Software Standardisation and Patent Protection Strategies

1. Standardisation and Software Protection Strategies

2. Table of Contents • Overview • Standards involving patents • Impact on software protection strategy

3. 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. 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 • potentialmarket power of an essential IPR holdercontrolling 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. Table of Contents • Overview • Standards involving patents • Impact on software protection strategy

6. 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 Tension leading to conflicts whenever a patent is needed for the implementation of a standard Patents are destined for private exclusive use Standards are intended for free, collective use

7. 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 increaselikelihood of effective access (avoidforeclosure) • 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. Table of Contents • Overview • Standards involving patents • Impact on software protection strategy

9. 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. Thank you for listening! Michael Fröhlich mfroehlich@rim.com +49 (0)211 971 996 30