Patent Pools

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The U.S. Department of Justice (DOJ) recently issues a business review letter (BRL) and press release concerning a proposed patent pool of patents owned by universities called the University Technology Licensing Program (UTLP) in response to UTLP’s BRL request of August 14, 2020.  The UTLP pool is not intended to have standard essential patents (SEPs), but has provisions in the event that a patent in the pool is found to be an SEP.  This business review letter provides incremental insight into DOJ’s competition law distinctions between SEP patent pools and non-SEP patent pools.

We do a quick summary of it below, but (as always) recommend that you read the BRL itself if you need to make decisions based on it.  Some incremental insights from this BRL with the distinction between SEP and non-SEP patent pools from a competition law point of view include:

  • Competition law is particularly concerned with pooling together substitute patents (e.g., pooling together patents covering mutually exclusive, competing technologies), but a pool of standard essential patents do not raise that concern because such patent pools would have only complementary patents (e.g., patents on technologies that may be used together, which generally is the case for patents essential to the same standard).
  • A licensee can pick-and-chose patents to license from a pool of non-SEPs, but cannot for a pool of SEPs because a license is required for all the SEPs (else patents in the pool are not essential to the standard after all).
  • Price flexibility based on the number of patents in a non-SEP patent pool that one licenses is helpful because–unlike with a pool of SEPs–not all implementers will require access to every patent in that pool so discounts for licensing more patents provides incentives to use the technology and has transaction efficiencies.
  • Competition concerns might be raised when sharing royalty distribution among all members of a pool of non-SEPs in which not all patents may be licensed (because not all licensees may use all the patented technology), but those concerns do not arise with SEP patent pools in which the entire SEP pool must be licensed (because licensees need a license to all patents that are essential to the standard).
  • Making the patent pool of non-SEPs the exclusive entity to obtain a license to any patents in that pool was not a concern here given other circumstances, but it may be a concern for an SEP patent pool, which is why such SEP pools typically allow the patent owners to independently license there SEPs if not licensed through the SEP pool.

As we stated with other DOJ business review letters, this letter is limited to whether DOJ currently perceives any competition law issues with the proposed business plan and does not represent an endorsement that a business plan is substantively better than other approaches.  Thus, this business review letter’s conclusion is limited to finding that the “UTLP is unlikely to harm competition” so DOJ has “no present intention to challenge the program.”  DOJ also stressed that this letter is limited to the particular type patent pools of universities that have unique issues in enforcing their patents in this particular technological area of physical sciences.
Continue Reading DOJ Business Review Letter of University Tech. Licensing Program for Non-SEPs

Back in June, we alerted you to a number of infringement suits brought by licensors to the MPEG LA ATSC patent pool in the Southern District of Florida, targeting several television  manufacturers — ViewSonic, Craig Electronics, and Curtis International.  Yesterday, a different group of MPEG LA licensors filed suit on patents related to a different…

TVFor the second time in a couple of weeks, members of a standard-essential patent pool have filed an infringement lawsuit.  Last month, it was Blu-ray patent pool One-Blue (and several licensors) filing suit against Imation Corp.  Yesterday, a group of licensors to the MPEG LA Advanced Television Systems Committee (ATSC) digital television patent pool…

This past Wednesday, the Blu-ray patent pool One-Blue, LLC and several of its licensors (Philips, Panasonic, Pioneer, and Sony) filed a patent infringement lawsuit in Delaware district court, accusing Imation Corp. of infringing several patents that are either essential or related to the Blu-ray Disc Assocation’s (BDA) Blu-ray standards.

[One-Blue v Imation Complaint]Continue Reading Patent pool One-Blue and several licensors file suit against Imation over Blu-ray patents

A couple of weeks ago, we noted a peculiar minute order emanating from Judge James L. Robart’s courtroom in the Microsoft-Motorola RAND case.  Based on his review of Google’s AVC/H.264 standard-essential patent pool license agreement with MPEG LA, Judge Robart asked the parties to submit short letter briefs addressing two questions regarding the relevance of the Enterprise License provision (Section 3.1.7) to any grantback license that Motorola (as a subsidiary of Google) might owe to Microsoft.

Late Friday, the parties submitted their respective answers to the court’s questions (Microsoft’s / Motorola’s).  The parties’ answers and arguments show just how millions of dollars in royalties could turn on the interpretation of just a couple of short phrases in the MPEG LA agreement.  After the jump, we’ll provide a short summary of both Microsoft’s and Motorola’s positions.  Essentially, though, the parties’ arguments boil down to this — Was the MPEG LA agreement’s grantback provision designed to extend to all affiliates of a given licensee, whether those affiliates receive any benefits under the agreement or not?Continue Reading Microsoft, Motorola submit final arguments to Washington court on the relevance and effects of Google-MPEG LA AVC/H.264 agreement to a Microsoft-Motorola RAND license

[UPDATE]  Since this post was originally published on January 22, the deadline passed for the parties to submit extrinsic evidence and additional arguments supporting their respective interpretations of the Google-MPEG LA AVC/H.264 license agreement.  Microsoft submitted both a brief and a supporting Declaration of Lawrence A. Horn, who is the President and CEO of MPEG LA, LLC.  Mr. Horn’s declaration supports Microsoft’s argument (as detailed in our original post below) that the scope of the grant-back under the MPEG LA license agreement extends to all Affiliates of Google, not just to those specifically identified.  For its part, Motorola argues that the “scope” language of the MPEG LA agreement remains ambiguous, and that Mr. Horn’s declaration represents inadmissible hearsay because Motorola was unable to cross-examine him.

The parties’s respective briefs and Mr. Horn’s declaration may be accessed from the links below:

[/UPDATE]

Judge Robart’s forthcoming opinion in the Microsoft v. Motorola RAND breach of contract case in the Western District of Washington is highly anticipated by those who pay attention to standard-essential patent disputes, as it will likely provide a judicially-sanctioned roadmap for how to determine RAND terms and conditions in a given licensing situation.  But before he issues a written decision, a hearing is scheduled for January 28, during which Judge Robart will hear oral argument from Microsoft and Motorola regarding the implications that Google’s AVC/H.264 patent pool license agreement with MPEG-LA may have on the appropriate RAND terms for Motorola Mobility’s H.264-essential patent portfolio. (Google, of course, being the parent company of Motorola Mobility since it acquired Motorola in May 2012).


Continue Reading Preview: Motorola, Microsoft set to debate relevance of Google’s MPEG LA license agreement to RAND terms next week

Because so many SEP-related issues have arisen over the past year, we will periodically revisit some of the more important occurrences with a brief post.  The recent bench trial before Judge James L. Robart of the Western District of Washington between Microsoft and Motorola a may yield a groundbreaking opinion in the area of standard-essential patents, so this is a case that warrants a review.

The dispute between the parties originated back in the fall of 2010.  Microsoft sued Motorola in the U.S. District Court for the Western District of Washington and the U.S. International Trade Commission, accusing Motorola Android devices of infringing several Microsoft patents.  Motorola in turn sent two letters to Microsoft, offered Microsoft licenses to two of Motorola’s standard-essential patent portfolio – for the 802.11 WiFi standard and the H.264 video coding standard – at a rate of 2.25% of the net selling price of the end products that practice those standards.  Microsoft then filed a complaint in the W.D. Wash. against Motorola for breach of contract – specifically, Microsoft alleged that Motorola’s offers to Microsoft breached Motorola’s prior promises to the IEEE and the ITU to offer licenses to its 802.11 and H.264-essential patents on RAND terms.Continue Reading Catching up on…Microsoft v. Motorola