Richard Lloyd

In some ways not much has changed since the IEEE Standard Association’s (IEEE SA) new patent policy came into effect in March last year. There remains a group of tech companies led by Qualcomm, Ericsson and Nokia who refuse to license their standard essential patents (SEPs) under the new rules while, on the other side, the IEEE and another, larger band of tech companies including Cisco and Intel, insist that the changes were vital in bringing clearer guidelines to licensing on fair, reasonable and non discriminatory (FRAND) grounds.

But over the last 12 months each side has continued to manoeuvre to test the boundaries of the new policy, seeking guidance from the IEEE SA’s Patent Committee (PatCom) and, for the refuseniks, looking for ways to obviate the new regime. Effectively the situation is currently at an impasse.

But to what extent has the rate of innovation in the mobile communications industry been affected? The reality is that so far we don’t know. Speak to people on both sides of the debate and most would admit that it’s too early to say progress is being impeded, but concerns are being raised.

At an IEEE committee meeting in January, for instance, claims were made that the development of the latest version of WiFi had been delayed by four to six months because of uncertainty over the new policy. What’s more, according to recent research, the rate at which Letters of Assurance (LOAs) are being submitted to the IEEE’s 802.11 working group (802.11 is the standard that covers WiFi) also appears to have fallen.

An LOA outlines the terms under which anyone who submits a patented technology to an IEEE standard is prepared to license the relevant patents. Analysis by Ron Katznelson, President of Bi-Level of Technologies and a vocal opponent of the new policy, shows that the number of LOAs has dropped significantly since March 2015.

Of course, some fall over the last year should have been expected. The small band of companies opposed to the policy might be in the minority but they have long been significant contributors to IEEE standards, particularly in WiFi. But even beyond that, Katznelson’s numbers suggest that there is a broader group of companies who, at the very least, are waiting to see how the current impasse plays out.

Katznelson’s numbers also take into account negative LOAs – those submitted by Nokia and Ericsson that have indicated the companies’ unwillingness to license under the new policy. The filing of negative LOAs is a significant development in this evolving story. Here’s how a spokesperson for Nokia described the company’s position:

Nokia has been trying over the last year to navigate the complexities around filing Letters of Assurance (LOAs) under the new and seemingly ever evolving procedures. We recently filed four LOAs indicating unwillingness to license under the new IEEE Patent Policy, in line with statements we had given to IEEE when the new Patent Policy was being contemplated. All four LOAs relate to mature standards (802.11ad, 802.11af, 802.11n and 802.16.1). 

As the procedure does not allow us to indicate on the LOA that Nokia is prepared to offer licences under the previous Patent Policy terms, we wrote separately to IEEE to confirm this. Unfortunately, though we asked IEEE to communicate this internally in the interest of transparency, it has not yet done so, depriving its members of important information needed to make objective decisions in the technology selection process.

Katznelson’s analysis does not include what he refers to as “duplicate LOAs” – those for which an LOA was previously accepted. Since March Intel has been particularly active in submitting duplicate LOAs, a move which has been interpreted by some as a sign of the tech giant’s willingness to support the new policy.

Intel, however, insists that this is not a change in its approach. According to Cindy Faatz, a vice president in the company’s law and policy group: “Intel has consistently filed Letters of Assurance for IEEE standards to which it contributes and refiled past letters of assurance to indicate Intel’s willingness to license its standard essential patents to any implementer under the updated policy even for previously approved IEEE standards.”

Faatz also refutes the notion that disagreements over the new licensing terms are undermining the IEEE. “Contrary to the dire prognostications of a few companies, IEEE is alive and well and standardisation efforts, including for the ubiquitous 802.11 or “WiFi” standard, continue to thrive,” she comments. “Intel believes that is because the IEEE’s policies reflect the actual business practices of the majority of the electronics industry and therefore the recent updates caused few, if any, changes to the actual business practices of its members.” 

One point that the policy proponents emphasise is that IEEE standards cover a far broader range of technology than simply WiFi. “Nobody at IEEE feels under pressure to review the policy because it’s non-controversial in 99% of what they do,” insists Gil Ohana senior director for anti-trust and competition at Cisco. But if comments at committee meetings are to be believed and the fall off in LOAs is any indication, then there has to be concern about the longer term development of what is perhaps the IEEE’s flagship standard.  

It is also not clear if the IEEE will take any action over the blanket LOA which Qualcomm is now covered by following its acquisition last year of British company CSR. As this blog reported last October, CSR had signed a blanket LOA in 2009, meaning that any submission it made to an IEEE 802.11 standard would be covered by the terms of the old patent policy. Following the acquisition, Qualcomm put in place a licensing deal which effectively tied its own WiFi SEPs to CSR’s blanket LOA.

That prompted Cisco’s Ohana to lead calls for the PatCom to carefully consider the ramifications of Qualcomm’s actions. While some would undoubtedly have liked it to somehow rule against Qualcomm, there appears to be little that the PatCom can do. This leaves one of the most important contributors to 802.11 free to license its SEPs under the old policy – one that Qualcomm maintains is fairer to patent owners.

Despite benefiting from a blanket LOA, Qualcomm remains among the most active opponents of the new policy. In February, the San Diego-based tech giant, along with Ericsson and Alcatel Lucent, officially challenged IEEE’s re-accreditation as a standards body by the American National Standards Institute (ANSI). It was perhaps the starkest indication of the degree to which the two sides remain divided.

The trio of companies argued that the IEEE should not be re-accredited because it failed to follow due process in making changes to the patent policy and because the policy itself does not comply with ANSI requirements. ANSI ruled in favour of the IEEE, although both Qualcomm and Ericsson have confirmed they will appeal the decision.   

If the IEEE’s new policy is the battle then the much broader war currently being fought is exactly under what terms patent owners should be expected to offer their SEPs for license. While IEEE (which declined to comment for this article) remains the only SSO to modify its policy, it has been clear for some time that several governments around the world have been taking action against what they deem to be unfair SEP licensing policies. China, in particular, has been quick to move, most notably in forcing Qualcomm to change the terms under which it licenses some of its SEPs in the country. Korea has also tweaked its IP regulations to make it a much tougher market for licensors.

To Cisco’s Ohana that means that the IEEE dispute is about much more than a small number, albeit significant, changes to its patent policy. “I have never believed that the furore around the IEEE policy has much to do with the policy itself but more to do with the concerns that some companies have about contagion,” he says. “Fundamentally what they’re worried about is if what has happened at IEEE spreads beyond the IEEE.”