1. The challenge of patent governance in ICT Standards, seen from a patent authority’s perspective Dr. Konstantinos Karachalios, Scenarios Analyst, EPO Presented at Workshop about "China’s Standards and Innovation Policy – Sharing the Benefits in the Emerging Global Knowledge Economy" Beijing, October 14, 2009

2. SDOs technological platforms IP Offices + documentation, cutting edge patent applications + valid IP titles proprietary standards Formal standardisation process VIRTUOUS CIRCLE OF INNOVATION

3. SDOs patent gaming, no access to drafts trivial patents IP Offices submarine patents emerging a posteriori Lack of institutional interfaces Competition authorities technical working groups

4. EPO scenarios for the future Whose Game Scenario: Escalating standards wars with patents as the Pawn lead to splitting of the world in two separate trade blocks; a nightmare story.

5. Exaggerating, no problem ? System works for 95 % of cases with no major frictions A Anyway, the market will care I If not, courts will decide

6. Possible objections The `remaining` 5 % of the cases may be the most virulent and critical ones The `remaining` 5 % of the cases may be the most virulent and critical ones Self-regulation capabilities of markets doubted nowadays, even by Greenspan Self-regulation capabilities of markets doubted nowadays, even by Greenspan

7. Risks for involved institutions If tensions escalate, there is a real risk for losing trust from the side of business and society to the formal standardization processes and to the patent system.  Possible impact: Private consortia substituting formal SDOs Back to secrecy

8. Dilemma of patent offices For the patent system, its good reputation and even the societal goodwill may be at stake here. For the patent system, its good reputation and even the societal goodwill may be at stake here. However, this is an eminently political field and patent offices are not used to explicit political actions. However, this is an eminently political field and patent offices are not used to explicit political actions. Should thus the patent system, which has benefited tremendously from the rise of the value of intangibles, remain inactive, even if its own most valuable intangibles are at stake ?

9. What could POs do ? Internally: improve quality, prioritise examination in critical fields, reduce pendency and thus uncertainty Externally: Get engaged

10. Quality improvement Make the application of existing rules stricter and more rigorous Man skilled in the art should track progress of technical working groups Getting early, upstream, non- confidential documentation from within standardisation process  Eventually, grant less patents

11. Reduce pendency time Prioritise hot spots inside specific industrial sectors, thereby increasing certainty Make relevant information about uncertainty in specific areas of pending patents publicly available* * For now: pure data elements and statistics, of the type that are not currently database searchable but which are nevertheless public through epoline on-line file inspection

12. Get engaged Actively defend the original rationale and virtue of the patent system: openness and transparency (Latin patere means: to lay open) Actively defend the original rationale and virtue of the patent system: openness and transparency (Latin patere means: to lay open) Seek for better exchange of information and collaboration between competition authorities, patent agencies and standardisation bodies Seek for better exchange of information and collaboration between competition authorities, patent agencies and standardisation bodies  improve disclosure

13. Key areas to be explored* Which applicant behaviour in the patent process is a leading indicator of potential abuse? Which targeted information should patent offices send to competition authorities and SDOs and when? Which targeted information should competition authorities and SDOs send to patent offices and when? How can the transparency and accessibility of patent related information be improved in order to make monitoring IP rights, including pending ones, easier?

14. General principles* The EPO believes that a better understanding of the competitive implications of companies exploiting otherwise perfectly logical and legitimate provisions in secondary patent legislation can lead to improvements. The EPO believes that a better understanding of the competitive implications of companies exploiting otherwise perfectly logical and legitimate provisions in secondary patent legislation can lead to improvements. The focus of the EPO is therefore not in ex post individual competition cases - this is not the vocation of the EPO. Although, if the EPO is able to shine a light on the growing mass of (pending) IP rights, then this will be definitely be considered. The focus of the EPO is therefore not in ex post individual competition cases - this is not the vocation of the EPO. Although, if the EPO is able to shine a light on the growing mass of (pending) IP rights, then this will be definitely be considered. Instead the focus of the EPO is in appropriate measures, from various regulatory bodies including the patent offices themselves, in order to correct rules and procedures whose original intentions are open to uncompetitive distortions. Instead the focus of the EPO is in appropriate measures, from various regulatory bodies including the patent offices themselves, in order to correct rules and procedures whose original intentions are open to uncompetitive distortions.

15. Some practical ideas for cooperation Improve documentation standards of major SDOs to fit examination purposes of patent offices Cooperate with SDOs on technical projects capable of enhancing transparency (e.g. for automatic updating IPR DBs of SDOs) Make a joint effort to create a specific, ICT- standards-related documentation DB, open to the major patent offices for examination purposes POs to participate actively in IP fora of major SDOs and at GSC, adding their perspective in the public debate Carry out patent searches on demand?