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ITU Workshop on Standards and Intellectual Property Rights (IPR) Issues

ITU Workshop on Standards and Intellectual Property Rights (IPR) Issues. Patent Pool: a possible means to reduce aggregated royalties. Dr. Ir. Serge RAES, Intellectual Property & Standards Manager France Telecom — Orange. Internal Organization. Orange Labs & Network Carriers. Procurement.

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ITU Workshop on Standards and Intellectual Property Rights (IPR) Issues

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  1. ITU Workshop on Standards and Intellectual Property Rights (IPR) Issues Patent Pool: a possible means to reduce aggregated royalties Dr. Ir. Serge RAES, Intellectual Property & Standards Manager France Telecom — Orange

  2. Internal Organization Orange Labs & Network Carriers Procurement Legal IP R&D Standardization & Ecosystems Dev. IP & Licensing Research & Strategy IP & Standardization Co-Ordination

  3. Generalised model for rapid licensing PRODUCTS / SERVICES 3G LTE Patent Pools Ready made tools for fast technology transfer: - « shop window of the technology » - Collective Licensing Agreement Missing Link ? IPR Policy : Fair, Reasonable and Non- Discriminatory (FRAND or RAND) • Technical standards making • Standards bodies (ITU, ETSI, ANSI, ARIB, GISFI ?) • Industry clubs (TM Forum, IPTV Forum, IEEE, IETF) Existing Structure

  4. Quantification of RAND Licensing scheme: Maximum Aggregated Royalty LICENSING ADMINISTRATION PATENT POOL Evaluates Patent Essentiality PATENT EVALUATION MECHANISM « added value » IPR POLICY OF STANDARDS BODIES (SDO) Basic IPR Policy STANDARDS BODIES (ITU, ETSI, ANSI, ARIB, GISFI ? ) Standards making

  5. 3G LTE situation : Acquiring Essential Patent licenses >> Essential Patents Owners >562 patent families declared (756 for GSM and 1605 for UMTS) each Company must negotiate best deal 1 : 1 3G LTE Patent Pools MAR x % Total IPR Cost ?? ? x % MAR = Maximum Aggregated Royalties x % + ?

  6. License scope and Royalty base: patent rights exhaustion Licenses obtained by Final Manufacturer protect all < Manufacturers and > Operators, Service Providers and Consumers RANGE OF SELLABLE SERVICES Added Value within Supply Chain FINISHED MANUFACTURED PRODUCT WITH A SALES PRICE 30 Essential Patents 60 Essential Patents 9 Essential Patents 1 Essential Patent Service + Application Provider 1 Manufacturer 1 Manufacturer 2 Manufacturer 3 Final Manufacturer Operator 1 Supply Chain MANUFACTURING CHAIN SERVICE PROVISION CHAIN CONSUMER

  7. Patent Pool Suppliers’ Benefits • Eliminates existing licensing negotiation deficiencies (e.g. unfair, discriminatory, complicated, time consuming, expensive) • Catalyses market growth through easier access to technology • Reduces exposure to patent infringement litigation though global license coverage • Minimises Essential Patent cost as a real competitive cost element • Reduces substantially the internal licensing and negotiation costs • Knowledge of which patents are essential and their holders • No competition issue associated with classical Patent Pools • Retains total control over your own IPR

  8. Patent Pool Operators’ Benefits • Reduce investment cost for the acquisition of the infrastructure • Creates a more favorable business case, arising from more affordable technology cost, which will stimulate market launch and growth • Removes uncertainty concerning patent infringement litigation which could impact on the service provision • Defines a more certain and deterministic Essential Patents environment for the planning of new commercial services • Increases the choice among competitive suppliers globally • Creates a more favorable stock market view for the standard • Removes the hassle of Essential Patent portfolio management • Retains total control over your own IPR

  9. Collective Licensing: Conclusions • Patent Pool is not a panacea ! • Bilateral licensing negotiation will continue • Large patent holders will likely stay outside • Not a remedy against Non-Practicing Entity • Collective Licensing Agreements may still improve : • new features • exploring other business strategies (e.g. defensive Patent Pools) • in 2012, 3G LTE Patent Pools defined

  10. Thank youSerge RAESIntellectual Property & Standards Senior Managerc/o France Telecom - Orange Office IB 313T38-40 rue du Général LeclercF-92130 Issy Les MoulineauxFranceTel: +33 1 4529 6007Fax: +33 1 4529 5126serge.raes@orange.com

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