Disputes on Royalty over Standard Essential Patents.

         Before the creation of a standard, all patents are implementation patents. However, when a standard is created and a patent holder declares its patents to be essential to the standard, the patent is a standard-essential patent (SEP) and is subject to the FRAND (Fair, Reasonable, Non discriminatory) commitment. A patent holder is obligated to make licenses available to its Essential Patent Claims defined as  “any Patent Claim the use of which was necessary to create a compliant implementation of either mandatory or optional portions of the normative clauses of the [Proposed] Standard when, at the time of the [Proposed]  Standard’s approval, there was no commercially and technically feasible non-infringing alternative.” The IEEE’s guidelines emphasize that the IEEE bears no responsibility for identifying essential patent claims for which a license may be required or for investigating the legal validity or scope of essential patent claims.

         CCI ( Competition Commission of India) recently addressed this issue in the dispute between Micromax Vs Ericsson. The Informant (Micromax) has alleged that the OP (Ericsson) was demanding unfair, discriminatory and exorbitant royalty for its patents regarding GSM technology. The royalty demanded by Ericsson was excessive when compared to royalties charged by other patentees for patents similar or comparable to the patents held by Ericsson.  OP demanded royalty on sale price of product whereas Informant took the stand that royalty should be applicable on Chip (protected with the patents) and not on phone as smart phone manufacturer has to pay royalties on other components as well , leading to royalty stalking. Second, Ericsson was inclined to share data on Royalties imposed on other licensees to verify non-discriminatory aspect.

         CCI ruled:

         The allegations made in the information and not refuted by OP concerning royalty rates make it clear that the practices adopted by the OP were discriminatory as well as contrary to FRAND terms. The royalty rates being charged by the OP had no linkage to patented product, contrary to what is expected from a patent owner holding licences on FRAND terms. The OP seemed to be acting contrary to the FRAND terms by imposing royalties linked with cost of product of user for its patents. Refusal of OP to share commercial terms of FRAND licences with licensees similarly placed to the informant, fortified the accusations of the Informant, regarding discriminatory commercial terms imposed by the OP. For the use of GSM chip in a phone costing Rs. 100, royalty would be Rs. 1.25 but if this GSM chip is used in a phone of Rs. 1000, royalty would be Rs. 12.5. Thus increase in the royalty for patent holder is without any contribution to the product of the licensee. Higher cost of a smartphone is due to various other softwares/technical facilities and applications provided by the manufacturer/licensee for which he had to pay royalties/charges to other patent holders/patent developers. Charging of two different license fees per unit phone for use of the same technology primafacie is discriminatory and also reflects excessive pricing vis-a-vis high cost phones. 

         In view of above discussion, the Commission is of the opinion that it was a fit case for through investigation by the DG into the allegations made by the Informant, and violations, if any, of the provisions of the Competition Act. 

          This is the first and defining case in India. Request readers to share information on similar cases from other countries.

 

Altiux Innovations

Based out of Bangalore, Altiux helps large MNCs as well as startups in joint IP development, prototyping, new product introduction, concept development, product re-engineering and emerging market-focused solutions.CEO, Shyam Vedantam earlier worked with Harman International  as Head Engineering, General Manager , Indian R&D Center, KeyPoint Technologies,  Technoology Manager, GE etc.

Seeking Foot, Nail & Leg Care Technologies/Devices

SkyQuest,  is looking at licensing/acquiring electric/battery operated technologies/devices or products with applications in foot care, nail care and leg care.
Required features:

• Technology/Device for use on nails, feet and/or legs;
• Applications of the Technology/Device should be ranging from buffering or exfoliation of skin, filing/nail care and/or massage;

Constraints:

• Technology/Device operable via battery or powered electronically;
• If battery operated, then recharging source should also be available;
• The Technology/Device should be in market/near commercialization.

Markets to be commercialized: Worldwide.

Please note that we will not considertechnology/devices for hair removal or which are manually operated.
To submit a technology, write to info@skyquestt.com or neha.jhala@skyquestt.com

World's E-Waste

The escalating global e-waste problem is graphically portrayed in a first-of-its-kind StEP E-Waste World Map, available online at www.step-initiative.org/index.php/WorldMap.html,

The interactive map resource, presenting comparable annual data from 184 countries, shows the estimated amount of electrical and electronic equipment (EEE — anything with a battery or a cord) put on the market and how much resulting e-waste is eventually generated (i.e. comes out of use or post-use storage destined for collection by a recycling company or disposal). By providing a better sense of e-waste quantities to anticipate, the initiative is expected to The map shows, for example, that almost 48.9 million metric tons of used electrical and electronic products was produced last year — an average of 7 kg for each of the world's 7 billion people. And the flood of e-waste is growing. Based on current trends, StEP experts predict that, by 2017, the total annual volume will be 33 per cent higher at 65.4 million tons, The StEP e-waste world map database shows that in 2012 China and the United States topped the world’s totals in market volume of EEE and e-waste. China put the highest volume of EEE on the market in 2012 – 11.1 million tons, followed by the US at 10 million tons. Those positions were reversed when it came to the total volume of e-waste generated per year, there being more products put on the market in the past in the US which are now likely to be retired. Here the US had the world’s highest figure of 9.4 million tons and China generated the second highest e-waste total of 7.3 million tons. 

India generated e-waste in 2012 was 0.27 million tonnes.

Global spending on R&D: 2014 forecast

The big news is that China spending on R&D could surpass USA by as early as 2020.
Leaving aside comparison with China, poor India's spending on R&D is not insignificant. In 2014 India is expected to spend $44 billion , that is same as that of U.K and much more than wealthy nations like Canada, Sweden, Netherlands, Australia and several times that of nations known for their innovation prowess like Israel, Finland, Taiwan,Singapore.
This raises issue on productivity/ return on R&D investment.

1. How is that despite spending 4 times higher than Israel, we have nothing to show in global market place?
2 .Even in research publications, Australia, Singapore and Taiwan are far ahead.

'Innovation without Research': Concept for comments

Framework of concept paper given below for comments. This deals with technological innovations.

a)    Corporate R&D started weaning away researchers from universities by offering better facilities and freedom. In-house research centers blossomed with hundreds of highly qualified and competent scientists and researchers working in frontier areas of Science &Technology. During the boom period returns on investment in R&D  was not an issue, firms spent a percentage of their turnover benchmarking the spend with industry average.

b)    Despite large budget and acclaimed outcome, many a time firm noticed they could not compete with fast moving players. Categorization into small r, capital D followed, proving space for catch up work. It is expected that capital D projects, smal duration projects aimed at bettering competition would derive strength from capital R work. The pool of competences developed with capital R projects could be harvested for both capital R and capital D projects, where the firm is the industry leader but also for capital D projects benchmarking competitors product in the market place, with faster response. Portfolio of R & D projects, all marshaled with internal resources was in order for many years.

c)    Sponsored research was always an integral part , researchers generally continued working with alumni institute. Strategic alliances was an acknowledgement of limitation of doing everything in-house and complex strategies evolved for managing strategic alliance with shadow teams, IP sharing , market segmentation etc. acquisition of start-ups for their IP was more smoother operation.

d)    Open innovation and crowd sourcing  was a disruptive practice, firms looked at the vast pool of global talent and shifted focus from ownership to access. The complexity of innovation challenges and multiple teams accepting those challenges call for redefining the contours of global stock of knowledge.

e)    Globalization had seen relative decline in competitiveness of OECD nations and most analysts agree the only way these nations can continue to save jobs is to invest in R&D. With the result, we had seen larger number of talented people working on commercial research than ever before in human history.

f)     The pipeline taking research to market bellowed at the research end leading to a jump in global stock of knowledge. Considering the large ownership base, it can be said this stock of knowledge is publicly owned. This worked wonders for crowd sourcing of ideas, innovation challenges.

g)    And this also provides an unique opportunity for catching up economies like India to improve their innovation score without proportionate increase in national R&D budget. India , a poor nation more on R&D than Australia, Finland etc. Historically , most of spending was by government for scientific and research projects. Whereas, the industry garnered market and developed technological competences based on imported technology. Thus there was a significant disconnect between government funded research institutes and commercial firms. Globalization and IT widened  the rift to disconnect of minds. Collapse of joint ventures ended the inexhaustible source of competitive technology with most technology suppliers setting up their own Indian operations. New generation entrepreneurs smelled better success in IT enable services and largest number of engineers today work in IT firms rather than assembly lines. The  so called Indian human resource strength ends  with students graduation , still Indian government continues to increase their budgets for research by government funded institutes, calling industry to take the fruits of that public spend.

h)    India is a large country needing jobs in all categories and there is revival of interest in manufacturing mainly due to market demand and IT players are looking for value addition beyond labour arbitrage.

Hypothesis 1

Indian government can get better returns by funding proposals in capital D category based on globally sourced capital R.

Hypothesis 2

India firms need to practice and learn to use Open innovation Platforms.