with end-product makers.

So what is it really about?

I propose that we non-judgmentally and truthfully--and in perfect consistency with the expert group report's own definition--distinguish from now on between "implementer's choice" and "patentee's choice" in this context. "Implementer's choice" means any implementer, at whatever level of the value chain, is entitled to a license. Of course, "any" may also mean licensing requests from more than one level of the supply chain, but realistically those who are covered by patent exhaustion wouldn't have a need to sign a license agreement. "Patentee's choice" steers clear of suggesting legal certainty by "access to all" when there are serious issues at unlicensed levels of the supply chain, as patent exhaustion works only downstream, not upstream.

Back in 2018, I was profoundly concerned that a predominantly Qualcomm-aligned SEP expert group would endorse and promote patentee's choice. Presumably, some members of that group sought to accomplish just that. Fortunately, they met resistance. They couldn't impose their will, and the outcome is now an "agree to disagree" chapter spanning 20 pages that serve to crystallize the issues.

One of many things I like about the chapter on component-level licensing is the acknowledgement that different licensing levels are prevalent in different industries, and that there are exceptions (such as component-level licenses covering smartphones--for instance, even Ericsson granted Qualcomm a chipset-level SEP license--or end-product-level licenses for cars).

It's also true that some standard-setting organizations required the participants in their standard-setting efforts to make a clearer commitment to the implementer's choice approach than others, though it's debatable whether ETSI's FRAND pledge could be interpreted in any number of ways. I've heard some very compelling argument from French law scholars that on the bottom line even ETSI's IPR policy entitles component makers to an exhaustive license.

On the technical side, I'm unconvinced of claims--which are often heard from SEP holders and their allies and also found in the expert group report--according to which it would be hard to determine at what level of the value chain a SEP is actually practiced. The baseband chipset is the master brain of cellular communications. About a year ago I showed that Nokia's patents-in-suit against Daimler are easily identifiable as baseband chipset-level patents. If one focuses on where the allegedly inventive step in any of those claimed inventions resides, the answer is simply the baseband chip. A patent litigator who frequently represents both Daimler and Qualcomm confirmed this.

The chapter on value chain licensing does make a number of valid points. For example, it might indeed be desirable to enable the companies in a given value chain, or even companies at the same level of such a chain, to engage in some coordination in order to determine the most efficient approach to licensing (Proposals 29-33, pages 46-49; I don't mean to endorse any particular one of those, but they raise important questions). Concerns over potentially violating competition law through illegal forms of cooperation appear to complicate coordination especially in the automotive industry, and in some situations the upside of allowing them to work out the most efficient solution in a given context might outweigh the downside.

Proposal 35 on page 53, Limited exhaustion -- in rem, comes down to limiting exhaustion to a field of use. This would require new patent legislation. So far, patent exhaustion is based in case law, but legislation would have more flexibility. The EU's Single Market is large enough that an EU-wide patent exhaustion regime would be relevant, and might lead other jurisdictions to take similar initiatives. However, exhaustion always has a territorial aspect. Given the chaos surrounding antisuit (and especially "multiple-anti"-suit) injunctions and extraterritorial royalty determinations (Unwired Planet), what I would consider most helpful would be a new international patent law treaty, ideally at the WHO level or at least between the U.S., the EU and key Asian jurisdictions, that would address exhaustion, antisuit injunctions, and extraterritorial patent-related determinations (such as patent valuation).

Finally, Proposal 37 on page 54, Different connectivity rates (so as to enable a patentee to "different royalties for the different chips depending on the connectivity rates of these chips"), is also very interesting. Many Internet of Things products actually just need minimal data throughput: they must be connected, but the amount of data they send may be limited to reporting a temperature once every five minutes. I'm not against price differentiation if it's based on objective criteria. I just can't see why a high-end smartphone that makes use of, say, 4G connectivity just like any low-end "dumbphone" should entitle SEP holders to a higher per-unit royalty only because of larger and higher-quality screens, more memory, and other technical characteristics that are unrelated to connectivity.

In practical terms, it's much more likely, however, that the Dusseldorf Regional Court's referral of certain component-licensing questions to the Court of Justice of the EU will bring clarification than that any policy initiative in this context is going to make an impact.

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European Commission's Action Plan on Intellectual Property deemphasizes automotive industry concerns, prioritizes upload filters

Today the European Commission formally adopted and announced its Action Plan on Intellectual Property ("IP Action Plan").

A near-final draft of the document already leaked last week and generated some media attention. I elected to wait for the final document (also because I'm very busy with the impending launch of my iOS and Android game). Given that some significant changes have been made, I'm glad I did hold off.

So here's my rapid response, and I may go into more detail on some of these issues later or in a follow-up post:

• While a draft version of the document placed a great deal of emphasis on the need to engage with the automotive sector (given the particular issues it is facing with a view to the licensing of standard-essential patents (SEPs)), the final plan downgrades that industry's problems or at least seeks to defocus from them:

  "Although currently the biggest disputes seem to occur in the automotive sector, they may extend further as SEPs licensing is relevant also in the health, energy, smart manufacturing, digital and electronics ecosystems." (emphasis added)

  "With a view to clarifying these issues and identify [sic] best practices, the Commission has launched a study, with a specific focus on strategic sectors including the healthcare and automotive sectors." (emphasis added)

  The fact that the Commission deemphasizes the automotive industry's SEP issues may be attributable to the immense lobbying firepower and persistent, highly professional efforts by major SEP holders such as Nokia and Ericsson, which is not a conspiracy theory but based in fact (and would serve to explain the repeated postponement of the publication of this document). The automotive industry's lobbying departments are basically one-trick ponies that only know about emissions standards and similar topics. Those organizations may need another decade or two before they figure out IP policy.

  I actually doubt that the automotive industry would have had to expect anything positive to come out from the Commission's DG GROW (formerly called DG MARKT) "brokering" an agreement between the automotive sector and major SEP holders. That's because the commissioner in charge of DG GROW, Thierry Breton, is totally in the tank for Nokia and Ericsson, even up to the point where he describes fake news as "a fact! A fact! It is a fact!".

• The paper recognizes that small and medium-sized enterprises (SMEs) don't account for lots of patent filings. But basically the answer this plan attempts to give is just a combination of ever more internationalization and subsidies. Nowhere does the plan recognize that many SMEs would rather be protected from patents than by patents.

• One of the top two or three fallacies in the patent policy context is reiterated by the IP Action Plan:

  "Between 2010 and 2019, the number of European patents granted rose from 58 000 to 137 000, approximately - although the rise is less marked than in other parts of the world, notably Asia, where economies are quickly catching up on IP generation."

  A European patent is a patent that can be asserted in Europe--not a patent granted to a European company. None of the top four filers with the European Patent Office (EPO) is European.

• Artificial Intelligence (AI) patents are software patents, which actually shouldn't be granted in Europe in the first place. Here's what the paper says about Europe's low share of AI patent applications:

  "[A]lthough 26% of high-value research publications on AI comes from Europe, only 4 out of the top 30 applicants (13%) and 7% of businesses, engaged in AI patenting worldwide, are European."

  The reason for that is mostly that major platform companies (in the digital platform economy, Europe is at a level with Africa and irrelevant compared to the U.S. and Asia) generate a lot of income from their core businessees and invest some of that money into AI, enabling them to offer the most attractive working conditions to researchers--and to file for many patents in that field. I can't see how the IP Action Plan would change a thing about that.

• The Commission loves its upload filters:

  "A crucial part of this work concerns the implementation of Article 17 of the Copyright Directive, which sets out a specific legal regime for the use of copyright-protected content by user-uploaded content sharing platforms. The Commission has carried out an extensive stakeholder dialogue to gather the views of relevant stakeholders on the main topics related to this article's application. Taking into account the results of the dialogue, the Commission will soon issue guidance to support Member States in implementing this provision."

  Just last week, a senior Commission official actually acknowledged that Article 17 may not survive a pending court challenge. I opposed it (even spoke at a couple of demonstrations against it).

• While this is outside the industry focus of this blog, I believe it would make a whole lot of sense for the Commission to "to introduce a unified [Supplementary Protection Certificate] grant mechanism and/or create a unitary SPC title," which the IP Action Plan mentions as possibilities.

The IP Action Plan is per se underwhelming and unspecific, but that doesn't mean that the initiatives it outlines as potential measures couldn't be impactful in the end--possibly even with respect to SEPs. We'll have to stay tuned.

[Update] The Fair Standards Alliance (FSA) just issued a statement, saying the organization "welcomes the European Commission’s goal to bring more transparency to standard essential patent (SEP) licensing." [/Update]

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Misinformed EU commissioner Thierry Breton spreads Nokia-funded fake news of European 5G patent leadership: anything but "a fact"

Further below you can find previously not published data showing what a huge problem with the expiration of 5G-essential patents Nokia faces in the coming years. If you wish to skip right to that passage, please click here.

Among the three most powerful members of the current European Commission, EU commissioner Thierry Breton (Twitter profile) is "Monsieur Non" with respect to enforcing EU competition law against standard-essential patent (SEP) abuser Nokia. He and his cabinet are the ones who adamantly oppose what would not only be right from an antitrust perspective but also benefit Europe's economy at large, from small Internet of Things startups to car makers.

For the EU, it should be a no-brainer to require SEP holders to extend exhaustive component-level SEP licenses to component makers. The enforcement priorities of the Commission's Directorate-General for Competition (DG COMP) appear to pursue only one principle: protectionism. By letting Nokia and its partners in crime (the Avanci gang) get away with what they're doing (they've already obtained two Germany-wide patent injunctions against Daimler and are seeking many more), while coming up with novel and at times even absurd theories of harm concerning American companies, the Commission is systematically destroying the reputation as a competition regulator that it worked so hard to build in earlier decades. But Mr. Breton doesn't care.

Atypically for a Frenchman, he doesn't even give a damn about his own country's economic interests. France holds few cellular SEPs, but has a sizable automotive industry, which may so far not have been sued by the Avanci gang, yet will inevitably face the same shakedown as German and American car makers. There is no such thing as a free lunch--much to the contrary, whatever royalties Nokia and its allies extract from foreign companies will be used as "comparable license agreements" in any license fee dispute with their French counterparts. There are purely tactical reasons for which it hasn't happened yet. Back royalties will be huge.

Mr. Breton's negative influence extends far beyond his informal veto of any DG COMP investigation of Nokia's refusal to live up to its FRAND licensing promise. You can set your watch by him: once the Commission has to provide input to the Court of Justice of the EU on component-level licensing, Mr. Breton is going to have no more regard (i.e., zero) for the Commission's Legal Services than he has for DG COMP's regulatory responsibility. And the Commission's IP policy unit is part of DG GROW, formerly (and less euphemistically) called the Directorate-General for the Internal Market ("growth" is something at which the EU has failed miserably, with no chance that it would ever close the digital-economy gap). The Commission's SEP Expert Group is coordinated by that IP policy unit, which is ultimately under Mr. Breton's control.

What I heard about Mr. Breton acting like a Nokia/Ericsson lobbyist, coupled with the fact that the former CEO of France Telecom may have longstanding contacts with Nokia and Ericsson, made me wonder why a commissioner would do that. The only plausible explanation is that he actually--and very much mistakenly--believes he's doing the right thing for Europe's future. In a recent YouTube interview with Politico EU, he credibly comes across as someone driven by a desire to strengthen Europe in political and economic terms (this post continues below the video):

At minute 39, however, he spouts nonsense--and repeats himself multiple times insisting that it's "a fact":

"We have been always leading in mobile communication, including in 5G. Today, Europe is the leading continent in 5G: the most patents and contracts. We are happy to have two European global companies [Nokia and Ericsson, he means] and these two companies are having [sic] more patents than others. [...] but this is a fact [...] this is just a fact [...] facts are extremely important--not just rhetoric--it's a fact."

No, Mr. Breton. You--and probably your advisers first--have to get your facts right. You're entitled to your opinion, and to your agenda, but not to your own facts. What you say about Europe leading in 5G patents is simply the opposite of a fact. It's completely untrue, and if you check the facts, chances are no one will be more embarrassed than you. So let me give you the real facts since your advisers have either failed to do so or you didn't listen to them because you're predisposed toward buying whatever Nokia's and Ericsson's lobbyists tell you.

There's not even one serious SEP study in the whole wide world that sees Europe ahead in 5G SEPs. All the independent studies see Europe behind, and losing ground.

There's only one plausible--and regrettably poisoned--source for Mr. Breton's misinformation, and that's a "study" that the very law firm representing Nokia in the automotive SEP licensing talks (including the mediation that failed earlier this year) put together. Ericsson published its key findings. Interestingly, the study is not even consistent with what the author of that Ericsson blog post, Mrs. Peterson, testified in FTC v. Qualcomm when she was trying to devalue Qualcomm's portfolio.

[Update on 09/30/2020] Bird & Bird has meanwhile stated on LinkedIn that there's a more recent version of the study, which in fact has Asia ahead of Europe, confirming my point and suggesting that Mr. Breton relies not only on incorrect, but even outdated information. [/Update]

The "methodology" of that "study" is vaguely described as applying Justice Birss's Unwired Planet v. Huawei "filtering" approach (paragraphs 325 et seq. of the ruling, but that one was actually derived from what expert witnesses paid by the litigants told the court. What the ruling indicates is that the methodology involved essentiality determinations based on a sample of patents. If Nokia's own lawyers performed that kind of analysis here, I wouldn't recommend anybody--and especially not an EU commissioner--to take the result at face value.

That "study" was published in response to other statistics based on declarations (such as IPlytics) and/or contributions to the standardization process. Those other approaches didn't lead to the kind of result Nokia and Ericsson would have liked, and while one can indeed level criticism at simple counts, they're at least performed by independent entities, not Nokia's own lawyers.

If, however, the name of the game is to take a critical perspective and conduct an essentiality analysis, Amplified and GreyB did just that, did it independently, and did a great job (click on the image to enlarge; this post continues below the image):

In the Amplified/GreyB study, Nokia's essentiality rate (i.e., the percentage of declared SEPs that passed a technical plausibility test) was just average, and Ericsson's was rather poor.

Nokia is facing a huge patent expiration problem

Many of Nokia's so-called 5G SEPs are actually patents that were already declared essential to earlier standards. The age of Nokia's portfolio is a huge issue, and I wanted to shed some light on it here. Given that the Amplified/GreyB study is currently the best 5G SEP portfolio analysis out there, I contacted them and asked them for data on how many of the "5G Core SEPs" (i.e., patent families (note they correctly focus on patent families as opposed to separately counting patents on the same invention filed in parallel in multiple jurisdictions) that were declared essential to 5G and passed their plausibility test) will expire in the years ahead. Thankfully, Amplified/GreyB provided the following table showing the number of patent families to expire by the end of a given year as well as subtotal for the years 2020-2023 (click on the image to enlarge; this post continues below the image):

Based on the numbers in the above table, I've done some further calculation that shows the cumulative percentage of the currently-live 5G SEP families (only the ones that passed the Amplified/GreyB plausibility test) that will have expired by then (click on the image to enlarge; this post continues below the image):

The dark green line at the top shows that a far higher percentage of Nokia's currently-live 5G SEP families will expire than of any other major SEP holder. In fact, over the course of the next five years, Nokia alone will lose more 5G SEP families as a result of expiration than the rest of the industry combined.

Amplified and GreyB have nothing to do with the content of this blog post other than that I asked them for the percentages of patent families set to expire in certain years. I very much appreciate the fact that they answered my question, and as I expected, the numbers are telling.

By protecting Nokia, Mr. Breton is placing a postfactual bet on a dying company's shrinking portfolio, coming from an incorrect assumption of Europe's competitiveness in that field. The alternative for him would be to show more appreciation for the innovative potential of European IoT startups and the automotive industry, including the suppliers of digital components. If he did that, his numbers might even work out.

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After voting down EC candidate Goulard, the European Parliament should oppose giving France control over both DG GROW and DG CONNECT

The Financial Times' EU reporter Mehreen Khan just reported that the European Parliament has overwhelmingly decided to reject Sylvie Goulard, French president Emmanuel Macron's candidate for what would arguably have been the most powerful position in the new European Commission (this post continues below the tweet):

🔔Goulard loses her confirmation vote and is dumped by the European parliament. 82 votes against, 29 in favour and 1 abstention

— Mehreen (@MehreenKhn) October 10, 2019

As Mehreen Khan noted, only 12 MEPs outside her own European-level political group voted for her. Practically all European People's Party and Socialists & Democrats MEPs voted against Mrs. Goulard, a scandal-ridden candidate who failed to provide a convincing answer in her confirmation hearing to the simple question of why one should confirm her as an EU commissioner in light of the fact she had to resign as French minister of defense. She promised to step down should she be ultimately convicted of any wrongdoing, but that was unsatisfactory because it wouldn't have occurred before the end of her term.

Virtually all European media reports in the build-up to the parliamentary decision suggested that resistance to her nomination was fueled by institutional outrage: at least the two largest groups in the European Parliament believe in the spitzenkandidat approach, a word borrowed from German that means "top-list candidate" and stands for the notion that only a candidate for the EP should be named president of the European Commission, the bloc's executive branch of government. But the new Commission president, Ursula von der Leyen, didn't run in this year's EU elections. She was Germany's minister of defense, and came into play when neither the EPP's Manfred Weber or the S&D's Frans Timmermans (whom I've repeatedly called "Poor Man's Bernie") managed to secure a majority.

What only one of the articles I saw mentioned is, however, the issue I'd like to focus on because innovation matters more than retribution: apparently some MEPs were concerned not only about the integrity of that particular candidate but also (or even primarily) about the allocation of fields of policy-making among the different commissioners.

No matter who will be named instead of Mrs. Goulard, what the EP should never accept--for the sake of Europe's fitness for an increasingly digital future--is that one commissioner--and especially not a French commissioner--effectively controls both DG GROW (the Directorate-General for the Internal Market, previously called DG MARKT) and DG CONNECT (Directorate-General for Communications Networks, Content and Technology, previously called DG INFSOC = Information Society).

Formally, the DGs are part of the Commission's "services" and "independent" from the commissioners and their aides ("cabinets"). But that's nominal. In reality, the political appointees make all the decisions.

The IP policy unit is part of DG GROW, and they consistently promote ever broader patents and ever more leverage in litigation for patent holders. By contrast, DG CONNECT has a tradition of, and hard-earned reputation for, being sympathetic to the digital sector. DG CONNECT takes a more balanced approach. They understand the implications of IP enforcement in connection with highly complex and multifunctional products. They realize to a greater extent than some other people that certain startups seek to be protected by patents, while many others need to be protected from patents. And they tend to look at free and open-source software as an opportunity, not merely a threat to other business models.

DG GROW already has the upper hand in IP policy-making. But with DG CONNECT ceasing to be an independent voice within the Commission (which would be the inevitable effect of the same commissioner being in charge), there's a risk of the EU Commission's IP policies completely drifting off balance.

Even the Wall Street Journal's article entitled "Incredible Shrinking Europe," which describes the EU as an economic-policy failure, acknowledges that the Single Market is the one aspect of EU economic policy that is working out--not in the sense of growth or wealth, but sheer size (more than 500 million consumers).

France got the most out of all the backroom horse-trading between the governments of the EU member states:

• The new Commission president, Ursula von der Leyen, grew up in French-speaking Brussels, was nominated by France (as opposed to her country), and is more likely to pursue an agenda to Macron's liking than to advance Germany's interests.

• A Frenchwoman, Christine Lagarde, will be president of the European Central Bank and continue its policy of financing southern European governments in contravention of EU law.

• And France secured not only one of the two most important areas of responsibility within the Commission--the Internal Market (only Competition is similarly important)--but convinced the rest of the EU to allow the Internal Market division to absord and neutralize DG CONNECT.

Not only does France have its own national patent troll (France Brevets), which creates a huge conflict of interest for a French commissioner, but the Macron Administration is on a crusade against global digital powerhouses they generally refer to as "GAFA" (Google, Apple, Facebook, Amazon). Their top-listed candidate in this year's EU elections even likened those companies to large countries such as China.

A French EU commissioner nominated by Macron is, in practical terms, going to be an anti-GAFA commissioner. Giving an anti-GAFA commissioner control over both DG GROW and DG CONNECT is a bad idea. It's ultimately even bad for Europe because the French agenda does not benefit European consumers (who want access to innovative digital products and services) and countries with a stronger innovation culture than France, such as the Nordic countries or even Germany.

France has a rich history, but it doesn't have much of a future. None of its largest corporations (such as LVMH, L'Oréal, and Sanofi-Aventis) is a digital-economy player. Macron likes to think of France as a "Startup Nation," but has no facts to back up that vision. And it's hard to see how this is ever going to improve, given that many of the brightest young French engineers and programmers go to work for GAFA and other non-French companies and, which is so shocking, considering that only 2% of French students reach the top performance level in the TIMSS international math test, roughly at a level with Persian Gulf states. By comparison, 50% of Singapore's students are top performers in math, 40% of South Korean students, 20% of Russian students, and 14% of American students. Even Kazakhstan is at a level with the U.S., i.e., seven times as strong as France.

The French digital policy agenda is to dumb down all of Europe only because France has degenerated. This year's EU copyright reform is an example, as is the French pet project of a "digital tax" (the U.S. threatened with retaliation, but a deal was reached in August). The situation will get a whole lot worse with a Macron appointee controlling both the EU's internal-market and digital-policy divisions--an unprecedented concentration of power that would be undesirable even if the commissioner came from a more innovative country with brighter students.

Hopefully the European Parliament will defend DG CONNECT's independence. Today's vote against Mrs. Goulard opens the door to interinstitutional negotiations. The French government is already afraid of this, and I agree with former Swedish MEP Amelia Andersdotter that commissioner portfolios aren't allocated to countries:

Could France cut it out? Portfolios are not allocated to countries, they are allocated /for Europe/ - if France seeks good cooperation with its European peers, it must accept that European peers are *equal*. This exemplifies what Europe does. not. need. at. all! https://t.co/yyqBBRsfiZ

— Amelia Andersdotter (@teirdes) October 10, 2019

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Qualcomm hijacks EU Commission expert group on licensing and valuation of standard-essential patents

Last December this blog commented very favorably on the European Commission's "approach to standard-essential patents" document. Unfortunately, the implementation of one item--the creation of a group of "experts on the licensing and valuation of standard-essential patents (SEPs)"--is now going in the totally wrong direction.

On Friday (19 October) a "draft" list of experts was published on the EU Commission's website (the list should ultimately appear under the "Members" tab on this page). That list is utterly lopsided to say the least (this post continues below the image; click on the screenshot to enlarge):

The above list was taken down shortly thereafter, but it has already drawn harsh criticism from the Brussels-based Fair Standards Alliance, an industry group that promotes transparency and fairness in SEP licensing and has been mentioned here on multiple occasions:

"The Fair Standards Alliance [has] strong concerns about the unbalanced nature of this group, and fear[s] that the outcome of the discussions in the group will negatively impact incentives to innovate for the years to come, to the detriment of European industry and consumers. Furthermore, we have significant concerns about the lack of substantial experience and significant competence within the experts group in terms of the licensing and valuation of SEPs, even though the Commission decision required 'substantial experience in licensing and/or valuation of SEPs.' In our view, the group lacks a sufficient amount of industry experts that have day-to-day expertise in the negotiations of SEP licenses. We therefore urge the Commission to reconsider its selection, in order to have a group that will be able to achieve balanced views on what are the best next steps in terms of FRAND licensing for European policy makers to consider as the industry moves towards the development of 5G and IoT."

That's a pretty strong and clear statement, and I philosophically agree with it, but I'll allow myself to be much more blunt: the composition of this group is a recipe for disaster. Given the positions that many of those people have voiced on countless other occasions, the outcome is predictable. It will be a nightmare for competition and innovation, and all SEP abusers' wet dream.

This group is not the result of responsible choices made by neutral public servants desiring the best for Europe. It looks like none other than Qualcomm put it together, with other aggressive SEP monetizers like Nokia, Ericsson and InterDigital possibly having contributed to it, and some patent radicals at DG GROW (the Directorate-General for the Internal Market, which I fought hard against in the days of my NoSoftwarePatents campaign) rubberstamped it.

The Commission website says "[t]he aim of the group is to increase expertise and know-how about the determination of fair, reasonable and non-disciminatory (FRAND) licensing terms, as well as the sound valuation of intellectual property." That is fake news, and the recommendations coming out of this in the end will certainly be fake FRAND.

To be clear, there are some very smart people with lots of SEP-related expertise among them. In particular, I have the greatest respect for Damien Geradin, a lawyer and a professor (University of Tilburg, Netherlands)--but the first time I heard him speak at a Brussels event (in the spring of 2010), a large part of his presentation was simply hardcore advocacy for Qualcomm. His Tilburg Law and Economics Center (TILEC) lists Qualcomm as its number one sponsor in its annual report (page 23 of the PDF).

[Update] Professor Geradin (one of my esteemed readers) has meanwhile told me that he has not represented Qualcomm since 2010 and has, in fact, also represented clients adverse to them. While the information about TILEC being funded by Qualcomm was accurate, Professor Geradin says his work does not benefit from Qualcomm's sponsorship, and he tells me he will approach the expert group meetings with an open mind. [/Update]

Economist Justus Baron is a researched at Northwestern University's Searle Center on Law, Regulation, and Economic Growth, which announced in 2013 that it received $2 million from Qualcomm for "patent research." The press release describes Qualcomm as a "visionary company."

Another economist, Jorge Padilla, heads Compass Lexecon Europe. Qualcomm is one of his firm's major clients (possibly the primary client), and he has written various papers on SEPs, habitually denying that hold-up and patent stacking are actual issues (actually, even this blog here has provided numerous examples over the years that those concerns are well-founded).

Ruud Peters used to head the IP department of Philips from 1999 to 2013, then became a part-time adviser. If I recall correctly, I crossed paths with him at an EIF (European Internet Forum) event in 2004. In any event, Philips is very active in SEP monetization.

Bowman Heiden of the University of Gothenburg, Sweden co-authored a paper last year on "patent holdout" that was sponsored by 4iP  Council, an organization that is in turn sponsored by Qualcomm, Philips, InterDigital, and the Qualcomm's two primary allies, Nokia and Ericsson (though both at different points in time complained about Qualcomm's aggressive leveraging of SEPs).

[Update] A reader has pointed me to Mr. Heiden's PhD thesis, for which he received financial and other support from Ericsson: "First, I would like to thank Gustav Brismark at Ericsson for introducing me to the complexity of FRAND and partially funding my research while allowing me the freedom to reach my own conclusions." [/Update]

Qualcomm's allies simply outnumber potential voices of reason such as Audi's Chief Licensing Officer, Mathias Schneider.

I'm afraid DG GROW won't listen to the Fair Standards Alliance, and the set of recommendations that this group will put forward will be materially consistent with whatever Qualcomm's legal department would propose.

[Update] The list is now final. Very disappointing. [/Update]

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