1. 1 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 1 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 Standardisation and Software Protection Strategies

2. 2 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 Table of Contents 1. Overview 2. Standards involving patents 3. Impact on software protection strategy

3. 3 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 Growing importance of standardisation Importance of standardisation is growing –more and more products have to work together Standardisation can cover various issues, such as –different grades or sizes of a particular product –technical specifications to enable compatibility and interoperability Very often companies achieve interoperability among products by working together in standard-setting organisations. Though, standardisation can take different forms –Formal standards –Informal / ad-hoc standards –De facto standards

4. 4 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 If properly executed, standardisation generally viewed favourably Standardisation can lead to economic efficiency and consumer benefits., e.g. –facilitating interoperability –network effects –increasing user and consumer choice But, standardisation comes also with cost, e.g. –risk of foreclosure –possible constraints in variety of products and innovation –potential market power of an essential IPR holder controlling a standard Elimination of alternatives by a group of competing firms is generally accepted by antitrust law because of substantial efficiencies relative to harm, provided conditions are met –No obligation to comply –Unrestricted participation for competitors –Transparency for the wider circle of stakeholders –Effective access to the standard (including IPR, see following slides)

5. 5 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 Table of Contents 1. Overview 2. Standards involving patents 3. Impact on software protection strategy

6. 6 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 Standards involving patents Restrictive effects on competition can arise if patents that are needed for the implementation of a standard are not available, because – of a refusal to licence – access is only granted on unreasonably high royalty rates or exclusionary terms and conditions Patents are destined for private exclusive use Standards are intended for free, collective use Tension leading to conflicts whenever a patent is needed for the implementation of a standard

7. 7 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 IPR policy is required to ensure benefits outweigh risk of harm In the case of a standard involving patents, a clear and binding IPR policy is required to ensure benefits outweigh risk of harm and to increase likelihood of effective access (avoid foreclosure) SSOs IPR Policy is a contractual self-regulation mechanism –put in place by the members of the standard-setting organisation –does neither supplement nor replace antitrust law, but has similar or identical legal effects than antitrust law requirements SSOs IPR Policy typically imposes constraints on members: –Obligatory ex ante disclosure of essential patents –Commitment to license on royalty-free or fair, reasonable, and non-discriminatory (FRAND) terms, if wishing to have IPR included in the standard

8. 8 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 Table of Contents 1. Overview 2. Standards involving patents 3. Impact on software protection strategy

9. 9 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 Impact on software protection strategy When submitting technology for standardisation and technology eventually gets chosen, you should be aware that –in exchange for the advantages that an enlarged standardised market offers –you take over obligations What does this mean concretely –disclose patents that will be needed for the implementation of a standard –FRAND-licencing

10. 10 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 10 AIPPI Forum 2011 Hyderabad, India, 15 October 2011 Thank you for listening! Michael Fröhlich mfroehlich@rim.com +49 (0)211 971 996 30