Thursday 15 August 2013, 1:00-2:00 pm PDT
We continued our discussion of the version 4 draft of the IP-flow document, focusing again on Essential Patents.
We started with the "simple" statement:
"JCP members who are not members of the Expert Group and who do not contribute to the JSR have an obligation to disclose any Essential Patents of which they have personal knowledge. Having done so they are obligated to grant rights to these patents on FRAND terms."
Patrick asked whose “personal knowledge” in the case of corporate members? Does this mean the member's primary representative, or everyone associated with that member who is serving (or whoever has served) on an Expert Group? He also asked whether there would be any obligation with regard to patents that are not disclosed. If no, then this is an incentive to withhold information.
Scott Jameson said that this language should be interpreted as broadly as possible - the goal is full disclosure. He argued that the "personal knowledge" term is widely used in the standards world.
Patrick responded that “personal knowledge” and “full disclosure” are contradictory. Full disclosure would require a patent-search.
Anish Karmarker noted that disclosure is usually in the interests of a carve-out. The W3C has a disclosure period. The purpose of disclosure there is to identify patents that will be withheld. This is also the case in the current version of the JSPA. In our current proposal if you don’t disclose you have no obligation.
Patrick asked again whether there is an obligation with regard to patents that are not disclosed. If there is no such obligation then this could be considerd an incentive to disclose since members would have to do so if they wished to charge royalties where their patents are infringed.
Werner Keil pointed out that a company may acquire another company and their patents after the disclosure period and therefore there might be patents that a JSR infringes on that could not have been known during the disclosure period.
Steve Harris suggested that the goal should be to prevent people from exploiting the situation – from keeping a patent secret and then springing it on people later. Also we should provide an incentive for people to license their patents.
Someone suggested that we look at the W3C and OASIS policies. We briefly did so, noting that they only obligate those who participate in Working Groups/Technical Committees.
Anish asked whether the high-level goal is to reduce the obligation as currently defined in Section 6 while still discouraging “sneaky behavior” – deliberately not disclosing a known patent and then coming back later and claiming royalties.
Mike DeNicola suggested that we should not obligate companies who do not participate in an EG. W3C and OASIS state that only EG members are obligated to license Essential Patents. He also noted, however, that EG members may point out to the Spec Lead that company X may have a patent that bears on the work of the EG. The Spec Lead can then make a Disclosure Request of the member company.
Patrick asked what would trigger such request. At what point(s) in the process? Who would be asked to disclose? (The Primary Rep, presumably.) May those who are asked to disclose answer only from personal knowledge or must they go back to the company and research their patent portfolio? If they do not disclose something are they permitted to later assert a patent? This would be desirable, since it would provide an incentive to disclose.
Scott Jameson responded that this would be a non-starter for any company that has a large patent portfolio. Case-law says that people have the right to claim royalties even if they did not disclose.
Patrick then asked why we should not drop altogether the obligation on non-EG members? Our language is so weak that it would be completely ineffective. Scott responded that there is still a benefit if we “request” disclosure. We should try to encourage good behavior even if we cannot enforce it.
Steve Harris suggested that we could state what the consequences of asserting a patent would be. We then discussed - but did not resolve - whether "asserting a patent" is the same as "initiating litigation alleging infringement".
It was suggested that the PMO could issue a Call for Patents (to all members via the primary contacts) at a particular stage for each JSR. Members would be asked to respond directly to the Spec Lead. Patrick asked why anybody would respond if there are no consequences for not doing so.
He then asked about the possibility of withholding patents. What could a member company do if it learned that a JSR is about to infringe on one of its “crown jewel” patents? Would there be any opportunity to withhold a patent or would the only recourse be to withdraw from the JCP? Anish responded that as the proposal is currently worded the only option would be to withdraw.
Scott Jameson had earlier responded to this question (during the EC meeting) stating that so long as the obligation to license was FRAND rather than Royalty-Free there would be no need to permit withholding - the EG would probably want to redefine the JSR to eliminate the patent infringement and therefore the need to license.
Anish asked whether Scott, Steve and Mike would re-word their proposal to take some of these concerns into consideration. Scott responded that if they did so it would still be necessary to discuss everything again in the Working Group.
Patrick promised to formulate some explicit questions to guide our next discussion. He did so, and incorpated them into an updated version of the document which is available here.