51 min

#18 Claudia Tapia - How to set FRAND rates The SEP Couch with Tim Pohlmann

    • Technology

“FRAND should be a framework that all stakeholders can innovate on together!“
Dr. Claudia Tapia is Director IPR Policy at Ericsson, where she leads the IPR Policy’s Research team and its activities worldwide. She is a speaker, writer, lecturer, and reviewer in IP and standardization-related topics. Prior to joining Ericsson, Claudia was Director IP Policy at BlackBerry. While at BlackBerry, she focused on various aspects of intellectual property, including intellectual property rights policies in standards, global patent policies, as well as licensing and litigation. Claudia holds a law degree from the University of Valencia, an LL.M degree specializing in International Patent Law from the Ludwig-Maximilian University in Munich, and a Ph.D. degree on FRAND and Standardization in the telecoms sector from the Faculty of Law in Augsburg (summa cum laude). Claudia is also president of 4iP Council, a non-profit research council dedicated to developing high-quality academic insight and empirical evidence on topics related to IP and innovation, and a member of the Editorial Board of The Patent Law magazine and of the Intellectual Property Magazine and member of the Advisory Board of C-IP2.
In the podcast, Claudia, speaking on her own behalf, elaborates on the lack of incentives for standard implementers to negotiate a FRAND license in good faith. Here she explains that companies typically implement the standards subject to SEPs first before anyone even approaches them for royalties. And then when the negotiation starts there is little incentive for implementers to find reach a FRAND agreement. That’s why SEP holders must go to court in some cases. Also, she explains that she believes that past damages for the use of SEPs without a license will also not properly compensate SEP holders, because these damages typically only relate to the patent/s that is/are part of the litigation, which represents only a very small share of the whole portfolio subject to be licensed. Moreover, damages do not properly compensate for the additional costs that the enforcement of the patents has created and do not typically sanction bad behavior which in return creates too little incentives for implementers to license in good faith. Put differently, a willing licensee should not be treated the same as an unwilling licensee. Otherwise, willing licensees would be discriminated and there would be less opportunity for innovators to obtain reasonable royalties in a timely manner, which they generally reinvest in the next generation of the standard Claudia explains. Finally, Claudia refers to a legal maxim "Justice delayed is justice denied". In other words, if legal redress or equitable relief to an injured party is available, but is not forthcoming in a timely fashion, it is effectively the same as having no remedy at all. Purposely delaying of a FRAND negotiation to avoid paying FRAND or force the SEP holder to accept royalties below FRAND, i.e., hold out, could be improved if there was a time-limited to such negotiations. Here Claudia believes 12 months for courts to issue their decision regarding FRAND and 6 months for appeal’s court (if appealed) would be more reasonable.  
When it comes to the value of 5G in IoT Claudia believes that we will have to wait and see what IoT will bring and how devices in different industries, in the end, will be connected. There may indeed be use cases where a fiber cable may be more efficient while there will also be many use cases that will need to rely on cellular connectivity. This is particularly the case for issues related to security, connected via wireless technologies. 
For Claudia, FRAND should be a framework that all stakeholders can innovate on together. Such a framework however also needs compensation on time. Claudia says that too often people do not see the big picture, i.e., they forget how important standards are for innovation today but even more for the future.

“FRAND should be a framework that all stakeholders can innovate on together!“
Dr. Claudia Tapia is Director IPR Policy at Ericsson, where she leads the IPR Policy’s Research team and its activities worldwide. She is a speaker, writer, lecturer, and reviewer in IP and standardization-related topics. Prior to joining Ericsson, Claudia was Director IP Policy at BlackBerry. While at BlackBerry, she focused on various aspects of intellectual property, including intellectual property rights policies in standards, global patent policies, as well as licensing and litigation. Claudia holds a law degree from the University of Valencia, an LL.M degree specializing in International Patent Law from the Ludwig-Maximilian University in Munich, and a Ph.D. degree on FRAND and Standardization in the telecoms sector from the Faculty of Law in Augsburg (summa cum laude). Claudia is also president of 4iP Council, a non-profit research council dedicated to developing high-quality academic insight and empirical evidence on topics related to IP and innovation, and a member of the Editorial Board of The Patent Law magazine and of the Intellectual Property Magazine and member of the Advisory Board of C-IP2.
In the podcast, Claudia, speaking on her own behalf, elaborates on the lack of incentives for standard implementers to negotiate a FRAND license in good faith. Here she explains that companies typically implement the standards subject to SEPs first before anyone even approaches them for royalties. And then when the negotiation starts there is little incentive for implementers to find reach a FRAND agreement. That’s why SEP holders must go to court in some cases. Also, she explains that she believes that past damages for the use of SEPs without a license will also not properly compensate SEP holders, because these damages typically only relate to the patent/s that is/are part of the litigation, which represents only a very small share of the whole portfolio subject to be licensed. Moreover, damages do not properly compensate for the additional costs that the enforcement of the patents has created and do not typically sanction bad behavior which in return creates too little incentives for implementers to license in good faith. Put differently, a willing licensee should not be treated the same as an unwilling licensee. Otherwise, willing licensees would be discriminated and there would be less opportunity for innovators to obtain reasonable royalties in a timely manner, which they generally reinvest in the next generation of the standard Claudia explains. Finally, Claudia refers to a legal maxim "Justice delayed is justice denied". In other words, if legal redress or equitable relief to an injured party is available, but is not forthcoming in a timely fashion, it is effectively the same as having no remedy at all. Purposely delaying of a FRAND negotiation to avoid paying FRAND or force the SEP holder to accept royalties below FRAND, i.e., hold out, could be improved if there was a time-limited to such negotiations. Here Claudia believes 12 months for courts to issue their decision regarding FRAND and 6 months for appeal’s court (if appealed) would be more reasonable.  
When it comes to the value of 5G in IoT Claudia believes that we will have to wait and see what IoT will bring and how devices in different industries, in the end, will be connected. There may indeed be use cases where a fiber cable may be more efficient while there will also be many use cases that will need to rely on cellular connectivity. This is particularly the case for issues related to security, connected via wireless technologies. 
For Claudia, FRAND should be a framework that all stakeholders can innovate on together. Such a framework however also needs compensation on time. Claudia says that too often people do not see the big picture, i.e., they forget how important standards are for innovation today but even more for the future.

51 min