A few weeks ago, the White House Office of Management and Budget’s (OMB)  proposed revisions to Circular A-119 entitled “Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities.”  In this post we provide an overview of OMB’s proposed 60+-page revised Circular A-119.

Last revised in 1998, Circular A-119 provides instructions and information to various federal agencies that are involved or participate in developing and using standards and standardization systems.  OMB proposed revisions to Circular A-119 “in light of changes that have taken place in the world of regulation, standards, and conformity assessment since the Circular was last revised”, under the general goal of promoting economic growth, innovation, and competition in addition to facilitating international trade.

The proposed changes to Circular A-119 fall into four major categories:

  1. SDO (Standards Developing Organizations) Process Related Issues
  2. IPR (Intellectual Property Rights) Related Issues
  3. Conformity Assessment Related Issues
  4. Agency Related Issues

The OMB’s request for comments on the proposed revisions were published in the Federal Register on February 11, 2014, seeking responses by May 12, 2014.

SDO Process Related Issues

Keeping with the current version, the revised circular expresses preference for voluntary consensus standards (VCSs) over standards developed by federal agencies.  The revised circular acknowledges that several types of voluntary standards could be relevant to a federal agency’s mission, including non-consensus standards under certain circumstances, but expresses preference for consensus standards over non-consensus standards where practicable. The proposed revisions also encourage agencies to participate in the activities of intergovernmental organizations and voluntary non-consensus bodies, providing guidance on how Federal representatives should participate in standards development activities.

The revised circular also offers a modified definition of a VCS Development Process as characterized by openness, balance of representation (previously “balance of interest”), due process, an appeals process, and consensus.  During a recent webinar, ANSI noted that, whereas the definitions provided by the original circular were in line with the ANSI Essential Requirements, this may no longer be the case because OMB’s revisions are slightly less inclusive than the Essential Requirements.  In other words, if one complies with the ANSI Essential Requirements, one complies with OMB, though one can comply with OMB and still not comply with ANSI Essential Requirements.

IPR Related Issues

As the 1998 version of Circular A-119 addresses IPR policies only briefly, OMB is seeking public comment on “whether it should consider providing more specific guidance for agencies with respect to intellectual property rights (IPR)-related considerations with regard to standards”. OMB’s current proposal includes the following language:

This evaluation [of using a voluntary standard] should include consideration of the economic effect of the IPR policies of the VCS bodies on standards implementers, such as the extent to which entities practicing the standards may obtain licenses to patented technology incorporated into the standard on a non-discriminatory and reasonable royalty or royalty-fee basis. This evaluation should also include consideration of whether such IPR policies bind subsequent transfers of patented technology incorporated into the standard.

The revised circular also indicates that an SDO’s IPR policies “should be easily accessible and the rules governing the disclosure and licensing of IPR should be clear and unambiguous.”

As noted at pages 5-6 of the proposed revisions, OMB is particularly interested in receiving public comment on whether the circular should provide more specific guidance on IPR-related considerations with respect to standards, including what factors an agency should consider regarding the interests of intellectual property holders whose intellectual property is incorporated in the standard and the interests of parties seeking to implement that standard.

The revised circular also addresses and reaffirms the rights of IP holders whose IP is incorporated into a voluntary standard published in an agency document, indicating federal agencies must observe and protect the underlying intellectual property right and meet all obligations required to comply with the standard.  Where an agency incorporates material that is protected or otherwise not freely available, the revised circular directs agencies to work with relevant standards developers to promote the availability of the materials while respecting the IP owner’s interest in protecting its IP.

Agency Related Issues

The revised circular also provides advice on how federal agencies should participate in standards development, including serving on the board or in a leadership position of a SDO, noting that participation does not equate to endorsement of a particular standard.  The revised circular also advises agencies to ensure timely updating of standards and provides additional guidance on complying with international obligations, indicating the agencies should consult with USTR and State Department on how to comply with international trade (including WTO Agreements) and other international obligations.

 

Yesterday marked the start of the long-awaited Microsoft-Motorola RAND breach of contract jury trial, taking place before Judge James L. Robart in the Western District of Washington.  Over the next week or so, the jury will hear testimony on whether Motorola breached its IEEE- and ITU-related RAND obligations through its licensing negotiations and course of dealing with Microsoft, as well as whether Motorola owes damages to Microsoft (Microsoft is apparently seeking $23M stemming from a move of its European distribution center to avoid a German patent injunction, plus $6M in attorneys’ fees incurred in defending injunction claims).  We’ll try to keep you apprised of any interesting rulings or nuggets that come to light during the trial.  In the meantime…

  • Even on the first day, there were already some reporters tweeting live updates from the courtroom, including Janet Tu of The Seattle Times (Twitter feed @janettu) and Todd Bishop of Geekwire (Twitter feed @toddbishop).  You can read Janet’s recap of the first day here, and check out Todd’s recap here.  For those of you who are interested in following live updates on Twitter, check out the hashtag #motosoft.
  • Last week we dove a little bit into the issues raised by Motorola’s dealings with Marvell — Microsoft’s 802.11 chip supplier — and the parties’ arguments regarding whether the jury should be allowed to consider Motorola’s conduct toward Marvell as part of its breach of contract analysis, and also whether a hypothetical license between Motorola and Marvell would have exhausted Motorola’s patent rights with respect to Microsoft.  Yesterday, Judge Robart issued an order excluding Microsoft’s efforts to argue that patent exhaustion would apply.  However, Judge Robart will allow Microsoft to introduce evidence relating to Motorola’s conduct with Marvell, finding that such evidence could be relevant to Microsoft’s claim that Motorola violated its RAND-based duty of good faith and fair dealing.
  • Tim Worstall of Forbes also brings us a preview of the trial.
  • Over at AllThingsD, John Paczkowski wonders what if any effect the outcome of this trial could have on BlackBerry, speculating that a jury verdict of breach might lead BlackBerry to file a similar RAND breach of contract suit against Motorola (the parties were previously involved in a wide-ranging patent dispute from 2008-2010).
  • Lastly, FOSS Patents’ Florian Mueller argues that this jury trial wouldn’t be taking place if not for what he calls [Motorola parent company] Google’s “patent schizophrenia.”
  • InsideCounsel magazine recently published an article of ours, titled “Establishing Federal Rules of Patent Procedure“.  This article is the first in a three-part series in which we examine certain “patent reforms” that have been proposed in response to the perceived rise in assertions by non-innovative patent assertion entities.  In this article, we look at the potential for establishing special uniform rules of civil procedure that would govern all patent cases, regardless of which district court the complaint was filed in. (via InsideCounsel)
  • Speaking of perceived problems with PAE lawsuits, Prof. Adam Mossoff of the George Mason School of Law writes in the Truth on the Market blog that this concern is largely overblown, calling it “The Myth of the ‘Patent Troll’ Litigation Explosion“. (via Truth on the Market)
  • We’ve previously noted Vermont’s efforts to stop the infamous so-called “scanner troll” — MPHJ Technologies — from asserting its patents against Vermont companies and organizations.  Those efforts have now expanded to other states, apparently.  First, Nebraska’s attorney general opened an investigation into Farney Daniels, the law firm representing MPHJ.  And now comes the news that that the Minnesota attorney general has entered into a settlement in which it has agreed not to send any licensing or assertion letters to Minnesota businesses without providing the AG’s office with at least 60 days’ notice, and obtaining the AG’s consent — however, MPHJ is apparently not prohibited from filing infringement lawsuits against Minnesota businesses.  (via Bloomberg)
  • Finally, Samsung has appealed to the Federal Circuit several of the U.S. International Trade Commission’s decisions in Inv. No. 337-TA-794, the case in which the U.S. Trade Representative vetoed the ITC’s issuance of an exclusion order due to concerns over standard-essential patent issues.  While the USTR’s veto is not appealable, Samsung has appealed the ITC’s findings of non-infringement of several other patents, including one patent — U.S. Patent No. 7,486,644 — that Samsung has alleged to be essential to certain wireless standards. (via Law360)

CAFC

  • Yesterday, the U.S. Court of Appeals for the Federal Circuit affirmed a jury verdict invalidating a University of California patent that had been asserted by a non-practicing entity, Eolas, against dozens of companies based on their use of “interactive” features on the World Wide Web.  More on this case from Joe Mullin at ArsTechnica.
  • As noted by Jason Rantanen at Patently-O, the Federal Circuit Advisory Council just released a model order addressing limitations on excess asserted claims and prior art in patent litigations.  The orders seeks to provide district courts with a roadmap for narrowing the issues in patent cases and reducing litigation costs for the parties, and follows a 2011 Federal Circuit Advisory Council model order addressing e-discovery issues.
  • Court watchers and readers of this blog might be particularly interested in a couple of upcoming oral arguments taking place at the Federal Circuit over the next month and a half:
    • On August 9, the court will hear oral argument in appeal no. 13-1129, which is the Apple’s appeal of Judge Lucy Koh’s decision not to impose a permanent injunction on Samsung for infringement of several Apple patents, in part because Apple failed to establish a “causal nexus” between Samsung’s infringement and any irreparable harm to Apple.
    • And on September 11, oral argument is scheduled in appeal no. 12-1548, which is the appeal of Judge Posner’s decision to dismiss both Apple’s and Motorola’s dueling claims for damages and injunctions in a Northern District of Illinois infringement case.  The standard-essential patent-related portion of this oral argument should be especially interesting, as the judges may be posing questions on the appropriate methodology for calculating a RAND royalty and whether injunctive relief may be obtained as a remedy for infringement of a RAND-pledged SEP.
  • Lastly, congratulations to Todd Hughes, the Deputy Director of the Commercial Litigation Branch of the Civil Division at the Department of Justice who was nominated earlier this year by President Obama to become a Federal Circuit judge.  Last week, Mr. Hughes’ nomination was approved by the Senate Judiciary Committee, and his nomination now proceeds to the full Senate for a confirmation vote. (via Blog of Legal Times)

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  • We recently prepared a Patent Alert on the Federal Circuit’s decision (penned by Chief Judge Rader) in Ultramercial v. Hulu, where the court reversed a district court’s prior finding (on a motion to dismiss) that Internet-related patent claims were not patentable subject matter under Section 101.  At IP Watchdog, Eric Guttag says that Judge Rader has “thrown down the gauntlet” before the Supreme Court on the eligibility of computer-implemented inventions, and offers seven “pearls of wisdom” to glean from the court’s decision.
  • Indirect infringement, particularly inducement, is often a very murky issue — and the Federal Circuit’s 2012 Akamai/McKesson en banc decisions (which found no single direct infringer was needed to show inducement) may have further unsettled things in this area.  But as Dennis Crouch at Patently-O notes, the Supreme Court may now be closer to granting a petition for certiorari to clarify some of these issues — it recently asked the U.S. Solicitor General for its views on the issue.
  • As part of Wired‘s op-ed series “The Patent Fix,” Prof. Colleen Chien of Santa Clara Law School wrote a thoughtful opinion piece titled “Everything You Need to Know About Trolls (The Patent Kind).”  Prof. Chien offers some useful insight into the scope of the perceived problems involving non-practicing entities, as well as numerous links to background literature, presentations, and studies on the issue.
  • Florian Mueller at FOSS Patents alerts us to a number of lawsuits filed by Cellular Communications Equipment LLC (an apparent Acacia Research subsidiary) against wireless device companies and service providers in the Eastern District of Texas, alleging these companies of infringing several patents (including some cellular standard-essential patents).  What’s notable about these cases is that the patents all appear to have been assigned to the plaintiff from Nokia, potentially in conjunction with a December 2012 settlement between Acacia and Nokia.
  • Shameless Plug Alert: Dow Lohnes attorneys and Essential Patent Blog founders David Long and Matt Rizzolo wrote an article that was recently published in the June/July 2013 issue of Today’s General Counsel magazine.  The article, titled “Design Patents May Be Next Troll Target,” takes a look at whether non-practicing entities might turn to design patents in an attempt to recover an accused infringer’s total profits.
  • In case you missed it on Friday, an en banc Federal Circuit ruled that it has jurisdiction to hear an appeal of liability issues prior to a determination on damages or willfulness.  Many have speculated this will lead to increased bifurcation of liability and damages issues during patent cases.  (Patent Alert – Bosch v. Pylon)

Over the last several days, a lot of ink (and pixels?) have been spilled about Judge James L. Robart’s April 25 Microsoft v. Motorola RAND royalty-setting opinion.  Here at the Essential Patent Blog, we’ve done an initial dive into Judge Robart’s opinion [LINK], posted a table showing his modified Georgia-Pacific analysis [LINK], and also prepared a handy annotated copy of the 207-page order [LINK].  But many others, of course, have their own takes on Judge Robart’s groundbreaking opinion — below is a list of some of the more interesting ones that we’ve come across:

  • Groklaw has two good posts on the case.  One is an initial reaction to the judge’s order.  The second post goes into greater detail regarding the opinion, and also has a very helpful plain text version of the entire order (along with some general background on standards generally for the uninitiated).
  • At Patently-O, Prof. Jorge Contreras from American University’s Washington College of Law gives a brief report on the order — “SO THAT’S WHAT ‘RAND’ MEANS?
  • Patent Progress‘s Matt Schruers gives us his observations on Judge Robart “crossing the RAND rubicon.
  • FOSS PatentsFlorian Mueller gleefully writes that at the RAND rate set by Judge Robart, it would take Google almost 7,000 years to recoup Motorola’s $12.5B purchase price from Microsoft.  He also takes his own closer look at the opinion.
  • At Consortium.org’s Standards Blog, Andy Updegrove ponders “the future of FRAND” in the aftermath of Judge Robart’s ruling.
  • Alison Frankel from Thomson ReutersOn the Case blog expresses concern about the implications of Judge Robart’s ruling, calling it “a call to litigation.

There will no doubt be much more written about this decision as the order continues to be digested and dissected by the legal and business community.  If we see other interesting articles, we will pass them along.

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