Home EuropeEurope II 2007 Intellectual property in the new network environment

Intellectual property in the new network environment

by david.nunes
Robert Lind Issue: Europe II 2007
Article no.: 15
Topic: Intellectual property in the new network environment
Author: Robert Lind
Title: Partner
Organisation: Marks & Clerk, Patent and Trademark Attorney
PDF size: 292KB

About author

Robert Lind is a Partner in Marks & Clerk, Patent and Trademark Attorney; he is a Chartered Patent Attorney and European Patent Attorney specialising in the patenting of inventions related to telecommunications and computing, with particular emphasis on Internet-related technologies. Dr Lind joined Marks & Clerk after training with a firm of patent attorneys in London. He later worked as an in-house attorney for Nokia Mobile Phones in Finland before returning to the firm. He is a contributor to the European Patents Handbook. Dr Lind graduated from Glasgow University with an honours degree in Electronic Engineering and subsequently obtained a PhD in Bioelectronics from the same university.

Article abstract

Convergence raises many serious intellectual property rights, IRP, questions. How can we deal with content IRP when networks throughout the world are involved? The IRP issues involving technologies and equipment used in a converged environment, given the differing laws around the world, are truly complex and perplexing even when standards and international standards organisations are involved. The growth of convergence would be greatly facilitated by international agreement based upon genuinely common standards and obligatory licensing on fair and reasonable terms.

Full Article

Undeniably, todayís networks are evolving at a rapid pace. More convergent technologies are starting to emerge, whilst the promise of third generation mobile networks may be on the point of delivery through higher speed data access and the provision of quality content. Yet in spite of this high rate of change, the landscape remains a disparate collection of different technologies. Debates as to the respective merits of WiMAX and LTE, Bluetooth and WiFi rage despite all the talk of convergence. So what role does intellectual property have to play in this complex environment? Should the industry genuinely crack the convergence model, the role of intellectual property will be unlike anything we have seen to date. For achieving convergence will necessarily involve the agreement of genuinely common standards – and all those who participate will likely be forced to license on fair and reasonable terms. The benefits of convergence are clear – from the seamless roaming capabilities for the consumer, to the advantage for providers of delivering exceptional content through a simple, generic Internet protocol infrastructure. Contrast this model with the co-existence of multiple competing technologies, which lends power to organisations to use the patent system to create near monopolistic positions in their technology areas, with all the downsides of reduced competition and fragmented access and service provision. In both of these scenarios, intellectual property remains at the centre of innovation – as it should. The patent system is designed to encourage innovation and reward those who participate in technological development. In the creation of a single standard converged network, however, compulsory licensing on fair terms will allow a greater number of entrants into the market, increasing competition and driving down prices. For those who innovate and contribute to the converged network environment, royalty rates may be reduced, but the total income will be that much greater. But what about those who choose to remain outside the creation of this standard? How will they use intellectual property? Looking back over the history of the mobile networks, every leap in technology has resulted in subsequent patent disputes, from GSM through to 3G. Many of these have involved ëoutsidersí. The disputes have also resulted in the industry grappling with the very different intellectual property systems that operate across Europe and America. Notably, in the NTP/RIM case, the spotlight was cast on the US intellectual property framework and this has since led to NTP pursuing Palm for similar infringement. The US allows an injunction to be granted purely on the basis of patent infringement, before the validity of the patent has been considered. In the BlackBerry case, this made it difficult for RIM not to settle, irrespective of whether the contested patent would be upheld. Still, for all the criticism of the various intellectual property systems, and the way in which IPR is managed by individual organisations, intellectual property itself should not be cast as defensive or burdensome. To do so would be to ignore the major, positive role that intellectual property has had in technological development and its role in stimulating innovation. Jari Vaario, Director of Intellectual Property Rights for Nokia in Finland, recently commented: ìIn general, royalty payments force companies to compete by introducing innovative products, rather than with price, making them even stronger in the long run. Thus royalty payments should not be considered only negatively, but as an incentive for innovation.î Of course, the potential for abuse will exist in a converged model. The creation of a powerful, global standard could even make it more of a target to those outside of its development. Such a scenario would see the industry face yet more strain due to the differences between the various intellectual property legal systems across the globe – perhaps one of the most pressing concerns to date. However, the hope is that a converged model will leave fewer outsiders. This is clearly preferable but, of course, a large number of patent disputes have to date involved the big players, the ëinsidersí, such as Nokia and Qualcomm. One would have hoped that bodies such as the European Telecoms Standards Institute, ETSI, would have resolved disputes between those involved in the creation of a standard. However this has not been the case, and whilst ETSI has avoided regulatory action, following accusations of a lax attitude to intellectual property, criticism remains. Despite ETSI tightening its IPR policy, players such as T-Mobile remain vocal on the impact of IPR licensing on equipment pricing. Such criticisms have at times resulted in a call for greater transparency and upfront disclosure as to the intellectual property costs that will be incurred from licensing. In the converged model, patent pools may well become more of a norm, but ultimately, to avoid insider disputes, these kinds of industry bodies will need to get better at defining what constitutes fair and reasonable. Challenges will remain. Sharing technology effectively between organisations both inside and outside of the standards is, and will, prove fundamental. One of the key advantages of convergence is that it allows for the reuse of technology at multiple points in the network. Yet the industry may itself already be making some progress in sharing technology more effectively. This can be seen by the recent move by some companies to create technology platform licences, in a bid to shape their patent portfolios into income generating assets. Ericsson is an example of a company that has actively marketed itself to rivals, making its IPR a major part of its corporate agenda. Its intellectual property has become a business case that no doubt will be adopted by others. The licensing of IPR in this way should be seen by the industry as an opportunity as much as a threat – and a necessary step on the road to convergence. In this respect, the use of IP rights is in some cases already more forward-looking than is often portrayed. Meanwhile, the clearer delineation in strategy between the respective telecoms companies may in fact end up contributing to better partnerships and the development of more innovation. Recognising the value of intellectual property, and allowing IPR to shape the way in which the industry competes, should be seen as a given in an era of such immense change. If anything, the telecoms industry should expect to see IPR play an increasingly important role in doing business, seeing as there will be a proliferation of strategic alliances around mobile content to secure access to othersí intellectual property. Intellectual property has moved from the sidelines to the very heart of corporate affairs. It is down to the individual players in the market to stimulate their own innovation and manage their own intellectual assets to compete effectively in this new environment.

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