Centre for Internet and Society

Fab to Fabless: Understanding the Process of Chip Manufacturing (Interviews with Semiconductor Industry - Part 2)

maggie — 2014-12-26T12:06:48Z

This is the second of a four-part blog series highlighting findings from a small sample of interviews with fabless semiconductor industry professionals in Taiwan. These industry insiders was approached for the intent of understanding expert knowledge on the process of integrated circuit design. This post explores the process of chip manufacturing and the foundry business model.

See the first blog post here.

Studies have shown that Taiwan's integrated circuit manufacturing sector have shown spatial and industrial knowledge spillover, resulting in "increased information diffusion, interaction and communication, innovation, and intellectual capital.". Market research company IC Insights found that Taiwanese and Chinese companies represented five of the eight fastest-growing fabless integrated circuit ("IC") suppliers in 2013.

The Pervasive Technologies: Access to Knowledge in the Marketplace project is looking at the accessibility of networked communication technologies in the mass market within the sub-100 dollar range. This has resulted in a narrowing of the research scope to the mobile phone due to the pervasiveness of the mobile for accessing Internet, as understood by exploring the trends in technology usage models as explored in Part I of this blog post series: Trends and Changes in Technology (Part I of IV).

The need to understand the full story of the mobile phone production led CIS to Taiwan to understand the beginnings of the manufacturing process - the development of an integrated chip. The interviewed professionals all represented fabless IC semiconductor design companies which operated via a foundry business model where the actual fabrication is outsourced.

According to one expert whose company earned 50% of its revenue from mobile chipsets alone, the process of the mobile phone manufacturing begins at the fabless design stage, where fabless IC design companies design a chip following consultation with the fabricators to specify the mechanical constraints of the process (the size of the die, the minimum size of the wiring line, etc.) to ensure design requirements are met, and to negotiate the costs of production. Another interviewee highlighted that during this design phase, there are three clear goals: 1) Upgrade performance, 2) Reduce cost by integrating features, and 3) Reduce power consumption.

These particular companies provided insight to some of the commonly licensed technology that went into a smartphone chipset. This included the central processing unit (CPU) from ARM Holdings, who in 2010 held 95% of the CPU marketshare in smartphone technology, and have only increased since then. One of the interviewed companies also uses the graphics processing unit (GPU) intellectual property from Imagination Technologies, which after Qualcomm had the 2nd largest market share of IP for personal devices in 2013. Qualcomm who owns the most patents to the 3G standard with over 250 licenses in its CDMA portfolio has made considerable revenue gains thus far, but some analysts predict due to a transition into 4G technology without the same dominant 3G portfolio, they will lose their dominant market position.

Having taken into account these IP into the design process, the design is then sent to fabricators such as the Taiwan Semiconductor Manufacturing Industry (TSMC) who in 2013 owned at least 50% of the world's global maker share in fabrication, and others like the United Microelectronics Corporation (UMC) and Global Foundries). According to the interviewee, the fabrication process requires about 2-3 months.

This foundry business model is a result of increased efficiency and division of labour. Fabrication plants require large amounts of investments into manufacturing facilities. According to interviewees, one would have to spend an average of 5-10 billion USD to built a fabrication plant now. Since plants like TSMC exists, semiconductor industries can now focus on their area of expertise, which is design and customer relationship, and optimize their synergistic relationship for gains for all.

One of the recent revolutionary developments which have contributed to low-cost smartphone manufacturing has been the turnkey solution chipset, which includes the hardware reference design, the printed circuit board, the software, and instructions for how to create a mobile phone. This turnkey solution, amongst other electronic parts, are sent for white box packaging, then shipped to a distributor like WPG Holdings who are the largest electronics distributor in Asia. WPG and others will then distribute these chips and other related products to their customers, the smartphone manufacturers. This entire production cue takes about 3-4 months.

The turnkey solution as mentioned before vastly contrasts the traditional manufacturing process of a mobile phone, where a chip could be designed, given to the original equipment manufacturer (OEM) who would then design all the remaining parts. There used to be a very clear division of labour. Now, one interviewee explained, manufacturers will "buy a turnkey solution, open a factory, take a chassis (case), screw it all together, and sell it. This is what's driven the demand, and that's what created this low cost-market."

According to our interviewees, the low-cost production of this turnkey chip solution is the reason how so many of the phones in the sub-$100 dollar market exist today.

P.127 of Tsai, Diana H. A. “Knowledge Spillovers and High-Technology Clustering: Evidence from Taiwan’s Hsinchu Science-Based Industrial Park.” Contemporary Economic Policy 23.1 (2005): 116–128. Print.

IC Insights. “Taiwanese and Chinese Companies Represented Five of Eight Fastest Growing Top-25 Fabless IC Suppliers in 2013.” IC Insights. N.p., 7 May 2014. Web. 3 Sept. 2014.

Morgan, Timothy Prickett. “ARM Holdings Eager for PC and Server Expansion.” The Register, Feb. 2011. Web.

Trefis Team. “Why Qualcomm’s Royalty Rate Will Continue To Decline.” Forbes, 10 June 2014. Web.

Wang, Lisa. “TSMC Eyes 50% Global Market Share.” 26 Mar. 2014: 13. Print.

For more details visit https://cis-india.org/a2k/blogs/interviews-with-semi-conductor-industry-professionals-in-taiwan-2

Exploring the Internals of Mobile Devices — Report from a One-day Workshop at TERI

jdine — 2012-12-01T05:57:53Z

On October 27, 2012, the Centre for Internet & Society (CIS) organised a one-day workshop on exploring the internals of mobile technologies at the TERI Southern Regional Centre in Bangalore. The workshop received more than 140 registrants, of which approximately 40 attended. In this post, Jadine Lannon explores the discussions and the developments that took place at the workshop.

The event brought together professional and non-professional individuals and communities interested in exploring mobile technologies. The aim of the workshop was the provide participants with the knowledge and tools to better understand the internals of mobile technologies as well as familiarize the attendees with CIS's "Pervasive Technologies" research project.

Anil Kumar Pugalia, Sudar Muthu and Pankaj Bharadiya were the expert speakers. The event was supported by the well-established online security, hardware and software domain communities NULL, SecurityXploaded, Computer Club India and Bangalore Android User Group.

Sudar Muthu: Capabilities of Arduino

Capabilities of Arduino (including Due) from Sudar Muthu	Sudar Muthu began the workshop with a talk on the capabilities of Arduino and the ways in which Arduino can be used to interface with different external devices. He discussed with us different types of Arduino, the technical specifications of Arduino, the ways that Arduino can be used to interface with external boards and the interfacing that he has been able to accomplish using Arduino and various devices. The slides from his Powerpoint presentation are viewable on the left.

Anil Kumar Pugalia: Mobile Hacking using Linux Drivers

Anil Kumar Pugalia followed Sudar's presentation with an exploration of methods of mobile hacking using Linux drivers. He discussed various Linux kernel hacking techniques as well as tools that can be used to perform reverse-engineering on a mobile device. The slides from Anil's presentation can be accessed on the right.	Mobile Hacking using Linux Drivers from Anil Kumar Pugalia

The following two talks were delivered by Pankaj Bharadiya from Texas Instruments. In his first presentation, he explored hardware hacking and board/chips capabilities. His second talk was on porting open software on hardware. In addition to his discussions, he also covered porting Android on open hardware. The slides from his presentations will be posted shortly.

After all the presentations, the participants were invited to handle and open up the 12 mobile devices that CIS purchased for our Pervasive Mobile Technologies research project. The participants worked in teams of two to five members to open up the mobile devices and observe their internals. We asked the participants to record any information about the internals of the mobiles that they were able to find, including the make, model, and serial numbers of the components. Pictures from this part of the workshop will be posted shortly.

All of the collected information was recorded and distributed among the participants so that the group could continue to work on identifying the mobile internals and the various data sheets associated with each component. This data will be added to the specifications of each mobile device as it is collected. CIS hopes to continue to collaborate with the individuals and communities who participated in this workshop as well as other interested individuals who may have been unable to attend the one-day workshop to proceed with this process of identification. We also hope to hold a second event, a one- to two-day hackathon, sometime in December to continue the exploration of our mobile devices.

CIS would like to thank Anil Kumar Pagalia, Sudar Muthu, Pankaj Bharadiya, Khasim Syed Mohammed, Akash Mahajan (NULL representative), Amit Malik (SecurityXploaded representative), the NULL, SecurityXploaded, Bangalore Android User Group and Computer Club India communities, and all of the participants for making the workshop a huge success and aiding us in our ongoing research project!

You can reach participating communities at following links:

For any further information on the past workshop or future events, please connect with us:

Jadine Lannon (jadine@cis-india.org), research intern for the A2K programme
Amarjit Singh (amarjitlife@gmail.com), the Workshop Manager.

Click below for a slideshow of the pictures from the workshop:

Photos

For more details visit https://cis-india.org/a2k/blogs/exploring-the-internals-of-mobile-devices

Dataset: Patent Landscape of Mobile Device Technologies in India

rohini — 2016-05-03T20:06:43Z

Patent landscape of mobile technology patents and patent applications held by 50 companies operating in India. Licensed CC-BY-SA 4.0.

Dataset: Patent Landscape of Mobile Device Technologies in India

This dataset contains a landscape of 23,569 patents and patent applications registered in India and relevant to the domain of mobile technology. These patents and patent applications are held by 50 Indian and non-Indian companies operating in the country. The patent landscape has been released under the Creative Commons-Attribution-Share Alike 4.0 (CC-BY-SA 4.0) License as a part of the ongoing Pervasive Technologies research project.

For the detailed methdology used for drawing up this landscape, read: Methodology: Patent Landscaping in the Indian Mobile Device Marketplace

A paper titled "Patents and Mobile Devices in India: An Empirical Survey" published on SSRN in March 2016 presents an analyis of this patent landscape.

For queries regarding the dataset or its reuse, write to rohini@cis-india.org.

Using this dataset:

Assignee: The assignee is one of 50 companies specified in Annexure 4 of the methodology document. Where two assignees are mentioned, the patent was transferred from the second assignee to the first on account of sale of the patent, company merger, etc. For example, "Huawei|NEC" indicates that a patent that belonged to NEC was transferred to Huawei.

Patent Number: This column contains the patent number in the case of granted patents and the application number in case of patent applications. Patent numbers have been coded in the Thomson Reuters database as IN<6 digit number>B. For example, the patent number 247760 in the Indian Patent Office database is coded as IN247760B in this dataset. The application number is coded as well. However, there is a separate column (Column R) for the application number as given in the Indian Patent Office database.

Level 1: Patents and patent applications in the landscape have been categorised into: Body Design, Communication, Connectable Interfaces, Display, Energy Storage, Memory, Operational Blocks, Sensors, Software, and Sound, image and video.

Level 2: Almost all categories have further been divided into sub-categories, i.e., Level 2 categories.

Infrastructure/ UE: Refers to whether the patent pertains to infrastructure and the user equipment (IUE) or only the user equipment (UE).

For more details visit https://cis-india.org/a2k/blogs/dataset-patent-landscape-of-mobile-device-technologies-in-india

Dataset for "Patent Working Requirements and Complex Products: An Empirical Assessment of India's Form 27 Practice and Compliance"

rohini — 2017-09-10T15:11:38Z

Dataset of the first comprehensive and systematic analysis of 4,916 valid Statements of Working (Form 27) corresponding to 3,126 patents pertaining to mobile technology in India. Licensed CC-BY-SA 4.0.

Dataset for "Patent Working Requirements and Complex Products: An Empirical Assessment of India's Form 27 Practice and Compliance" (.xlsx)

Dataset for "Patent Working Requirements and Complex Products: An Empirical Assessment of India's Form 27 Practice and Compliance" (.ods)

The dataset has been released under the Creative Commons-Attribution-Share Alike 4.0 License (CC-BY-SA 4.0) as a part of the Pervasive Technologies project.

For the detailed methdology used for this study, refer to Methodology: Statements of Working (Form 27) of Indian Mobile Device Patents. For information on how to read this dataset, refer to the section "Detailed legend and process of logging the results" in the methodology.

A paper titled Patent Working Requirements and Complex Products: An Empirical Assessment of India's Form 27 Practice and Compliance authored by Prof. Jorge Contreras and Rohini Lakshané, published in July 2017 presents an analysis of the dataset.

The patents chosen to be included in this dataset are a subset of the patents found in another study by the same authors, Patents and Mobile Devices in India: An Empirical Survey [PDF]. The dataset for the patent landscaping study is available under the CC-BY-SA 4.0 license.

License terms

Data is provided AS-IS, without warranty as to accuracy or completeness.

All uses of the accompanying data and modifications and derivatives thereof must contain the following attribution: "Data provided by Jorge L. Contreras and Rohini Lakshané (2017)"

For more details visit https://cis-india.org/a2k/blogs/dataset-for-patent-working-requirements-and-complex-products-an-empirical-assessment-of-indias-form-27-practice-and-compliance

Conference on Standards Settings Organizations (SSO) and FRAND, NLSIU

rohini — 2016-04-02T18:12:41Z

Rohini Lakshané attended the Conference on Standards Settings Organizations (SSO) and FRAND held at NLSIU, Bengaluru on March 21 and 22, 2015. It was organised by the MHRD Chair on Intellectual Property Rights, Centre for Intellectual Property Rights and Advocacy (CIPRA), National Law School of India University, Bengaluru in association with Intel Technology India. This post is a compilation of notes from the conference.

Programme Schedule

Significant Takeaways
It is anti-competitive to seek to exclude competitors from the market by seeking injunctions on the basis of SEPs, if the licensee is willing to take a license on FRAND terms. In these circumstances, the seeking of injunctions can distort licensing negotiations and lead to unfair licensing terms, with a negative impact on consumer choice and prices. -- EU Competition Policy Brief, Issue 8, June 2014. This is a very important issue for India as it thinks about how it can attract foreign investments. India has a unique opportunity to learn from these lessons from around the globe and craft India-specific solutions. India has the intellectual capability and the institutions capable of crafting these solutions, and in doing that we can support Make In India. India needs to be mindful about what is happening in the [South Asian] region. China has moved aggressively to try to curb FRAND abuse. The People's Court in China ruled in Huawei vs. InterDigital that for 2G, 3G, and 4G patents, the license fees of royalties should not exceed 0.019% of the actual sale price. Apple also stated that Ericsson was calculating royalties on the sale price of the iPhone or iPad, whereas the royalty should be calculated on the value of the baseband chip that runs this technology in the mobile device. If such litigation occurs in India, what would be India's position? If a building block contains the technology pertaining to a patent, then royalty should be calculated on the smallest possible patent practising unit and not the entire product. The government of India has adopted a royalty free (RF) approach to licensing open standards. Non-essential claims are excluded from disclosure. Pending patent applications are not. Only 16% patents declared as SEPs are actually SEPs, according to a study. The Delhi High Court has passed interim orders restraining the CCI from deciding these cases. Our appeal to the courts is that these patent infringement lawsuits should not be viewed in isolation. They should not be viewed as merely contractual issues between the licensor and the licensee. They should be seen in the context of their economic effects and their adverse effect on competition. The CCI should be enabled to deal with such cases. Matheson: The phrase "compulsory license" sends a shiver down every corporate's spine every time it is used. International experience is that the judicial system has been the only forum where we have been able to have due process to enable us to construct cases properly in order to explain to the judge or to the jurors how the system works. That has produced very sensible solutions to this problem. Handing it off to the government to institute a compulsory license wouldn't be fair to the SEP holders.

SSOs and FRAND: Licensing issues

John Matheson, Director of Legal Policy (Asia Pacific), Intel

The role of licensing policy

Ensuring market access
Standards often depend on patented technology, which is accessed through the Promise to License on FRAND terms.
It is equally critical to ensure that standards can be implemented without unfair legal games.
It is essential to prevent patent hold-up.
Reasonable compensation

Patent holders remain entitled to fair compensation and benefit from the proliferation of their technologies via standardisation.

Why FRAND?

A FRAND commitment embodies certain fundamental principles that have been recognised widely by the courts and regulators.

The fundamental purpose of a FRAND commitment is widespread adoption of the standard.

Because of the peculiar nature of SEPs, the process is open to abuse.

A FRAND commitment is aimed at preventing patent holders from exploiting a hold-up value and extracting unreasonable royalties and concessions that could otherwise follow from being in a very unique position. Often, the holders of the IP have a single solution to an interoperability or connectivity conundrum that technology is facing.

Why are SEP license negotiations different from Non-SEP ones?

In the context of non-SEPs, one may be negotiating to obtain a license to a patent for a particular feature. If the licensor is being difficult, one can discard the feature to include something else. In a competitive market, this negotiation is focused on the value of the invention to be licensed. Thus one can redesign to avoid a particular claim and, in turn, avoid injunction.

On the other hand, it is necessary to either obtain a license for or infringe an SEP to manufacture the mobile device. There is no workable alternative or workaround to obtaining a license for the desired technology. With the threat of an injunction looming over the negotiations, the prospective licensee is under pressure to obtain a license. So the market negotiations for SEPs and non-SEPs are very different. One-way negotiations raise the possibility of a patent hold-up, and abuse of the standard implementer.

IP policies inevitably involve compromise.

Common areas of misunderstanding include:

Valuations or meaning of "reasonable". Valuations of IP under consideration.
Injunctive relief or exclusion orders
Discrimination or refusal to license
Patent transfer (It requires a continuation of the FRAND commitment, and shouldn't get differential treatment in the IP policy.)

Competition authorities in the US and EU have asked SSOs to reconsider policies to reduce ambiguity in the context of these areas of misunderstanding.

The ex-ante or the incremental value of the SEPs before the standard is set needs to be understood. The SSOs look at several different ways to solve a connectivity problem. The patent owners bring their patents into the standards body and claim that theirs is the best way to solve that problem. The market and consumers want an uncomplicated solution which works and is as cheap as possible. In many cases, there is one single winner, simply because we need one solution. In exchange for being the winner, the FRAND discipline is quid pro quo.

European Commission's response to two different patent lawsuits:

In the Samsung and Motorola cases, the Commission clarifies that in the standardisation context where the SEP holders have committed to:

License their SEPs
Do so on FRAND terms

It is anti-competitive to seek to exclude competitors from the market by seeking injunctions on the basis of SEPs, if the licensee is willing to take a license on FRAND terms.

In other words, if there is a bona fide commitment on the part of the licensee to agree to that test, then it is anti-competitive to seek an injunction.

In these circumstances, the seeking of injunctions can distort licensing negotiations and lead to unfair licensing terms, with a negative impact on consumer choice and prices. -- EU Competition Policy Brief, Issue 8, June 2014.

Anyone who needs access to connectivity or needs interoperability requires to get a SEP license, and if that license is required to be obtained within a time limit, it almost -- by definition -- is not going to work. Patent licenses take years to negotiate, and they're incredibly complex. For example, a patent policy may offer up to 12 months to agree on a license, but that is not the way the market works. So we cannot expect policies that put forth time limits to work in the SEP arena. What we can expect is that the implementers make a bona fide commitment to seek a license.

Motorola vs. Microsoft, Germany:

Motorola sought injunctive relief against Microsoft in Germany. Microsoft moved its distribution centre from Germany to the Netherlands. This resulted in loss of jobs, relocation costs ($11.6 million), and annual increased operating costs of $5 million for Microsoft.

Samsung vs. Apple, Germany

Similarly, on the basis of one patent, a temporary injunction was granted on the sale of the Apple iPad and iPhone. Apple was forced to agree to terms it didn't want to agree to, so that the sale of its products would resume.

This is a very important issue for India as it thinks about how it can attract foreign investments. India has a unique opportunity to learn from these lessons from around the globe and craft India-specific solutions. India has the intellectual capability and the institutions capable of crafting these solutions, and in doing that we can support Make In India.

SEP holders that make FRAND commitments should not be allowed to obtain injunctions against alleged infringers, except in limited circumstances. This formula has been adopted by the IEEE, which has solved this problem. India has the opportunity to leapfrog a lot of patent litigation by adopting the IEEE test.

Learn from what happened with Microsoft in Germany. What kind of message do you want to send to the foreign community about investing in India? Do you want to use the scare tactics of injunctions or do you want to adopt a policy that will avoid litigation?

India needs to be mindful about what is happening in the [South Asian] region. China has moved aggressively to try to curb FRAND abuse. The People's Court in China ruled in Huawei vs. InterDigital that for 2G, 3G, and 4G patents, the license fees of royalties should not exceed 0.019% of the actual sale price.

Reasonable Compensation Considerations

Royalty based on the smallest unit that practices the standard.
Technical value of patented technologies vs. alternatives.
Overall royalty that could reasonably charged for all SEPs.

Non-discrimination

A commitment to license every implementer of the relevant standard.

Transfer

FRAND commitments follow the transfer of a patent to subsequent proprietors.

Dr. Krishna Sirohi, Impact Innovator, GISFI, President, I2TB

As per the Make in India programme, we have to achieve zero imports by 2020. Product development in India by Indian companies will happen with collaborative research and development and IPR sharing through licenses. We are looking at national capacity building through product development and patent uses.

Global Information and Communication Technology Forum for India (GISFI) is a standards setting body involved with standardisation and research. It is a telecommunications standards development body (TSDO) set up with the approval of the DoT. It has peer relationships with ITU, OMA, TTC and a bunch of other SDOs. Internet of Things (IoT), mobility and security are its three major research programmes.

GISFI is working towards defining 5G in India. The 5G standardisation theme in India is called WISDOM (Wireless Innovative System for Dynamic Operating Mega Communications). GISFI is considering the perspective of the Indian user, the network capability, the network architecture, network development and the Indian revenue model, strategic and special purpose networks, inclusive growth, and network security.

However, some India-specific aspects such as illiteracy and lack of basic civic infrastructure need to be considered in the standardisation process.

GISFI plans and stages for 5G definition and adoption

Stage 1 (2014-2018): National agenda for strategic research, innovation and experimentation

Focus on Digital India and Make in India programmes.

Stage 2 (2016-2019): Standardisation

Stage 3 (2017-2021): Product Development

Stage 4 (2019-2023): Early Development

Technical understanding required for IPR issues

Enhancement applicable to general scenarios
- Traffic capacity
- Cell coverage
- Edge cell performance
- Intercell interference
- Network congestion
- Mobility
- Energy consumption
Enhancements targeting new use cases
- machine-type communication
- national security
- public safety services
Carrier aggregation
- Higher throughput owing to intra and inter-band transmission bandwidth of more than 20 MHz.
- Reduced network congestion owing to load-balancing across multiple carriers.
- Improvement in mobility and reduction in inter-cell interference.
Enhanced MIMO
- Improved spatial diversity and multiplexing
- Improved beam-forming
- Multiple access with multi-antenna transmission
Coordinated Multi-Point Operation (CoMP)
- Reduction in intercell interference owing to coordinated scheduling or beamforming (CS/CB)
- Transmission from multiple distribution points (base stations, RRH) in a coordinated way (Dynamic point selection, and Joint transmission)

What do SSOs handle IPR in different parts of the world and what are the issues they face?

GISFI has adopted ITU's IPR policy.

In SSOs, the FRAND principle works well only when participating entities have equal or almost equal IPR clout, and can reciprocate with their own patents every time other entities share their patents. It is difficult to create a balance between entities that only own IPR and those that only consume IPR.

Most of the members of SSOs are IPR owners. The entities that develop [technological] solutions without owning the IPRs are usually not a part of SSOs. However, additional strategies need to be implemented for realising the "Make in India" goal. The goal of zero imports by 2020 can only be achieved if a large number of small companies use these standards to develop products locally. So small manufacturers should be represented even at the highest levels of the standards development body. An IPR policy should be defined/ modified to factor in these needs.

Evaluation of LTE essential patents declared by ETSI

Cyber Creative Institute, June 2013: http://www.cybersoken.com/research/pdf/lte03EN.pdf

A large number of LTE patents are held by a handful of companies. There is no Indian owner of any LTE SEP.

Ericsson sued Apple in the US over infringement of its LTE patents. As of January 2015, Apple countersued Ericsson in a federal court in California and claimed that it did not owe any royalties to the latter.

Apple also stated that Ericsson was calculating royalties on the sale price of the iPhone or iPad, whereas the royalty should be calculated on the value of the baseband chip that runs this technology in the mobile device. If such litigation occurs in India, what would be India's position? If a building block contains the technology pertaining to a patent, then royalty should be calculated on the smallest possible patent practising unit and not the entire product.

Dr. Kumar N. Shivarajan, CTO, Tejas Networks

TSDSI's (Telecommunications Standards Development Society of India) IPR policy states that a member's technology will become a part of a standard as long as the member licenses it on FRAND terms to other members.

By 2017, 70% of the global equipment spend will be on LTE.
TD-LTE subscriber base in India has been projected to reach 67 million by 2017.
Most of the data connections in India are still on 2.5G.
Smartphones have become affordable but 3G continues to languish in India; 4G yet to take off.
The number of 3G connections in India grew from 30 million to 33 million from 2013 to 2014.

Is 5G the answer to India's access problems?

The mobile industry is aiming to go beyond traditional 4G LTE in 2015 and there is increasing focus on adding new bells and whistles to 4G and realise 4G+.

LTE Licensed-assisted access (formerly LTE-Unlicensed)
LTE Direct/ Peer-to-peer
LTE-M for machine to machine communication
CoMP

Countries forming 5G groups to take an early lead:

China: IMT-2020 (5G) Promotion Group
Korea: 5G Forum
EU: 5G Public Private Partnership (5G-PPP)

5G in its current form is souped-up 4G.

Key India-specific requirements for 5G standard development

5G must factor in the Indian requirement for DSL-like connectivity: Always ON, low latency, affordable cost
To minimise costs, 5G must minimise the use of BTS sites and focus on spectral efficiency.
5G should allow virtual network operations enabling multiple operators to use the same physical network infrastructure.
5G must work well in Indian propagation environments: concrete buildings blocking signals, dense barriers.
5G infrastructure should be green as electricity shortfall is a problem. India has 400,000 cell towers. 10% of them are not connected to the electricity grid. More than 70% experience power outages longer than 8 hours per day, and work on diesel-powered generators. As a result, 25% of the operational costs of telcos are their energy bills. India imports 3 billion litres of diesel annually to run these cell sites.

India can try to get a headstart in owning the IPR that would eventually go into the 5G standard.

Prof. Ramakrishna, MHRD Chair, NLSIU, Bengaluru

The attitude of an SSO towards patented technology determines the objective of its IPR policy. For example, an SSO may want to:

Promote widespread implementation of a standard without unnecessary IPR implications.
Ensure transparency and certainty about the declaration of patents and patents' claims as SEPs.
Ensure that every patented technology is available at a reasonable fee, comparable to the value of the technology.

What happens when IP ownership is transferred to another owner? It continues to be a part of the SSO but things get complicated.

New owners, third parties, subsidiaries, and affiliates fall under the purview of the IPR policy, by extension.

IP and Disclosure policies of Indian SDOs

BIS (Bureau of Indian Standards) and TEC (Telecommunication Engineering Centre) do not have IP policies of their own. TEC refers to the ISO/IEC IP policies wherever the technology is equivalent or the same.
GISFI disclosure requirement: Each member is required to inform GISFI in a timely manner of essential IPRs. But members are not under any obligation to conduct IP searches. GISFI's IPR policy is based on that of ETSI.
DOSTI (Development Organization of Standards for Telecommunications in India) is not functional.

IPR policy for open standards in e-governance

The government of India has adopted a royalty free (RF) approach to licensing open standards.

Mandatory Characteristics of Open Standards:

The patent claims necessary to implement the standard should be made available royalty free for the lifetime of the standard.
The standard shall be adapted and maintained by a not-for-profit organisation.
The standard shall have a technology-neutral specification.

The RF approach and the maintenance by a non-profit may be a disincentive for IP owners.

IEEE patent policy:

IEEE invites participants to disclose patent claims essential to a standard under development. Upon disclosure, the patent holder needs to submit a letter of assurance that states:

License(s) will be made available without compensation or at a RAND rate.
A commitment to enforce the essential patent claims against any entity complying with the standard.
Or state its unwillingness or inability to license its essential patent claims.

Common patent policy for ITU-T/ ITU-R/ ISO/ IEC

Recommendations/ deliverables are non-binding -- ensure compatibility of technologies and systems on a worldwide basis.

The "code of practice":

It is desirable that the fullest available information should be disclosed although ITU, ISO or IEC are unable to verify the validity of any such information.

Major types of IPR policies:

Participation-based IPR policies

These are common in small, informal bodies such as consortia.
Members are bound by the terms of membership to commit to licensing SEPs on RAND or RF terms.
SEP holders notify the standards body in case RAND or RF licenses are not available after the draft standard has been published.

Commitment-based IPR policies
- These are commonly followed large, standards setting bodies.
- These bodies identify SEPs to a draft standard through disclosure and submission of licensing commitment.
- Parties may seek alternative solutions or work on a withdrawn standard is the the alternative solutions don't work out.

Basic building blocks of commitment-based IPR policies

Disclosure policies:

Disclosure is important for
- sending requests to SEP holders to make licensing commitments
- ensuring that experts' groups make informed decisions on inclusion of patented technologies
- providing information to prospective standards implementers about the SEP owners

Two forms of disclosure:

A call for patents is made at the start of meetings. This is more informational than binding.
Later, the member states its intentions regarding licensing the patent on RAND terms.

How disclosure obligations arise (and commitments are binding):

IEEE has by-laws that are binding on members.
ITU, IEC, and ISO: It is via a resolution or recommendation.

(Indicative list)

General disclosure procedure:

The nature of disclosure rules concerning self-owned patents depends on the status or the role of the entity.

A "submitter" is a participant in the working group making a conscious decision to submit its technology to the SSO for a license or free of royalty.
A participant in a working group may submit its technology to the SSO free of royalty, on RAND terms, on RAND terms with the right to charge a fee, or with a refusal to license it. (A working group participant who discloses technology is usually a technology expert. When someone who does not have adequate knowledge of patents discloses technology, it has complicated implications.)
A non-working group participant (third-party) may also submit its technology.

ANSI has left it to the accredited SSO to decide the terms of disclosure for participants of working groups. It has not laid out a policy in this regard. Other organisations have laid out obligations on the submitter to disclose SEPs.

Nature of disclosure terms for patents owned by third-parties:

ETSI: It is obligatory.

ITU/ ISO: Obligatory only for participants of the working groups.

IEEE: Entirely voluntary

Non-essential claims are excluded from disclosure. Pending patent applications are not.

Working groups prefer early disclosure so that they may adopt or discard the claim as early as possible in the standard setting process.

ITU: Disclosure from the outset

IEEE: During meetings of the working group

ETSI: "Timely manner"

AFSI: At a sufficiently mature level

There is no mandate for updating the disclosure in case a standard evolves.

Most SSOs make disclosed patents public. Failure to disclose patents may result in accusations of abuse of monopoly or anti-trust/ anti-competitive activities.

It is difficult to identify all potentially essential patents due to the complexity of specifications.

Some SSOs don't require IP disclosure at all. The obligations to license on FRAND terms would be sufficient.

Only 16% patents declared as SEPs are actually SEPs, according to a study.

It makes sense for rightsholders to go for blanket disclosures instead of disclosure of specific patents.

Vinod Dhall, ex-chairperson of the Competition Commission of India (CCI):

Our competition law is new, so there aren't any cases pertaining to patent litigation and involving the competition law, which we can treat as precedents. In one of the mobile phone patent litigation cases in India, the implementer has approached the CCI claiming that the licensor has been abusing its dominant position in the market by charging unreasonable royalties.

The Delhi High Court has passed interim orders restraining the CCI from deciding these cases. Our appeal to the courts is that these patent infringement lawsuits should not be viewed in isolation. They should not be viewed as merely contractual issues between the licensor and the licensee. They should be seen in the context of their economic effects and their adverse effect on competition. The CCI should be enabled to deal with such cases.

Questions-answers round:

What are the criteria for declaring a patent an SEP?

T. Ramakrishnan: SSOs have no role in declaring that a patent is an SEP. The SEP holder declares that their patent is essential to a technical standard. Most of the time, the SEP may turn out to be a non-SEP at a later stage. Statistically, 16 out 100 claimed SEPs are actually SEPs. There is no way for SSOs to tell if a patent is an SEP. IP policies of most SSOs state that they don't search [if a patent is an SEP]. The members of SSOs are under no obligation to search.

The commitment to license an SEP on FRAND terms is more important to an SSO [than determining if the patent is indeed an SEP].

Can compulsory licensing be implemented with government intervention in India so that the Central Government can fix a royalty and put an end to patent litigation?

Matheson: The phrase "compulsory license" sends a shiver down every corporate's spine every time it is used. International experience is that the judicial system has been the only forum where we have been able to have due process to enable us to construct cases properly in order to explain to the judge or to the jurors how the system works. That has produced very sensible solutions to this problem. Handing it off to the government to institute a compulsory license wouldn't be fair to the SEP holders.

With respect to the "safe harbour" approach towards SEP-based injunctions, what does the licensee need to do to prove to the courts that it is a willing licensee, in the event that licensing negotiations fail or take a long time?

Matheson: It gets down to the licensee showing its willingness to negotiate. The licensee cannot make a half-hearted attempt and decline to negotiate or decline the licensor's offer and then disappear. They should physically engage in the negotiation. If and when it gets to a judicial environment, the judges know when people are telling stories and when parties are bona fide. They can tell a ruse when they see one, and I think it is one of the things you observe in practice.

Ramakrishnan: The licensee should be able to demonstrate that it is willing to pay the royalty and should deposit an amount towards royalty. One recommendation from AIPP states that instead of using the terms "willing licensee" and "willing licensor", use "good faith response". For "good faith" we have very well established criteria. The entire licensing process should end within 12 months of starting. If the negotiations fail or if the process takes longer, then they should agree upon an arbitrator to fix FRAND terms. These are indicators that demonstrate the licensee being a "willing licensee" or a "good faith" licensee.

Often technology changes before the legal action can be taken or the lawsuit completed, and the patent over which litigation has happened may no longer be relevant to the technology. How do patent holders deal with this situation?

S.K. Murthy, Research Scholar, NLSIU: Even if the technology becomes obsolete, damages can be claimed retrospectively.

Matheson: You have a commitment to a FRAND solution, so that when you enter the protracted negotiation, you know that at the end of it you will get a fair solution. That's not always the case when you are dealing outside the FRAND world. You're dealing with a FRAND incumbent, not with unlicensed patents.

Why is putting a time limit to negotiations not a good idea? Also, IEEE seems to have done well by taking the threat of negotiations out of its way. Is it practical in India, because injunction is still the most potent weapon to protect intellectual property rights in India currently?

Matheson: Licensing is incredibly complex. There can be claims to the validity of the patent, there are claim charts to be drawn, there is expert evidence to be put together. Litigation over patents can take 2 to 3 years. To say that there must be a solution [arrived at] within a smaller framework gives the licensor the opportunity to wait around till the end of that period and assert its patents through an injunction. If you're leaving injunction at the table, you will not have a fair solution. The licensee will always be at a major disadvantage. The IEEE solution is a good one because it has taken the time limit away, but at the same time the policies that would adopt that solution need to include the discipline to ensure that the negotiations are bona fide.

What percentage of the sale price should be provisioned by a product developer for royalties? Can a mechanism be drawn up for this purpose?

Justice Ratnakala: Definitely. Such a mechanism should be drawn up in the near future.

For more details visit https://cis-india.org/a2k/blogs/conference-on-standards-settings-organizations-sso-and-frand-nlsiu

Compilation of Mobile Phone Patent Litigation Cases in India

rohini — 2018-02-08T14:41:17Z

This working paper is an attempt to chronicle information about big-ticket lawsuits pertaining to mobile technology patents filed in India. All information presented in this paper has been gathered from publicly available sources. Interns Nayana Dasgupta, Sampada Nayak and Suchisubhra Sarkar (in alphabetical order) provided invaluable research assistance. This paper was first published as a blog post on the CIS website on March 15, 2015. It was periodically updated till October 31, 2017 to reflect new developments in the different lawsuits at the Delhi High Court and the cases with the Competition Commission of India.

Abstract

Nearly three years after litigation over patents and designs associated with big-ticket mobile technology started in the US, the first salvo in the patent wars was fired in India. Sweden-based Ericsson, a provider of communications infrastructure and services, sued home-grown budget smartphone manufacturer Micromax in early 2013. Patent litigation in the arena of mobile phone technology has steadily risen since. Lei Jun, the chairman of China's largest smartphone manufacturer Xiaomi has said that facing a patent lawsuit "can be considered a rite of passage for a company that is coming of age". This paper is an attempt to chronicle lawsuits pertaining to mobile technology patents filed in India. The first part of this paper, “Compilation of lawsuits” is an attempt to chronicle the significant developments in big-ticket lawsuits pertaining to mobile technology patents filed in India. The second part, “Commonalities and differences in the lawsuits” is an attempt to join the dots between the developments that were either remarkably common or notably different. All information presented in this paper has been gathered from publicly available sources and is up-to-date till the time of writing (October 31, 2017). This paper has been published as a part of the Pervasive Technologies project at the Centre for Internet and Society (CIS).

View paper on SSRN.

Access the court orders and other references in the paper.

Edit logs

Edited, April 2, 2015: To add section "6. Vringo vs. ZTE"

Edited, April 3, 2015: To add section "7. Vringo vs. Asus"

Edited, October 23, 2015: To add sections "8. Ericsson vs. iBall", "9. Ericsson vs. Competition Commission of India", "10. Ericsson vs. Lava". To update "Ericsson vs. Micromax" from “Micromax has challenged……”

Edited, April 15, 2016: To update "9. Ericsson vs Competition Commission of India... In a judgement dated March 30, 2016, the court dismissed all the writ petitions and applications pertaining to the role of the CCI before it and made these observations..."; "8. Ericsson vs iBall"; "10. Ericsson vs. Lava"; and "6. Vringo vs. ZTE".

Edited, April 29, 2016: To update "Ericsson vs. Xiaomi...On April 22, 2016, the Delhi High Court vacated the interim order passed in December 2014..."

Edited, January 13, 2017: To update "Ericsson vs. Gionee... In July 2014..."

Edited, February 8, 2018: To upload copy of working paper.

For more details visit https://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india

Comments on Department of Industrial Policy and Promotion Discussion Paper on Standard Essential Patents and their Availability on Frand Terms

Anubha Sinha, Nehaa Chaudhari and Rohini Lakshane — 2016-05-03T02:30:15Z

The Centre for Internet & Society gave its comments to the Department of Industrial Policy and Promotion. The comments were prepared by Anubha Sinha, Nehaa Chaudhari and Rohini Lakshané.

Download the PDF To access other submissions to the DIPP Discussion Paper on SEP and FRAND, please click here

Authors

I. PRELIMINARY

1. This submission presents comments by the Centre for Internet and Society, India ("CIS") on the Discussion Paper on Standard Essential Patents and their Availability on FRAND Terms (dated 01 March, 2016), released by the Department of Industrial Policy and Promotion ("the DIPP"), Ministry of Commerce and Industry, Government of India (" the discussion paper/ discussion paper").

2. CIS commends the DIPP for its efforts at seeking inputs from various stakeholders on this important and timely issue. CIS is thankful for the opportunity to put forth its views.

3. This submission is divided into three main parts. The first part, 'Preliminary', introduces the document; the second part, 'About CIS', is an overview of the organization; and, the third part, 'Submissions on the Issues', answers the questions raised in the discussion paper. A list of annexures and their URLs is included at the end of the document.

II. ABOUT CIS

4. CIS is a non-profit organisation that undertakes interdisciplinary research on internet and digital technologies from policy and academic perspectives. The areas of focus include digital accessibility for persons with diverse abilities, access to knowledge, intellectual property rights, openness (including open data, free and open source software, open standards, open access, open educational resources, and open video), internet governance, telecommunication reform, freedom of speech and expression, intermediary liability, digital privacy, and cyber-security.

5. CIS values the fundamental principles of justice, equality, freedom and economic development. This submission is consistent with CIS' commitment to these values, the safeguarding of general public interest and the protection of India's national interest at the international level. Accordingly, the comments in this submission aim to further these principles. In addition, the comments are in line with the aims of the Make in India and Digital India initiatives of the Government of India.

III. SUBMISSION ON THE ISSUES FOR RESOLUTION

6. The following sections provide CIS' views and recommendations on the issues enumerated in section 11 of the discussion paper:

a) Whether the existing provisions in the various IPR-related legislations, especially the Patents Act, 1970 and antitrust legislations, are adequate to address the issues related to SEPs and their availability on FRAND terms? If not, then can these issues be addressed through appropriate amendments to such IPR-related legislations? If so, what changes should be affected?

A.1. The issues related to Standard Essential Patents ("SEPs") and their licensing on a fair, reasonable and non-discriminatory ("FRAND") basis lie at the intersection of intellectual property ("IP") law and competition law . As such, in India, the Patents Act, 1970 ("the Patents Act") and, the Competition Act, 2002 ("the Competition Act") are the relevant legislations to be studied. These have been recently discussed, most recently, by Justice Bakhru in his comprehensive order inTelefonaktiebolaget LM Ericsson (Publ) v. Competition Commission of India and Another.

A.2. It is our submission that at the moment, amendments to the Patents Act and the Competition Act may not be preferred. As Justice Bakhru has noted in the aforesaid decision, there is no conflict between the remedies in the Patents Act and in the Competition Act, and, the pursuit of rights and remedies under one of these legislations does not bar a party from pursuing rights and remedies in the other. Further, under both legislations, there are scenarios for the respective authorities - the Controller General of Patents, Designs and Trademarks ("the Controller") and the Competition Commission of India (" the CCI") for the Patents Act and for the Competition Act respectively - to seek inputs from each other.

A.3. We also note that the CCI is a fairly nascent regulator; one whose jurisdiction is not yet a settled matter of law. While the judgment in the Ericsson-CCI case is indeed a good beginning, we do not believe that the matter has been conclusively decided. Accordingly, given the complex legal questions involved, over not just the interpretation of the Patents Act and the Competition Act, but also constitutional issues around the jurisdiction of regulators and the power of judicial review of the courts, we believe that it would be prudent to examine the ruling of the courts on these issues in some detail, before considering amendments.

A.4. In addition, we are of the opinion that our IP law, and, our competition law, fully honor our international commitments, including the requirements under the TRIPS Agreement. As such, we would urge the Government of India to not enter into free trade agreements including, inter alia, the Regional Comprehensive Economic Partnership, that threaten our use of TRIPS flexibilities, and, impose 'TRIPS-plus' obligations.

A.5. We also urge the Government of India to adopt a balanced National IPR Policy, and, a National Competition Policy, both of which has been in abeyance for a considerable amount of time. We believe that these policies are crucial to realize the objectives of the Make in India and Digital India initiatives. At the same time, we submit that these policies be balanced, taking into account the interests of all stakeholders, developed through an extensive consultative process, and, suitably modified based on feedback.

b) What should be the IPR policy of Indian Standard Setting Organizations in developing Standards for Telecommunication sector and other sectors in India where Standard Essential Patents are used?

B.1. The discussion paper identifies four Standard Setting Organizations ("SSOs") in India, namely, the Telecom Standards Development Society of India ("TSDSI"), the Telecommunication Engineering Center ("TEC"), the Bureau of Indian Standards (" BIS"), the Global ICT Standardization Forum for India ("GISFI"), and, the Development Organization of Standards for Telecommunications in India ("DOSTI"). Comments on each of their policies have been made in the following paragraphs.

B.2. The BIS does not have an intellectual property rights ("IPR") policy of its own. The BIS Act, 2016 does not include one either. As the discussion paper notes, the BIS refers to the IPR policies of the relevant international SSO in the context of technology implemented in India, that is the same or equivalent to the ones developed or maintained by the respective SSOs.We recommend that BIS adopt an IPR policy at the earliest, factoring in India specific requirements differences: a large and exponentially growing mobile device market makes it possible for manufacturers, patent owners and implementers alike to achieve financial gains even with a low margin ("India specific requirements"). In addition, our comments on the IPR policy of the TSDSI in paragraph B.4. of this submission (below), may also be considered for the content of the BIS' future policy on IPR.

B.3 . According to the discussion paper, the TEC considers the IPR policies of the International Telecommunication Union. We recommend that like the BIS, the TEC also adopt its own IPR policy, factoring in the India specific requirements detailed above. In addition, our comments on the IPR policy of the TSDSI in paragraph B.4. of this submission (below), may also be considered for the content of the BIS' future policy on IPR.

B.4. The TSDSI, a relatively new standards body, has defined an IPR policy . In respect of this policy, the following observations are presented. First, this policy notes that IPR owners should be adequately and fairly rewarded.Second, it requires members to disclose essential IPRs in a "timely fashion." Third, as per its policy, the TSDSI can request the owner of an essential IPR to undertake, within three months, to license it irrevocably on FRAND terms. At the same time, the policy also states that the (aforesaid) ask may be subject to the condition that licensees agree to reciprocate. Should such an undertaking not be forthcoming, the TSDSI may suspend work on the standard or technical specification in question, or, adopt another course of action. Fourth, the policy identifies two scenarios for the non availability of licences prior to publication, based on the existence, or, the lack thereof, of alternative technologies. In the event of a lack of alternative technology, the policy requires a member to disclose in writing its reasons for not licensing its patents. Following this, it is submitted that there is no clarity on the concrete steps that the TSDSI would adopt in case the efforts to convince a member to license their essential IPRs, fail. The policy only states that "the TSDSI shall take further action as deemed fit." The same is also true where the IPR owner is not a member of the TSDSI. Fifth, the policy also envisages a scenario of non-availability post publication. The procedure for dealing with this is akin to the one detailed above, with the TSDSI asking for a written explanation, considering further action, including the possible withdrawal of the standard or technical specification in question. Sixth, it is observed that the policy does not require a commitment from its members to refrain from seeking injunctive relief. Seventh, it is accordingly recommended that the policy be suitably modified (a) to include India specific requirements discussed above; (b) to require a commitment from its members, that they refrain from seeking injunctive relief; (c) to delete the condition where FRAND negotiations may be subject to a condition of reciprocity; (d) to identify in detail the procedure to be followed in case of patent 'hold-ups' and patent 'hold-outs'; (e) to identify in detail the procedure to be followed in case of refusal to license by TSDSI members, and, non-members, both; and, (f) to include a detailed process on the declassification of a standard or technical specification.

B.5. The IPR policy of GISFI, is substantially similar to the IPR policy of the TSDSI, discussed in paragraph B.4. of this submission (above). Inter alia, GISFI's IPR policy also does not indicate the specific steps to be taken in case an IPR owner refuses to license essential IPRs for which no alternative technology is available. This is true in the cases both, where the refusal is by a member, and, by a non-member. Our recommendations on the IPR policy of the TSDSI in paragraph B.4. of this submission (above), may also be considered for the GISFI's IPR policy.

B.6. According to the discussion paper, the IPR policy of the DOSTI resembles that of the GIFSI. It is submitted that these policies are similar in the context of refusal to license by a member or non-member, and, like the TSDSI and the GISFI, the DOSTI also requires the patent holder to license its IPR irrevocably on FRAND terms. Accordingly, we reiterate our comments on the IPR policy of the TSDSI in paragraph B.4. of this submission (above). The aforesaid recommendations may also be considered to be relevant for the DOSTI's IPR policy.

B.7. We are also of the opinion that it would be useful for Indian SSOs to consider recommending the use of royalty-free licenses for IPRs. Illustratively, the World Wide Web Consortium ("W3C") and the Open Mobile Alliance ("OMA") encourage royalty-free licensing.

c) Whether there is a need for prescribing guidelines on working and operation of Standard Setting Organizations by Government of India? If so, what all areas of working of SSOs should they cover?

C.1. In our opinion, in a milieu where instances of SEP litigation are becoming increasingly complex, and, there is a tangible threat of the abuse of the FRAND process, it might be useful for the Government of India to make suggestions on the working of Indian SSOs.

C.2. It is suggested that the Government of India develop Model Guidelines that may be adopted by Indian SSOs, taking into account India specific requirements, including the ones detailed in paragraph B.2. of this submission (above). We believe that this measure will also enable the fulfilment of the objectives of the Make in India and Digital India initiatives.

C.3. We recommend that various stakeholders, including IP holders, potential licensees and users of IP, civil society organizations, academics, and, government bodies, including the the Indian Patent Office ("IPO"), the Department of Telecommunications, the DIPP, TRAI, and, the CCI be consulted in the creation of these Model Guidelines.

C.4. In our opinion, the Model Guidelines may cover (a) the composition of the SSO; (b) the process of admitting members; (c) the process of the determination of a standard or technical specification; (d) the process of declassification of a standard or technical specification; (e) the IPR Policy; (f) resolution of disputes; (g) applicable law.

d) Whether there is a need for prescribing guidelines on setting or fixing the royalties in respect of Standard Essential Patents and defining FRAND terms by Government of India? If not, which would be appropriate authority to issue the guidelines and what could be the possible FRAND terms?

D.1. In light of the inadequacies in the IPR policies (discussed above) of various SSOs in India, as well the the spate of ongoing patent infringement lawsuits around mobile technologies, we recommend that the Government of India intervene in the setting of royalties and FRAND terms.

D.2. We propose that the Government of India initiate the formation of a patent pool of critical mobile technologies and apply a compulsory license with a five per cent royalty. Further details of this proposal have been enumerated in answer to question 'f' of the discussion paper (below).

D.3. Our motivations for this proposal are many-fold. In our opinion, it is near-impossible for potential licensees to avoid inadvertent patent infringement. As a part of our ongoing research on technical standards applicable to mobile phones sold in India, we have found nearly 300 standards so far . It is submitted that carrying out patent searches for all the standards would be extremely expensive for potential licensees. Further, even if such searches were to be carried out, different patent owners, SSOs and potential licensees disagree on valuation, essentiality, enforceability, validity, and coverage of patents. In addition, some patent owners are non-practising entities ("NPEs") and may not be members of SSOs. The patents held by them are not likely to be disclosed. More importantly, home-grown manufacturers that have no patents to leverage and may be new entrants in the market would be especially disadvantaged by such a scenario. Budget phone manufacturers, standing to incur losses either as a result of heavy licensing fees, or, potential litigation, may close down. Alternatively, they may pass on their losses to consumers, driving the now-affordable phones out of their financial reach. With the objectives of Make in India and Digital India in sight, it is essential that Indian consumers continue to have access to devices within their purchasing power.

e) On what basis should the royalty rates in SEPs be decided? Should it be based on Smallest Saleable Patent Practicing Component (SSPPC), or on the net price of the Downstream Product, or some other criterion?

E.1. It is our submission that royalty rates for SEPs should be based on the smallest saleable patent practising component ("SSPPC"). Most modern telecommunication and IT devices are complex with numerous technologies working in tandem. Different studies indicate that the number of patents in the US applicable to smartphones is between 200,000 and 250,000. A comprehensive patent landscape of mobile device technologies conducted by CIS reveals that nearly 4,000 patents are applicable to mobile phones sold in India. It is thus extremely difficult to quantify the exact extent of interaction and interdependence between technologies in any device, in such a way that the exact contribution of the patented technology to the entire device can be determined.

E.2. The net cost of the device is almost always several times that of the chipset that implements the patented technology. Armstrong et al have found that the cost of a 4G baseband chip costs up to $20 including royalties in a hypothetical $400 phone sold in the US. One of the litigating parties in the ongoing patent infringement lawsuits in India has stated that one of the reasons for preferring to leverage its patents as downstream as possible in the value chain is that it will earn the company more royalties . In instances where patent exhaustion occurs much earlier in the value chain, such as in the case of the company's cross-licenses with Qualcomm (another company that owns patents to chip technologies), the company does not try to obtain royalties from the selling prices of devices for the cross-licensed technologies. It is submitted that such market practices could be detrimental to the government's objectives such as providing a mobile handset to every Indian by 2020 as a part of the Digital India programme . It is also worth noting in this context that the mobile device is the first and only medium of access to the Internet and telecom services for a large number of Indians, and, consequently, the only gateway to access to knowledge, information and critical services, including banking.

E.3. The discussion paper notes that J. Gregory Sidak, having studied the proceedings before the Delhi High Court, approved of the manner in which the court determined royalties. In his paper, Sidak(2015) notes that in determining royalties, the court relied, inter alia, on the decision of CSIRO v.Cisco ("the CSIRO case"), a 2015 decision of the US Court of Appeals for the Federal Circuit. 2015. We humbly disagree with the opinion of the Delhi High Court on the manner of determining royalties, and, with Sidak's approval of the same.

E.4. It is our submission that the CSIRO case relied on a previous judgment, which we disagree with. The decision, a 2014 district court judgment, analogises the determination of royalties on SEPs to the determination of royalties on a copyrighted book. The court notes, "[b]asing a royalty solely on chip price is like valuing a copyrighted book based only on the costs of the binding, paper, and ink needed to actually produce the physical product. While such a calculation captures the cost of the physical product, it provides no indication of its actual value." In our opinion, this analogy is flawed. While a book is a distinct product as a whole, a mobile phone is a sum-total of its parts. If at all, a mobile phone could be compared with a book with several authors, as multiple technologies belonging to several patent holders are implemented in it. This judgement bases valuation for one set of technologies on the whole device, thus awarding compensation to the licensor even for those technologies implemented in the device that are not related to the licensed technologies. In our opinion, charging royalty on the net selling price of a device for one technology or one set of technologies is thus more like a referral scheme and less like actual compensation for the value added. Accordingly, royalties must be charged on the SSPPC principle.

f) Whether total payment of royalty in case of various SEPs used in one product should be capped? If so, then should this limit be fixed by Government of India or some other statutory body or left to be decided among the parties?

F.1. CIS has proposed a compulsory licensing fee of five per cent on a patent pool of critical mobile technologies. The rationale for this figure is the royalty cap imposed by India in the early 1990s.

F.2. As part of regulating foreign technology agreements, the (former) Department of Industrial Development (later merged with the DIPP) capped royalty rates in the early 1990s. Payment of royalties was capped at either a lump sum payment of $2 million, or, 5 percent on the royalty rates charged for domestic sale, and, 8 percent for export of goods pertaining to "high priority industries". Royalties higher than 5 percent or 8 percent, as the case may be, required securing approval from the government.

F.3. While the early 1990s (specifically, 1991) was too early for the mobile device manufacturing industry to be listed among high priority industries, the public announcement by the government covered computer software, consumer electronics, and electrical and electronic appliances for home use. The cap on royalty rates was lifted by the DIPP in 2009.

F.4. It is submitted in the case of mobile device technology, we are witnessing a situation similar to that of the 1990s. In this sphere, most of the patent holders are multinational corporations which results in large royalty amounts leaving India. At the same time, in our opinion, litigation over patent infringement in India has limited the manufacture and sale of mobile devices of homegrown brands.

F.5. We believe that the aforementioned developments are detrimental to the Make in India and Digital India initiatives of the Government of India, and, the government's aim of encouraging local manufacturing, facilitating indigenous innovation, as well as strengthening India's intellectual property regime. It is our submission, therefore, that the payment of royalties on SEPs be capped.

F.6. We submit that such a measure is particularly important, given the nature of SEP litigation in India. While SEP litigation in India is indeed comparable to international SEP litigation on broader issues raised, specifically competition law concerns, but differs crucially where the parties are concerned. International SEP litigation is largely between multinational corporations with substantial patent portfolios, capable of engaging in long drawn out litigations, or engaging in other strategies including setting off against each other's patent portfolios. Dynamics in the Indian market differ - with a larger SEP holder litigating against smaller manufacturers, many of whom are indigenous, home-grown.

F.7. In June, 2013, we had recommended to the erstwhile Hon'ble Minister for Human Resource Development that a patent pool of essential technologies be established, with the compulsory licensing mechanism. Subsequently, in February, 2015, we reiterated this request to the Hon'ble Prime Minister. We propose that the Government of India initiate the formation of a patent pool of critical mobile technologies and mandate a five percent compulsory license. As we have stated in our request to the Hon'ble Prime Minister, we believe that such a pool would "possibly avert patent disputes by ensuring that the owners' rights are not infringed on, that budget manufacturers are not put out of business owing to patent feuds, and that consumers continue to get access to inexpensive mobile devices. Several countries including the United States issue compulsory licenses on patents in the pharmaceutical, medical, defence, software, and engineering domains for reasons of public policy, or to thwart or correct anti-competitive practices."

F.8. We believe that such a measure is not in breach of our international obligations under the TRIPS Agreement.

g) Whether the practice of Non-Disclosure Agreements (NDA) leads to misuse of dominant position and is against the FRAND terms?

G.1. The issue of Non Disclosure Agreements ("NDAs") in SEP/FRAND litigation is a contentious one. Patent holders argue that they are essential to the license negotiation process to protect confidential information, whereas potential licensees submit that NDAs result in the imposition of onerous conditions.

G.2. In India's SEP litigation, the use of NDAs has been raised as an issue in at least two cases - separately by Intex and by iBall , in their cases against Ericsson. Intex and iBall have both claimed that the NDAs that Ericsson asked them to sign were onerous, and favoured Ericsson.

G.3. According to Intex, the NDA in question would result in high legal costs for Intex, and, would render it unable to disclose crucial information to its vendors (who had agreed to supply to Intex on the condition that Intex was not infringing on any patents).

G.4. According to iBall, the parties had agreed to enter a global patent license agreement ("GPLA") but Ericsson insisted on an NDA. Upon receiving the terms of the NDA, iBall claimed before the CCI that Ericsson's refusal to identify the allegedly infringed SEPs; the threat of patent infringement proceedings; the attempt to coax iBall to enter into a "one-sided and onerous NDA"; the tying and bundling patents irrelevant to iBall's products by way of a GPLA; demanding unreasonably high royalties by way of a certain percentage value of handset as opposed to the cost of actual patented technology used all constituted abuse of Ericsson's dominant position under Section 4 of the Competition Act.

G.5. In India, the law on misuse (abuse) of dominant position by an 'enterprise' is found primarily in Section 4 of the Competition Act (read with Section 2(h) of the Competition Act, which defines 'enterprise'). In its recent decision in the Ericsson-CCI case , the Delhi High Court has found Ericsson to be an 'enterprise' for the purposes of the Competition Act, and hence subject to an inquiry under Section 4 of the same legislation. In the same decision, the court has also recognised the jurisdiction of the CCI to examine Ericsson's conduct for abuse of behaviour, based on complaints by Micromax and Intex. The use of NDAs is one of the grounds on which the parties have complained to the CCI.

G.6. Pending a final determination by the CCI (and subsequent appeals), it would be premature to make an absolute claim on whether the use of NDAs results in an abuse of dominant position in all instances. However, the following submissions are made: First, the determination of misuse/abuse of dominant position is influenced by a number of factors , i.e., such a determination should be made on a case to case basis. Second, the market regulator, the CCI, is best situated to determine (a) abuse of dominance, and (b) whether the use of NDAs by an enterprise constitutes an abuse of its dominance. Third, the question of whether the use of NDAs constitutes misuse of dominance needs to be addressed in two parts - (a) whether the use of the NDA itself is abusive, irrespective of its terms and, (b) whether the use of certain specific terms renders the NDA abusive. Fourth, NDAs could potentially lead to the patent owner abusing its dominant position in the market, as well as result in an invalidation of FRAND commitments and terms. NDAs make it impossible to determine if a patent holder is engaging in discriminatory licensing practices. Fifth, NDAs are especially harmful in the case of NPEs-- companies that hold patents and monetise them but don't build or manufacture the components or devices that implement the technology associated with the patents.

h) What should be the appropriate mode and remedy for settlement of disputes in matters related to SEPs, especially while deciding FRAND terms? Whether Injunctions are a suitable remedy in cases pertaining to SEPs and their availability on FRAND terms?

H.1. The licensing of SEPs on FRAND terms requires the parties to negotiate "reasonable" royalty rates in good faith, and apply the terms uniformly to all willing licensees. It is our submission that if the parties cannot agree to FRAND terms, they may enter into binding arbitration. Further, if all efforts fail, there exist remedies under the Patents Act and the Competition Act, 2002 to address the issues.

H.2. Section 115 of the Patents Act empowers the court to appoint an independent scientific adviser " to assist the court or to inquire and report upon any such question of fact or of opinion (not involving a question of interpretation of law) as it may formulate for the purpose. " Such an independent adviser may inform the court on the technical nuances of the matter.

H.3. Further, under the Patents Act, pending the decision of infringement proceedings the Court may provide interim relief, if the plaintiff proves first, a prima facie case of infringement; second, that the balance of convenience tilts in plaintiff's favour; and, third, that if an injunction is not granted the plaintiff shall suffer irreparable damage. H.4. However, it is our suggestion that courts adopt a more cautious stance towards granting injunctions in the field of SEP litigation. First, in our opinion, injunctions may prove to be a deterrent to arrive at a FRAND commitment, in particular, egregiously harming the willing licensee. Second, especially in the Indian scenario, where litigating parties operate in vastly different price segments (thereby targeting consumers with different purchasing power), it is difficult to establish that "irreparable damage" has been caused to the patent owner on account of infringement. Third, we note the approach of the European Court of Justice, which prohibited the patent holder from enforcing an injunction provided a willing licensee makes an offer for the price it wishes to pay to use a patent under the condition that it deposited an amount in the bank as a security for the patent holder. Fourth, we also note the approach of the Federal Trade Commission in the USA, which only authorizes patent holders to seek injunctive relief against potential licensees who have either stated that they will not license a patent on any terms, or refuse to enter into a license agreement on terms that have been set in the final ruling of a court or arbitrator. Further, as Contreras (2015) observes, that the precise boundaries of what constitutes as an unwilling licensee remains to be seen. We observe a similar ambiguity in Indian jurisprudence, and accordingly submit that courts should carefully examine the conduct of the licensee to injunct them from the alleged infringement.

i) What steps can be taken to make the practice of Cross-Licensing transparent so that royalty rates are fair & reasonable?

I.1. The Patents Act requires patentees and licensees to submit a statement on commercial working of the invention to the Controller every year. Form 27 under section 146(2) of the Act lists the details necessary to be disclosed for compliance of the requirement of "working". A jurisprudential analysis reveals the rationale and objective behind this mandatory requirement. Undeniably, the scheme of the Indian patent regime makes it amply clear that "working" is a very important requirement, and the public as well as competitors have a right to access this information in a timely manner, without undue hurdles. Indeed, as the decision in Natco Pharma v. Bayer Corporation reveals, the disclosures in Form 27 were crucial to determining the imposition of a compulsory license on the patentee. Thus, broadly, Form 27 disclosures can critically enable willing licensees to access patent "working" information in a timely manner.

I.2. However, there has been little compliance of this requirement by the patentees, despite the IPO reiterating the importance of compliance through the issuance of multiple public notices (suo motu and in response to a public interest litigation filed in 2011 ), and, reminding the patentees that non-compliance is punishable with a heavy fine. Findings of research submitted by one of the parties in the writ of the 2011 public interest litigationShamnad Basheer v. Union of India and others reveal as follows. First, a large number of Form 27s are unavailable for download from the website of the IPO. This possibly indicates that the forms have either not been filed by the patentees with the IPO, or have not been uploaded (yet) by the IPO. Second, a large number of filings in the telecom sector remain incomplete.

I.3. In 2015, CIS queried the IPO website for Form 27s of nearly 4,400 patents. CIS' preliminary research (ongoing and unpublished) echoes findings similar to the ones disclosed in the case discussed in paragraph I.2. of this submission (above).

I.4. In view of the submissions above, CIS makes the following recommendations to make the practice of cross-licensing transparent so that royalty rates are fair & reasonable: first, that there be a strict enforcement of the submission of Form 27s on a regular and timely basis by the patentees; and, second, that guidelines may be drawn up on whether it was discriminatory to charge no royalties (whether on the SSPPU or on the whole device) for a patent holder in a cross-licensing arrangement with another, when it charges royalty on the selling price of the device from a non-cross-licensor.

j) What steps can be taken to make the practice of Patent Pooling transparent so that royalty rates are fair & reasonable?

J.1. Patent pools can be understood as an agreement between two or more patent owners to license one or more of their patents to one another or to third parties. Thus, the creation of a patent pool makes use of the legal instrument of licensing, similar to the practice of cross-licensing. Insofar, we reiterate our recommendations made in paragraph I.3. of this submission (above), which apply to the answer to the instant question.

J.2. In furtherance of the recommendation above, we also propose the alteration of the Form 27 template to include more disclosures. Presently, patentees are required to to declare number of licensees and sub-licensees. We specifically propose that the format of Form 27 filings be modified to include patent pool licenses, with an explicit declaration of the names of the licensees and not just the number.

J.3. It is also our submission that patent pools be required to offer FRAND licenses on the same terms to both members and non-members of the pool.

k) How should it be determined whether a patent declared as SEP is actually an Essential Patent, particularly when bouquets of patents are used in one device?

K.1. We submit that several studies on the essentiality of SEPs indicate that only a small percentage of SEPs are actually essential. A study conducted byGoodman and Myers (2004) showed that only 21% of SEPs pertaining to the 3G standard in the US were deemed to be actually essential. Another study conducted by the same authors in 2009 for WCDMA patents showed that 28% SEPs were essential.

K.2. In our opinion, first, the methodology adopted by Goodman and Myers could be replicated to determine the "essential" nature of an SEP. Second, while adopting their methodology, it would be useful to address some of the issues over which these studies were critiqued. Accordingly, we suggest that (a) laboratory tests may be conducted by an outside expert or by a commercial testing laboratory, and not at an in-house facility owned by either parties, so as to eliminate in the lab results; and, (b) expert opinions may be considered in order to determine essentiality.

l) Whether there is a need of setting up of an independent expert body to determine FRAND terms for SEPs and devising methodology for such purpose?

L.1. In our opinion, there is no need for an independent expert body to determine FRAND terms for SEPs and devising the methodology for such a purpose. The existing legal and regulatory framework is reasonably equipped to determine FRAND terms. A more detailed submission on the existing framework and suggested changes has been made in our answer to question 'a' of the discussion paper (above).

L.2. However, we observe that Indian courts, tribunals and the CCI are yet to endorse a methodology for making FRAND determinations. The judgments of the Delhi High Court do not provide a conclusive rationale or methodology for the imposition of royalty rates in the respective matters.

L.3. We submit that in the absence of definitive Indian jurisprudence for determination of FRAND terms, American jurisprudence provides certain guidance. Contreras (2015) informs us about the various case law American courts and regulators have developed and adhered to whilst making such determinations.The dominant analytical framework for determining "reasonable royalty" patent damages in the United States today was set out in 1970 by the District Court for the Southern District of New York in Georgia-Pacific Corp. v. U.S. Plywood Corp . While this may be used as a guiding framework, the question of methodology remains far from settled.

m) If certain Standards can be met without infringing any particular SEP, for instance by use of some alternative technology or because the patent is no longer in force, what should be the process to declassify such a SEP?

M.1. In our opinion, if a standard can be met without infringing a patent declared to be "essential" to it, then the patent is not actually "essential". In this instance, the methods suggested in response to question 'k' of the discussion paper (above) could be used to declassify the SEP.

M.2. We further submit that if a patent is no longer in force, that is, if it has expired, then it ceases to be patent, and therefore an SEP. The process to declassify such an SEP could be simply to declare it an expired patent.

M.3. In addition, if it is possible to implement a certain standard by using an alternative technology, then the SEP for such a standard is not actually an SEP. However, the scale of operations and that of mass manufacturing and compatibility requirements in devices and infrastructure mean that it is unlikely to have different methods of implementing the same standard.

M.4. In general, it is our submission that an Indian SSO could maintain a publicly accessible database of SEPs found to be invalid or non-essential in India.

7. We reiterate our gratitude to the DIPP for the opportunity to make these submissions. In addition to our comments above, we have shared some of our research on this issue, in the 'Annexures', below.

8. It would be our pleasure and privilege to discuss these comments with the DIPP; and, supplement these with further submissions if necessary. We also offer our assistance on other matters aimed at developing a suitable policy framework for SEPs and FRAND in India, and, working towards the sustained innovation, manufacture and availability of mobile technologies in India.

On behalf of the Centre for Internet and Society, 22 April, 2016

Anubha Sinha - anubha@cis-india.org | Nehaa Chaudhari - nehaa@cis-india.org

Rohini Lakshané - rohini@cis-india.org

___________________________________________________________________________

___________________________________________________________________________

ANNEXURES

___________________________________________________________________________

● Anubha Sinha, Fuelling the Affordable Smartphone Revolution in India, available at http://cis-india.org/a2k/blogs/digital-asia-hub-the-good-life-in-asias-21-st-century-anubha-sinha-fueling-the-affordable-smartphone-revolution-in-india (last accessed 22 April, 2016).

● Nehaa Chaudhari, Standard Essential Patents on Low-Cost Mobile Phones in India: A Case to Strengthen Competition Regulation?, available at http://www.manupatra.co.in/newsline/articles/Upload/08483340-C1B9-4BA4-B6A9-D6B6494391B8.pdf (last accessed 22 April, 2016).

● Nehaa Chaudhari, Pervasive Technologies:Patent Pools, available at http://cis-india.org/a2k/blogs/patent-pools (last accessed 22 April, 2016).

● Nehaa Chaudhari, The Curious Case of the CCI:Competition Law and SEP Regulation in India, presented at the 4th Global Congress on Intellectual Property and the Public Interest, available at http://cis-india.org/a2k/blogs/the-curious-case-of-the-cci-competition-law-and-sep-regulation-in-indi a (last accessed 22 April, 2016).

● Nehaa Chaudhari, Letter for Establishment of Patent Pool for Low Cost Access Devices through Compulsory Licences, available at http://cis-india.org/a2k/blogs/letter-for-establishment-of-patent-pool-for-low-cost-access-devices (last accessed 22 April, 2016).

● Prof Jorge L. Contreras and Rohini Lakshané, Patents and Mobile Devices in India: An Empirical Survey, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2756486 (last accessed 22 April, 2016).

● Rohini Lakshané, CIS, List of technical standards and IP types (Working document), available at https://drive.google.com/file/d/0B8SgjShAjhbtaml5eW50bS01d2s/view?usp=sharing (last accessed 22 April, 2016).

● Rohini Lakshané, Open Letter to Prime Minister Modi, February 2015, available at http://cis-india.org/a2k/blogs/open-letter-to-prime-minister-modi (last accessed 22 April, 2016).

● Rohini Lakshané, FAQ: CIS' proposal to form a patent pool of critical mobile technology, September 2015, available at http://cis-india.org/a2k/blogs/faq-cis-proposal-for-compulsory-licensing-of-critical-mobile-technologies (last accessed 22 April, 2016).

● Rohini Lakshané, Joining the dots in India's big-ticket mobile phone patent litigation, May 2015, last updated October 2015, available at http://cis-india.org/a2k/blogs/joining-the-dots-in-indias-big-ticket-mobile-phone-patent-litigation (last accessed 22 April, 2016).

● Rohini Lakshané, Compilation of Mobile Phone Patent Litigation Cases in India, March 2015, last updated April 2016, available at http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india , (last accessed April 22, 2016).

● Rohini Lakshané, Patent landscaping in the Indian Mobile Device Marketplace, presented at the 4th Global Congress on Intellectual Property and Public Interest, December 2015, available at https://drive.google.com/open?id=0B8SgjShAjhbtME45N245SmowOGs (last accessed 22 April, 2016).

● Vikrant Narayan Vasudeva, Patent Valuation and Licence Fee Determination in the Context of Patent Pools, available at http://cis-india.org/a2k/blogs/patent-valuation-and-license-fee-determination-in-context-of-patent-pools (last accessed 22 April, 2016).

************

This submission has been authored by (alphabetically) Anubha Sinha, Nehaa Chaudhari and Rohini Lakshané, on behalf of the Centre for Internet and Society, India.

See The Centre for Internet and Society, available at http://cis-india.org (last accessed 22 April, 2016) for details of the organization, and, our work.

Make in India, available at http://www.makeinindia.com/home (last accessed 22 April, 2016).

Digital India, available at http://www.digitalindia.gov.in/ (last accessed 22 April, 2016).

See Nehaa Chaudhari, The Curious Case of the CCI:Competition Law and SEP Regulation in India, presented at the 4th Global Congress on Intellectual Property and the Public Interest, available at http://cis-india.org/a2k/blogs/the-curious-case-of-the-cci-competition-law-and-sep-regulation-in-india (last accessed 21 April, 2016) for further details on relevant provisions.

In the High Court of Delhi, W.P.(C) 464/2014 & CM Nos. 911/2014 & 915/2014, judgment delivered on 30 March, 2016. Hereafter referred to as the Ericsson-CCI judgment.

Id.

Under Articles 226 and 227 of the Constitution of India, and, under Article 32 of the Constitution of India, for the High Courts and the Supreme Court, respectively.

Agreement on Trade-Related Aspects of Intellectual Property Rights, available at https://www.wto.org/english/tratop_e/trips_e/t_agm0_e.htm (last accessed 22 April, 2016).

KEI Staff, 2015 October 15 version: RCEP IP Chapter, available at http://keionline.org/node/2472 (last accessed 22 April, 2016).

BIS Act, 2016, available at http://www.bis.org.in/bs/bsindex.asp (last accessed 21 April, 2016).

TSDSI, Intellectual Property Rights Policy, available at http://www.tsdsi.org/media/Help/2014-12-17/TSDSI-PLD-40-V1.0.0-20141217.pdf (last accessed 22 April, 2016).

Id at Clause 3.1.

Id at Clause 5.1.

Id at Clause 5.2.

Id at Clause 5.5.

Id at Clauses 7.1. and 7.2.

Id at Clause 7.2.1.a (iii).

Id at Clause 7.2.1.b(iii).

Id at Clause 7.3.

GISFI, Intellectual Property Rights Policy, available at http://www.gisfi.org/ipr_policy/gisfi_intellectual_property_righ.htm (last accessed 22 April, 2016).

Id at Clauses 6.2.1.a(iii) and 6.2.1.b(iii).

See W3C, Patent Policy, available at https://www.w3.org/Consortium/Patent-Policy-20040205/ (last accessed 22 April, 2016) for more details on their royalty-free licences.

See OMA, Use Agreement, available at http://openmobilealliance.org/about-oma/policies-and-terms-of-use/use-agreement/ (last accessed 22 April, 2016) for more details on their royalty-free licences.

See Rohini Lakshané, Open Letter to PM Modi, available at http://cis-india.org/a2k/blogs/open-letter-to-prime-minister-modi (last accessed 22 April, 2016) for further details of CIS' proposal.

Rohini Lakshané, CIS, List of Technical Standards and IP Types (Working document), available at https://drive.google.com/file/d/0B8SgjShAjhbtaml5eW50bS01d2s/view?usp=sharing (last accessed 22 April, 2016).

Mark Lemley and Carl Shapiro, Patent Holdup and Royalty Stacking, 85 Tex. L. Rev. at 2015; See also, for e.g., RPX Corporation, Amendment No. 3 to Form S-l, 11 Apr. 2011, at 59, available at http://www.sec.gov/Archives/edgar/data/1509432/000119312511101007/ds1a.htm (last accessed 22 April, 2016), quoting - "Based on our research, we believe there are more than 250,000 active patents relevant to today's smartphones…".; See further Steve Lohr, Apple- Samsung Case Shows Smartphone as Legal Magnet, New York Times, 25 Aug. 2012, available at http://www.nytimes.com/2012/08/26/technology/apple-samsung-case-shows-smartphone-as-lawsuit-magnet.html (last accessed 22 April, 2016).

Jorge L. Contreras and Rohini Lakshané, Patents and Mobile Devices in India: An Empirical Survey, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2756486 (last accessed 22 April, 2016).

Ann Armstrong, Joseph J. Mueller and Timothy D. Syrett, The Smartphone- Royalty Stack:Surveying Royalty Demands for the Components Within Modern Smartphones, available at https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/The-Smartphone-Royalty-Stack-Armstrong-Mueller-Syrett.pdf (last accessed 22 April, 2016).

Florian Mueller, Ericsson Explained Publicly why it Collects Patent Royalties from Device (Not Chipset) Makers, available at http://www.fosspatents.com/2014/01/ericsson-explained-publicly-why-its.html (last accessed 22 April, 2016).

Romit Guha and Anandita Singh Masinkotia, PM Modi's Digital India Project:Government to Ensure that Every Indian has a Smartphone by 2019, available at http://articles.economictimes.indiatimes.com/2014-08-25/news/53205445_1_digital-india-india-today-financial-services (last accessed 22 April, 2016).

Nehaa Chaudhari, Standard Essential Patents on Low-Cost Mobile Phones in India: A Case to Strengthen Competition Regulation?, available at http://www.manupatra.co.in/newsline/articles/Upload/08483340-C1B9-4BA4-B6A9-D6B6494391B8.pdf (last accessed 22 April, 2016).

See part 10.2.2. of the Discussion Paper, at page 25.

J.Gregory Sidak, FRAND in India:The Delhi High Court's Emerging Jurisprudence on Royalties for Standard-Essential Patents, available at http://jiplp.oxfordjournals.org/content/early/2015/06/11/jiplp.jpv096.full (last accessed 22 April, 2016).

Appeal from the United States District Court for the Eastern District of Texas in No. 6:11-cv-00343-LED, decided on 03 December, 2015, available at. http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1066.Opinion.12-1-2015.1.PDF (last accessed 22 April, 2016).

Id.

Kumkum Sen, News on Royalty Payments Brings Cheer in New Year, available at http://www.business-standard.com/article/economy-policy/news-on-royalty-payment-brings-cheer-in-new-year-110010400044_1.html (last accessed 21 April, 2016).

See Sanjana Govil, Putting a Lid on Royalty Outflows- How the RBI Can Help Reduce India's IP Costs, available at http://cis-india.org/a2k/blogs/lid-on-royalty-outflows (last accessed 21 April, 2016), for a discussion on the introduction of royalty caps in the early 1990s, and its success in reducing the flow of money out of India.

Supra note 33.

Nehaa Chaudhari, Letter for Establishment of Patent Pool for Low-cost Access Devices through Compulsory Licenses, available at http://cis-india.org/a2k/blogs/letter-for-establishment-of-patent-pool-for-low-cost-access-devices (last accessed 21 April, 2016).

Supra note 26.

Rohini Lakshané, FAQ: CIS' proposal to form a patent pool of critical mobile technology, September 2015, available at http://cis-india.org/a2k/blogs/faq-cis-proposal-for-compulsory-licensing-of-critical-mobile-technologies (last accessed 22 April, 2016).

Id.

See the Ericsson-CCI case, supra note 6, for Intex's submissions as discussed by Justice Bakhru.

Id.

Rohini Lakshané, Compilation of Mobile Phone Patent Litigation Cases in India, available at http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india (last accessed 21 April, 2016).

See the Ericsson-CCI case, supra note 6, at paragraph 19.2.

Supra note 47.

See the Ericsson-CCI judgment, supra note 6, at paragraphs 88-105.

Section 19(4) of the Competition Act. See also Competition Commission of India v. Steel Authority of India and Another, (2010) 10 SCC 744.

Section 115 of the Patents Act, 1970.

Huawei Technologies Co. Ltd v. ZTE Corp. and ZTE Deutschland, Judgment of the Court (Fifth Chamber) of 16 July 2015 in GmbH C-170/13.

Third Party United States Fed. Trade Commission's Statement on the Public Interest, In re Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, U.S. Int'l Trade Comm'n, Inv. No. 337-TA-745 (Jun. 6, 2012).

Jorge L. Contreras, A Brief History of FRAND: Analyzing Current Debates in Standard Setting and Antitrust Through a Historical Lens, 80 Antitrust Law Journal 39 (2015), available at http://ssrn.com/abstract=2374983 or http://dx.doi.org/10.2139/ssrn.2374983 (last accessed 22 April, 2016).

Section 146(2) of the Patents Act, 1970..

Sai Vinod, Patent Office Finally Takes Form 27s Seriously, available at http://spicyip.com/2013/02/patent-office-finally-takes-form-27s.html (last accessed 22 April, 2016).

Order No. 45/2013 (Intellectual Property Appellate Board, Chennai), available at http://www.ipab.tn.nic.in/045-2013.htm (last accessed 22 April, 2016).

Intellectual Property India, Public Notice, available at http://www.ipindia.nic.in/iponew/publicNotice_Form27_12Feb2013.pdf (last accessed 22 April, 2016) and Intellectual Property India, Public Notice, available at http://ipindia.nic.in/iponew/publicNotice_24December2009.pdf (last accessed 22 April, 2016).

Supra note 57.

Id.

See research findings available at http://spicyip.com/wp-content/uploads/2015/05/FORM-27-WP-1R-copy.pdf (last accessed 22 April, 2016).

In the High Court of Delhi, W.P.(C) 5590/2015. This litigation is currently ongoing. See, illustratively, Mathews P. George, Patent Working in India: Delhi HC issues notice in Shamnad Basheer v. Union of India & Ors. - I, available at http://spicyip.com/2015/09/patent-working-in-india-delhi-hc-issues-notice-in-shamnad-basheer-v-union-of-india-ors-i.html (last accessed 22 April, 2016).

In response to an RTI request made to the IPO in Mumbai for forms unavailable on the website, CIS received a reply stating, "As thousand [sic] of Form -27 are filed in this office, it is very difficult to segregate Form-27 for the patent numbers enlisted in your RTI application as it needs diversion of huge official staff/ manpower and it will affect day to day [sic] work of this office." This research is ongoing and unpublished. Please contact us for a copy of the RTI application and the response received.

WIPO Secretariat, Patent Pools and Antitrust - A Comparative Analysis, available at https://docs.google.com/viewer?url=http%3A%2F%2Fwww.wipo.int%2Fexport%2Fsites%2Fwww%2Fip-competition%2Fen%2Fstudies%2Fpatent_pools_report.pdf (last accessed 22 April, 2016).

Form 27, The Patents Act, available at http://ipindia.nic.in/ipr/patent/manual/HTML%20AND%20PDF/Manual%20of%20Patent%20Office%20Practice%20and%20Procedure%20-%20html/Forms/Form-27.pdf (last accessed 22 April, 2016).

David J. Goodman and Robert A. Myers, 3G Cellular Standards and Patents, available at http://patentlyo.com/media/docs/2009/03/wirelesscom2005.pdf (last accessed 22 April, 2016).

Darien CT, Review of Patents Declared as Essential to WCDMA through December, 2008, available at http://www.frlicense.com/wcdma1.pdf (last accessed 22 April, 2016).

Supra note 67.

Donald L. Martin and Carl De Meyer, Patent Counting, a Misleading Index of Patent Value: A Critique of Goodman & Myers and its Uses, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=949439 (last accessed 22 April, 2016).

Rohini Lakshané, Joining the Dots in India's Big-Ticket Mobile Phone Patent Litigation, available at http://cis-india.org/a2k/blogs/joining-the-dots-in-indias-big-ticket-mobile-phone-patent-litigation (last accessed 22 April, 2016). See also supra note 47 for more details.

Supra note 55.

318 F. Supp. 1116, 1120 (S.D.N.Y. 1970), modified and aff'd, 446 F. 2d 295 (2d Cir. 1971), cert. denied, 404 U.S. 870 (1971).

2015

They filed it in 2011

The 2011 filing only includes pharma, BTW: http://spicyip.com/docs/Form%2027s.pdf. Also, this writ is from May 2015: http://spicyip.com/wp-content/uploads/2015/05/FORM-27-WP-1R-copy.pdf Anyway, I'll leave it as it is.

For more details visit https://cis-india.org/a2k/blogs/comments-on-department-of-industrial-policy-and-promotion-discussion-paper-on-standard-essential-patents-and-their-availability-on-frand-terms

CIS' Submission to DIPP and CGPDTM at meeting with IP Stakeholders

sinha — 2017-12-13T14:31:54Z

The Office of the Controller General of Patents, Designs and Trademarks held a meeting with IP stakeholders on December 7, 2017, chaired by the Secretary, DIPP, to take suggestions on improving procedures and functioning of the Office. Anubha Sinha attended the meeting and requested the DIPP to improve compliance of uploading Form 27s by patentees and ensure proper enforcement of related provisions within the Indian Patent Act, 1970. Additionally, we sent a detailed submission to the Office, drawing from our recent research. Thanks to Rohini Lakshane and Aman Goyal for their inputs.

Submission to the Department of Industrial Planning and Promotion (DIPP) at Meeting with IP Stakeholders on 07 December, 2017

1. As the DIPP is aware, the Indian mobile device manufacturing industry is mired in issues related to licensing of standard essential patents (SEPs). Disputes have resulted in imposition of heavy interim royalty rates on Indian manufacturers, payable to foreign SEP holders. Section 146(2) of the Patent Act, 1970 mandates patentees to provide information on working of patents, which is crucial for willing licensees to access patent working information in a timely manner. This requirement, that the details of patent working be disclosed by patentees supports the goal of making unworked patents available for compulsory licensing in India, both to promote economic development and public access to patented products. Penalties for failing to furnish such information (via Form 27) are steep, potentially resulting in fines or imprisonment.

2. We note that in 2009, 2013 and 2015 the Controller issued public notices calling on patent owners to comply with their obligations to file statements of working on Form 27. Further, on February 12, 2013, the Indian Patent Office (IPO) announced plans to make Form 27 submissions for the year 2012 available to the public via the IPO website.

3. We commend the efforts of the IPO, however, our empirical research on ICT innovations[i] as well as by Prof. Shamnad Basheer (on ICT and pharmaceutical sector)[ii] reveals that there are serious lapses as far as compliance and enforcement of statutory provisions mandating filing of Form 27 are concerned.

4. In the past year, we studied data available from 2009- 2016 for the mobile device sector, and could only identify and access 4,916 valid Forms 27, corresponding to 3,126 mobile device patents, leaving 1,186 Indian patents for which a Form 27 could have been filed, but was not found.[iii] For a surprising number of Form 27s (3%) the working status of the relevant patent was not designated.

Even among the Form 27s that had been obtained, almost none contained useful information regarding the working of the subject patents or fully complying with the informational requirements of the Indian Patent Rules. Many patentees simply omitted required descriptive information from their forms without any explanation.[iv]

Via our research we also gathered complaints raised by patentees and industry observers regarding the structure of the Form 27 requirement itself. For example, patents covering complex, multi-component products that embody dozens of technical standards and thousands of patents may not necessarily be amenable to the individual-level data requested by Form 27.

5. Regardless, we submit that these technical difficulties should not hinder the critical statutory requirement placed on patent holders to diligently comply with Form 27 compliance. In the context of licensing of SEPs, several stakeholders recently suggested solutions as revealed from our study of the submissions made to the TRAI Consultation on Promoting Local Telecom Manufacturing[v]:

Two industry associations, namely Telecom Equipment Manufacturers Association of India (TEMA) and Telecom Equipment & Services Export Promotion Council (TEPC) and a telecommunication enabler Vihan Network Limited recommended that a modified and longer version of Form 27 (Form 27S) may be designed for SEP holders that should apply right at the filing stage. Section 159 of the Patent Act, 1970 empowers the central government to make such modifications to the form, as necessary.[vi]
Further, Prof. T Ramakrishna (MHRD Chair on Intellectual Property Rights) at NLSIU, specifically recommended that Form 27 may be amended to include a new column, which may require the patent holder to declare if their patent forms a part of any standard and in case of affirmative answer – the name of the Standard Setting Organisation and corresponding standard of which it is a part.

6. Further, we would like to draw attention to how our study was limited by the technical capabilities of the Indian Patent Office’s online Form 27 repository, such as[vii]:

IPAIRS returned either a 404 error or Connection Time Out ("site is taking too long to respond") http://ipindiaonline.gov.in/patentsearch/search/index.aspx. In our opinion, it could be redirected to InPASS as it uses the same search engine as InPASS. Further, http://ipindia.nic.in/patsea.htm returned a 404 error.
Some PDFs of the forms comprise scanned image files without OCR of the text. This makes them inaccessible to the visually impaired, and prevents search and discoverability of their content. This also makes them less usable by preventing copying and selection of text.
In some cases, it was difficult to identify which one in the list of documents associated with a patent is Form 27, because of obscure filenames.

For example, for Patent Number 262228, Form 27 was named 68.262228.pdf, as found on IPAIRS.
For Patent number 260603, the filename for Form 27 was "ipindiaonline.gov.in_epatentfiling_online_frmPreview.asp.pdf" on IPAIRS.

Inconsistency in search results found on IPAIRS. Searching for the peripheral documents of the patents, returned the results, "No PDF found" for one full week. The next week, the documents started showing. Some searches returned results for an entirely different patent number.
Sometimes, Form 27 found on InPASS was not found on IPAIRS and vice versa.
Runtime errors occur due to browser caching.

7. We are thankful to DIPP for the opportunity to make these submissions. It would be our pleasure and privilege to discuss these submissions and recommendations in details with the DIPP. We also offer our assistance on other matters aimed at developing a suitable policy framework for SEPs and FRAND in India, and, working towards sustained innovation, manufacture and availability of mobile technologies in India.

Annexure

Complete Data of CIS’ Study[i]

[i] See Contreras, Jorge L. and Lakshané, Rohini and Lewis, Paxton, Patent Working Requirements and Complex Products (October 1, 2017). NYU Journal of Intellectual Property & Entertainment Law; Available at SSRN: https://ssrn.com/abstract=3004283

[ii] See Shamnad Basheer, Making Patents Work: Of IP Duties and Deficient Disclosures, 7 QUEEN MARY J. INTELL. PROP. 3, 16-17 (2017).

[iii] Supra note 1.

[iv] Refer to Appendix for a breakdown of compliance of Form 27 by patent holders in the mobile device sector.

[v] See TRAI’s Consultation Paper on Promoting Local Telecom Equipment Manufacturing dated 18.09.2017 and the responses, available here: http://trai.gov.in/consultation-paper-promoting-local-telecom-equipment-manufacturing?page=2

[vi] Section 159 of the Patent Act, 1970 empowers the central government to make rules. Accordingly, the Rule 131 of the Patents Rules, 2003 prescribes Form 27 as the manner in which section 146(2) of the Act is to be implemented.

[vii] An email by Rohini Lakshane (CIS) compiling these issues was sent to Dr. K.S. Kardam (Senior Joint Controller of Patents and Designs - ‎Indian Patent Office) on 09.09.2017.

[viii] See Contreras, Jorge L. and Lakshané, Rohini and Lewis, Paxton, Patent Working Requirements and Complex Products (October 1, 2017). NYU Journal of Intellectual Property & Entertainment Law; Available at SSRN: https://ssrn.com/abstract=3004283

For more details visit https://cis-india.org/a2k/blogs/cis-submissions-to-dipp-and-cgptdm-at-meeting-with-ip-stakeholders

Changing Usage Models: Desktops to Ubiquitous Cloud-Based Mobile Computing (Interviews with Semiconductor Industry - Part 1)

maggie — 2014-12-26T12:08:34Z

This is the first of a four-part blog series highlighting findings from a small sample of interviews with fabless semiconductor industry professionals in Taiwan. These industry insiders was approached for the intent of understanding expert knowledge on the process of integrated circuit design. However, the conversations resulted in leanings far beyond that scope. This post explores the trends of personal computing technology, which provides the pretext for the narrowing of the Pervasive Technologies project scope to a focus on the mobile phone.

Since the mid-1990s, the dissemination of information communications technologies (ICTs) has been hailed as the solution to bridging the digital divide. This rationale led to a multitude of programs, including One Laptop per Child, the Aakash tablet, and most recently, Modi's 'Digital India' campaign, to ensure all Indians have a mobile phone by the year 2019.

The Pervasive Technologies project looking at Access to Knowledge has come to understand that mobile phone technology have become ubiquitous, with 79% of internet users accessing the internet through mobiles in 2014. Particularly for low-income consumers, those who do not have access to computing rely on their mobile phones for accessing tools ranging from the common email, text messaging, calling; and the more advanced and revolutionary - mobile banking (e.g. m-PESA), crowd-sourced environmental protection (e.g. SpillMap), and more.

The evolution to the ubiquity of mobile technology was a valuable learning gained from recent interviews in Taiwan with professionals from the fabless semiconductor chip design industry. A senior executive with over 20 years experience in the field provided some insight to trends/changes in personal computing technology upon inquiring about the recent trends and changes within the industry.

One significant change that has been occurring is the usage model of consumers. Desktops and even laptops are not fully mobile since they cannot be used in one's hands. As broadband have become more pervasive, smartphones and tablets have resulted in new usage models where computing can be done virtually anywhere. People now tend to vale this more than the desktop experience.

The 'cloud' has also changed computing because the performance requirements for PC processors and other technologies no longer have to be as advanced. In addition, there has been a big shift from desktop content creation to mobile computing. This has mostly been catered towards content consumption (e.g. accessing email, viewing photos, using social media, etc.).

As a result of changing usage models and cloud competing, there has been a general industry shift away from computers. The PC market has slowed down, and the smartphone and tablet markets have exploded. They are generally cheeper, don't have as many bugs, and are much more convenient. Previously, the big names were desktop providers HP, and Dell; but now "there's less sex appeal around it… we're not excited by it.. it's the smartphone that's very exciting". The tech revolution has brought to light exciting smartphone brands like HTC, Samsung, Google and Apple.

In addition to big name smartphone brands, smaller, low-cost manufacturers like Xiaomi are developing a new business model through service, or application shopping. Prices of smartphones are continuing to decrease, so manufacturers using this model are looking to sell their hardware with smaller margins, and profit mainly through software. According to Digi-Capital, an investment bank for mobile apps and games, by 2017, mobile apps could reach $70 billion in annual revenue. Thus, greater affordability for the physical devices are naturally occurring within the market due to changing business models.

Accessibility of mobile phones through decreased costs are also supplemented by the trend of technology becoming much more open in the past 10-20 years. "One of the biggest challenges in the last 10 years is that you've got open source, you've got open hardware…things like the maker movement….", including Arduino, Linux, and others. There is a general market trend of consumers wanting to know more about their products.

However, one interviewee believed it was still much too closed, likening today's lack of openness to selling a vacuum cleaner without the user guide explaining how it works. "It's basically the same as buying a Hoover for home, and you don't get the user manual. How am I supposed to change the bag inside? They're not going to tell you."

When asked if this demand for more openness will change the industry, he responded: "There is a demand, there is a lot of demand, but very little supply. There is demand from the outside, and those within the company. We have to convince our departments to be more open. We have to convince the engineers. It's a lot like convincing politicians, there is no immediate reward."

Given these trends, it was of one interviewees' belief that increased accessibility of technology through both decreased cost and increased availability may not necessarily lie in the legal environment or the policy sphere, but rather requires patience for the industry to adapt to a changing marketplace.

Understanding the modes and mediums which information, culture, and ultimately knowledge is accessed is fundamental to the Pervasive Technologies research as an Access to Knowledge issue. Thus, getting a grasp on technological trends, and being able to predict upcoming business models was a very valuable learning.

Guha, Romit, and Anandita Mankotia Mankotia. “PM Modi’s Digital India Project: Government to Ensure That Every Indian Has Smartphone by 2019.” The Economic Times 25 Aug. 2014. Web. 2 Sept. 2014.

See the research proposal for the Pervasive Technologies project here: http://cis-india.org/a2k/pervasive-technologies-research-proposal.pdf

“Smartphone Users Worldwide Will Total 1.75 Billion in 2014.” eMarketer. N.p., 16 Jan. 2014. Web. 3 Sept. 2014.

Takahashi, Dean. “Mobile Apps Could Hit $70B in Revenues by 2017.” VentureBeat. N.p., 29 Apr. 2014. Web. 7 Sept. 2014.

This will be further explored in the last blog post of this series.

For more details visit https://cis-india.org/a2k/blogs/interviews-with-semi-conductor-industry-professionals-in-taiwan-1

CCI allowed to probe Ericsson: FAQs on Ericsson’s disputes with Micromax and Intex

nehaa — 2016-05-01T13:46:52Z

The blog post is an analysis of the recent decision of the Delhi High Court, clarifying that the Competition Commission of India could investigate Ericsson for a violation of competition law. A shorter version of this blog post was published in the Quint on April 30, 2016.

Read the original article published by Quint on April 30 here.

The mobile phone is the sole access point to the internet for about half of India’s population. It has an important role to play in India’s development story, one that is amplified given the central government’s focus on leveraging the internet for better governance. The government has recognized this importance, evidenced through electronics manufacturing incentives and, a stated commitment to ensure ‘universal access to mobile connectivity’. Homegrown brands, including Micromax and Intex, with their affordable, low-cost mobile phones, play an important role in this development story.

In March, 2013, the Swedish multinational, Ericsson, sued Micromax for patent infringement, setting in motion a series of events, with the potential to disturb India’s mobile phone dream. Then, last month, the Delhi High Court (the Court) recognized the authority of the market regulator - the Competition Commission of India (CCI) - to probe Ericsson for its allegedly anticompetitive conduct.

Why did Ericsson sue Micromax?

Ericsson claims that Micromax’s mobile phones infringe its standard essential patents (SEPs) on mobile phone technologies, including 3G and EDGE.

How are some patents identified as SEPs?

International Standard Setting Organizations (SSOs) – such as ETSI or IEEE - recognize international standards. 3G and Wi-Fi are examples of such internationally recognized standards.

According to the SSOs, the determination of standards depends on consensus, driven by their members. After a standard is determined, SEP owners (including Ericsson) voluntarily disclose which of their patents are essential to the determined standard, and, undertake to license these on fair, reasonable and non-discriminatory (FRAND) terms, to any willing licensee.

Does this give rise to legal issues?

This process results in a variety of (well-documented) legal questions, many of which have been raised in India’s SEP litigation, and have been alluded to by the Court in the present judgment. The Court has recognized the potential for SEPs to create dominant positions for their owners, noting that “any technology accepted as a standard would have to be mandatorily followed [emphasis, mine] by all enterprises in the particular industry.”

Some other legal issues around SEPs include the enforceability of FRAND commitments; determining what would constitute ‘fair’, ‘reasonable’ and, ‘non-discriminatory’; the possibility of non/incomplete disclosure by patent owners; and, a refusal by licensees to negotiate FRAND terms in good faith. A related issue that has received comparatively less attention is the essentiality of peripheral or, non standard but essential patents, where there is no obligation to license on FRAND terms.

Have there been other SEP infringement suits filed in India?

Yes. Besides Micromax, Ericsson has also sued other low-cost mobile phone sellers/manufacturers, homegrown and otherwise, for patent infringement. These include Intex, Lava, Gionee, Xia and iBall. In addition, Vringo has also sued ZTE and Asus, separately. [In this article, we will limit ourselves to a discussion on Ericsson’s suits against Micromax and Intex.]

What did Micromax and Intex do after being sued by Ericsson?

Ericsson’s suits were followed by deliberations between the parties (Ericsson and Micromax, and, Ericsson and Intex, independently) and some interim orders by the Court. This litigation is ongoing, and final orders are awaited.

Meanwhile, both Micromax and Intex have pursued a series of other remedies. Intex has filed applications for the revocation of Ericsson’s patents. In addition, Micromax and Intex have each filed separate complaints under India’s Competition Act, 2002 before the CCI, alleging that Ericsson had abused its dominant position. This is a punishable offence under Indian competition law.

Micromax and Intex have both claimed that Ericsson’s royalty rates were excessive. In addition, Micromax has objected to Ericsson’s use of the threat of injunctions and custom seizures, and, has also claimed that Ericsson’s conduct results in a denial of market access for Indian handset manufacturers. Intex has alleged, inter alia, that it was forced into signing an onerous non disclosure agreement by Ericsson; and, that it was forced to negotiate licences without a complete disclosure of its patents by Ericsson.

The CCI, finding there to be a prima facie case in each of the above complaints, ordered the Director General to undertake an investigation into the allegations made by both – Micromax and Intex. These orders were challenged by Ericsson in the Court.

On what grounds did Ericsson challenge the CCI’s orders?

Briefly, Ericsson argued-

(a) that the issue was one of patent law, which barred the applicability of competition law;

(b) that it was not an ‘enterprise’ under the Competition Act, 2002, and, that the CCI was empowered to check anticompetitive conduct only of ‘enterprises’;

(d) that since the disputes between the parties were already being heard in other proceedings before the Court, the CCI could not adjudicate them; and,

(e) that Intex and Micromax were barred from making such allegations. Ericsson opined that since they had challenged its ownership of the SEPs, through revocation of petition applications (filed by Intex), and a denial of infringement claims (by Micromax), they could not now present a complaint premised on it being the owner of those same SEPs.

What did the Court hold?

Rejecting Ericsson’s arguments, the Court held that the CCI did [emphasis, mine] have the jurisdiction to examine if Ericsson’s conduct was anticompetitive, finding it to be an ‘enterprise’ under the Competition Act, 2002. However, the Court was clear that the CCI’s actions could be subject to judicial review by the High Court. It also found that the mere applicability of the Patents Act, 1970, did not bar the applicability of competition law, since the legislations covered distinct fields and served different purposes. Further, it opined that Micromax and Intex were free to explore alternative remedies; neither this pursuit, nor, the pendency of disputes on similar issues before the Court, was a bar to the CCI’s jurisdiction.

Interestingly, while not adjudicating the issue of Ericsson’s abuse of dominance in this particular case, Justice Bakhru, citing its conduct as presented by the other parties said that in some cases, “such conduct, if it is found, was directed in pressuring an implementer to accept non-FRAND terms, would amount to an abuse of dominance.”

What does the judgment mean for India’s homegrown brands?

The judgment is a boost for India’s home grown manufacturers in their battle against global patent holders. However, while it certainly validates the role and powers of India’s young market regulator, it will no doubt be appealed. One also expects multiple appeals over the CCI’s findings in the present and, future similar cases.

It is impossible to predict the outcome of legal proceedings in SEP litigation. Accordingly, Micromax, Intex (and others) would do well to augment their own patent portfolios (either by filing their own patents, or, by acquiring those of other companies). This may create a more level playing field, opening up alternate channels of negotiation, including, cross-licensing. They may also seek access to Ericsson’s SEPs under the compulsory licensing mechanism in India’s patent law.

What does the government have to say?

The Department of Industrial Policy and Promotion has recently released a discussion paper on these issues, inviting comments from stakeholders. It would be unsurprising if the government intends to regulate this space, given the strong implications for not just its flagship Make in India and Digital India programs, but also its foreign policy narrative on protecting IPRs and fostering innovation. Immediate welcome steps from the government would be a final word on the National IPR Policy, and, the adoption of the National Competition Policy, awaited since 2014 and 2011, respectively.

For more details visit https://cis-india.org/a2k/blogs/the-quint-nehaa-chaudhari-april-30-2016-cci-allowed-to-probe-ericsson

Beyond Alcohol and Angel Investors: Building Business Models in an Age of Mobile Music Streaming (Conference Learnings)

maggie — 2015-02-23T12:39:36Z

This blog post is the first of a series of blogs to document, synthesize, and analyze learnings from attending various music industry trade conferences. This first post introduces the research question, and highlights learnings about the various business models which can be accessible via the mobile, and broadly how the music industry is attempting to respond to monetization challenges.

Introduction

The Pervasive Technologies: Access to Knowledge in the Marketplace project is conducting research on access to the mobile phone hardware, software, and content in the context of the intellectual property regimes in India and China. This chapter focuses on access to music content via the mobile phone in India with a particular focus on copyright law.

Following preliminary research, it was identified that the copyright organizing institutions in India lacked legitimacy amongst stakeholders within the music industry. For the purposes of this research, these institutions include the Copyright Act, the Copyright Board, and the copyright societies. Collectively, these institutions have received constitutionality petitions, corruption allegations, and critiques of overall ineffectiveness in regulating and balancing music copyright for the maximal benefit to society. This is of particular importance in light of new modes of digital music distribution technologies (such as mobile phones, and music streaming platforms) which have resulted in a tremendous increase in music consumption but simultaneous decrease in revenue. This is in part due to new business models for music streaming services, and the increasing complexity of music copyright and licensing management in the digital content industries.

1) How have evolving music distribution technologies accessible via the mobile phone impacted business models and licensing practices amongst stakeholders in the digital music industry?

2) What are the specific copyright challenges for each stakeholder in the digital music distribution chain? How can the copyright institutions provide for a more effective regulation and regulation of music in India?

The research methodology1 includes a series of expert interviews whose participants were identified by attending the following key music industry trade conferences in India, and remotely attending in the relevant conferences abroad:

1) 6th MixRadio Music Connects Conference in Mumbai ("MRMC")2

2) The Exchange UK Conference ("Exchange")

3) Indiearth Independent Music, Film, and Media Xchange Conference ("Indiearth XChange")

4) Future of Music Coalition Policy Summit (remote attendance) ("FMC")3

5) San Francisco Music Tech Summit (remote attendance) ("SFMT")4

This first post will highlight learnings from the above conferences5, primarily to respond to the question: What business models for digital music distribution exist in the market today? How is music production financed today? The question of how each industry stakeholder is responding to monetization challenges will also be explored. The main findings documented are mainly sourced from the MRMC and IndiEarth Xchange conferences due to their focus on India and its unique, context-specific challenges.

"India should stop chasing and build business models. We are already ahead... being a mobile-first market... now must lead by learning from our rich cousins - the film and television industry. " - Sridhar Subramaniam, CEO, Sony Music India⁶

Business models and monetization seemed to be the key buzz words at the 6th annual MixRadio Music Conference held in Mumbai, with industry veteran Sridhar Subramaniam, CEO Of Sony Music India giving the opening keynote speech 'How the Industry Stands Today?'. Despite Vijay Lazarus, Secretary of the Indian Music Industry preceding the keynote with a welcome speech warning of piracy as the biggest barrier to monetization. Subramaniam seemed much more optimistic, declaring 2016 as the 'year of music' despite a 10% decline in the former year due to decreased subscription in c first aller ring-back tunes 7. This was in part due to his belief that India was ahead of the game -- being a mobile-market amidst a global trend of mobile music convergence through streaming-based music consumption. Given India's increasing preference for music access in this form, Subramaniam suggested India "stop chasing and build business models" via learning from the music industry's two rich cousins -- the television and film industry.

Subramaniam outlined a strategic plan for growing the 200 million dollar music industry up to a billion in 5 years. He explained how the music industry is positioned where the TV industry was 5 years ago - giving content away for free via ad-supported revenues. This is due to the popular "freemium" business model for music streaming, which allows users to listen to music for "free" (data-consuming, supported by advertisements), with an option to upgrade to a paid tier.

Given recently overlapping ecosystems - standalone music services, device-embedded music services, and operator-supported music services - the question was whether there was enough advertising based revenue to sustain this cluttered industry. In three years, Subramaniam predicted moving from predominantly pirate-consumed music, to ad-supported to a consumer-paid revenue model.

This transition would be done via learning from the film industry through a technique called windowing. This is when the same content is released through multiple windows - for film, this is done first in a theatre, then via home video, then television, then broadcast TV. For the music industry, monetization could occur via exclusives, recommendations, personalization, quality, or regional restrictions; holding some kind of premium content behind a paid wall. This strategy according to Subramaniam's estimates could reach the billion dollar mark in 3 years with the goal of transitioning the 200 million pirated market, to 75 million ad supported, to 25 million subscribers.

" For the first time we have access [to music] from not just one, two, but three ecosystems - standalone music services, device embedded music services, and operator-supported music services." - Sridhar Subramaniam

Following the forward thinking strategy for future business models, the rest of MRMC's panels brought the conversation back to current services and ecosystems of standalone, device-embedded, and operator-supported music services. This increasingly crowded space, along with new international entrants makes the mapping of upcoming services extremely difficult. Nevertheless, the diversity of these services were attempted to be represented at MRMC, with "standalones" like streaming services Gaana, Hungama Australian-based Guvera, and RDIO (which acquired former Indian service Dhingana), along with download stores like Indian-based independent platforms OKListen, Songdew, and Insync. "Device-embedded" services were represented by Samsung with its MilkMusic service, and formerly Microsoft/Nokia owned MixRadio (which has been recently acquired by LINE messaging app8). Lastly, "operator supported" platforms was represented by Bharti Airtel who introduced their new Wynk app, only fully accessible for Airtel telecom subscribers. Multinational content aggregator Believe Digital also was present, providing insight on how the back-end aggregation of content works. A question from the audience inquiring about how to get ones' music onto the various platforms revealed content aggregators' main value -- providing smaller labels and independent artists the ability to ensure their content is distributed widely across multiple platforms.

Although the MRMC panel Streaming: Gathering Momentum hosted a variety of different streaming services, it seemed that there is increasingly less differentiation. Services like user-tracking playlist curation and recommendation, social media-inspired tagging, mood-based suggestions, friend-based recommendations, temporary offline downloads, and more were all being adopted in various forms. Business models of initial free-to-use/access with premium pricing for ad removal and full-on downloads were also becoming a standard across platforms. Some services prioritized specific stakeholders, like Guvera who described their advertiser/brand focused approach through brand play-list curation to target to certain music users.

The Global Music and Mobile panel at the San Francisco Music Tech Summit ("SFMT") highlighted challenges for music applications, with Kathleen McMahon, Vice-President at SoundHound noting the challenge of merely staying relevant in the app store, in part due to the decreasing differentiation with other services. In the streaming ecosystem, a variety of music consumption options are increasingly available through a singular platform (i.e. Hungama enabling on line streaming, download of songs, and purchase of ring-tunes). Given the principle product - the music itself - is the same, the differentiator is marked in part by the user interface, and perhaps more significantly, by price differentiation.

Panelists also spoke of interesting licensing challenges, one being the complexity of differing rates between web-streaming verses mobile streaming, wifi-data transfer, verses 3G access. This copyright challenge was also exemplified when a panelist lamented on the challenges of licensing in various geographic territories, asking "Should I be able to listen to my Spotify subscription wherever I go? Is this not possible purely because of rights and not technology? Do borders even make sense anymore?" These specific challenges will be discussed in an upcoming post highlighting copyright and licensing challenges, but it is worth mentioning here as a barrier to potential technological innovation and ultimately success and survival of these platforms.

" [MCNs are] the new age record label...except far more equitable and less exploitative." - Samir Bhanghra, Managing Director and Co-Founder, Qyuki ⁹

Despite the increasing competition and services, one particular streaming platform which need not be concerned is the audio-video streaming service YouTube, which has a reach of 1 billion consumers, averaging to a viewership of 450billion mins per month 10. Framed as the new broadcast company for user-uploaded content, this viewership directly translates into advertising revenue for the platform, with brands sponsoring specific content creators ("YouTubers") themselves. An interesting new stakeholder which is in part facilitating this phenomena are multi-channel networks ("MCNs"), who was represented in the MRMC Indian MCNs panel by MCNs Qyuki, Digital Quotient, Ping Network and YouTubers All India Bakchod. The MCNs described their business model as a relationship-service, which acts as an aggregator and optimizer of various YouTube channels. With back-end analytics and advertising strategies, MCNs aim to optimize monetization opportunities by focusing on maximizing CPM (clicks per impression) and identifying brand sponsors. Despite the seemingly disruptive service, Tammay Bhat of All India Bakchod was skeptical about the need for such service, asking "How will an MCN actually help me get more money and sustain? As a creator, brands are coming directly. They are so accessible and it's not that difficult. Perhaps it could help smaller creators but..."

Smaller creators and independent artists was definitely one of the target clientele for Qyuki. Samir Bhangra, co-founder of MCN Qyuki's held workshop They Say You Can Monetize Content Digitally - Really? at the IndiEarth Xchange ("the Xchange") independent music film, and media trade conference. He appealed to the independent artists by illustrating the potential reach of the one billion YouTube viewers, and explained some useful back-end analytics which can allow for more strategic and effective monetization. According to Bhangra, the CPM in India is about 1Rs per view, with the possibility of doubling or tripling this if viewed in the United States. Qyuki in particular sought to optimize monetization through ad-funded support (via CPM and brand sponsorship), payment via the MCN themselves for content creation, and 'forward integration' through increasing demand for live and digital gigs through increasing regular viewers. Bhangra even went as far as hailing Qyuki and MCNs as the "new age record label" which would allow content creators full creative control.

"Well, I support piracy so..." - Sohail Arora, Founder, KRUNK¹¹

For independent artists, social media tools like YouTube, Facebook, and other direct-to-fan digital services are of even greater importance considering the relative lack of accessibility to mass-media marketing power. In the XChange workshop Driving Your Career with Social Media, Sohail Arora, founder of booking agency and general artist management company KRUNK focused on search-engine optimization strategies for various social media platforms This included tips such as tagging influencers via social media, strategic timings of content posting, unique release and distribution of music, diversity in content posts, suggestions for increased fan engagement, and more.

The rise of new technologies seem to have brought an increased role and importance to not just social media tools, but also artists managers as well to utilize these services effectively as one of their duties. This new role and its various responsibilities was highlighted by the The Exchange Music Trade Conference ("the Exchange") in the panel The Role of Artist Management Agencies. Considering the diversity of distribution options available, and the difficulty of controlling content usage once released, I asked artist manager Arora for his thoughts on some musicians' strategies of giving away free music downloads. He responded by stressing that freely giving away music was an essential marketing tool for his artists. The ability to download and share would in turn translate to an increased number of fans, quantifiable, measurable social media support (via "likes" and "follows"), and subsequently increased ticket sales, attendance for live shows, and brand sponsorship. This perspective resulted in an interesting conversation/debate with the audience, one member of whom was Marti Bharath, producer/composer of electronic act Sapta who believed that giving away music for free led to piracy, and a devaluation of music. In response, Arora unashamedly stated that he supported piracy, which temporarily halted that conversation during the time-crunched presentation.

" Independent Music is... anything that is not Bollywood" - Nikhil Udupa - MTV Indies. "If you liked it, good. If you didn't, not my problem" - Verhnon Ibrahim, Consultant¹²

Despite the numerous social media tools and online opportunities available for self-promotion, the reach of mass media and its role as a marketing tool was not forgotten amongst the independent music scene.

In the Making Space for Culture panel, an interesting conversation arose on what it meant to be an "independent" artist. It seems that it boiled down to those who were mostly unconnected to the larger institutional support of the music industry like major labels and traditional media -- radio, newspapers, magazines, and television. On the one hand, there was a sense of ambivalence as to whether or not their work would ever appeal to the tastes of the masses. One panelist had asked - would popularization of a certain artist or music remove the label of being "independent"? Nikhil Udupa of MTV Music defined independent music in India as anything that was not Bollywood, due to its dominance in the Indian music market and overall appeal to the masses. Music industry veteran Verhnon Ibrahim conveyed the notion of an independent artist by expressing the somewhat indifference to likeability when reflecting on his days while in a heavy metal band: "If you liked it, good. If you didn't, not my problem". He seemed to imply that appeal to the masses was essentially irrelevant, and almost more revered due to a sense of being able to maintain artistic integrity and authenticity.

The title of the panel itself - Making Space for Culture - was interesting, seemingly alluding to the opinion that mass-consumed, popular music was perhaps not as "cultured" . The main grievance and topic of conversation was that independent music, film, and media did not receive adequate airtime space on traditional media - television, radio, and even print. This premise was probably the only agreement during the panel, as conversation soon evolved to heated debates on whether media created trends or merely picked up on them; and whether there was lack of quality independent content for full-time curation of independent channels, a sentiment expressed by Nikhil Udupa from MTV Indies. This panel's conversation also touched upon a sense of entitlement which independent artists held, in which audience member Guru Somayji of Bangalore-venue CounterCulture expressed his agreement. This echoed the comment from an audience member earlier in the day who stated "musicians do not deserve to be paid... venue spaces do not deserve to make money. There is no entitlement. You only make money when people are breaking down the door to listen to you."

Amidst a crowd of independent musicians and artists hoping to devote their lives to creating their art in a financially feasible way, there was an understandably ill response from the audience. The main criticism was the lack of broadcasters' efforts in finding quality content, and allowing independents a chance to perform in large venues and mass media channels. Verhnon Ibrahim, consultant and industry expert on the Making Space for Culture Panel attempted to explain that radio, television, and other traditional forms of media and communication was a mass-market game, whose purpose was to ultimately to sell ads. He cited radio's high cost of royalty payments to explain the need to curate for the majority so advertisers will get the most reach. Ibrahim stressed the need to demonstrate quantifiable forms of "deserving" - number of Facebook likes, YouTube views etc. to demonstrate virality and fan following, so the media would have to pick up on ones' popularity.

"It's public knowledge that vast sums of money in royalties have not been collected... [due to a] situation of buying out rights, but even labels and rights holders say hundreds of thousands of pounds are not making their way back." - Terry Mardi, Managing Director, Asian Music Publishing¹³

Although several independent musicians raised grievances about the lack of avenues to perform in, and the reoccurring problem of being paid on time, there seemed to be a hesitancy when discussing business strategies and the challenges of copyright due to technological innovation. In the independent space, this was anecdotally demonstrated by one panelists' response when asked about the impact of technology on the distribution strategies for their art, and on financial returns for their livelihood. He responded: "Those are two separate things... one is about making money and making a living. The other is about making an art form. These are two separate things." Within the larger industry conference MRMC, there seemed to be a lack of representation by musicians and content creators. Yet, one particularly vocal audience member, and later panel member of the UK Exchange was Terry Mardi, Managing Director of Asian Music Publishing. Numerous times throughout both conferences, he raised the controversial issue of missing royalty payments in India, and the absence of royalty collection and distribution by unregistered copyright societies IPRS and PPL. In MRMC, this issue was ever so briefly touched upon in a panel when Bollywood playback singer Natalie Di Luccio who's worked closely with A.R. Rahman mentioned that she had never received a contract outlining her rights and her royalty dues. Although there was very little curated conversation about this issue, coffee breaks demonstrated a clear gravitation towards those vocal and concerned about the issue, while many stakeholders, particularly the few musicians in the room seemed to find this a significant gap in voices not heard and expressed in MRMC. At IndiEarth, Vivek Ragpolan, representative of the Music Composers Association of India briefly commented as an audience member about the need to take collective action regarding composers and overall musicians' rights, stressing the importance of independent artists also being included within the new provisions of the Copyright Amendment Act. Though this issue of royalty licensing will be reviewed in a future post, this brief mention demonstrates the challenge of monetization and livelihood at multiple levels -- significantly for content creators, but also for the music platforms themselves.

"It seems like the pricing model is wrong... it's the only way to explain the drop in revenue" - Tarun Malik, Apps & Content Strategy, Samsung ¹⁴

Across different platforms, panels, conferences, and countries, one particular question seemingly common to all was that of price points band business model viability. Tarun Malik, Apps & Content Strategy of Samsung in Biggies Give Their View commented on the growth of the industry. Despite an increase in overall consumption, he noted - "It seems like the pricing model is wrong...it is the only way to explain the drop in revenue". Atul Charumani, formerly Head of Content with OnMobile and currently Managing Director of Turnkey Music stated that "in no other industry where the content is produced at such a high cost, is the product given away for free." In the Global Mobile and Music Panel at the San Francisco Music Tech Summit, the moderator asked a panel of music distribution service providers - "What is the value of music? Does music have intrinsic value at this point? Or is it just how it is presented?" In response, Dean Bolte, Managing Director of Omniphone expressed that the value of music was different for every person, and that some people were willing to pay more for access than others. The priority is to ensure that those who value music more have the opportunity to express through payment, since anything was better than zero. Beyond competition between music service apps, Bolte noted that the competition for funds also occurred across app categories, noting a generation of youth conditioned to acquire music for free through Napster, yet pay for additional levels in games. He closed the panel with the insight that "the product needs to be better than the sword".

The targeting of youth and young adults was also conveyed by the somewhat surprising pervasiveness of brands, who had a larger than anticipated presence for a music industry conference. The UK Exchange demonstrated the potential of partnerships in its Brands & Music - When They Combine Forces panel. MRMC panel The Brand Sponsor also invited the Taj hotel (who seem like an unlikely sponsor) an opportunity to express its interest in supporting the discovery of new talent. Aditya Swami from MTV & MTV Indies said that brands can communicate through music, and create conversations with their consumers. Subramaniam, CEO of Sony Music mentioned the importance of funding through brands and advertising in the MRMC keynote How the Industry Stands Today, while IndiEarth's Taking it Live panel opened the day with a conversation about live venues seeking sponsorship from alcohol, clothing and other 'lifestyle' companies. Even the MCNs in the MRMC Indian MCNs panel discussed one of its main services as the securing of brand sponsorship.

"Independent music in India would not exist if it weren't for alcohol sponsorships" - Tej Brar, Artist Manager, Only Much Louder ¹⁵

Music platform MixRadio, the title sponsor of MRMC was an understandably suitable partner, since it closely correlated to the main music product. Yet, particularly in India, it soon became apparent that alcohol brands have a very significant role in financing the music industry. This was highlighted when liquor-brand Bacardi received an award during MRMC for 'excellent brand association'. It was later learned in an interview that liquor and cigarette brands are not legally able to advertise in India, hence the popularity of alcohol sponsorships for live music festivals, venues, and club nights. Tej Brar, EDM Artist Manager for Only Much Louder believed that independent music would not exist in India if it weren't for alcohol brands. This is an interesting phenomenon considering just a decade ago, the idea of synchronizing ones' music with a corporate brand would be akin to "selling out". However, in today's increasingly digital world, especially in India where non-film musicians don't have much of a presence, brand sponsorship is one of the main 'monetization strategies' for music production. The last important significant financier to mention are investors, showcased in the MRMC panel Of All Things Finance. These "angel investors" play an instrumental role in backing many of the technology start-ups and other streaming services while experimenting with various business models. Yet whether these investment decisions are one that would reap sustainable returns is still a question to be answered.

Conclusion

It seems in this mobile first market, India has the opportunity to lead the way in developing business models that grow the industry through multi-tiered windowing of music streaming. Strategically, in an ecosystem still rampant with piracy, moving consumers towards legal access to music can facilitate new sources of revenue. This opportunity has also given rise to new intermediaries like YouTube and multi-channel networks. time will tell whether their contribution will legitimately grow the industry or simply take away more pieces of what seems to be a shrinking profit pie. Independent artists are able to use new direct-to-fan distribution platforms such as YouTube, amongst others to share their works. Yet, it is clear that the sustenance of a livelihood off of digital sales and distribution is extremely difficult. It is interesting to note that the bulk of financing for music seems to be trending towards live shows and brand sponsorship. However, despite increase in digital music consumption, the distribution of the revenue needs to be further studied and understood. Given the ease of replication, this will require a further in-depth understanding of licensing and copyright management in India today.

1 See the research methodology here: http://cis-india.org/a2k/blogs/copyright-management-in-age-of-mobile-music last accessed Jan 22, 2015

2 All of the panels from this conference can be found online here: http://musicconnects.indiantelevision.com/y2k14/videos.php last accessed Jan 20^th 2015

3 See here for the IndiEarth website: http://www.xchange14.indiearth.com/ last accessed Jan 20 ^th 2015

4 Watch and/or listen to the Future of Music Coalition panels here:https://futureofmusic.org/events/future-music-summit-2014 last acccesed Jan 19 ^th 2014

5 All data in this solely from public conference panels; including quotes, etc. Does not include any individual interview data.

6 As quoted from the MixRadio Music Connects Keynote panel:

7 Though it was not mentioned in the speech, it is useful to understand the initail demand for CRBTs was not necessarily genuine, for the fall in revenue was due to the crackdown by the Telecom Regulatory Authority of India to prevent false billing by telecom and value-added-service providers.

8 See http://blogs.wsj.com/digits/2014/12/19/messaging-app-lines-first-acquisition-music-streaming-service-mixradio/

9 As heard in the MixMusic Radio Connects panel Indian MCNs on Nov 5^th 2014

10 According to Samir Bhangra in MixRadio Music Connects' Indian MCNs panel on Nov 5^th 2014

11 As heard at the IndiEarth Xchange conference in the Driving Your Career with Social Media panel on Dec 5^th 2014

12 Stated at IndiEarth Xchange Conference in the Making Space for Culture panel on Dec 4^th 2014

13 As heard at UK The Exchange Submerge conference on Nov 7^th 2014

14 As stated on the MixRadio Music Connects panel Crystal Ball Gazing: Bigges Give Their View on Nov 5^th 2014

15 In a conversation at the IndiEarth Music Xchange Conference on Dec 5^th, 2014

For more details visit https://cis-india.org/a2k/blogs/beyond-alcohol-and-angel-investors

A Study of J. Sai Deepak's Comments on Competition Law in India

Aarushi Bansal — 2015-11-21T06:18:42Z

In his blog, 'The Demanding Mistress', J. Sai Deepak has commented on the competition law in India, using provisions of different acts, case judgments and amendments to these acts. He has also included a comment on India’s patent law. This review studies his comments to the Competition Act, 2002 (“Competition Act”) and the Patents Act, 1970 (“Patents Act”).

Read J. Sai Deepak - The Demanding Mistress[1]. Nehaa Chaudhari provided inputs and edited this blog post.

The Nexus Between the Competition Act and the Patents Act

Sai Deepak explains the nexus between the Competition Act and the Patents Act[2] using two positions. Firstly, by using two situations to explain which of these two acts will apply under different circumstances. Secondly, by explaining the overlap that is apparent in cases of abuse of power.

Under the first issue, the two situations are thus. In a case where a patentee's patent over a technology allows him to acquire a position of dominance, Competition Act will be applied if he abuses this dominance. In case a patentee imposes a high license fee on his product, many players cannot afford it and get ejected from the market. Here, both the acts would apply, thereby indicating an overlap.

Under the second issue, it is stated that abuse of power could also happen if a patentee sets an "unfair price". Therefore, Sai Deepak argues that for ensuring fair or affordable price, there should be harmony between Competition Act and Patents Act. He has derived harmonized interpretations of "unfair price" under the Competition Act and "reasonably affordable price" under the Patents Act. He explains that the price under each law is measured according to the price for the licensee and not the price demanded or the value of the licensed technology. He further, argues that such a harmonization is possible since "price" under these two acts is essentially used in the same context. It is necessary to harmonize the two acts since the overriding effect of Section 60 of the Competition Act can be effective only when an inconsistency is proved with the other provisions or laws.

Patents and Competition "Arrangements"

An arrangement[3] or collusion may exist between two market players if their activities can be foreseeably linked, even if there is no express act or formal arrangement between these parties. This has been explained through an example.

A sells a patented drug in the market. B sells another patented drug which is similar to the drug sold by A. A also has some share in B's company. When C introduces a similar drug at a much cheaper price, B is forced to reduce his the price of his drug. A follows suit.

It may be noted that since there were similarities between the drugs being sold by A and B, and, therefore the patent, it may have been possible for B to challenge A’s patent on prior art and eject A from the market, thereby reducing competition.

Since he did not challenge A's patent which was closest to that of B in terms of prior art, there may be an arrangement between A and B. This shows that A and B decided to divide the market and not encroach upon each other's trading space. In addition to this, the fact that A was a shareholder in B's company, points in the direction of a collusive activity.

Legality of Pay-for-Delay Settlement Payments

This post, as written by Amshula Prakash, refers to J. Sai Deepak's comments on the topic. She has described a Pay-For-Delay settlement [4] as a patent settlement wherein the patentee pharmaceutical company pays the generic manufacturer to remain ejected from the market for a certain period of time.

She justifies these agreements by relying on the case of Federal Trade Commission v. Actavis [5],which upheld that such agreements are lawful as long as their anti-competitive activities are covered under the exclusive patent granted to them. She opines that entering late into the market is better than not entering at all, and such a deal would anyway not go beyond the life of the patent. She concludes by reiterating J. Sai Deepak's statement that the exact impact of the agreement cannot be ascertained, as no such cases of Pay-For-Delay agreements have arisen in the Indian market yet.

Collective Bargaining

J Sai Deepak has addressed two issues under this post. Firstly, the relation between collective bargaining and cartel-like conduct. Secondly, whether any defense under S.3(3) [6] of the Competition Act is available against cartel-like conduct.

In first issue, [7] J. Sai Deepak suggests that collective bargaining is a joint venture as it increases efficiency of entities in providing services. Similarly, an agreement to reduce such efficiency is also a joint venture, since it may ensure competitiveness in the market and control over prices. He specifies grounds to determine the purpose of a collective act which helps ascertain whether it will be covered under "collective bargaining". These include the nature of business, parity between parties, past negotiations etc. He has relied on foreign sources to justify cartel-like behavior of smaller entities, like Australia's Dawson Committee and Taiwan's efforts to integrate smaller enterprises into the mainstream market to increase efficiency and competitiveness. Hence he suggests that an amendment should be made in law to permit small businesses to make an exception to cartel-like conduct and collective bargaining.

Under the second issue, [9] he opines that a strict assumption of the presence of any anticompetitive nature or agreement is counter productive to the intention of the law. The available defenses under S.3(3) for parties accused of cartel-like conduct can be justified using the proviso[10] under this section. He explains that collective bargaining may be seen as a "joint venture" under the proviso of S.3 if it is not anti-competitive. He has further supported this argument by relying on FICCI - Multiplex Association of India v. United Producers/ Distributors Forum, [11] where "collective bargaining" was accepted as a valid defense to cartel-like behavior.

Power of Competition Commission with Respect to Abuse of Powers

J. Sai Deepak has explained the powers of the Competition Commission of India (CCI),[12] firstly, with respect to abuse of powers and secondly, in terms of imposing liability.

With Respect to Abuse of Powers

With respect to abuse of powers, he refers to Section 4 of the Competition Act. It refers to a situation wherein a dominant player in the market sets a discriminatory (including predatory price) or unfair price in the sale of his good. Predatory pricing is explained in this section and not discriminatory or unfair price. J. Sai Deepak argues that since they are capable of having different meanings, there might be different forms of abuse which a dominant entity can exercise.

He relies on a test laid down in a case on unfair price, namely United Brands Company v. Commission of the European Communities.[13] A question arising under this test was whether the regulator is expected to fix prices if they are found to be unfair. To show that the CCI has the power to fix prices, S.27 and 28 of the Act have been compared. Section 27(d) empowers the CCI to direct that agreements which are in contravention of Section. Furthermore, Section 27 (g) allows the CCI to pass orders 'it may deem fit'. Section 28(2)(a) empowers the CCI to vest property rights, which creates licenses for third parties. The CCI can set future commercial terms in agreements remove complexities of the market in the interest of equity and justice. This shows the abundant powers the Competition Commission of India has to set prices.

In Terms of Imposing Liability

To answer whether these decisions of the CCI are in rem [14], he explains that the CCI can regulate market transactions and the finding of an abusive practice would be applied to other enterprises with similar practices. This shows that CCI lays down rules prescribing acceptable practices in the market.

Review of the Competition Amendment Bill, 2012

This post discusses the proposed amendments in the Bill [15] regarding three issues. Firstly, in regards to joint dominance, i.e. position of dominance enjoyed by one or more enterprises, J. Sai Deepak argues that the Bill recognizes an oligopolistic market's collusive activities, thereby providing a legal method of identifying it. He argues that it is not yet time to introduce it into the Indian industrial arena, since S.3 which regards anti-competitive agreements, is too rigorous to harmonize the concept of joint dominance with it.

Secondly, another proposed change is to render the decision taken under S.21[16] appeal-able under S.53A of the Act. He criticizes this by saying that an appeal on S.21 while adjudicating on S.53A may lead to a multiplicity of legislations and jurisdiction issues.

Lastly, the amendment of S.5A, empowers the government to specify the values of any assets or turnovers based on the class of enterprises. The government may consult the CCI, but the consultation is not binding or of mandatory assent, which shows that the CCI might turn into a tool which furthers the powers of the executive.

Conclusion

On reading J. Sai Deepak's comments on the competition law in India, I have concluded that several provisions under legislations regulating competition in Indian markets might still not be comprehensive. This may be because many scenarios for which these provisions have been made have not yet arisen in India. Hence a few outcomes of these legislations remain to be mere speculations and as several developments in the market are still underway, laws like the Competition Act should adopt to these if and when they arise.

[1]. http://thedemandingmistress.blogspot.in/

[2]. http://thedemandingmistress.blogspot.in/2013/09/the-overlap-between-patents-and.html#links

[3]. http://thedemandingmistress.blogspot.in/2011/10/patents-and-competition-need-for.html#links

[4]. http://thedemandingmistress.blogspot.in/2013/06/legality-of-pay-for-delay-settlement.html#links

[5]. 570 U. S. ____ (2013)

[6]. Defines the type of agreements which would qualify as anti-competitive

[7]. http://thedemandingmistress.blogspot.in/2012/01/collective-bargaining-and-cartel-like.html#links

[8]. Committee of Inquiry for the Review of the Trade Practices Act of the Australian Parliament

[9]. http://thedemandingmistress.blogspot.in/2012/01/competition-act-is-collective.html#links

[10]. Refers to “any agreement entered into by way of joint ventures”.

[11]. Case No. 01 Of 2009

[12]. http://thedemandingmistress.blogspot.in/2015_01_01_archive.html

[13]. C-27/76 [1978]

[14]. http://thedemandingmistress.blogspot.in/2014/07/are-decisions-of-competition-commission.html#links

[15]. http://thedemandingmistress.blogspot.in/2015/03/a-review-of-competition-amendment-bill.html#links

[16]. Reference by Commission to statutory authority in case of contravention with the Act

For more details visit https://cis-india.org/a2k/blogs/a-study-of-j-sai-deepaks-comments-on-competition-law-in-india

[Updated] Exclusive: OnePlus 5T’s Face Unlock feature may have infringed upon SensibleVision’s face recognition patents

Admin — 2018-01-17T01:07:51Z

The blog post by Nachiket Mhatre was published by mysmartprice on December 22, 2017.

Update

We had reached out to OnePlus early in the morning yesterday (that is, December 22) for an official statement prior to publishing the post later in the evening. Even a day later, as of this update, OnePlus hasn’t issued any clarifying statement either confirming or denying the patent infringement claim made by SensibleVision.

We had also contacted George Brostoff, the CEO and Co-Founder of SensibleVision, regarding the legal ramifications of his claim and if SensibleVision is contemplating legal action against OnePlus. Brostoff issued the following statement in response:

“Actually the comment by the patent expert quoted in the linked article is spot on,” noted Brostoff before issuing additional clarifying statement. “Legal process is always SensibleVision’s last resort. We pursue legal patent infringement only with companies that we have approached first through non-legal means and if they choose to then use our patented technology in the markets that our patents cover. Some of our patents are US only. We see companies like OnePlus as our possible customers. Our technology, both patented and proprietary, provides them with the possibility of better performance and more secure solutions. When companies license our solutions, they get the benefits of our broad patent portfolio and SensibleVision’s early entry into the market, something that helps minimize other companies claiming patent infringement against them. Unlike India, OnePlus currently has little to no US sales presence. So while they are on our partnership ‘radar’, they are not on our ‘legal’ radar for infringement.”

The gist of SensibleVision’s statement is that it probably won’t file a patent infringement lawsuit, but instead approach OnePlus to settle the matter amicably — say, by forging a Global Patent License Agreement (GPLA) — wherein OnePlus could be expected to pay to licence SensibleVision patents that are allegedly being employed in the OnePlus 5T’s Face Unlock system.

What’s interesting is Brostoff admitting that some of SensibleVision’s patents are valid only in the US, with him further insinuating that OnePlus’s sales volumes in the USA cannot justify prohibitive patent litigation costs.

We asked our resident patent expert, Rohini Lakshane, for her opinion on this statement and she confirmed that, in some cases, patent infringement settlements awarded by the US courts are in proportion to sales value and volume of the infringing products. In short, SensibleVision might not be too keen on taking the legal route against OnePlus, because the potential settlement payout might not be enough to cover the excessive cost of litigation in US patent courts.

The original story continues…

The OnePlus 5T’s Face Unlock technology has been critically acclaimed across the board, with our personal experience too pegging the biometric security system as one of the fastest face recognition implementations available in the market today, while being seemingly secure and impenetrable to simple workarounds. Even as technology critics and consumers wonder if this piece of biometric security is too good to be true, there could be a patent war brewing on the horizon for OnePlus.

Speaking in an interview with MySmartPrice, the CEO and Co-Founder of SensibleVision, George Brostoff, claimed that OnePlus might have infringed upon at least one of the patents belonging to the biometric security solutions provider. He also revealed that, in addition to other unspecified face recognition patents, OnePlus may have employed SensibleVision’s patent pertaining to the use of the screen as an illuminator. In fact, Brostoff claims to have notified “several companies” about their infringement of that particular patent.

“This is nothing new. We have been doing this for years. It even appears that they may be using several patented technologies,” said George Brostoff when asked what he made of OnePlus 5T’s Face Unlock implementation. “We have not licensed our patents to OnePlus or their supplier. From the video on Forbes, they are likely infringing at the very least on our illumination patent.”

Analysis from a patent and IP expert

Brostoff refused to divulge further details citing that SensibleVision has since handed the matter over to its legal firm, which probably means that we might hear more about this in the near future. Patent infringement claims in particular are extremely difficult to verify, so we spoke with Rohini Lakshane, who’s a Public Policy Researcher with extensive experience on patent and intellectual property regulation for more insight into the matter and an expert analysis on what this potential patent spat could entail.

“SensibleVision is a US company. Patents are valid only in the jurisdiction where they have been granted. Unless the company has registered a patent application or was awarded one for face recognition in China, there is no infringement. That is with respect to sale of the devices in China. With respect to sale in India, again, SensibleVision needs to have registered the patents in India,” explains Lakshane. “The way licensing works is the companies that hold many patents for a particular technology often license entire patent portfolios for use anywhere in the world. This is called Global Patent Licence Agreement (GPLA). This is usually confidential. What patents and how many are in the portfolio and what are the licensing terms [Editor’s note: in other words, how much money changes hands, among other things] is also confidential.”

From what Brostoff has revealed to us during the course of the interview, there seems to be no patent sharing agreement between OnePlus and SensibleVision to our knowledge. While it’s not easy to file and win patent lawsuits against Chinese companies in China, Lakshane suggests that SensibleVision can at least potentially begin patent infringement proceedings in the USA, where it has filed for the aforementioned patent.

However, all of this is conjecture from an expert in the field, as there’s no concrete corroborating proof legitimising SensibleVision’s patent infringement claims against OnePlus either. We have contacted OnePlus for its response on the matter, and will update this article with the official statement, so keep watching this space.

Read the original story here

For more details visit https://cis-india.org/a2k/news/nachiket-mhatre-december-22-2017-exclusive-oneplus-5ts-face-unlock-feature-may-infringed-upon-sensiblevisions-face-recognition-patents

[Open] Innovation and Expertise > Patent Protection & Trolls in a Broken Patent Regime (Interviews with Semiconductor Industry - Part 3)

maggie — 2014-12-26T13:19:46Z

This is the third of a four-part blog series1 highlighting findings from a small sample of interviews with fabless semiconductor industry professionals in Taiwan. These industry insiders was approached for the intent of understanding expert knowledge on the process of integrated circuit design. However, the conversations resulted in leanings far beyond that scope. This post explores some of their views on the current intellectual property system.

The intellectual property framework is meant to provide a temporary monopoly so those taking the risk to invest time, money, and resources into research and development can reap the returns for that investment without having to worry about others undercutting their price and competing for market share. Registration of patents supposedly encourages the dissemination of ideas and overall greater knowledge contribution for public access and eventual public domain. The interviewees were asked about their thoughts on this system of protection, incentivization, and knowledge-share, resulting in five broad themes:

1) Expertise trumps patent ownership

Particularly today in a digital world where innovative ideas and concepts can be easily shared, the first thing many people think about when discussing innovation, is the need to protect via patents. A vast amount of literature attempts to review the implications of patents' on technological innovation and economic development.

However, one interviewee noted that this emphasis on patent protection often overshadows what is much vital to the success of a technology business or industry - the people: the expertise and experience of the companies, their engineers, and their management. A lot of knowledge and 'intellectual property' lies in the procedures and processes which have resulted in effective application of standards and high level of performance for ones' products. The value of these skills and intelligence of human resources far outweigh the importance of protecting and owning patents.

2) Broken patent system

There was a clear consensus that the number one intellectual property concern is the need to revamp the current patent regime, with all interviewees agreeing that "useless patents" were being filed. Some suggestions for improvement included international standardization regarding the definition of a patent, the process of patent applications, and the scope of what a patent should cover. One interviewee believed that currently, the patent system actually prevents technological innovation, because one single patent can cover many ways of achieving something. The Apple patent entitled ' Method for providing human input into computer' which patents nearly every single possible human-computer interaction is an example of this.

"Patents today are trivial, and don't contain information regarding HOW to make something; there are too many process and design patents, and not enough functional patents...merely competitive differentiations rather than fundamental technological changes" .

This quote expressed the perception that only inventions that affect functionality in a fundamental way should be patented. A patent should not be claimed for something you cannot do, or does not show any kind of knowledge for how to solve a problem. One interviewee suggested that if a patent is granted without use for 3 years either by the owner or through licensing, the patent should be considered invalid.

Another industry expert explained that numerous patent applications are entered into the system without enough resources and competencies in the government to review them well. Albeit suggested in a joking manner, there may be truth to his claim that a knowledgeable intellectual property tech expert would opt to work for the more lucrative law firm over the government. He observed over the years a cycle where patents are easily approved, in which if a lawsuit arose, the patents are assessed more carefully again, resulting in massive inefficiencies for the system.

3. Patent Trolls

The poor execution of the patent system has resulted in the phenomenon of 'patent trolls', or what is more neutrally termed as non-practicing entities ("NPEs")[1] or patent assertion entities ("PAEs").[2] As explained by one interviewee, the business models of these entities often begin by conceiving of future technologies which may be necessary or foreseeable in the near future. Then, they seek to patent those ideas with no intention of actually producing producing or manufacturing the product. The main purpose is to profit through litigation and licensing. An example given of a patent trolling company was "Intellectual Ventures", which describes themselves as an "invention capital company" that "owns some of the world's largest and fastest growing intellectual property portfolios"[3]

The difficulty is that patent trolls are virtually indistinguishable from aspiring inventors and engineers, who may seek to manufacture and scale up their products through outsourcing and licensing. In addition, the lack of actual production makes valuation, legislation, and enforcement around this practice extremely difficult.

"The problem is, the guys who have patents think it's worth this much money… and the company that wants to license think it's worth another amount. From a regulatory or legal point of view, it's very difficult to legislate these things… you can't legislate a value right? In the end, it's how much the customer is willing to pay for it. It doesn't matter how many years someone's been working on it, if no one wants to buy it, it's not worth anything."

Robert L Stoll, former USPTO Commissioner of Patents says the most effective way to reduce predatory behavior is to ensure bad patents don't get issued in the first place, highlighting a legislation in the America Invests Act of 2011 which allows third parties to challenge granted patents on basis of former prior art, and non-technical financial or product patent.[4] Increased collaboration shown through standards and cross-licensing

The development of standards is very "fashionable" at the moment, according to one interviewee, who expressed his desire for his own company to be more involved in the process. However, another interviewee stated that more could be done to enhance collaboration within industry so that technologies could be provided free of licensing and ultimately benefit society at large through greater interoperability. Although there are signs of partnerships through cross-licensing agreements, particularly amongst larger firms, there are limitations because not everyone, including small firms, can afford it.

Most interviewees also expressed the need for greater emphasis on knowledge and research, rather than relying on proprietary technologies, which may actually hinder technological innovation. Examples given for companies doing this were Google and IBM, who both have more of a research background, and potentially have more research and development resources to engage in this kind of work.

5) Need for more openness

One interviewee who had extensive experience in the hackerspace community was an advocate for openness within the industry, and believed many companies had the option to become more open and effectively 'outsource' their research and development to the larger community.

Some successful projects he suggested was an open-sourced graphics processing unit ("GPU"), which does not exist even for the largely open Rasberry Pi. Even the development of a lower quality open sourced GPU in the market would result in tremendous demand, in his opinion. The ARM technology, the most popular CPU in the market is also currently semi-closed, and could in his opinion have benefited from more openness.

One interviewee expressed disappointment that all of the chips in his company was proprietary, even those that were no longer in production due to fear that competitors would be able to anticipate future developments from past projects. He suspected that many things were protected simply because the legal department assumed confidential and proprietary, without necessarily a coordinated long-term vision from head management. It is this normalized culture in industry that is, in his opinion a great hindrance to innovation, development, and accessibility of technology.

https://www.patentfreedom.com/about-npes/background/

http://www.ftc.gov/policy/studies/patent-assertion-entities-pae-study

http://www.intellectualventures.com/about

http://www.wipo.int/wipo_magazine/en/2014/02/article_0007.html

For more details visit https://cis-india.org/a2k/blogs/interviews-with-semi-conductor-industry-part-3

2016 Works-in-Progress Intellectual Property ("WIPIP") Colloquium

praskrishna — 2016-03-20T05:10:52Z

Prof. Jorge Contreras presented a paper co-authored by Rohini Lakshané on the patent landscape conducted for the Pervasive Technologies project at WPIP. The event was held in Washington D.C. on February 19 and 20, 2016. It was organized by School of Law, University of Washington.

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For more details visit https://cis-india.org/a2k/news/2016-works-in-progress-intellectual-property-wipip-colloquium