Richard Lloyd

The US and Canadian branch of the Licensing Executives Society (LES) has been approved as an Accredited Standards Developer by the American National Standards Institute (ANSI) in what is a significant step in the its drive to introduce best practices into the IP market.

ANSI accreditation comes after LES started to actively focus on introducing standards into a range of areas more than two and a half years ago. It has formed five working groups focused on looking at best practices in patent licensing, IP brokerage, IP protection in the supply chain, IP valuation and IP in the boardroom to analyse how standards may be introduced into each area.  

In an industry scarred by costly and high profile litigation, arguments over “patent trolls” and “efficient infringers” and often broad disagreements over patent values, LES’s initiative is designed to encourage market participants to act responsibly. Given the entrenched differences that exist between different types of player that may seem like a tall order, but there’s no doubt that ANSI accreditation shows that LES is onto something.

“This gives us a great deal more credibility,” commented Brian O’Shaughnessy, LES President and Board Chair. “A lot of people have looked at this initiative and a number have expressed scepticism saying, “you’ll never get the industry to agree, no one wants to be told how to do licensing”. This demonstrates that this is serious and we’ve given it serious thought and we’re going to do it — there will be standards that come out.”

With the ANSI stamp of approval LES can now pitch itself as a standards designating organisation. This will add significant weight to any guidelines it produces. Each of the five working groups should ultimately issue at least one or a package of standards and Bill Elkington, LES Chair-elect and a key force behind the initiative, indicated that a couple of the groups were in the process of working on drafts. Once they have been approved internally, LES will then seek public comment through an official, ANSI-required process.

Elkington added that the ultimate goal is for any standards that are issued to be widely used. “The objective is for standards to be global in their applicability so we will be reaching out to government bodies and companies around the world,” he said. That outreach will also involve other national LES groupings.

O’Shaughnessy and Elkington highlighted a number of reasons why the introduction of standards is so important. For one thing, in patent licensing there is often a mismatch between the two sides in a negotiation. “The parties at the table often have an asymmetry in experience and knowledge so a set of expectations for both parties can go a long way in getting them comfortable that the approaches they’re each taking are reasonable,” Elkington said.

For his part, O’Shaughnessy stressed the benefits of self-regulation over other options: “The alternative is we go down a path where legislators feel like they need to weigh in and then everyone is harmed. Legislators wield a very, very blunt instrument and people who write legislation don’t have more than a passing familiarity with any subject.”

He then added: “Congress has demonstrated that it doesn’t understand the patent system, let alone how it dovetails with the rest of the economy. So if we create standards there will be greater incidence of responsible, prudent and ethical behaviour, and there will be less need for legislators to wield their blunt instrument.”

Given that the spectre of patent reform continues to hang over patent owners in the US and we’re just over five years since the America Invents Act was signed into law, many IP stakeholders would probably agree that the last thing  now needed is another broad piece of legislation. That should help garner support for LES’s push; but the true proof-point will be when a significant number of companies from a diverse range of industries start committing themselves to the best practices that the standards set out.