1. Standards, open standards and Interoperability
ETSI, Sophia Antipolis, 20 September 2005
Track 3 – SOS and IPR break out session
Status, discussion and way forward
Moderators Track 3 Markus Münkler, Vodafone Karl Heinz Rosenbock, ETSI Director General

2. IPR policy: can one size fit all?
Need to define (F)RAND (a possible enhancement)
In (F)RAND context, IPR claims (and timeliness) should be made mandatory and be controlled
Companies’ IPR strategies change over time and depending on market segments/competitive positioning
IPR strategy can be both open and proprietary (see IBM)
Technologies/standards
IPR : threat of fear, uncertainty & doubt
Range of policies is probably the model to explore

3. Objectives of SOS II - Track 3
Agree on a problem definition on IRP issues
Assess requirements on an updated IPR regime
Position ETSI an the “IPR think tank” for IPRs & Standards
Ensure that ETSI is part of the solution to be found

4. Summary of contributions
People’s Republic of China
Call for WTO to act on IPR regime
Vodafone evaluation of IPR challenges and requirements
Highlighting key challenges of today’s IPR regime
Focus on commercial impacts decreasing value of standardisation
Pointing out requirements for an updated ETSI IPR regime
Focus on creating a predictable commercial environment within ETSI and increasing visibility of 3rd party IPR
Reactions on Vodafone contributions
Tim Frain, Nokia: In agreement, adding issues “proportionality”, “essentiality assessment”, “transparency of essential patent holdings”, and “transparency of licensing terms”
Mark Paxman, PA Consulting: In agreement, (1) pointing at effort to conduct multiple licence negotiations and (2) suggesting to explore scoping and implementation aspects: “IPR overseeing entity”, “handover of IPR matters”, “fixing 3G and GSM/timing”

5. Summary of contributions (cont.)
GSC#10 Resolution N° 15 "IPR Policies"
Posted by ETSI Secretariat
Today’s IPR policies typically provide effective incentives to interoperate, innovate and compete
IPR policies of the majority of SDOs provision for standards users to license essential IP under RAND/FRAND compensatory or compensation-free (e.g. royalty free) terms and conditions
Some IPR policies seek to have overbroad disclosure obligations that discourage participation implicitly requiring patent searches to avoid severe penalties for inadvertently failing to make a disclosure
Rigo Wenning, W3C, commenting: “Grosso modo the GSC#10 confirmed the current policy; not recognizing the troubles that were discussed at our last conference.”; “I think mixing and mangeling discriminatory patent-pool policies and reasonable and non-discriminatory royalty free approaches together in one phrase is showing that there is trouble and concern, but a rather profound dislike of change.”; “I'm rather confused by the message of GSC#10 and I think they missed the opportunity for good directions when everybody was listening.”

6. Summary of contributions (cont.)
Posted by George T. Willingmyre, GTW Associates
Open Standards and the Problem with Submarine Patents (Aura H. Soininen)
Patents that surface after the technology has been widely adopted without the knowledge of lurking rights may create problems in the marketplace, harming both companies and consumers
It has often been assumed that antitrust (U.S.) and competition laws (Europe) will help in alleviating those problems. I have found, however, that neither the Sherman Act nor the Treaty of Rome provide much help in the submarine-patent dilemma
Evaluating the Performance of Standard Setting Organizations with Patent Data (Marc Rysman, Tim Simcoe)
Attempt to systematically measure SSO’s role in economic performance or technological change
Showing that the SSO patents collect many more citations, typically around three times as many, and receiving them over a longer time
Found an economically and statistically significant correlation of citations with disclosure

7. Summary of contributions (cont.)
Comments on the discussion to date
Posted by Isabelle Valet-Harper, Microsoft
Focus remains on patents rather than software/copyright issues; careful balance interests of IPR holders and implementers
Resist urge to make quick changes as it may cause significant contributors to discontinue participation, in effect move their patent claims outside relevant IP policy
First demonstrate that problems are real and systemic
Cumulative patents or pool pricing may be more appropriately addressed through market forces or other mechanisms that lay outside the scope of a standards organization or its IPR policy

8. Summary of contributions (cont.)
GSMA IPR Advisory Group problem statement on IPR
Posted by David O’Byrne, GSMA
Problem lies in IPR disclosure, ambiguous understanding of FRAND licensing, patent ambush, unpredictable IPR payments, and true patent essentiality
Unless the SDOs and operators develop an approach to perfecting a solution for these issues, the industry could soon find itself impeded by oppressive royalties for all new technologies, stifling competition and growth

9. Way forward / next steps
Goals of SOS II IPR
Agree on a problem definition on IPR policy
Position ETSI as the “IPR think tank” for IPRs & Standards
Ensure that ETSI is part of the solution to be found
Assess requirements on an updated IPR policy
SOS II IPR to ETSI GA in November
Agree to present problem statement and requirements assessment along with other workshop results for information
Agree to propose to the GA to mandate official IPR work stream for IPR reform (if required) and first pilot case under new IPR regime by March GA
SOS III IPR workshop at middle of February 2006 ?
Continue debate through SOS web forum
Focus on requirements and solutions for an updated IPR regime
Discuss possible pilot case with new IPR regime
Outline steps to IPR reform