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Comments on Department of Industrial Policy and Promotion Discussion Paper on Standard Essential Patents and their Availability on Frand Terms
http://editors.cis-india.org/a2k/blogs/comments-on-department-of-industrial-policy-and-promotion-discussion-paper-on-standard-essential-patents-and-their-availability-on-frand-terms
<b>The Centre for Internet & Society gave its comments to the Department of Industrial Policy and Promotion. The comments were prepared by Anubha Sinha, Nehaa Chaudhari and Rohini Lakshané.</b>
<p><strong><a href="http://editors.cis-india.org/a2k/blogs/dipp-comments.pdf" class="external-link">Download the PDF </a></strong><strong>To access other submissions to the DIPP Discussion Paper on SEP and FRAND, please <a class="external-link" href="http://cis-india.org/a2k/blogs/responses-to-the-dipps-discussion-paper-on-seps-and-their-availability-on-frand-terms">click here</a></strong><strong><br /></strong></p>
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<p style="text-align: justify; "><strong>Authors <a name="_ftnref1"></a> </strong></p>
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<p style="text-align: justify; "><strong>I. PRELIMINARY</strong></p>
<p style="text-align: justify; "><strong>1. </strong> This submission presents comments by the Centre for Internet and Society, India ("<strong>CIS</strong>") on the <i>Discussion Paper on Standard Essential Patents and their Availability on FRAND Terms</i> (dated 01 March, 2016), released by the Department of Industrial Policy and Promotion ("<strong>the</strong> <strong>DIPP</strong>"), Ministry of Commerce and Industry, Government of India (" <strong>the discussion paper/ discussion paper</strong>").</p>
<p style="text-align: justify; "><strong>2. </strong> CIS commends the DIPP for its efforts at seeking inputs from various stakeholders on this important and timely issue. CIS is thankful for the opportunity to put forth its views.</p>
<p style="text-align: justify; "><strong>3. </strong> This submission is divided into three main parts. The <i>first </i>part, 'Preliminary', introduces the document; the <i>second</i> part, 'About CIS', is an overview of the organization; and, the <i>third </i>part, 'Submissions on the Issues', answers the questions raised in the discussion paper. A list of annexures and their URLs is included at the end of the document.</p>
<p style="text-align: justify; "><strong>II. ABOUT CIS</strong></p>
<p style="text-align: justify; "><strong>4. </strong> CIS is a non-profit organisation <a name="_ftnref2"></a> that undertakes interdisciplinary research on internet and digital technologies from policy and academic perspectives. The areas of focus include digital accessibility for persons with diverse abilities, access to knowledge, intellectual property rights, openness (including open data, free and open source software, open standards, open access, open educational resources, and open video), internet governance, telecommunication reform, freedom of speech and expression, intermediary liability, digital privacy, and cyber-security.</p>
<p style="text-align: justify; "><strong>5. </strong> CIS values the fundamental principles of justice, equality, freedom and economic development. This submission is consistent with CIS' commitment to these values, the safeguarding of general public interest and the protection of India's national interest at the international level. Accordingly, the comments in this submission aim to further these principles. In addition, the comments are in line with the aims of the Make in India<a name="_ftnref3"></a> and Digital India <a name="_ftnref4"></a> initiatives of the Government of India.</p>
<p style="text-align: justify; "><strong>III. SUBMISSION ON THE ISSUES FOR RESOLUTION</strong></p>
<p style="text-align: justify; "><strong>6. </strong> The following sections provide CIS' views and recommendations on the issues enumerated in section 11 of the discussion paper:</p>
<p style="text-align: justify; "><strong> a) <i> Whether the existing provisions in the various IPR-related legislations, especially the Patents Act, 1970 and antitrust legislations, are adequate to address the issues related to SEPs and their availability on FRAND terms? If not, then can these issues </i> <i>be addressed through appropriate amendments to such IPR-related legislations? If so, what changes should be affected?</i> </strong></p>
<p style="text-align: justify; "><strong>A.1. </strong> The issues related to Standard Essential Patents ("<strong>SEPs</strong>") and their licensing on a fair, reasonable and non-discriminatory ("<strong>FRAND</strong>") basis lie at the intersection of intellectual property ("<strong>IP</strong>") law and competition law <a name="_ftnref5"></a>. As such, in India, the Patents Act, 1970 ("<strong>the Patents Act</strong>") and, the Competition Act, 2002 ("<strong>the Competition Act</strong>") are the relevant legislations to be studied. These have been recently discussed, most recently, by Justice Bakhru in his comprehensive order in<i>Telefonaktiebolaget LM Ericsson (Publ)</i> v. <i>Competition Commission of India and Another.</i> <a name="_ftnref6"></a></p>
<p style="text-align: justify; "><strong>A.2. </strong> It is our submission that at the moment, amendments to the Patents Act and the Competition Act may not be preferred. As Justice Bakhru has noted in the aforesaid decision,<a name="_ftnref7"></a> there is no conflict between the remedies in the Patents Act and in the Competition Act, and, the pursuit of rights and remedies under one of these legislations does not bar a party from pursuing rights and remedies in the other. Further, under both legislations, there are scenarios for the respective authorities - the Controller General of Patents, Designs and Trademarks ("<strong>the Controller</strong>") and the Competition Commission of India (" <strong>the CCI</strong>") for the Patents Act and for the Competition Act respectively - to seek inputs from each other.</p>
<p style="text-align: justify; "><strong>A.3. </strong> We also note that the CCI is a fairly nascent regulator; one whose jurisdiction is not yet a settled matter of law. While the judgment in the Ericsson-CCI case<a name="_ftnref8"></a> is indeed a good beginning, we do not believe that the matter has been conclusively decided. Accordingly, given the complex legal questions involved, over not just the interpretation of the Patents Act and the Competition Act, but also constitutional issues around the jurisdiction of regulators and the power of judicial review of the courts,<a name="_ftnref9"></a> we believe that it would be prudent to examine the ruling of the courts on these issues in some detail, before considering amendments.</p>
<p style="text-align: justify; "><strong>A.4. </strong> In addition, we are of the opinion that our IP law, and, our competition law, fully honor our international commitments, including the requirements under the TRIPS Agreement.<a name="_ftnref10"></a> As such, we would urge the Government of India to not enter into free trade agreements including, <i>inter alia,</i> the Regional Comprehensive Economic Partnership,<a name="_ftnref11"></a> that threaten our use of TRIPS flexibilities, and, impose 'TRIPS-plus' obligations.</p>
<p style="text-align: justify; "><strong>A.5. </strong> We also urge the Government of India to adopt a balanced National IPR Policy, and, a National Competition Policy, both of which has been in abeyance for a considerable amount of time. We believe that these policies are crucial to realize the objectives of the Make in India and Digital India initiatives. At the same time, we submit that these policies be balanced, taking into account the interests of all stakeholders, developed through an extensive consultative process, and, suitably modified based on feedback.</p>
<p style="text-align: justify; "><strong> <i> b) What should be the IPR policy of Indian Standard Setting Organizations in developing Standards for Telecommunication sector and other sectors in India where Standard Essential Patents are used? </i> </strong></p>
<p style="text-align: justify; "><strong>B.1.</strong> The discussion paper identifies four Standard Setting Organizations ("<strong>SSOs</strong>") in India, namely, the Telecom Standards Development Society of India ("<strong>TSDSI</strong>"), the Telecommunication Engineering Center ("<strong>TEC</strong>"), the Bureau of Indian Standards (" <strong>BIS</strong>"), the Global ICT Standardization Forum for India ("<strong>GISFI</strong>"), and, the Development Organization of Standards for Telecommunications in India ("<strong>DOSTI</strong>"). Comments on each of their policies have been made in the following paragraphs.</p>
<p style="text-align: justify; "><strong>B.2.</strong> The BIS does not have an intellectual property rights ("<strong>IPR</strong>") policy of its own. The BIS Act, 2016 <a name="_ftnref12"></a> does not include one either. As the discussion paper notes, the BIS refers to the IPR policies of the relevant international SSO in the context of technology implemented in India, that is the same or equivalent to the ones developed or maintained by the respective SSOs.We recommend that BIS adopt an IPR policy at the earliest, factoring in India specific requirements differences: a large and exponentially growing mobile device market makes it possible for manufacturers, patent owners and implementers alike to achieve financial gains even with a low margin ("<strong>India specific requirements</strong>"). In addition, our comments on the IPR policy of the TSDSI in paragraph <strong>B.4.</strong> of this submission (below), may also be considered for the content of the BIS' future policy on IPR.</p>
<p style="text-align: justify; "><strong>B.3</strong> . According to the discussion paper, the TEC considers the IPR policies of the International Telecommunication Union. We recommend that like the BIS, the TEC also adopt its own IPR policy, factoring in the India specific requirements detailed above. In addition, our comments on the IPR policy of the TSDSI in paragraph <strong>B.4.</strong> of this submission (below), may also be considered for the content of the BIS' future policy on IPR.</p>
<p style="text-align: justify; "><strong>B.4. </strong> The TSDSI, a relatively new standards body, has defined an IPR policy <a name="_ftnref13"></a>. In respect of this policy, the following observations are presented. <i>First, </i>this policy notes that IPR owners should be adequately and fairly rewarded.<i>Second, </i>it requires members to disclose essential IPRs in a "timely fashion." <a name="_ftnref14"></a> <i>Third, </i>as per its policy, the TSDSI can request the owner of an essential IPR to undertake, within three months, to license it irrevocably on FRAND terms. <a name="_ftnref15"></a> At the same time, the policy also states that the (aforesaid) ask may be subject to the condition that licensees agree to reciprocate. <a name="_ftnref16"></a> Should such an undertaking not be forthcoming, the TSDSI may suspend work on the standard or technical specification in question, or, adopt another course of action. <a name="_ftnref17"></a> <i>Fourth, </i>the policy identifies two scenarios for the non availability of licences prior to publication, <a name="_ftnref18"></a> based on the existence, or, the lack thereof, of alternative technologies. In the event of a lack of alternative technology, the policy requires a member to disclose in writing its reasons for not licensing its patents. Following this, it is submitted that there is no clarity on the concrete steps that the TSDSI would adopt in case the efforts to convince a member to license their essential IPRs, fail. The policy only states that "the TSDSI shall take further action as deemed fit."<a name="_ftnref19"></a> The same is also true where the IPR owner is not a member of the TSDSI. <a name="_ftnref20"></a> <i>Fifth, </i>the policy also envisages a scenario of non-availability post publication. <a name="_ftnref21"></a> The procedure for dealing with this is akin to the one detailed above, with the TSDSI asking for a written explanation, considering further action, including the possible withdrawal of the standard or technical specification in question. <i>Sixth, </i>it is observed that the policy does not require a commitment from its members to refrain from seeking injunctive relief. <i>Seventh, </i>it is accordingly recommended that the policy be suitably modified (a) to include India specific requirements discussed above; (b) to require a commitment from its members, that they refrain from seeking injunctive relief; (c) to delete the condition where FRAND negotiations may be subject to a condition of reciprocity; (d) to identify in detail the procedure to be followed in case of patent 'hold-ups' and patent 'hold-outs'; (e) to identify in detail the procedure to be followed in case of refusal to license by TSDSI members, and, non-members, both; and, (f) to include a detailed process on the declassification of a standard or technical specification.</p>
<p style="text-align: justify; "><strong>B.5. </strong> The IPR policy of GISFI<a name="_ftnref22"></a>, is substantially similar to the IPR policy of the TSDSI, discussed in paragraph <strong>B.4.</strong> of this submission (above). <i>Inter alia, </i> GISFI's IPR policy also does not indicate the specific steps to be taken in case an IPR owner refuses to license essential IPRs for which no alternative technology is available. This is true in the cases both, where the refusal is by a member, and, by a non-member. <a name="_ftnref23"></a>Our recommendations on the IPR policy of the TSDSI in paragraph <strong>B.4.</strong> of this submission (above), may also be considered for the GISFI's IPR policy.</p>
<p style="text-align: justify; "><strong>B.6. </strong> According to the discussion paper, the IPR policy of the DOSTI resembles that of the GIFSI. It is submitted that these policies are similar in the context of refusal to license by a member or non-member, and, like the TSDSI and the GISFI, the DOSTI also requires the patent holder to license its IPR irrevocably on FRAND terms. Accordingly, we reiterate our comments on the IPR policy of the TSDSI in paragraph <strong>B.4.</strong> of this submission (above). The aforesaid recommendations may also be considered to be relevant for the DOSTI's IPR policy.</p>
<p style="text-align: justify; "><strong>B.7.</strong> We are also of the opinion that it would be useful for Indian SSOs to consider recommending the use of royalty-free licenses for IPRs. Illustratively, the World Wide Web Consortium ("<strong>W3C</strong>") <a name="_ftnref24"></a> and the Open Mobile Alliance ("<strong>OMA</strong>") <a name="_ftnref25"></a> encourage royalty-free licensing.</p>
<p style="text-align: justify; "><strong> <i> c) Whether there is a need for prescribing guidelines on working and operation of Standard Setting Organizations by Government of India? If so, what all areas of working of SSOs should they cover? </i> </strong></p>
<p style="text-align: justify; "><strong>C.1. </strong> In our opinion, in a milieu where instances of SEP litigation are becoming increasingly complex, and, there is a tangible threat of the abuse of the FRAND process, it might be useful for the Government of India to make suggestions on the working of Indian SSOs.</p>
<p style="text-align: justify; "><strong>C.2. </strong> It is suggested that the Government of India develop Model Guidelines that may be adopted by Indian SSOs, taking into account India specific requirements, including the ones detailed in paragraph <strong>B.2.</strong> of this submission (above). We believe that this measure will also enable the fulfilment of the objectives of the Make in India and Digital India initiatives.</p>
<p style="text-align: justify; "><strong>C.3. </strong> We recommend that various stakeholders, including IP holders, potential licensees and users of IP, civil society organizations, academics, and, government bodies, including the the Indian Patent Office ("<strong>IPO</strong>"), the Department of Telecommunications, the DIPP, TRAI, and, the CCI be consulted in the creation of these Model Guidelines.</p>
<p style="text-align: justify; "><strong>C.4.</strong> In our opinion, the Model Guidelines may cover (a) the composition of the SSO; (b) the process of admitting members; (c) the process of the determination of a standard or technical specification; (d) the process of declassification of a standard or technical specification; (e) the IPR Policy; (f) resolution of disputes; (g) applicable law.</p>
<p style="text-align: justify; "><strong> <i> d) Whether there is a need for prescribing guidelines on setting or fixing the royalties in respect of Standard Essential Patents and defining FRAND terms by Government of India? If not, which would be appropriate authority to issue the guidelines and what could be the possible FRAND terms? </i> </strong></p>
<p style="text-align: justify; "><strong>D.1. </strong> In light of the inadequacies in the IPR policies (discussed above) of various SSOs in India, as well the the spate of ongoing patent infringement lawsuits around mobile technologies, we recommend that the Government of India intervene in the setting of royalties and FRAND terms.</p>
<p style="text-align: justify; "><strong>D.2. </strong> We propose that the Government of India initiate the formation of a patent pool of critical mobile technologies and apply a compulsory license with a five per cent royalty<a name="_ftnref26"></a>. Further details of this proposal have been enumerated in answer to question 'f' of the discussion paper (below).</p>
<p style="text-align: justify; "><strong>D.3.</strong> Our motivations for this proposal are many-fold.<i> </i>In our opinion, it is near-impossible for potential licensees to avoid inadvertent patent infringement. As a part of our ongoing research on technical standards applicable to mobile phones sold in India, we have found nearly 300 standards so far <a name="_ftnref27"></a>. It is submitted that carrying out patent searches for all the standards would be extremely expensive for potential licensees. Further, even if such searches were to be carried out, different patent owners, SSOs and potential licensees disagree on valuation, essentiality, enforceability, validity, and coverage of patents. In addition, some patent owners are non-practising entities ("<strong>NPEs</strong>") and may not be members of SSOs. The patents held by them are not likely to be disclosed. More importantly, home-grown manufacturers that have no patents to leverage and may be new entrants in the market would be especially disadvantaged by such a scenario. Budget phone manufacturers, standing to incur losses either as a result of heavy licensing fees, or, potential litigation, may close down. Alternatively, they may pass on their losses to consumers, driving the now-affordable phones out of their financial reach. With the objectives of Make in India and Digital India in sight, it is essential that Indian consumers continue to have access to devices within their purchasing power.</p>
<p style="text-align: justify; "><strong> <i> e) On what basis should the royalty rates in SEPs be decided? Should it be based on Smallest Saleable Patent Practicing Component (SSPPC), or on the net price of the Downstream Product, or some other criterion? </i> </strong></p>
<p style="text-align: justify; "><strong>E.1. </strong> It is our submission that royalty rates for SEPs should be based on the smallest saleable patent practising component ("<strong>SSPPC</strong>"). Most modern telecommunication and IT devices are complex with numerous technologies working in tandem. Different studies indicate that the number of patents in the US applicable to smartphones is between 200,000 and 250,000. <a name="_ftnref28"></a> A comprehensive patent landscape of mobile device technologies conducted by CIS reveals that nearly 4,000 patents are applicable to mobile phones sold in India. <a name="_ftnref29"></a> It is thus extremely difficult to quantify the exact extent of interaction and interdependence between technologies in any device, in such a way that the exact contribution of the patented technology to the entire device can be determined.</p>
<p style="text-align: justify; "><strong>E.2. </strong> The net cost of the device is almost always several times that of the chipset that implements the patented technology. Armstrong et al <a name="_ftnref30"></a> have found that the cost of a 4G baseband chip costs up to $20 including royalties in a hypothetical $400 phone sold in the US. One of the litigating parties in the ongoing patent infringement lawsuits in India has stated that one of the reasons for preferring to leverage its patents as downstream as possible in the value chain is that it will earn the company more royalties <a name="_ftnref31"></a>. In instances where patent exhaustion occurs much earlier in the value chain, such as in the case of the company's cross-licenses with Qualcomm (another company that owns patents to chip technologies), the company does not try to obtain royalties from the selling prices of devices for the cross-licensed technologies. It is submitted that such market practices could be detrimental to the government's objectives such as providing a mobile handset to every Indian by 2020 as a part of the Digital India programme <a name="_ftnref32"></a>. It is also worth noting in this context that the mobile device is the first and only medium of access to the Internet and telecom services for a large number of Indians, and, consequently, the only gateway to access to knowledge, information and critical services, including banking. <a name="_ftnref33"></a></p>
<p style="text-align: justify; "><strong>E.3. </strong> The discussion paper notes that J. Gregory Sidak, having studied the proceedings before the Delhi High Court, approved of the manner in which the court determined royalties.<a name="_ftnref34"></a> In his paper, Sidak(2015)<a name="_ftnref35"></a> notes that in determining royalties, the court relied, <i>inter alia, </i>on the decision of <i>CSIRO</i> v.<i>Cisco</i> ("<strong>the CSIRO case</strong>"), a 2015 decision of the US Court of Appeals for the Federal Circuit. 2015. <a name="_ftnref36"></a> We humbly disagree with the opinion of the Delhi High Court on the manner of determining royalties, and, with Sidak's approval of the same.</p>
<p style="text-align: justify; "><strong>E.4.</strong> It is our submission that the CSIRO case <a name="_ftnref37"></a> relied on a previous judgment, which we disagree with. The decision, a 2014 district court judgment, analogises the determination of royalties on SEPs to the determination of royalties on a copyrighted book. The court notes, "[b]asing a royalty solely on chip price is like valuing a copyrighted book based only on the costs of the binding, paper, and ink needed to actually produce the physical product. While such a calculation captures the cost of the physical product, it provides no indication of its actual value." In our opinion, this analogy is flawed. While a book is a distinct product as a whole, a mobile phone is a sum-total of its parts. If at all, a mobile phone could be compared with a book with several authors, as multiple technologies belonging to several patent holders are implemented in it. This judgement bases valuation for one set of technologies on the whole device, thus awarding compensation to the licensor even for those technologies implemented in the device that are not related to the licensed technologies. In our opinion, charging royalty on the net selling price of a device for one technology or one set of technologies is thus more like a referral scheme and less like actual compensation for the value added. Accordingly, royalties must be charged on the SSPPC principle.</p>
<p style="text-align: justify; "><strong> <i> f) Whether total payment of royalty in case of various SEPs used in one product should be capped? If so, then should this limit be fixed by Government of India or some other statutory body or left to be decided among the parties? </i> </strong></p>
<p style="text-align: justify; "><strong>F.1. </strong> CIS has proposed a compulsory licensing fee of five per cent on a patent pool of critical mobile technologies. The rationale for this figure is the royalty cap imposed by India in the early 1990s.</p>
<p style="text-align: justify; "><strong>F.2.</strong> As part of regulating foreign technology agreements, the (former) Department of Industrial Development (later merged with the DIPP) capped royalty rates in the early 1990s. Payment of royalties was capped at either a lump sum payment of $2 million, or, 5 percent on the royalty rates charged for domestic sale, and, 8 percent for export of goods pertaining to "high priority industries". <a name="_ftnref38"></a> Royalties higher than 5 percent or 8 percent, as the case may be, required securing approval from the government.</p>
<p style="text-align: justify; "><strong>F.3.</strong> While the early 1990s (specifically, 1991) was too early for the mobile device manufacturing industry to be listed among high priority industries, the public announcement by the government covered computer software, consumer electronics, and electrical and electronic appliances for home use. The cap on royalty rates was lifted by the DIPP in 2009. <a name="_ftnref39"></a></p>
<p style="text-align: justify; "><strong>F.4.</strong> It is submitted in the case of mobile device technology, we are witnessing a situation similar to that of the 1990s. In this sphere, most of the patent holders are multinational corporations which results in large royalty amounts leaving India. At the same time, in our opinion, litigation over patent infringement in India has limited the manufacture and sale of mobile devices of homegrown brands.</p>
<p style="text-align: justify; "><strong>F.5.</strong> We believe that the aforementioned developments are detrimental to the Make in India and Digital India initiatives of the Government of India, and, the government's aim of encouraging local manufacturing, facilitating indigenous innovation, as well as strengthening India's intellectual property regime. It is our submission, therefore, that the payment of royalties on SEPs be capped.</p>
<p style="text-align: justify; "><strong>F.6.</strong> We submit that such a measure is particularly important, given the nature of SEP litigation in India. While SEP litigation in India is indeed comparable to international SEP litigation on broader issues raised, specifically competition law concerns, but differs crucially where the parties are concerned. International SEP litigation is largely between multinational corporations with substantial patent portfolios, capable of engaging in long drawn out litigations, or engaging in other strategies including setting off against each other's patent portfolios. Dynamics in the Indian market differ - with a larger SEP holder litigating against smaller manufacturers, many of whom are indigenous, home-grown. <a name="_ftnref40"></a></p>
<p style="text-align: justify; "><strong>F.7.</strong> In June, 2013, we had recommended to the erstwhile Hon'ble Minister for Human Resource Development <a name="_ftnref41"></a> that a patent pool of essential technologies be established, with the compulsory licensing mechanism. Subsequently, in February, 2015, we reiterated this request to the Hon'ble Prime Minister.<a name="_ftnref42"></a> We propose that the Government of India initiate the formation of a patent pool of critical mobile technologies and mandate a five percent compulsory license. <a name="_ftnref43"></a> As we have stated in our request to the Hon'ble Prime Minister, we believe that such a pool would "possibly avert patent disputes by ensuring that the owners' rights are not infringed on, that budget manufacturers are not put out of business owing to patent feuds, and that consumers continue to get access to inexpensive mobile devices. Several countries including the United States issue compulsory licenses on patents in the pharmaceutical, medical, defence, software, and engineering domains for reasons of public policy, or to thwart or correct anti-competitive practices." <a name="_ftnref44"></a></p>
<p style="text-align: justify; "><strong>F.8.</strong> We believe that such a measure is not in breach of our international obligations under the TRIPS Agreement.</p>
<p style="text-align: justify; "><strong><i>g) Whether the practice of Non-Disclosure Agreements (NDA) leads to misuse of dominant position and is against the FRAND terms?</i></strong></p>
<p style="text-align: justify; "><strong>G.1.</strong> The issue of Non Disclosure Agreements ("<strong>NDAs</strong>") in SEP/FRAND litigation is a contentious one. Patent holders argue that they are essential to the license negotiation process to protect confidential information, whereas potential licensees submit that NDAs result in the imposition of onerous conditions.<a name="_ftnref45"></a></p>
<p style="text-align: justify; "><strong>G.2.</strong> In India's SEP litigation, the use of NDAs has been raised as an issue in at least two cases - separately by Intex<a name="_ftnref46"></a> and by iBall <a name="_ftnref47"></a>, in their cases against Ericsson. Intex and iBall have both claimed that the NDAs that Ericsson asked them to sign were onerous, and favoured Ericsson.</p>
<p style="text-align: justify; "><strong>G.3.</strong> According to Intex, the NDA in question would result in high legal costs for Intex, and, would render it unable to disclose crucial information to its vendors (who had agreed to supply to Intex on the condition that Intex was not infringing on any patents). <a name="_ftnref48"></a></p>
<p style="text-align: justify; "><strong>G.4.</strong> According to iBall, the parties had agreed to enter a global patent license agreement ("<strong>GPLA</strong>") but Ericsson insisted on an NDA. Upon receiving the terms of the NDA, iBall claimed before the CCI that Ericsson's refusal to identify the allegedly infringed SEPs; the threat of patent infringement proceedings; the attempt to coax iBall to enter into a "one-sided and onerous NDA"; the tying and bundling patents irrelevant to iBall's products by way of a GPLA; demanding unreasonably high royalties by way of a certain percentage value of handset as opposed to the cost of actual patented technology used all constituted abuse of Ericsson's dominant position under Section 4 of the Competition Act. <a name="_ftnref49"></a></p>
<p style="text-align: justify; "><strong>G.5.</strong> In India, the law on misuse (abuse) of dominant position by an 'enterprise' is found primarily in Section 4 of the Competition Act (read with Section 2(h) of the Competition Act, which defines 'enterprise'). In its recent decision in the Ericsson-CCI case <a name="_ftnref50"></a>, the Delhi High Court has found Ericsson to be an 'enterprise' for the purposes of the Competition Act, and hence subject to an inquiry under Section 4 of the same legislation. In the same decision, the court has also recognised the jurisdiction of the CCI to examine Ericsson's conduct for abuse of behaviour, based on complaints by Micromax and Intex. The use of NDAs is one of the grounds on which the parties have complained to the CCI.</p>
<p style="text-align: justify; "><strong>G.6.</strong> Pending a final determination by the CCI (and subsequent appeals), it would be premature to make an absolute claim on whether the use of NDAs results in an abuse of dominant position in <i>all</i> instances. However, the following submissions are made: <i>First, </i>the determination of misuse/abuse of dominant position is influenced by a number of factors <a name="_ftnref51"></a>, i.e., such a determination should be made on a case to case basis. <i>Second, </i>the market regulator, the CCI, is best situated to determine (a) abuse of dominance, and (b) whether the use of NDAs by an enterprise constitutes an abuse of its dominance. <i>Third, </i>the question of whether the use of NDAs constitutes misuse of dominance needs to be addressed in two parts - (a) whether the use of the NDA <i>itself </i>is abusive, irrespective of its terms and, (b) whether the use of certain specific terms renders the NDA abusive. <i>Fourth, </i>NDAs could potentially lead to the patent owner abusing its dominant position in the market, as well as result in an invalidation of FRAND commitments and terms. NDAs make it impossible to determine if a patent holder is engaging in discriminatory licensing practices. <i>Fifth, </i>NDAs are especially harmful in the case of NPEs-- companies that hold patents and monetise them but don't build or manufacture the components or devices that implement the technology associated with the patents.</p>
<p style="text-align: justify; "><strong> <i> h) What should be the appropriate mode and remedy for settlement of disputes in matters related to SEPs, especially while deciding FRAND terms? Whether Injunctions are a suitable remedy in cases pertaining to SEPs and their availability on FRAND terms? </i> </strong></p>
<p style="text-align: justify; "><strong>H.1.</strong> The licensing of SEPs on FRAND terms requires the parties to negotiate "reasonable" royalty rates in good faith, and apply the terms uniformly to all willing licensees. It is our submission that if the parties cannot agree to FRAND terms, they may enter into binding arbitration. Further, if all efforts fail, there exist remedies under the Patents Act and the Competition Act, 2002 to address the issues.</p>
<p style="text-align: justify; "><strong>H.2.</strong> Section 115 of the Patents Act empowers the court to appoint an independent scientific adviser " <i> to assist the court or to inquire and report upon any such question of fact or of opinion (not involving a question of interpretation of law) as it may formulate for the purpose. </i> "<a name="_ftnref52"></a> Such an independent adviser may inform the court on the technical nuances of the matter.</p>
<p style="text-align: justify; "><strong>H.3. </strong> Further<strong>, </strong>under the Patents Act, pending the decision of infringement proceedings the Court may provide interim relief, if the plaintiff proves <i>first, </i>a prima facie case of infringement; <i>second, </i>that the balance of convenience tilts in plaintiff's favour; and, <i>third, </i>that if an injunction is not granted the plaintiff shall suffer irreparable damage. <strong>H.4. </strong>However, it is our suggestion that courts adopt a more cautious stance towards granting injunctions in the field of SEP litigation. <i>First, </i>in our opinion, injunctions may prove to be a deterrent to arrive at a FRAND commitment, in particular, egregiously harming the willing licensee. <i>Second, </i>especially in the Indian scenario, where litigating parties operate in vastly different price segments (thereby targeting consumers with different purchasing power), it is difficult to establish that "irreparable damage" has been caused to the patent owner on account of infringement. <i>Third, </i>we note the approach of the European Court of Justice, which prohibited the patent holder from enforcing an injunction provided a willing licensee makes an offer for the price it wishes to pay to use a patent under the condition that it deposited an amount in the bank as a security for the patent holder. <a name="_ftnref53"></a> <i>Fourth, </i>we also note the approach of the Federal Trade Commission in the USA, which only authorizes patent holders to seek injunctive relief against potential licensees who have either stated that they will not license a patent on any terms, or refuse to enter into a license agreement on terms that have been set in the final ruling of a court or arbitrator. <a name="_ftnref54"></a> Further, as Contreras (2015)<a name="_ftnref55"></a> observes, that the precise boundaries of what constitutes as an unwilling licensee remains to be seen. We observe a similar ambiguity in Indian jurisprudence, and accordingly submit that courts should carefully examine the conduct of the licensee to injunct them from the alleged infringement.</p>
<p style="text-align: justify; "><strong><i>i) What steps can be taken to make the practice of Cross-Licensing transparent so that royalty rates are fair & reasonable?</i></strong></p>
<p style="text-align: justify; "><strong>I.1.</strong> The Patents Act requires patentees and licensees to submit a statement on commercial working of the invention to the Controller every year. <a name="_ftnref56"></a> Form 27 under section 146(2) of the Act lists the details necessary to be disclosed for compliance of the requirement of "working". A jurisprudential analysis reveals the rationale and objective behind this mandatory requirement. Undeniably, the scheme of the Indian patent regime makes it amply clear that "working" is a very important requirement, and the public as well as competitors have a right to access this information in a timely manner, without undue hurdles. <a name="_ftnref57"></a> Indeed, as the decision in <i>Natco Pharma</i> v. <i>Bayer Corporation</i> <a name="_ftnref58"></a> reveals, the disclosures in Form 27 were crucial to determining the imposition of a compulsory license on the patentee. Thus, broadly, Form 27 disclosures can critically enable willing licensees to access patent "working" information in a timely manner.</p>
<p style="text-align: justify; "><strong>I.2.</strong> However, there has been little compliance of this requirement by the patentees, despite the IPO reiterating the importance of compliance through the issuance of multiple public notices <a name="_ftnref59"></a> (suo motu and in response to a public interest litigation filed in 2011 <a name="_ftnref60"></a>), and, reminding the patentees that non-compliance is punishable with a heavy fine. <a name="_ftnref61"></a> Findings of research submitted by one of the parties<a name="_ftnref62"></a> in the writ of the<a></a><a></a><a>2011</a><a name="_msoanchor_1"></a><a name="_msoanchor_2"></a><a name="_msoanchor_3"></a> public interest litigation<i>Shamnad Basheer </i>v. <i>Union of India and others</i><a name="_ftnref63"></a> reveal as follows. <i>First, </i>a large number of Form 27s are unavailable for download from the website of the IPO. This possibly indicates that the forms have either not been filed by the patentees with the IPO, or have not been uploaded (yet) by the IPO. <i>Second, </i>a large number of filings in the telecom sector remain incomplete.</p>
<p style="text-align: justify; "><strong>I.3. </strong> In 2015, CIS queried the IPO website for Form 27s of nearly 4,400 patents. CIS' preliminary research (ongoing and unpublished) echoes findings <a name="_ftnref64"></a> similar to the ones disclosed in the case discussed in paragraph <strong>I.2.</strong> of this submission (above).</p>
<p style="text-align: justify; "><strong>I.4.</strong> In view of the submissions above, CIS makes the following recommendations to make the practice of cross-licensing transparent so that royalty rates are fair & reasonable: <i>first, </i>that there be a strict enforcement of the submission of Form 27s on a regular and timely basis by the patentees; and, <i>second, </i>that guidelines may be drawn up on whether it was discriminatory to charge no royalties (whether on the SSPPU or on the whole device) for a patent holder in a cross-licensing arrangement with another, when it charges royalty on the selling price of the device from a non-cross-licensor.</p>
<p style="text-align: justify; "><strong><i>j) What steps can be taken to make the practice of Patent Pooling transparent so that royalty rates are fair & reasonable?</i></strong></p>
<p style="text-align: justify; "><strong>J.1.</strong> Patent pools can be understood as an agreement between two or more patent owners to license one or more of their patents to one another or to third parties.<a name="_ftnref65"></a> Thus, the creation of a patent pool makes use of the legal instrument of licensing, similar to the practice of cross-licensing. Insofar, we reiterate our recommendations made in paragraph <strong>I.3. </strong>of this submission (above), which apply to the answer to the instant question.</p>
<p style="text-align: justify; "><strong>J.2.</strong> In furtherance of the recommendation above, we also propose the alteration of the Form 27 template <a name="_ftnref66"></a> to include more disclosures. Presently, patentees are required to to declare number of licensees and sub-licensees. We specifically propose that the format of Form 27 filings be modified to include patent pool licenses, with an explicit declaration of the names of the licensees and not just the number.</p>
<p style="text-align: justify; "><strong>J.3. </strong> It is also our submission that patent pools be required to offer FRAND licenses on the same terms to both members and non-members of the pool.</p>
<p style="text-align: justify; "><strong> <i> k) How should it be determined whether a patent declared as SEP is actually an Essential Patent, particularly when bouquets of patents are used in one device? </i> </strong></p>
<p style="text-align: justify; "><strong>K.1.</strong> We submit that several studies on the essentiality of SEPs indicate that only a small percentage of SEPs are actually essential. A study conducted by<i>Goodman </i>and <i>Myers </i>(2004) showed that only 21% of SEPs pertaining to the 3G standard in the US were deemed to be actually essential. <a name="_ftnref67"></a> Another study conducted by the same authors in 2009 for WCDMA patents showed that 28% SEPs were essential. <a name="_ftnref68"></a></p>
<p style="text-align: justify; "><strong>K.2.</strong> In our opinion, <i>first, </i>the methodology adopted by <i>Goodman </i>and <i>Myers</i> <a name="_ftnref69"></a><i> </i>could be replicated to determine the "essential" nature of an SEP. <i>Second, </i>while adopting their methodology, it would be useful to address some of the issues over which these studies were critiqued. <a name="_ftnref70"></a> Accordingly, we suggest that (a) laboratory tests may be conducted by an outside expert or by a commercial testing laboratory, and not at an in-house facility owned by either parties, so as to eliminate in the lab results; and, (b) expert opinions may be considered in order to determine essentiality.</p>
<p style="text-align: justify; "><strong> <i> l) Whether there is a need of setting up of an independent expert body to determine FRAND terms for SEPs and devising methodology for such purpose? </i> </strong></p>
<p style="text-align: justify; "><strong>L.1.</strong> In our opinion, there is no need for an independent expert body to determine FRAND terms for SEPs and devising the methodology for such a purpose. The existing legal and regulatory framework is reasonably equipped to determine FRAND terms. A more detailed submission on the existing framework and suggested changes has been made in our answer to question 'a' of the discussion paper (above).</p>
<p style="text-align: justify; "><strong>L.2.</strong> However, we observe that Indian courts, tribunals and the CCI are yet to endorse a methodology for making FRAND determinations. The judgments of the Delhi High Court do not provide a conclusive rationale or methodology for the imposition of royalty rates in the respective matters. <a name="_ftnref71"></a> <strong> </strong></p>
<p style="text-align: justify; "><strong>L.3. </strong> We submit that<strong> </strong>in the absence of definitive Indian jurisprudence for determination of FRAND terms, American jurisprudence provides certain guidance. Contreras<a name="_ftnref72"></a> (2015) informs us about the various case law American courts and regulators have developed and adhered to whilst making such determinations.The dominant analytical framework for determining "reasonable royalty" patent damages in the United States today was set out in 1970 by the District Court for the Southern District of New York in <i>Georgia-Pacific Corp. </i>v. <i> U.S. Plywood Corp <a name="_ftnref73"></a> </i> . While this may be used as a guiding framework, the question of methodology remains far from settled.</p>
<p style="text-align: justify; "><strong> <i> m) If certain Standards can be met without infringing any particular SEP, for instance by use of some alternative technology or because the patent is no longer in force, what should be the process to declassify such a SEP? </i> </strong></p>
<p style="text-align: justify; "><strong>M.1. </strong> In our opinion, if a standard can be met without infringing a patent declared to be "essential" to it, then the patent is not actually "essential". In this instance, the methods suggested in response to question 'k' of the discussion paper (above) could be used to declassify the SEP.</p>
<p style="text-align: justify; "><strong>M.2. </strong> We further submit that if a patent is no longer in force, that is, if it has expired, then it ceases to be patent, and therefore an SEP. The process to declassify such an SEP could be simply to declare it an expired patent.</p>
<p style="text-align: justify; "><strong>M.3. </strong> In addition, if it is possible to implement a certain standard by using an alternative technology, then the SEP for such a standard is not actually an SEP. However, the scale of operations and that of mass manufacturing and compatibility requirements in devices and infrastructure mean that it is unlikely to have different methods of implementing the same standard.</p>
<p style="text-align: justify; "><strong>M.4.</strong> In general, it is our submission that an Indian SSO could maintain a publicly accessible database of SEPs found to be invalid or non-essential in India.</p>
<p style="text-align: justify; "><strong>7. </strong> We reiterate our gratitude to the DIPP for the opportunity to make these submissions. In addition to our comments above, we have shared some of our research on this issue, in the 'Annexures', below.</p>
<p style="text-align: justify; "><strong>8. </strong> It would be our pleasure and privilege to discuss these comments with the DIPP; and, supplement these with further submissions if necessary. We also offer our assistance on other matters aimed at developing a suitable policy framework for SEPs and FRAND in India, and, working towards the sustained innovation, manufacture and availability of mobile technologies in India.</p>
<p style="text-align: justify; "><strong>On behalf of the Centre for Internet and Society, 22 April, 2016</strong></p>
<p style="text-align: justify; ">Anubha Sinha - <a>anubha@cis-india.org</a> | Nehaa Chaudhari - <a>nehaa@cis-india.org</a></p>
<p style="text-align: justify; ">Rohini Lakshané - <a>rohini@cis-india.org</a></p>
<p style="text-align: justify; "><strong>___________________________________________________________________________</strong></p>
<p style="text-align: justify; ">___________________________________________________________________________</p>
<p style="text-align: justify; "><strong>ANNEXURES</strong></p>
<p style="text-align: justify; "><strong>___________________________________________________________________________</strong></p>
<p style="text-align: justify; ">● Anubha Sinha, Fuelling the Affordable Smartphone Revolution in India, available at <a href="http://cis-india.org/a2k/blogs/digital-asia-hub-the-good-life-in-asias-21-st-century-anubha-sinha-fueling-the-affordable-smartphone-revolution-in-india"> http://cis-india.org/a2k/blogs/digital-asia-hub-the-good-life-in-asias-21-st-century-anubha-sinha-fueling-the-affordable-smartphone-revolution-in-india </a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Nehaa Chaudhari, Standard Essential Patents on Low-Cost Mobile Phones in India: A Case to Strengthen Competition Regulation?, available at <a href="http://www.manupatra.co.in/newsline/articles/Upload/08483340-C1B9-4BA4-B6A9-D6B6494391B8.pdf"> http://www.manupatra.co.in/newsline/articles/Upload/08483340-C1B9-4BA4-B6A9-D6B6494391B8.pdf </a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Nehaa Chaudhari, Pervasive Technologies:Patent Pools, available at <a href="http://cis-india.org/a2k/blogs/patent-pools">http://cis-india.org/a2k/blogs/patent-pools</a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Nehaa Chaudhari, The Curious Case of the CCI:Competition Law and SEP Regulation in India, presented at the 4th Global Congress on Intellectual Property and the Public Interest, <span>available </span>at <a href="http://cis-india.org/a2k/blogs/the-curious-case-of-the-cci-competition-law-and-sep-regulation-in-india"> http://cis-india.org/a2k/blogs/the-curious-case-of-the-cci-competition-law-and-sep-regulation-in-indi </a> <a href="http://cis-india.org/a2k/blogs/the-curious-case-of-the-cci-competition-law-and-sep-regulation-in-india">a</a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Nehaa Chaudhari, Letter for Establishment of Patent Pool for Low Cost Access Devices through Compulsory Licences, available at <a href="http://cis-india.org/a2k/blogs/letter-for-establishment-of-patent-pool-for-low-cost-access-devices"> http://cis-india.org/a2k/blogs/letter-for-establishment-of-patent-pool-for-low-cost-access-devices </a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Prof Jorge L. Contreras and Rohini Lakshané, Patents and Mobile Devices in India: An Empirical Survey, available at <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2756486">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2756486</a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Rohini Lakshané, CIS, List of technical standards and IP types (Working document), available at <a href="https://drive.google.com/file/d/0B8SgjShAjhbtaml5eW50bS01d2s/view?usp=sharing"> https://drive.google.com/file/d/0B8SgjShAjhbtaml5eW50bS01d2s/view?usp=sharing </a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Rohini Lakshané, Open Letter to Prime Minister Modi, February 2015, available at <a href="http://cis-india.org/a2k/blogs/open-letter-to-prime-minister-modi">http://cis-india.org/a2k/blogs/open-letter-to-prime-minister-modi</a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Rohini Lakshané, FAQ: CIS' proposal to form a patent pool of critical mobile technology, September 2015, available at <a href="http://cis-india.org/a2k/blogs/faq-cis-proposal-for-compulsory-licensing-of-critical-mobile-technologies"> http://cis-india.org/a2k/blogs/faq-cis-proposal-for-compulsory-licensing-of-critical-mobile-technologies </a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Rohini Lakshané, Joining the dots in India's big-ticket mobile phone patent litigation, May 2015, last updated October 2015, available at <a href="http://cis-india.org/a2k/blogs/joining-the-dots-in-indias-big-ticket-mobile-phone-patent-litigation"> http://cis-india.org/a2k/blogs/joining-the-dots-in-indias-big-ticket-mobile-phone-patent-litigation </a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Rohini Lakshané, Compilation of Mobile Phone Patent Litigation Cases in India, March 2015, last updated April 2016, available at <a href="http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india"> http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india </a> , (last accessed April 22, 2016).</p>
<p style="text-align: justify; ">● Rohini Lakshané, Patent landscaping in the Indian Mobile Device Marketplace, presented at the 4th Global Congress on Intellectual Property and Public Interest, December 2015, available at <a href="https://drive.google.com/open?id=0B8SgjShAjhbtME45N245SmowOGs">https://drive.google.com/open?id=0B8SgjShAjhbtME45N245SmowOGs</a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">● Vikrant Narayan Vasudeva, Patent Valuation and Licence Fee Determination in the Context of Patent Pools, available at <a href="http://cis-india.org/a2k/blogs/patent-valuation-and-license-fee-determination-in-context-of-patent-pools"> http://cis-india.org/a2k/blogs/patent-valuation-and-license-fee-determination-in-context-of-patent-pools </a> (last accessed 22 April, 2016).</p>
<p style="text-align: justify; ">************</p>
<div style="text-align: justify; "><br clear="all" />
<hr size="1" width="33%" align="left" />
<div id="ftn1">
<p><a name="_ftn1"></a> This submission has been authored by (alphabetically) Anubha Sinha, Nehaa Chaudhari and Rohini Lakshané, on behalf of the Centre for Internet and Society, India.</p>
</div>
<div id="ftn2">
<p><a name="_ftn2"></a> See The Centre for Internet and Society, available at <a href="http://cis-india.org/">http://cis-india.org</a> (last accessed 22 April, 2016) for details of the organization, and, our work.</p>
</div>
<div id="ftn3">
<p><a name="_ftn3"></a> Make in India, available at <a href="http://www.makeinindia.com/home">http://www.makeinindia.com/home</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn4">
<p><a name="_ftn4"></a> Digital India, available at <a href="http://www.digitalindia.gov.in/">http://www.digitalindia.gov.in/</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn5">
<p><a name="_ftn5"></a> See Nehaa Chaudhari, The Curious Case of the CCI:Competition Law and SEP Regulation in India, presented at the 4th Global Congress on Intellectual Property and the Public Interest, available at <a href="http://cis-india.org/a2k/blogs/the-curious-case-of-the-cci-competition-law-and-sep-regulation-in-india"> http://cis-india.org/a2k/blogs/the-curious-case-of-the-cci-competition-law-and-sep-regulation-in-india </a> (last accessed 21 April, 2016) for further details on relevant provisions.</p>
</div>
<div id="ftn6">
<p><a name="_ftn6"></a> In the High Court of Delhi, W.P.(C) 464/2014 & CM Nos. 911/2014 & 915/2014, judgment delivered on 30 March, 2016. Hereafter referred to as the Ericsson-CCI judgment.</p>
</div>
<div id="ftn7">
<p><a name="_ftn7"></a> Id.</p>
</div>
<div id="ftn8">
<p><a name="_ftn8"></a> Id.</p>
</div>
<div id="ftn9">
<p><a name="_ftn9"></a> Under Articles 226 and 227 of the Constitution of India, and, under Article 32 of the Constitution of India, for the High Courts and the Supreme Court, respectively.</p>
</div>
<div id="ftn10">
<p><a name="_ftn10"></a> Agreement on Trade-Related Aspects of Intellectual Property Rights, available at <a href="https://www.wto.org/english/tratop_e/trips_e/t_agm0_e.htm">https://www.wto.org/english/tratop_e/trips_e/t_agm0_e.htm</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn11">
<p><a name="_ftn11"></a> KEI Staff, 2015 October 15 version: RCEP IP Chapter, available at <a href="http://keionline.org/node/2472">http://keionline.org/node/2472</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn12">
<p><a name="_ftn12"></a> BIS Act, 2016, available at <a href="http://www.bis.org.in/bs/bsindex.asp">http://www.bis.org.in/bs/bsindex.asp</a> (last accessed 21 April, 2016).</p>
</div>
<div id="ftn13">
<p><a name="_ftn13"></a> TSDSI, Intellectual Property Rights Policy, available at <a href="http://www.tsdsi.org/media/Help/2014-12-17/TSDSI-PLD-40-V1.0.0-20141217.pdf"> http://www.tsdsi.org/media/Help/2014-12-17/TSDSI-PLD-40-V1.0.0-20141217.pdf </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn14">
<p><a name="_ftn14"></a> Id at Clause 3.1.</p>
</div>
<div id="ftn15">
<p><a name="_ftn15"></a> Id at Clause 5.1.</p>
</div>
<div id="ftn16">
<p><a name="_ftn16"></a> Id at Clause 5.2.</p>
</div>
<div id="ftn17">
<p><a name="_ftn17"></a> Id at Clause 5.5.</p>
</div>
<div id="ftn18">
<p><a name="_ftn18"></a> Id at Clauses 7.1. and 7.2.</p>
</div>
<div id="ftn19">
<p><a name="_ftn19"></a> Id at Clause 7.2.1.a (iii).</p>
</div>
<div id="ftn20">
<p><a name="_ftn20"></a> Id at Clause 7.2.1.b(iii).</p>
</div>
<div id="ftn21">
<p><a name="_ftn21"></a> Id at Clause 7.3.</p>
</div>
<div id="ftn22">
<p><a name="_ftn22"></a> GISFI, Intellectual Property Rights Policy, available at <a href="http://www.gisfi.org/ipr_policy/gisfi_intellectual_property_righ.htm"> http://www.gisfi.org/ipr_policy/gisfi_intellectual_property_righ.htm </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn23">
<p><a name="_ftn23"></a> Id at Clauses 6.2.1.a(iii) and 6.2.1.b(iii).</p>
</div>
<div id="ftn24">
<p><a name="_ftn24"></a> See W3C, Patent Policy, available at <a href="https://www.w3.org/Consortium/Patent-Policy-20040205/">https://www.w3.org/Consortium/Patent-Policy-20040205/</a> (last accessed 22 April, 2016) for more details on their royalty-free licences.</p>
</div>
<div id="ftn25">
<p><a name="_ftn25"></a> See OMA, Use Agreement, available at <a href="http://openmobilealliance.org/about-oma/policies-and-terms-of-use/use-agreement/"> http://openmobilealliance.org/about-oma/policies-and-terms-of-use/use-agreement/ </a> (last accessed 22 April, 2016) for more details on their royalty-free licences.</p>
</div>
<div id="ftn26">
<p><a name="_ftn26"></a> See Rohini Lakshané, Open Letter to PM Modi, available at <a href="http://cis-india.org/a2k/blogs/open-letter-to-prime-minister-modi">http://cis-india.org/a2k/blogs/open-letter-to-prime-minister-modi</a> (last accessed 22 April, 2016) for further details of CIS' proposal.</p>
</div>
<div id="ftn27">
<p><a name="_ftn27"></a> Rohini Lakshané, CIS, List of Technical Standards and IP Types (Working document), available at <a href="https://drive.google.com/file/d/0B8SgjShAjhbtaml5eW50bS01d2s/view?usp=sharing"> https://drive.google.com/file/d/0B8SgjShAjhbtaml5eW50bS01d2s/view?usp=sharing </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn28">
<p><a name="_ftn28"></a> Mark Lemley and Carl Shapiro, Patent Holdup and Royalty Stacking,<i> 85 Tex. L. Rev. at 2015</i>; See also, for e.g., RPX Corporation, Amendment No. 3 to Form S-l, 11 Apr. 2011, at 59, available at <a href="http://www.sec.gov/Archives/edgar/data/1509432/000119312511101007/ds1a.htm"> http://www.sec.gov/Archives/edgar/data/1509432/000119312511101007/ds1a.htm </a> (last accessed 22 April, 2016), quoting - <i>"Based on our research, we believe there are more than 250,000 active patents relevant to today's smartphones…"</i>.; See further Steve Lohr, Apple- Samsung Case Shows Smartphone as Legal Magnet,<i> </i>New York Times, 25 Aug. 2012, available at <a href="http://www.nytimes.com/2012/08/26/technology/apple-samsung-case-shows-smartphone-as-lawsuit-magnet.html"> http://www.nytimes.com/2012/08/26/technology/apple-samsung-case-shows-smartphone-as-lawsuit-magnet.html </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn29">
<p><a name="_ftn29"></a> Jorge L. Contreras and Rohini Lakshané, Patents and Mobile Devices in India: An Empirical Survey, available at <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2756486">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2756486</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn30">
<p><a name="_ftn30"></a> Ann Armstrong, Joseph J. Mueller and Timothy D. Syrett, The Smartphone- Royalty Stack:Surveying Royalty Demands for the Components Within Modern Smartphones, available at <a href="https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/The-Smartphone-Royalty-Stack-Armstrong-Mueller-Syrett.pdf"> https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/The-Smartphone-Royalty-Stack-Armstrong-Mueller-Syrett.pdf </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn31">
<p><a name="_ftn31"></a> Florian Mueller,<i> </i>Ericsson Explained Publicly why it Collects Patent Royalties from Device (Not Chipset) Makers, available at <a href="http://www.fosspatents.com/2014/01/ericsson-explained-publicly-why-its.html"> http://www.fosspatents.com/2014/01/ericsson-explained-publicly-why-its.html </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn32">
<p><a name="_ftn32"></a> Romit Guha and Anandita Singh Masinkotia, PM Modi's Digital India Project:Government to Ensure that Every Indian has a Smartphone by 2019, available at <a href="http://articles.economictimes.indiatimes.com/2014-08-25/news/53205445_1_digital-india-india-today-financial-services"> http://articles.economictimes.indiatimes.com/2014-08-25/news/53205445_1_digital-india-india-today-financial-services </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn33">
<p><a name="_ftn33"></a> Nehaa Chaudhari,<i> </i>Standard Essential Patents on Low-Cost Mobile Phones in India: A Case to Strengthen Competition Regulation?, available at <a href="http://www.manupatra.co.in/newsline/articles/Upload/08483340-C1B9-4BA4-B6A9-D6B6494391B8.pdf"> http://www.manupatra.co.in/newsline/articles/Upload/08483340-C1B9-4BA4-B6A9-D6B6494391B8.pdf </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn34">
<p><a name="_ftn34"></a> See part 10.2.2. of the Discussion Paper, at page 25.</p>
</div>
<div id="ftn35">
<p><a name="_ftn35"></a> J.Gregory Sidak, FRAND in India:The Delhi High Court's Emerging Jurisprudence on Royalties for Standard-Essential Patents, available at <a href="http://jiplp.oxfordjournals.org/content/early/2015/06/11/jiplp.jpv096.full"> http://jiplp.oxfordjournals.org/content/early/2015/06/11/jiplp.jpv096.full </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn36">
<p><a name="_ftn36"></a> Appeal from the United States District Court for the Eastern District of Texas in No. 6:11-cv-00343-LED, decided on 03 December, 2015, available at. <a href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1066.Opinion.12-1-2015.1.PDF"> http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1066.Opinion.12-1-2015.1.PDF </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn37">
<p><a name="_ftn37"></a> Id.</p>
</div>
<div id="ftn38">
<p><a name="_ftn38"></a> Kumkum Sen, News on Royalty Payments Brings Cheer in New Year, available at <a href="http://www.business-standard.com/article/economy-policy/news-on-royalty-payment-brings-cheer-in-new-year-110010400044_1.html"> http://www.business-standard.com/article/economy-policy/news-on-royalty-payment-brings-cheer-in-new-year-110010400044_1.html </a> (last accessed 21 April, 2016).</p>
</div>
<div id="ftn39">
<p><a name="_ftn39"></a> See Sanjana Govil, Putting a Lid on Royalty Outflows- How the RBI Can Help Reduce India's IP Costs<i>, </i>available at <a href="http://cis-india.org/a2k/blogs/lid-on-royalty-outflows">http://cis-india.org/a2k/blogs/lid-on-royalty-outflows</a> (last accessed 21 April, 2016), for a discussion on the introduction of royalty caps in the early 1990s, and its success in reducing the flow of money out of India.</p>
</div>
<div id="ftn40">
<p><a name="_ftn40"></a> Supra note 33.</p>
</div>
<div id="ftn41">
<p><a name="_ftn41"></a> Nehaa Chaudhari, Letter for Establishment of Patent Pool for Low-cost Access Devices through Compulsory Licenses, available at <a href="http://cis-india.org/a2k/blogs/letter-for-establishment-of-patent-pool-for-low-cost-access-devices"> http://cis-india.org/a2k/blogs/letter-for-establishment-of-patent-pool-for-low-cost-access-devices </a> <span> </span> (last accessed 21 April, 2016).</p>
</div>
<div id="ftn42">
<p><a name="_ftn42"></a> Supra note 26.</p>
</div>
<div id="ftn43">
<p><a name="_ftn43"></a> Rohini Lakshané, FAQ: CIS' proposal to form a patent pool of critical mobile technology, September 2015, available at <a href="http://cis-india.org/a2k/blogs/faq-cis-proposal-for-compulsory-licensing-of-critical-mobile-technologies"> http://cis-india.org/a2k/blogs/faq-cis-proposal-for-compulsory-licensing-of-critical-mobile-technologies </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn44">
<p><a name="_ftn44"></a> Id.</p>
</div>
<div id="ftn45">
<p><a name="_ftn45"></a> See the Ericsson-CCI case, supra note 6, for Intex's submissions as discussed by Justice Bakhru.</p>
</div>
<div id="ftn46">
<p><a name="_ftn46"></a> Id.</p>
</div>
<div id="ftn47">
<p><a name="_ftn47"></a> Rohini Lakshané, Compilation of Mobile Phone Patent Litigation Cases in India, available at <a href="http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india"> http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india </a> (last accessed 21 April, 2016).</p>
</div>
<div id="ftn48">
<p><a name="_ftn48"></a> See the Ericsson-CCI case, supra note 6, at paragraph 19.2.</p>
</div>
<div id="ftn49">
<p><a name="_ftn49"></a> Supra note 47.</p>
</div>
<div id="ftn50">
<p><a name="_ftn50"></a> See the Ericsson-CCI judgment, supra note 6, at paragraphs 88-105.</p>
</div>
<div id="ftn51">
<p><a name="_ftn51"></a> Section 19(4) of the Competition Act. See also <i>Competition Commission of India</i> v. <i>Steel Authority of India and Another</i>, (2010) 10 SCC 744.</p>
</div>
<div id="ftn52">
<p><a name="_ftn52"></a> Section 115 of the Patents Act, 1970.</p>
</div>
<div id="ftn53">
<p><a name="_ftn53"></a> <i>Huawei Technologies Co. Ltd </i> v.<i> ZTE Corp. and ZTE Deutschland</i>, Judgment of the Court (Fifth Chamber) of 16 July 2015 in GmbH C-170/13.</p>
</div>
<div id="ftn54">
<p><a name="_ftn54"></a> Third Party United States Fed. Trade Commission's Statement on the Public Interest, <i>In re Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof</i>, U.S. Int'l Trade Comm'n, Inv. No. 337-TA-745 (Jun. 6, 2012).</p>
</div>
<div id="ftn55">
<p><a name="_ftn55"></a> Jorge L. Contreras, A Brief History of FRAND: Analyzing Current Debates in Standard Setting and Antitrust Through a Historical Lens<i>,</i> 80 Antitrust Law Journal 39 (2015), available at <span>h</span><a href="http://ssrn.com/abstract=2374983">ttp://ssrn.com/abstract=2374983</a><span> or</span> <a href="http://dx.doi.org/10.2139/ssrn.2374983">http://dx.doi.org/10.2139/ssrn.2374983</a><a href="http://dx.doi.org/10.2139/ssrn.2374983"> </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn56">
<p><a name="_ftn56"></a> Section 146(2) of the Patents Act, 1970..</p>
</div>
<div id="ftn57">
<p><a name="_ftn57"></a> Sai Vinod, Patent Office Finally Takes Form 27s Seriously, available at <a href="http://spicyip.com/2013/02/patent-office-finally-takes-form-27s.html"> http://spicyip.com/2013/02/patent-office-finally-takes-form-27s.html </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn58">
<p><a name="_ftn58"></a> Order No. 45/2013 (Intellectual Property Appellate Board, Chennai), available at <a href="http://www.ipab.tn.nic.in/045-2013.htm">http://www.ipab.tn.nic.in/045-2013.htm</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn59">
<p><a name="_ftn59"></a> Intellectual Property India, Public Notice, available at <a href="http://www.ipindia.nic.in/iponew/publicNotice_Form27_12Feb2013.pdf">http://www.ipindia.nic.in/iponew/publicNotice_Form27_12Feb2013.pdf</a> (last accessed 22 April, 2016) <i>and</i> Intellectual Property India, Public Notice, available at <a href="http://ipindia.nic.in/iponew/publicNotice_24December2009.pdf">http://ipindia.nic.in/iponew/publicNotice_24December2009.pdf</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn60">
<p><a name="_ftn60"></a> Supra note 57.</p>
</div>
<div id="ftn61">
<p><a name="_ftn61"></a> Id.</p>
</div>
<div id="ftn62">
<p><a name="_ftn62"></a> See research findings available at <a href="http://spicyip.com/wp-content/uploads/2015/05/FORM-27-WP-1R-copy.pdf"> http://spicyip.com/wp-content/uploads/2015/05/FORM-27-WP-1R-copy.pdf </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn63">
<p><a name="_ftn63"></a> In the High Court of Delhi, W.P.(C) 5590/2015. This litigation is currently ongoing. See, illustratively, Mathews P. George, <i>Patent Working in India: Delhi HC issues notice in Shamnad Basheer </i>v<i>. Union of India & Ors. - I</i>, available at <a href="http://spicyip.com/2015/09/patent-working-in-india-delhi-hc-issues-notice-in-shamnad-basheer-v-union-of-india-ors-i.html"> http://spicyip.com/2015/09/patent-working-in-india-delhi-hc-issues-notice-in-shamnad-basheer-v-union-of-india-ors-i.html </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn64">
<p><a name="_ftn64"></a> In response to an RTI request made to the IPO in Mumbai for forms unavailable on the website, CIS received a reply stating, "As thousand [sic] of Form -27 are filed in this office, it is very difficult to segregate Form-27 for the patent numbers enlisted in your RTI application as it needs diversion of huge official staff/ manpower and it will affect day to day [sic] work of this office." This research is ongoing and unpublished. Please contact us for a copy of the RTI application and the response received.</p>
</div>
<div id="ftn65">
<p><a name="_ftn65"></a> WIPO Secretariat<i>, </i>Patent Pools and Antitrust - A Comparative Analysis, available at <a href="https://docs.google.com/viewer?url=http%3A%2F%2Fwww.wipo.int%2Fexport%2Fsites%2Fwww%2Fip-competition%2Fen%2Fstudies%2Fpatent_pools_report.pdf"> https://docs.google.com/viewer?url=http%3A%2F%2Fwww.wipo.int%2Fexport%2Fsites%2Fwww%2Fip-competition%2Fen%2Fstudies%2Fpatent_pools_report.pdf </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn66">
<p><a name="_ftn66"></a> Form 27, The Patents Act, available at <a href="http://ipindia.nic.in/ipr/patent/manual/HTML%20AND%20PDF/Manual%20of%20Patent%20Office%20Practice%20and%20Procedure%20-%20html/Forms/Form-27.pdf"> http://ipindia.nic.in/ipr/patent/manual/HTML%20AND%20PDF/Manual%20of%20Patent%20Office%20Practice%20and%20Procedure%20-%20html/Forms/Form-27.pdf </a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn67">
<p><a name="_ftn67"></a> David J. Goodman and Robert A. Myers, 3G Cellular Standards and Patents, available at <a href="http://patentlyo.com/media/docs/2009/03/wirelesscom2005.pdf">http://patentlyo.com/media/docs/2009/03/wirelesscom2005.pdf</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn68">
<p><a name="_ftn68"></a> Darien CT, Review of Patents Declared as Essential to WCDMA through December, 2008, available at <a href="http://www.frlicense.com/wcdma1.pdf">http://www.frlicense.com/wcdma1.pdf</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn69">
<p><a name="_ftn69"></a> Supra note 67.</p>
</div>
<div id="ftn70">
<p><a name="_ftn70"></a> Donald L. Martin and Carl De Meyer, Patent Counting, a Misleading Index of Patent Value: A Critique of Goodman & Myers and its Uses, available at <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=949439">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=949439</a> (last accessed 22 April, 2016).</p>
</div>
<div id="ftn71">
<h5><a name="h.b6s0l5evilsq"></a> <a name="_ftn71"></a> Rohini Lakshané, Joining the Dots in India's Big-Ticket Mobile Phone Patent Litigation<i>,</i> available at <a href="http://cis-india.org/a2k/blogs/joining-the-dots-in-indias-big-ticket-mobile-phone-patent-litigation"> http://cis-india.org/a2k/blogs/joining-the-dots-in-indias-big-ticket-mobile-phone-patent-litigation </a> (last accessed 22 April, 2016). See also supra note 47 for more details.</h5>
</div>
<div id="ftn72">
<p><a name="_ftn72"></a> Supra note 55.</p>
</div>
<div id="ftn73">
<p><a name="_ftn73"></a> 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970), modified and aff'd, 446 F. 2d 295 (2d Cir. 1971), cert. denied, 404 U.S. 870 (1971).</p>
</div>
</div>
<div style="text-align: justify; ">
<hr size="1" width="33%" align="left" />
<div>
<div id="_com_1"><a name="_msocom_1"></a>
<p>2015</p>
</div>
</div>
<div>
<div id="_com_2"><a name="_msocom_2"></a>
<p>They filed it in 2011</p>
</div>
</div>
<div>
<div id="_com_3"><a name="_msocom_3"></a>
<p>The 2011 filing only includes pharma, BTW: http://spicyip.com/docs/Form%2027s.pdf. Also, this writ is from May 2015: http://spicyip.com/wp-content/uploads/2015/05/FORM-27-WP-1R-copy.pdf Anyway, I'll leave it as it is.</p>
</div>
</div>
</div>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/comments-on-department-of-industrial-policy-and-promotion-discussion-paper-on-standard-essential-patents-and-their-availability-on-frand-terms'>http://editors.cis-india.org/a2k/blogs/comments-on-department-of-industrial-policy-and-promotion-discussion-paper-on-standard-essential-patents-and-their-availability-on-frand-terms</a>
</p>
No publisherAnubha Sinha, Nehaa Chaudhari and Rohini LakshaneAccess to KnowledgePervasive TechnologiesCompetitionFeaturedPatents2016-05-03T02:30:15ZBlog EntryCCI allowed to probe Ericsson: FAQs on Ericsson’s disputes with Micromax and Intex
http://editors.cis-india.org/a2k/blogs/the-quint-nehaa-chaudhari-april-30-2016-cci-allowed-to-probe-ericsson
<b>The blog post is an analysis of the recent decision of the Delhi High Court, clarifying that the Competition Commission of India could investigate Ericsson for a violation of competition law. A shorter version of this blog post was published in the Quint on April 30, 2016.</b>
<div>Read the original article published by <a class="external-link" href="http://www.thequint.com/technology/2016/04/29/all-you-want-to-know-about-the-ericsson-micromax-patent-dispute-intex-intellectual-property-rights-make-in-india">Quint</a> on April 30 here.</div>
<hr />
<p style="text-align: justify; ">The mobile phone is the <a href="http://cis-india.org/a2k/blogs/Standard-Essential-Patents-on-Low-Cost-Mobile-Phones-in-India-A-Case-to-Strengthen-Competition-Regulation.pdf"><span>sole access point to the internet</span></a> for about half of India’s population. It has an important role to play in India’s development story, one that is amplified given the central government’s <a href="http://www.digitalindia.gov.in/content/information-all"><span>focus</span></a> on <a href="http://www.digitalindia.gov.in/content/e-governance-%E2%80%93-reforming-government-through-technology"><span>leveraging the internet</span></a> for better <a href="http://www.digitalindia.gov.in/content/ekranti-electronic-delivery-services"><span>governance</span></a>. The government has recognized this importance, evidenced through <a href="http://www.digitalindia.gov.in/content/electronics-manufacturing"><span>electronics manufacturing incentives</span></a> and, a stated commitment to ensure ‘<a href="http://www.digitalindia.gov.in/content/universal-access-mobile-connectivity"><span>universal access to mobile connectivity’</span></a>. Homegrown brands, including Micromax and Intex, with their affordable, low-cost mobile phones, play an important role in this development story.</p>
<p style="text-align: justify; ">In March, 2013, the Swedish multinational, Ericsson, sued Micromax for patent infringement, setting in motion a <a href="http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india"><span>series of events</span></a>, with the potential to disturb India’s mobile phone dream. Then, last month, the Delhi High Court (the Court) <a href="http://lobis.nic.in/ddir/dhc/VIB/judgement/30-03-2016/VIB30032016CW4642014.pdf"><span>recognized</span></a> the authority of the market regulator - the Competition Commission of India (CCI) - to probe Ericsson for its allegedly anticompetitive conduct.</p>
<p style="text-align: justify; "><strong>Why did Ericsson sue Micromax?</strong></p>
<p style="text-align: justify; ">Ericsson claims that Micromax’s mobile phones infringe its standard essential patents (SEPs) on mobile phone technologies, including 3G and EDGE.</p>
<p style="text-align: justify; "><strong>How are some patents identified as SEPs?</strong></p>
<p style="text-align: justify; ">International Standard Setting Organizations (SSOs) – such as <a href="http://www.etsi.org/"><span>ETSI</span></a> or <a href="https://www.ieee.org/index.html"><span>IEEE</span></a> - recognize international standards. 3G and Wi-Fi are examples of such internationally recognized standards.</p>
<p style="text-align: justify; ">According to the <a href="http://www.etsi.org/standards/how-does-etsi-make-standards"><span>SSOs</span></a>, the determination of standards depends on consensus, driven by their <a href="http://www.etsi.org/membership"><span>members</span></a>. After a standard is determined, SEP owners (including Ericsson) <strong><span>voluntarily disclose</span></strong> which of their patents are <strong><i>essential</i></strong> to the determined standard, and, undertake to license these on fair, reasonable and non-discriminatory (FRAND) terms, to any willing licensee.</p>
<p style="text-align: justify; "><strong>Does this give rise to legal issues?</strong></p>
<p style="text-align: justify; ">This process results in a variety of (<a href="http://editors.cis-india.org/a2k/blogs/well-documented"><span>well-documented</span></a>) legal questions, many of which have been raised in India’s SEP litigation, and have been alluded to by the Court in the present judgment. The Court has recognized the potential for SEPs to create dominant positions for their owners, noting that “any technology accepted as a standard would have to be <strong><span>mandatorily</span></strong> <strong><span>followed </span></strong>[emphasis, mine] by all enterprises in the particular industry.”</p>
<p style="text-align: justify; ">Some other legal issues around SEPs include the enforceability of FRAND commitments; determining what would constitute ‘fair’, ‘reasonable’ and, ‘non-discriminatory’; the possibility of non/incomplete disclosure by patent owners; and, a refusal by licensees to negotiate FRAND terms in good faith. A related issue that has received comparatively less attention is the essentiality of peripheral or, non standard but essential patents, where there is no obligation to license on FRAND terms.</p>
<p style="text-align: justify; "><strong>Have there been other SEP infringement suits filed in India?</strong></p>
<p style="text-align: justify; ">Yes. Besides Micromax, Ericsson has also <a href="http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india"><span>sued other</span></a> low-cost mobile phone sellers/manufacturers, homegrown and otherwise, for patent infringement. These include Intex, Lava, Gionee, Xia and iBall. In addition, Vringo has also sued ZTE and Asus, separately. [In this article, we will limit ourselves to a discussion on Ericsson’s suits against Micromax and Intex.]</p>
<p style="text-align: justify; "><strong>What did Micromax and Intex do after being sued by Ericsson?</strong></p>
<p style="text-align: justify; ">Ericsson’s suits were followed by deliberations between the parties (Ericsson and Micromax, and, Ericsson and Intex, independently) and some interim orders by the Court. This litigation is ongoing, and final orders are awaited.</p>
<p style="text-align: justify; ">Meanwhile, both Micromax and Intex have pursued a series of other remedies. Intex has filed applications for the revocation of Ericsson’s patents. In addition, Micromax and Intex have each filed separate complaints under India’s Competition Act, 2002 before the CCI, alleging that Ericsson had abused its dominant position. This is a punishable offence under Indian competition law.</p>
<p style="text-align: justify; ">Micromax and Intex have both claimed that Ericsson’s royalty rates were excessive. In addition, Micromax has objected to Ericsson’s use of the threat of injunctions and custom seizures, and, has also claimed that Ericsson’s conduct results in a denial of market access for Indian handset manufacturers. Intex has alleged, <i>inter alia, </i>that it was forced into signing an onerous non disclosure agreement by Ericsson; and, that it was forced to negotiate licences without a complete disclosure of its patents by Ericsson.</p>
<p style="text-align: justify; ">The CCI, finding there to be a <i>prima facie</i> case in each of the above complaints, ordered the Director General to undertake an investigation into the allegations made by both – Micromax and Intex. These orders were challenged by Ericsson in the Court.</p>
<p style="text-align: justify; "><strong>On what grounds did Ericsson challenge the CCI’s orders?</strong></p>
<p style="text-align: justify; ">Briefly, Ericsson argued-</p>
<p style="text-align: justify; ">(a) that the issue was one of patent law, which barred the applicability of competition law;</p>
<p style="text-align: justify; ">(b) that it was not an ‘enterprise’ under the Competition Act, 2002, and, that the CCI was empowered to check anticompetitive conduct only of ‘enterprises’;</p>
<p style="text-align: justify; ">(c) that its conduct was not anticompetitive since it was only exercising its rights to enforce its patents;</p>
<p style="text-align: justify; ">(d) that since the disputes between the parties were already being heard in other proceedings before the Court, the CCI could not adjudicate them; and,</p>
<p style="text-align: justify; ">(e) that Intex and Micromax were barred from making such allegations. Ericsson opined that since they had challenged its ownership of the SEPs, through revocation of petition applications (filed by Intex), and a denial of infringement claims (by Micromax), they could not now present a complaint premised on it being the owner of those same SEPs.</p>
<p style="text-align: justify; "><strong>What did the Court hold?</strong></p>
<p style="text-align: justify; ">Rejecting Ericsson’s arguments, the Court held that the CCI <strong><span>did</span></strong> [emphasis, mine] have the jurisdiction to examine if Ericsson’s conduct was anticompetitive, finding it to be an ‘enterprise’ under the Competition Act, 2002. However, the Court was clear that the CCI’s actions could be subject to judicial review by the High Court. It also found that the mere applicability of the Patents Act, 1970, did not bar the applicability of competition law, since the legislations covered distinct fields and served different purposes. Further, it opined that Micromax and Intex were free to explore alternative remedies; neither this pursuit, nor, the pendency of disputes on similar issues before the Court, was a bar to the CCI’s jurisdiction.</p>
<p style="text-align: justify; ">Interestingly, while not adjudicating the issue of Ericsson’s abuse of dominance in this particular case, Justice Bakhru, citing its conduct as presented by the other parties said that in some cases, “such conduct, if it is found, was directed in pressuring an implementer to accept non-FRAND terms, would amount to an abuse of dominance.”</p>
<p style="text-align: justify; "><strong>What does the judgment mean for India’s homegrown brands?</strong></p>
<p style="text-align: justify; ">The judgment is a boost for India’s home grown manufacturers in their battle against global patent holders. However, while it certainly validates the role and powers of India’s young market regulator, it will no doubt be appealed. One also expects multiple appeals over the CCI’s findings in the present and, future similar cases.</p>
<p style="text-align: justify; ">It is impossible to predict the outcome of legal proceedings in SEP litigation. Accordingly, Micromax, Intex (and others) would do well to augment their own patent portfolios (either by filing their own patents, or, by acquiring those of other companies). This may create a more level playing field, opening up alternate channels of negotiation, including, cross-licensing. They may also seek access to Ericsson’s SEPs under the compulsory licensing mechanism in India’s patent law.</p>
<p style="text-align: justify; "><strong>What does the government have to say?</strong></p>
<p style="text-align: justify; ">The Department of Industrial Policy and Promotion has recently released a <a href="http://dipp.nic.in/english/Discuss_paper/standardEssentialPaper_01March2016.pdf"><span>discussion paper</span></a> on these issues, inviting <a href="http://cis-india.org/a2k/blogs/summary-of-cis-comments-to-dipp2019s-discussion-paper-on-seps-and-their-availability-on-frand-terms"><span>comments</span></a> from <a href="http://cis-india.org/a2k/blogs/responses-to-the-dipps-discussion-paper-on-seps-and-their-availability-on-frand-terms"><span>stakeholders</span></a>. It would be unsurprising if the government intends to regulate this space, given the strong implications for not just its flagship Make in India and Digital India programs, but also its foreign policy narrative on protecting IPRs and fostering innovation. Immediate welcome steps from the government would be a final word on the <a href="http://dipp.nic.in/English/Schemes/Intellectual_Property_Rights/IPR_Policy_24December2014.pdf"><span>National IPR Policy</span></a>, and, the adoption of the<a href="http://www.mca.gov.in/Ministry/pdf/Revised_Draft_National_Competition_Policy_2011_17nov2011.pdf"><span> National Competition Policy</span></a>, awaited since 2014 and 2011, respectively.</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/the-quint-nehaa-chaudhari-april-30-2016-cci-allowed-to-probe-ericsson'>http://editors.cis-india.org/a2k/blogs/the-quint-nehaa-chaudhari-april-30-2016-cci-allowed-to-probe-ericsson</a>
</p>
No publishernehaaAccess to KnowledgePervasive TechnologiesIntellectual Property RightsCompetition LawPatents2016-05-01T13:46:52ZBlog EntryStandard Essential Patents on Low-Cost Mobile Phones in India: A Case to Strengthen Competition Regulation?
http://editors.cis-india.org/a2k/blogs/the-socio-legal-review-nehaa-chaudhari-standard-essential-patent-on-low-cost-mobile-phones-in-india
<b>The realization of the promise of the sub hundred dollar mobile device as a facilitator of access to knowledge is contingent inter alia on its availability in the market place. In turn, the market availability of the sub hundred dollar mobile device is influenced by the existence of an enabling environment for producers to produce, and consumers to consume. From a regulatory perspective, the enabling environment itself is a function of existing laws and policies, and the ‘developmental effects’ of certain laws and policies (Saraswati, 2012).</b>
<p style="text-align: justify; ">This article seeks to examine one such legal and policy lever and the role of a regulator in the development of an enabling environment for access to sub hundred dollar mobile devices. This paper is founded on four assumptions: first, that access to sub hundred dollar mobile devices is influenced by their price; second, that the question of access necessitates conversation between the intellectual property regime and several other actors, sites and tools; third, that one of the fundamental goals of regulatory reform is the creation of a ‘stable, open and future- proof environment’ (Guermazi and Satola, 2005) that encourages access to these devices; and fourth, that there exist public law implications of intellectual property that justify the involvement of State actors and regulators in matters that may arise out of private transactions.</p>
<p style="text-align: justify; ">This article will examine whether there is a role to be played by competition law in this narrative of innovation, intellectual property and access to sub hundred dollar mobile devices. In light of increasing litigation around standard essential patents, and the inability of FRAND and International Standard Setting Organizations to find a comprehensive solution, this paper will question the efficacy of competition law as an ex post solution to a problem that might be better addressed by ex ante regulation from a specialized body.</p>
<p style="text-align: justify; ">In an attempt to address these questions, this article will examine the role of the Competition Commission of India and the Indian Judiciary. Orders of the Competition Commission will be studied from its inception till March, 2015, in order to draw conclusions about the role that the Commission identifies for itself and the nature of disputes it adjudicates. This article will also examine the role of similarly placed institutions in the United States of America as well as some member states of the European Union.</p>
<p style="text-align: justify; ">It will be argued that while Competition Law might address some of the issues arising out of litigation around standard essential patents, and might be a tool to increase access to sub hundred dollar mobile devices, its efficacy as a long term solution in light of its nature as an ex post solution, is questionable. Consequently, it might be prudent to have a conversation leaning towards exante regulation of the market place by a specialized regulator.</p>
<hr />
<p>The paper was published by <a class="external-link" href="http://www.sociolegalreview.com/standard-essential-patents-on-low-cost-mobile-phones-in-india-a-case-to-strengthen-competition-regultion/">Socio Legal Review</a> (National Law School of India University). Download the PDF <a href="http://editors.cis-india.org/a2k/blogs/Standard-Essential-Patents-on-Low-Cost-Mobile-Phones-in-India-A-Case-to-Strengthen-Competition-Regulation.pdf" class="internal-link">here</a>.</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/the-socio-legal-review-nehaa-chaudhari-standard-essential-patent-on-low-cost-mobile-phones-in-india'>http://editors.cis-india.org/a2k/blogs/the-socio-legal-review-nehaa-chaudhari-standard-essential-patent-on-low-cost-mobile-phones-in-india</a>
</p>
No publishernehaaPatentsCompetition LawCompetitionAccess to Knowledge2016-04-24T04:42:52ZBlog EntryThe new Guidelines for Computer Related Inventions are a big win for FOSS in India!
http://editors.cis-india.org/a2k/blogs/the-new-guidelines-for-computer-related-inventions-are-a-big-win-for-foss-in-india
<b>India is one of the few countries which permits patenting of software – a monopolization that has only benefited established corporations and largely throttled innovation in the software industry, worldwide. CIS has consistently advocated against patentablity of software and in a major victory last week, software patenting in India died a little more. This happened via the newly issued Guidelines for the Examination of Computer Related Inventions, which introduces a new test to restrict software patenting – in essence the same legal test that CIS had been proposing since 2010. This post highlights the new test and other noteworthy changes in the Guidelines. </b>
<p> </p>
<p>When
the Guidelines for examination of Computer Related Inventions(“
2015 Guidelines”) were released last year, it became <a href="http://www.livemint.com/Industry/XGBbgNllmvuEUhJWs2cWgK/Revised-guidelines-for-software-patents-put-on-hold.html">obvious
that they would have an adverse impact on innovation in the Indian
software industry</a>. Further, the 2015 Guidelines were legally
defective since they ran counter to the object of Section 3(k) of the
Patents Act, 1970, which is to unconditionally exclude mathematical
and business methods, computer programs per se, and algorithms from
patentable subject matter. To stop and prevent egregious harms, <a href="http://sflc.in/wp-content/uploads/2015/09/Letter_CRIGuidelines2015-Prime-Minister.pdf">civil
society organisations collectively wrote to the Prime Minister's
Office</a> flagging off the defects and requested for a recall of the
Guidelines. In
December 2015, the Indian Patent Office <a href="http://cis-india.org/a2k/blogs/guidelines-for-examination-of-computer-related-inventions-in-abeyance">promptly
recalled the 2015 Guidelines</a> and held a consultation to discuss
the concerns raised in the letter.</p>
<p>Based
on submissions by various stakeholders, the Patent Office released a
<a href="http://ipindia.nic.in/iponew/GuidelinesExamination_CRI_19February2016.pdf">new
set of Guidelines</a>(“Guidelines”), which are not only a
staggering improvisation from all previous versions, but also
introduce a new three step test to determine applicability of section
3(k), an area of Indian patent law that has been notoriously full of
uncertainties:</p>
<blockquote>
<p>5.
Tests/ Indicators to determine Patentability of CRIs (“Computer
Related inventions”):</p>
<p>Examiners
may rely on the following three stage test in examining CRI
applications:</p>
<p>(1)
Properly construe the claim and identify the actual contribution;</p>
<p>(2)
If the contribution lies only in mathematical method, business method
or algorithm, deny the claim;</p>
<p>(3)
If the contribution lies in the field of computer programme, check
whether it is claimed in conjunction with a novel hardware and
proceed to other steps to determine patentability with respect to the
invention. The computer programme in itself is never patentable. If
the contribution lies solely in the computer programme, deny the
claim. If the contribution lies in both the computer programme as
well as hardware, proceed to other steps of patentability.</p>
</blockquote>
<p> </p>
<p>CIS
had proposed the exact same test in its <a href="http://cis-india.org/a2k/blogs/cis-submission-draft-patent-manual-2010">earlier
submissions(2010)</a> to the Patent Office, albeit worded differently. We
submitted:</p>
<blockquote>
<p><em>"We
propose a new part to the above test to make the clause clearer. The
Manual should specify that “the computer programme portions of any
claimed invention should be treated as if it were covered by prior
art and patentability should thus be determined with respect to the
other features of the invention”. This way, we can ensure that an
invention which merely uses or implements a computer programme is not
granted patent on the basis of the inventiveness of the computer
programme </em>per
se<em>."</em></p>
</blockquote>
<p>Further,
the Guidelines also recognise that CRIs may fall under sections 3(k), 3(l), 3(m) and 3(n):</p>
<blockquote>
<p>2.2. The Patents (Amendment) Act, 2002 also introduced explicit exclusions from patentability under section 3 for CRIs as under:</p>
<p>3(k)
a mathematical or business method or a computer programme per se or
algorithms;</p>
<p>(l)
a literary, dramatic, musical or artistic work or any other aesthetic
creation whatsoever including cinematographic works and television
productions;</p>
<p>(m)
a mere scheme or rule or method of performing mental act or method of
playing game;</p>
<p>(n)
a presentation of information;</p>
</blockquote>
<p>And thus CRIs as such cannot be patentable, if they fall in either of the above
mentioned exclusions. Overall,
the new Guidelines offer more clarity and stick to the Patents Act,
1970's intention of disqualifying patentability of computer
programmes per se. We will soon post a detailed analysis of the Guidelines. In the meantime, you may read CIS' research on the subject in the section below.</p>
<h3><br /></h3>
<h3>CIS' Research and Submissions against Software Patenting<br /></h3>
<p>Over
the past years, CIS has produced research and consistently made
submissions advocating the roll- back of software patenting:</p>
<p><a name="parent-fieldname-title4"></a><a href="http://cis-india.org/a2k/blogs/arguments-against-software-patents">Arguments
Against Software Patents in India, 2010</a></p>
<p><a name="parent-fieldname-title"></a><a href="http://cis-india.org/a2k/blogs/cis-submission-draft-patent-manual-2010">CIS
Submission on Draft Patent Manual, 2010</a></p>
<p><a name="parent-fieldname-title1"></a><a href="http://cis-india.org/a2k/blogs/comments-on-draft-guidelines-for-computer-related-inventions">Comments
on the Draft Guidelines for Computer Related Inventions, 2013</a></p>
<p><a name="parent-fieldname-title3"></a><a href="http://cis-india.org/a2k/blogs/guidelines-for-examination-of-computer-related-inventions">Guidelines
for Examination of Computer Related Inventions: Mapping the
Stakeholders' Response</a>, 2014</p>
<p><a name="parent-fieldname-title2"></a><a href="http://cis-india.org/a2k/blogs/comments-on-the-guidelines-for-examination-of-computer-related-inventions-cris">Comments
on the Guidelines for Examination of Computer Related Inventions
(CRIs), 2015</a></p>
<p><a href="http://cis-india.org/a2k/blogs/cis-submission-to-indian-patent-office-on-examples-of-excluded-patentable-subject-matter-under-section-3-k-for-incorporation-in-the-yet-to-be-released-guidelines-for-computer-related-inventions">CIS'
submission to Indian Patent Office on Examples of Excluded Patentable
subject-matter under Section 3(k) for incorporation in the
yet-to-be-released Guidelines for Computer Related Inventions</a>,
2016</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/the-new-guidelines-for-computer-related-inventions-are-a-big-win-for-foss-in-india'>http://editors.cis-india.org/a2k/blogs/the-new-guidelines-for-computer-related-inventions-are-a-big-win-for-foss-in-india</a>
</p>
No publishersinhaFeaturedPatentsAccess to KnowledgeSoftware Patents2016-02-24T06:30:37ZBlog EntryCIS' submission to Indian Patent Office on Examples of Excluded Patentable subject-matter under Section 3(k) for incorporation in the yet-to-be-released Guidelines for Computer Related Inventions
http://editors.cis-india.org/a2k/blogs/cis-submission-to-indian-patent-office-on-examples-of-excluded-patentable-subject-matter-under-section-3-k-for-incorporation-in-the-yet-to-be-released-guidelines-for-computer-related-inventions
<b>The Patent Office had put the Guidelines on Computer Related Inventions, 2015 in abeyance last month. This step was taken after several stakeholders including CIS made representations to the Office about serious substantive legal issues in the document. In furtherance of the consultative process, a meeting was conducted in Mumbai with various stakeholders, chaired by the Controller General of Patents Design Trademarks (“CGPTDM”). Anubha Sinha participated in the meeting, after which the CGPTDM invited submissions from stakeholders on specific examples on exclusions from patentability under section 3(k) of the Patents Act, 1970, for possible incorporation in the Guidelines for Examination of Computer Related Inventions.</b>
<p style="text-align: justify;" class="Standard"> </p>
<p style="text-align: justify;" class="Standard">This post contains CIS' submission on specific examples on exclusions from patentability under section 3(k). <strong>You may view the Guidelines <a href="http://www.ipindia.nic.in/iponew/CRI_Guidelines_21August2015.pdf">here</a>. To read the letter sent to the PMO, click <a href="http://sflc.in/joint-letter-to-the-pmo-expressing-concerns-over-the-guidelines-for-examination-of-computer-related-inventions-cris/">here</a>. To read CIS' analysis of the Guidelines, click <a href="http://cis-india.org/a2k/blogs/comments-on-the-guidelines-for-examination-of-computer-related-inventions-cris">here</a>. <br /></strong></p>
<p style="text-align: justify;" class="Standard"><strong><em>It is worth noting that the IPO requested for negative examples of patentability [CRIs that cannot be patented under the Act]. While it is commendable that the IPO sought inputs from stakeholders for negative examples, stakeholders have often requested the IPO to provide positive examples of patentable CRIs. The yet-to-be-released-Guidelines should also mention a sufficient number of positive examples to provide better clarity to stakeholders.</em></strong></p>
<p style="text-align: justify;" class="Standard"><strong><br /></strong></p>
<hr style="text-align: justify;" />
<p style="text-align: center;">ILLUSTRATIVE EXAMPLES ON EXCLUSION FROM PATENTABILITY OF COMPUTER RELATED INVENTIONS<br />to<br />THE HON'BLE CONTROLLER GENERAL OF PATENTS DESIGNS AND TRADEMARKS<br />by<br />THE CENTRE FOR INTERNET AND SOCIETY, INDIA</p>
<p style="text-align: justify;"><strong>I. PRELIMINARY</strong></p>
<p style="text-align: justify;">1. This submission presents specific examples on exclusions from patentability, under section 3(k) of the Patents Act, 1970, for possible incorporation in the Guidelines for Examination of Computer Related Inventions.</p>
<p style="text-align: justify;">2. This submission is based on the Guidelines for Examination of Computer Related Inventions released in September 2015("2015 Guidelines/ Guidelines"). The Guidelines are in abeyance, presently.</p>
<p style="text-align: justify;">3. The Centre for Internet and Society ("CIS") commends the Hon'ble Controller General of Patents Designs and Trademarks ("CGPTDM"), Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India for its efforts at seeking inputs from various stakeholders. CIS is thankful for the opportunity to have been a part of this discussion since 2008; and to provide this submission in furtherance of of the feedback process continuing from the stakeholders' meeting conducted by the Hon'ble CGPTDM on 19.01.2016.</p>
<p style="text-align: justify;"><strong>II. OVERVIEW</strong></p>
<p style="text-align: justify;">4. The Centre for Internet and Society is a non-governmental organization engaged in research and policy work in the areas of, <em>inter alia</em>, intellectual property rights, access to knowledge and openness.<a name="_ftnref1" href="#_ftn1">[1]</a> This submission is consistent with CIS' commitment to safeguarding general public interest, and the interests and rights of various stakeholders involved. Accordingly, this submission aims to further these principles.</p>
<p style="text-align: justify;"><strong>III. SUBMISSIONS</strong></p>
<p style="text-align: justify;">5. Broadly, we submit that the Guidelines narrowed the legal exclusions on patentable subject matter in section 3(k). Consequently, the Guidelines were arguably in violation of section 3(k).</p>
<p style="text-align: justify;">6. To supply clarity to the examination procedure, CIS has proposed a definition to "computer programme per se" in its previous submissions to the Indian Patent Office :</p>
<p style="text-align: justify;"><em> "Computer programme per se in the relevant clause means (a) any computer programme in the abstract, (b) any computer programme expressed in source code form, including source code recorded on an information storage medium, or (c) any computer programme that can be executed or executes on a general purpose computer, including computer programme object code designed for execution on a general purpose computer that is recorded on an information storage medium."<a name="_ftnref2" href="#_ftn2"><em><strong>[2]</strong></em></a> </em></p>
<p style="text-align: justify;"><em> Further, since the inclusion of computer programmes in a broader application should not render the application ineligible subject matter, CIS previously proposed an addition to the test: </em></p>
<p style="text-align: justify;"><em> "We propose a new part to the subject-matter test to make the clause clearer. The Manual should specify that "the computer programme portions of any claimed invention should be treated as if it were covered by prior art and patentability should thus be determined with respect to the other features of the invention". This way, we can ensure that an invention which merely uses or implements a computer programme is not granted patent on the basis of the inventiveness of the computer programme </em> per se<em>." <a name="_ftnref3" href="#_ftn3"><em><strong>[3]</strong></em></a></em></p>
<p style="text-align: justify;">7. Accordingly, CIS would like to highlight examples of specific patent applications on exclusions from patentability, under section 3(k) of the Patents Act, 1970, for considering their possible incorporation in the Guidelines. The applications are:</p>
<h3 style="text-align: justify;">7.1 Application No.: 112/CHE/2008</h3>
<p style="text-align: justify;"><strong>Title: Bill payment card method and system</strong></p>
<p style="text-align: justify;">The Asst. Controller General correctly examined and rejected the invention on the grounds of it purely relating to a business method and processor configured software. Applicant had contended, <em>inter alia</em>, that the method claimed a series of steps being executed with hardware features , including a communication network, communication link and other hardware peripherals intrinsic to the execution of the claimed method.</p>
<p style="text-align: justify;">Further, in their reply to the objections in the FER, the applicants stated:</p>
<p style="text-align: justify;"><em> " There is present a database to perform the functions of the card electronically. The processor is configured to receive information, transmit information and/or authorize the card and associated information thereof. The processor may be configured to produce reports, issue reports, confirmation receipt etc. </em></p>
<p style="text-align: justify;"><em> It also consists of a card which may include electronic and/or magnetic features e.g. a microprocessor, memory and an electronic chip, a magnetic strip, a USB flash drive and a wireless communication device. The card may be configured to communicate with a wired devices, such as by USB, coaxial cable..." </em></p>
<p style="text-align: justify;"><em> "...The whole process brings out technical effect in a way that this system allows for the payment of bills without the use of a bank account, credit card, or money order. Hence it is a system with technical features producing technical effect. Hence, enhancement of a business or teaching a way in which a business is carried out is essentially not the the prime motive of the instant invention. With its technical character, technical features and enhancement in business comes as by-product of the implementation of the instant invention." </em></p>
<p style="text-align: justify;">The invention was rejected.</p>
<h3 style="text-align: justify;">7.2 Application No.: 48/CHE/2005</h3>
<p style="text-align: justify;"><strong>Title: Structured approach to software specification</strong></p>
<p style="text-align: justify;">The applicant asserted in their reply to the FER<a name="_ftnref4" href="#_ftn4">[4]</a> that the claims related to an information managing system including at least on processing unit, a system memory, a system bus, a LAN, a remote computer, a video adapter and monitor and a software architecture performing a particular task or implement particular abstract data types. As a result, they contended that the said invention did not fall under the purview of section 3(k) of the Indian Patents Act, 1970.</p>
<p style="text-align: justify;">The application was correctly rejected by the Controller in the first instance itself.</p>
<h3 style="text-align: justify;">7.3 Application No.: 2019/CHENP/2004</h3>
<p style="text-align: justify;"><strong>Title: Apparatus and method of a distributed capital system</strong></p>
<p style="text-align: justify;">The FER included objections regarding lack of novelty, inventiveness, lack of constructive features, lack of support for the word "means" , objections towards a business method, computer program per- se towards an algorithm (objections incl. 3(k)) per se and also towards claims relating to mere medium etc.</p>
<p style="text-align: justify;">Further, it was stated by the Office that even the amended claims failed to overcome the said objections because, inter alia, " <em> the subject matter of the claims related to a method of carrying out financial transactions with one or more parties in a Distributed capital system implemented by pure software I algorithms per-se. The said method is a mere business method/algorithm which is implemented in a computer network through software modules."<a name="_ftnref5" href="#_ftn5"><strong>[5]</strong></a> </em> <em> </em></p>
<p style="text-align: justify;"><em> </em> The invention was rejected.</p>
<h3 style="text-align: justify;">7.4. Application No.: 4986/DELNP/2006</h3>
<p style="text-align: justify;"><strong>Title: A method of tracking a radio frequency signal by means of electronic equipment.</strong></p>
<p style="text-align: justify;">The objections in the FER were that, the subject matter claimed fell within the scope section 3(k) as amended by the Patents (Amendment) Act 2005, for being algorithm based method. Subject matter as described and claimed in computer program product claims as well fell within the scope of section 3(k), for being relating to computer program per se. The examination correctly disregarded the implementation of the invention on electronic equipment.</p>
<p style="text-align: justify;">The invention was rejected.</p>
<h3></h3>
<h3 style="text-align: justify;">7.5 Application No.: 1405/MUMNP/2008</h3>
<p style="text-align: justify;"><strong>Title: Method for determining an output value from a sensor in automation engineering</strong></p>
<p style="text-align: justify;">Order issued u/s 15 clearly pointed out that the contribution of the applicant was a mathematical method to determine the output variable from the input variable. And since mathematical methods were intellectual in nature, the invention lacked technical advancement.</p>
<p style="text-align: justify;">The invention was rejected.</p>
<h3 style="text-align: justify;">7.6. Application No.: 914/CHE/2007</h3>
<p style="text-align: justify;"><strong>Title: A system, method to generate transliteration and method for generating decision tree to obtain transliteration</strong></p>
<p style="text-align: justify;">One of the claims read:</p>
<p style="text-align: justify;"><em> "A system to generate transliteration of source language script into target language script using decision tree based technique with automated supervised learning, said system comprising of </em></p>
<p style="text-align: justify;"><em>i. </em> <em>a device having memory;</em></p>
<p style="text-align: justify;"><em>ii. </em> <em>an input device for entering text;</em></p>
<p style="text-align: justify;"><em>iii. </em> <em>transliteration engine to maintain patterns and predetermined rules used in transliteration of source language script into target language script;</em></p>
<p style="text-align: justify;"><em>iv. </em> <em>a display device for displaying entered text and transliterated textl and</em></p>
<p style="text-align: justify;"><em>v. </em> <em>an interface to enable typing in any language and optionally to integrate the transliteration system into existing web-pages."</em></p>
<p style="text-align: justify;">The application was correctly rejected by the Examiner for on grounds of falling under section 3(k), <em>inter alia</em>.</p>
<p style="text-align: justify;">8. CIS welcomes the initiative of the Hon'ble CGPTDM to provide said illustrative examples. CIS believes that it is essential that the Guidelines avoid violation of section 3(k), and are formed complying with the Indian Patents Act, 1970 and relevant judicial decisions; and keeping in mind the legislative intent.</p>
<p style="text-align: justify;">9. CIS would be willing discuss these submissions with the Hon'ble CGPTDM; and supplement them with further submissions if necessary, and offer any other assistance towards the efforts at developing a Guidelines for Examination of Computer Related Inventions.</p>
<p style="text-align: justify;"><strong>On behalf of the Centre for Internet and Society</strong><br /><strong>Anubha Sinha<br />Programme Officer</strong></p>
<div style="text-align: justify;">
<hr />
<div id="ftn1">
<p><a name="_ftn1" href="#_ftnref1">[1]</a> <em> See</em> <a href="http://www.cis-india.org/">www.cis-india.org</a> for details about CIS' work.</p>
</div>
<div id="ftn2">
<p><a name="_ftn2" href="#_ftnref2">[2]</a> Pranesh Prakash, CIS' submission on Draft Patent Manual 2010 , available at < <a href="http://cis-india.org/a2k/blogs/cis-submission-draft-patent-manual-2010"> http://cis-india.org/a2k/blogs/cis-submission-draft-patent-manual-2010 </a> ></p>
</div>
<div id="ftn3">
<p><a name="_ftn3" href="#_ftnref3">[3]</a> Ibid.</p>
</div>
<div id="ftn4">
<p><a name="_ftn4" href="#_ftnref4">[4]</a> <em> See</em> First Examination Report, available at <<a>48-CHE-2005 EXAMINATION REPORT REPLY RECEIVED 31-05-2013.pdf</a>></p>
</div>
<div id="ftn5">
<p><a name="_ftn5" href="#_ftnref5">[5]</a> <em> See</em> First Examination Report for Application No.: 2019/CHENP/2004</p>
</div>
</div>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/cis-submission-to-indian-patent-office-on-examples-of-excluded-patentable-subject-matter-under-section-3-k-for-incorporation-in-the-yet-to-be-released-guidelines-for-computer-related-inventions'>http://editors.cis-india.org/a2k/blogs/cis-submission-to-indian-patent-office-on-examples-of-excluded-patentable-subject-matter-under-section-3-k-for-incorporation-in-the-yet-to-be-released-guidelines-for-computer-related-inventions</a>
</p>
No publishersinhaPatentsAccess to Knowledge2016-02-22T09:36:52ZBlog EntryPre-Budget Consultation 2016 - Submission to the IT Group of the Ministry of Finance
http://editors.cis-india.org/openness/pre-budget-consultation-2016-submission-to-the-ministry-of-finance
<b>The Ministry of Finance has recently held pre-budget consultations with different stakeholder groups in connection with the Union Budget 2016-17. We were invited to take part in the consultation for the IT (hardware and software) group organised on January 07, 2016, and submit a suggestion note. We are sharing the note below. It was prepared and presented by Sumandro Chattapadhyay, with contributions from Rohini Lakshané, Anubha Sinha, and other members of CIS.</b>
<p> </p>
<p>It is our distinct honour to be invited to submit this note for consideration by the IT Group of the Ministry of Finance, Government of India, as part of the pre-budget consultation for 2016-17.</p>
<p>The Centre for Internet and Society is (CIS) is a non-profit organisation that undertakes interdisciplinary research on internet and digital technologies from policy and academic perspectives. The areas of focus include digital accessibility for persons with diverse abilities, access to knowledge, intellectual property rights, openness (including open data, free and open source software, open standards, open access, open educational resources, and open video), internet governance, telecommunication reform, digital privacy, and cyber-security. We receive financial support from Kusuma Trust, Wikimedia Foundation, MacArthur Foundation, IDRC, and other donors.</p>
<p>We have divided our suggestions into the different topics that our organisation has been researching in the recent years.</p>
<p> </p>
<h3>Free/Libre and Open Source Software (FLOSS) is the Basis for Digital India</h3>
<p> </p>
<p>We congratulate the policies introduced by the government to promote use of free/libre and open source software and that of open APIs for all e-governance projects and systems. This is not only crucial for the government to avoid vendor lock-in when it comes to critical software systems for governance, but also to ensure that the source code of such systems is available for public scrutiny and do not contain any security flaws.</p>
<p>We request the government to empower the implementation of these policies by making open sharing of source code a necessity for all software vendors hired by government agencies a necessary condition for awarding of tenders. The 2016-17 budget should include special support to make all government agencies aware and capable of implementing these policies, as well as to build and operate agency-level software repositories (with version controlling system) to host the source codes. These repositories may function to manage the development and maintenance of software used in e-governance projects, as well as to seek comments from the public regarding the quality of the software.</p>
<p>Use of FLOSS is not only important from the security or the cost-saving perspectives, it is also crucial to develop a robust industry of software development firms that specialise in FLOSS-based solutions, as opposed to being restricted to doing local implementation of global software vendors. A holistic support for FLOSS, especially with the government functioning as the dominant client, will immensely help creation of domestic jobs in the software industry, as well as encouraging Indian programmers to contribute to development of FLOSS projects.</p>
<p>An effective compliance monitoring and enforcement system needs to be created to ensure that all government agencies are Strong enforcement of the 2011 policy to use open source software in governance, including an enforcement task force that checks whether government departments have complied with this or not.</p>
<p> </p>
<h3>Open Data is a Key Instrument for Transparent Decision Making</h3>
<p> </p>
<p>With a wider set of governance activities being carried out using information systems, the government is increasingly acquiring a substantial amount of data about governance processes and status of projects that needs to be effectively fed back into the decision making process for the same projects. Opening up such data not only allows for public transparency, but also for easier sharing of data across government agencies, which reduces process delays and possibilities of duplication of data collection efforts.</p>
<p>We request the 2016-17 budget to foreground the National Data Sharing and Accessibility Policy and the Open Government Data Platform of India as two key enablers of the Digital India agenda, and accordingly budget for modernisation and reconfiguration of data collection and management processes across government agencies, so that those processes are made automatic and open-by-default. Automatic data management processes minimise the possibility of data loss by directly archiving the collected data, which is increasingly becoming digital in nature. Open-by-default processes of data management means that all data collected by an agency, once pre-recognised as shareable data (that is non-sensitive and anonymised), will be proactively disclosed as a rule.</p>
<p>Implementation of the National Data Sharing and Accessibility Policy has been hindered, so far, by the lack of preparation of a public inventory of data assets, along with the information of their collection cycles, modes of collection and storage, etc., by each union government agency. Specific budgetary allocation to develop these inventories will be crucial not only for the implementation of the Policy, but also for the government to get an extensive sense of data collected and maintained currently by various government agencies. Decisions to proactively publish, or otherwise, such data can then be taken based on established rules.</p>
<p>Availability of such open data, as mentioned above, creates a wider possibility for the public to know, learn, and understand the activities of the government, and is a cornerstone of transparent governance in the digital era. But making this a reality requires a systemic implementation of open government data practices, and various agencies would require targeted budget to undertake the required capacity development and work process re-engineering. Expenditure of such kind should not be seen as producing government data as a product, but as producing data as an infrastructure, which will be of continuous value for the years to come.</p>
<p>As being discussed globally, open government data has the potential to kickstart a vast market of data derivatives, analytics companies, and data-driven innovation. Encouraging civic innovations, empowered by open government data - from climate data to transport data - can also be one of the unique initiatives of budget 2016-17.</p>
<p>For maximising impact of opened up government data, we request the government to publish data that either has a high demand already (such as, geospatial data, and transport data), or is related to high-net-worth activities of the government (such as, data related to monitoring of major programmes, and budget and expenditure data for union and state governments).</p>
<p> </p>
<h3>Promotion of Start-ups and MSMEs in Electronics and IT Hardware Manufacturing</h3>
<p> </p>
<p>In line with the Make in India and Digital India initiatives, to enable India to be one of the global hubs of design, manufacturing, and exporting of electronics and IT hardware, we request that the budget 2016-17 focus on increasing flow of fund to start-ups and Medium and Small-Scale Manufacturing Enterprises (MSMEs) in the form of research and development grants (ideally connected to government, especially defense-related, spending on IT hardware innovation), seed capital, and venture capital.</p>
<p>Generation of awareness and industry-specific strategies to develop intellectual property regimes and practices favourable for manufacturers of electronics and IT hardware in India is an absolutely crucial part of promotion of the same, especially in the current global scenario. Start-ups and MSMEs must be made thoroughly aware of intellectual property concerns and possibilities, including limitations and exceptions, flexibilities, and alternative models such as open innovation.</p>
<p>We request the budget 2016-17 to give special emphasis to facilitation of technology licensing and transfer, through voluntary mechanisms as well as government intervention, such as compulsory licensing and government enforced patent pools.</p>
<p> </p>
<h3>Applied Mathematics Research is Fundamental for Cybersecurity</h3>
<p> </p>
<p>Recent global reports have revealed that some national governments have been actively involved in sponsoring distortion in applied mathematics research so as to introduce weaknesses in encryption standards used in for online communication. Instead of trying to regulate key-length or mandating pre-registration of devices using encryption, as suggested by the withdrawn National Encryption Policy draft, would not be able to address this core emerging problem of weak cybersecurity standards.</p>
<p>For effective and sustainable cybersecurity strategy, we must develop significant expertise in applied mathematical research, which is the very basis of cybersecurity standards development. We request the budget 2016-17 to give this topic the much-needed focus, especially in the context of the Digital India initiative and the upcoming National Encryption Policy.</p>
<p>Along with developing domestic research capacity, a more immediately important step for the government is to ensure high quality Indian participation in global standard setting organisations, and hence to contribute to global standards making processes. We humbly suggest that categorical support for such participation and contribution is provided through the budget 2016-17, perhaps by partially channeling the revenues obtained from spectrum auctions.</p>
<p> </p>
<p>
For more details visit <a href='http://editors.cis-india.org/openness/pre-budget-consultation-2016-submission-to-the-ministry-of-finance'>http://editors.cis-india.org/openness/pre-budget-consultation-2016-submission-to-the-ministry-of-finance</a>
</p>
No publishersumandroOpen StandardsOpen SourceCybersecurityOpen DataIntellectual Property RightsOpen Government DataFeaturedPatentsOpennessOpen InnovationEncryption Policy2016-01-12T13:34:41ZBlog EntryComparison of National IPR Strategy September 2012, National IPR Strategy July 2014 and Draft National IP Policy, December 2014
http://editors.cis-india.org/a2k/blogs/comparison-of-national-ipr-strategy-september-2012-national-ipr-strategy-july-2014-and-draft-national-ip-policy-december-2015
<b>This is an analysis of the first draft of India's National IPR Policy with an earlier document "India's National IPR Strategy".</b>
<p>Nehaa Chaudhari provided inputs, analysed, reviewed and edited this blog post.</p>
<hr />
<p style="text-align: justify; ">As part of our IPR Policy Series, we have so far CIS has submitted comments to the Department of Industrial Policy and Promotion on the <a href="http://cis-india.org/a2k/blogs/comments-on-proposed-ip-rights-policy-to-dipp">proposed IPR Policy</a> and the <a href="http://cis-india.org/a2k/blogs/national-ipr-policy-series-cis-comments-to-the-first-draft-of-the-national-ip-policy">first draft of the National IPR Policy</a>, traced the <a href="http://cis-india.org/a2k/blogs/the-development-of-the-national-ipr-policy">development of the National IPR Policy</a>, <a href="http://cis-india.org/a2k/blogs/national-ipr-policy-series-indias-national-ipr-policy-what-would-wipo-think">evaluated</a> how the IPR Policy holds up to WIPO’s suggestions , filed RTI’s regarding the <a href="http://cis-india.org/a2k/blogs/rti-requests-dipp-details-on-constitution-and-working-of-ipr-think-tank">formation of the IPR Think Tank</a> and the <a href="http://cis-india.org/a2k/blogs/national-ipr-policy-series-what-have-sectoral-innovation-councils-been-doing-on-ipr">functioning of the Sectoral Innovation Council</a>.</p>
<p style="text-align: justify; ">In this blog post Amulya.P compares the National IPR Strategy September 2012 prepared by the Sectoral Innovation Council,<a name="_ftnref1"></a> the National IPR Strategy July 2014 <a name="_ftnref2"></a> and the Draft National IP Policy, December 2014 <a name="_ftnref3"></a> to understand the commonalities and differences between the three.</p>
<h3 style="text-align: justify; ">Vision/ Mission</h3>
<p style="text-align: justify; ">The vision stated in the IPR Strategy, July 2014 is “To develop India during the decade of Innovation into a major Innovative competitive and knowledge based economy by strategic utilization of IP as an engine for accelerated growth and sustainable and inclusive development.”<a name="_ftnref4"></a> This is comparable to the vision statement laid out in the Draft National IP Policy, December 2014 (Draft Policy) that states as follows: “An India where IP led growth in creativity and innovation is encouraged for the benefit of all; an India where IPRs promote advancement in science and technology, arts and culture, traditional knowledge and bio-diversity resources; an India where knowledge is the main driver of development, and knowledge owned is transformed into knowledge shared.”<a name="_ftnref5"></a> The Mission Statement laid out in the Draft Policy reads as follows “Establish a dynamic vibrant balanced intellectual property system in India to : foster innovation and creativity in a knowledge economy, accelerate economic growth, employment and entrepreneurship, enhance socio-cultural development and protect public health, food security and environment among other areas of socio-economic importance”<a name="_ftnref6"></a></p>
<p style="text-align: justify; ">Clearly the Draft Policy strives for more balance and envisions IPRs as not only a tool to ensure social welfare alongside economic growth, but also envisions IPR as a tool to ensure the sharing of knowledge.</p>
<h3 style="text-align: justify; ">Objectives/ Approaches</h3>
<p style="text-align: justify; ">The objectives of both the September 2012 National IPR Strategy and the July 2014 National IPR Strategy are more or less to “ Transform India into an innovative economy that would be reflected in high rankings in development and innovation indices from a global standpoint and develop, sustainable and innovation-promoting IPR management system in India while ensuring that the IP system continues to have appropriate checks and balances conducive to social and economic welfare and to a balance of rights and obligations. Besides measures that need to be taken, the strategy also needs to have an implementation matrix and a time bound schedule.”<a name="_ftnref7"></a></p>
<p style="text-align: justify; ">In addition to this, the September 2014 IPR Strategy Document lays down a four pronged approach- to promote respect for IP, to simulate creation of IPRs ,creation of new IP regimes to address needs of the country and strengthening protection of IP, and to facilitate commercialization of IP.<a name="_ftnref8"></a> The IPR Strategy of July 2014 expands on this to include the establishing of cost effective, efficient, service oriented administration, institutional capacity building and development of human capital and the integrating of IP components of national sectoral policy and the Addressing of IP issues in international fora.<a name="_ftnref9"></a></p>
<p style="text-align: justify; ">The Draft Policy though has enumerated seven objectives throughout the report. They are: a) “To create public awareness about economic social and cultural benefits of IP among all sections of society for accelerating development, promoting entrepreneurship, enhancing employment and increasing competitiveness”.<a name="_ftnref10"></a>b) “To stimulate creation of growth of IP through measures that encourage IP generation.”<a name="_ftnref11"></a>c) “To have strong and effective laws with regard to IPRs that are consistent with national priorities and international obligations which balance the interests of rights owners with public interest.”<a name="_ftnref12"></a> d) “To modernize and strengthen IP administration for efficient, expeditious and cost effective grant and management of IP rights and user oriented services.”<a name="_ftnref13"></a> e) “To augment the commercialization of IP rights, valuation licensing and technology transfer.”<a name="_ftnref14"></a> f)”To strengthen the enforcement and adjudicatory mechanisms for combating IP violations, piracy and counterfeiting, to facilitate effective and speedy adjudication of IP disputes to promote awareness and respect for IPRs among all sections of society.”<a name="_ftnref15"></a> f) “To strengthen and expand human resources, institutions and capacities for teaching, training, research and skill building in IP.”<a name="_ftnref16"></a></p>
<p style="text-align: justify; ">Clearly the Draft Policy lays more emphasis on raising public awareness about the benefits of IP, strengthening the enforcement and adjudicatory mechanisms to combat violations and on balancing different interests during the creation of new IP laws and regulations.</p>
<h3 style="text-align: justify; ">Raising Awareness</h3>
<p style="text-align: justify; ">While the September 2012 IPR Strategy speaks of raising awareness as a tool in encouraging creation of IP<a name="_ftnref17"></a> and facilitating commercialization of IP,<a name="_ftnref18"></a> the Draft Policy envisions an elaborate awareness raising and publicity program. Some of the schemes suggested in the Draft Policy include: Adoption of the slogan “Creative India: Innovative India” and launching an associated campaign on electronic , print and social media by linking IPRs and other national initiatives such as Make in India, Digital India, Skill India and Smart Cities. Reaching out to industry, MSMEs, R&D institutions, science and technology institutes, universities, colleges, inventors, creators, farmers/plant variety users, traditional knowledge holders, designers and artisans through campaigns tailored to their needs and concerns. Promoting the idea of high quality and cost effective innovation as a particularly Indian competence leading to competitive advantage, Involving of eminent personalities as ambassadors to spread awareness of India’s IP, Using audio visual material in print/electronic/social media for propagation, Creating moving exhibits that can travel to all parts of the country, Establishing Innovation and IPR museums, announcing a National IPR day and celebrating world IPR day etc.<a name="_ftnref19"></a></p>
<p style="text-align: justify; ">The Draft Policy has a much more elaborate program for awareness raising and publicity and this is reflected throughout the document with almost every stakeholder and department being involved in the awareness programme.</p>
<h3 style="text-align: justify; ">MSMEs</h3>
<p style="text-align: justify; ">The July 2014 IPR Strategy and the September 2012 IPR strategy both call for very similar policies with regard to MSMEs. Both lie emphasis on educating and incentivizing MSMEs to create new IP and formalize existing ones, on government intervention in setting up IP facilitation centers to bring about collaboration between the facilitation centers and the activities of existing industrial clusters, provision of access to databases on patent and non-patent literature to enable prior art research to IITs and NITs free of cost so that they can assist MSMEs or individuals with determining novelty in their inventions free of cost and other provide assistance with the patent application for a fee. While the September 2014 strategy called for identifying such institutions, the July 2014 Strategy does. Both of these strategies however, call for favorable tax treatments toward MSMEs for R&D Expenditures. Both also call for support mechanisms to offset IP costs and facilitate technology transfer through in-licensing from publicly funded research.<a name="_ftnref20"></a></p>
<p style="text-align: justify; ">The Draft Policy discusses MSMEs in less detail, but still calls for creation of educational materials for MSMEs and highlighting special mechanisms for them to develop and protect IP, encouraging IP creation by establishing and strengthening IP facilitation centers especially in industrial and innovation university clusters, Introducing “first-time patent” fee waiver and support systems for MSMEs and reduce transaction costs in other ways (e.g. prior art search).<a name="_ftnref21"></a> It does not specifically mention favorable tax treatment to MSMEs or access to databases to determine novelty or provision of assistance with patent application or call for government intervention to better the IP facilitation centers.</p>
<h3 style="text-align: justify; ">Academia and Research Organisations</h3>
<p style="text-align: justify; ">The July 2014 IPR Strategy and the September 2012 IPR strategy again recommend similar strategies when it comes to academia and research organisations. They both recommend some sort of education/awareness rising targeted at researchers and innovators regarding precautions to be exercised before patent application such as not selling inventions to company at early stages / not publishing research to public etc. they also recommend promoting university startups to motivate scientists to take up technology ventures. They both promote encouraging IITs and other similar institutions to undertake research on national issues like poverty, health, food, security, energy, information technology, bio-technology etc. They both recommend that IP creation be a key performance indicator for universities and institutions that participate in publicly sponsored/collaborative research and development and that this be gradually introduced in Tier 1 and Tier 2 institutions. And finally they both recommend that basic concepts of IP creation and respect for IP as part of formal education at school/college/university/vocational level including a course on IPR that is to be included in the curriculum of all technical programmes recognized by AICTE and in post grad/research programme in science and applied fields in universities.<a name="_ftnref22"></a></p>
<p style="text-align: justify; ">The Draft Policy recommends all this and more. It recommends the formulation of institutional IP policy/strategy in higher education, research and technical institutions. Even though it recommends educating researchers and innovators regarding IP and precautions to be taken with respect to protecting their invention before publishing, it doesn’t go into detail or state that there is a need to protect against inventions being sold prematurely to companies. The Draft Policy also recommends that public funded research organisations and private sector are to be tapped to create campaigns highlighting the process of IPR creation and the value generated therefrom. It also recommends that IITs NITs etc. be encouraged to focus on research in areas such as nanotechnology, data analytics and ICT in addition to areas such as food security, healthcare and agriculture. Further in addition to creating educational material about IPR at school and university levels, the Draft Policy also calls for online and distance learning programs for all categories of users that focus on IPR. And for IP courses/modules to be introduced in all major training institutes such as judicial academies, National Academy of Administration, Police and Customs Academies, IIFT, Institute of Foreign Service Training, Forest Training Institutes etc., creating IPR cells and technology development and management units in such institutes. The Draft Policy also recommends that IPR be a compulsory subject in all legal educational institutions, NIDs NIFTs, agricultural universities and management institutes, and making IP teaching a part of accreditation mechanism in institutes under the purview of UGC, AICTE MCI as well as IITs and IIMs.<a name="_ftnref23"></a></p>
<h3 style="text-align: justify; ">Large Organisations</h3>
<p style="text-align: justify; ">The September 2012 IPR Strategy recommends that the government encourage large organisations to take a long term view of R&D and make research investments to create strong self-reliant tech portfolio and also acquire the scale to build strategic global positions, it recommends that the government encourage these organisations to share their expertise and resources for national benefit through PPPs, development of high technology base requires strategic relationships with overseas players, it recommends that it be made mandatory for MNCs to align with innovation strategy and the National Innovation systems and that the MNCs be encouraged by the state to leverage their standing and reach to ensure inflow of best practices and investments.it also recommends sops and preferential treatment in public contracts to large Indian organisations with a strong culture of IP creation. And that these organisations be encouraged to tap open innovation platforms and tie ups with academia. The July 2014 IPR Strategy recommends more or less the same strategies with regard to large organisations. <a name="_ftnref24"></a></p>
<p style="text-align: justify; ">The Draft Policy recommends that public funded research organisations and private sector be encouraged to create campaigns highlighting the process of IPR creation and its value, that MNCs and large organisations develop IPR programs for their employees, that government encourage large organisations to create, protect and utilize IP in India and that the government create an industry-academia interface for encouraging cross-fertilization of ideas and IPR driven research and innovation in jointly identified areas.<a name="_ftnref25"></a> It makes no mention of requiring large organisations to align with the National IPR Policy, to ensure best practices but also doesn’t particularly mention tax cuts or other sops to encourage large organisations with a strong IP culture. The Draft Policy makes no mention at all of open innovation platforms. In large parts the Draft Policy is vague and lacks specifics with regard to strategies toward large organisations.</p>
<h3 style="text-align: justify; ">Startups and Individuals</h3>
<p style="text-align: justify; ">The September 2012 IPR Strategy and the July 2014 IPR Strategy both make separate recommendations aimed at startups and individuals. They both recommend that information on the delivery mechanism for support services including things like venture capital funding should be made expedient and that identified public institutions should offer end to end support for creation, protection and commercialization of IP.<a name="_ftnref26"></a> The September 2012 Strategy also recommends that procedural mechanisms adopted for giving financial support for patent filing should be made smoother and that the assistance provided should be improved.<a name="_ftnref27"></a> The Draft Policy does not include any specific recommendations with regard to start ups or individuals apart from involving them in the publicity/awareness campaigns. In this measure the Draft Policy seems to fall short.</p>
<h3 style="text-align: justify; ">Strengthening IP Protection/ Creating New IP Regimes</h3>
<p style="text-align: justify; ">The September 2012 IPR strategy generally called for improvement in institutions that grant IPRs and in institutions that are responsible for its enforcement and expansion of rights to include new IPRs.<a name="_ftnref28"></a></p>
<p style="text-align: justify; ">The July 2014 IPR Strategy had a significant advance to this and recommended periodic review and streamlining procedures and process and guidelines for search, grant examination, maintenance and registration of IPRs in consultation with relevant stakeholders and benchmarked with best practices. It also recommended that full benefit be taken of global protection systems of WIPO, Patent Cooperation Treaty, Madrid System for International Registration of Marks etc. and that consequent upon amendment in 2012 of the Copyright Act, 1957, consideration be given to acceding to the Marrakesh Treaty for the blind, that avenues for international cooperation in IPR be studied. And finally it recommended that with respect to traditional knowledge and grant of patents in other countries, the Nagoya protocol is a step in the right direction and while the Patents Act, 1970, Biological Diversity Act, 2002 and the Plant Variety Protection and Farmers Rights Act, 2001 address the issue, a sui generis system of protection to check misappropriation is required at the international level.<a name="_ftnref29"></a></p>
<p style="text-align: justify; ">The Draft Policy generally recommends that there be a review of existing IP laws to update and improve them and remove any inconsistencies, a review of IP related rules and procedures etc. to ensure clarity, simplification, streamlining, transparency and time bound process in administration and enforcement of IP rights. The Draft Policy also recommends that the government actively engage in negotiating international treaties and agreements in consultation with stakeholders, examine accession to some multilateral treaties that are in the countries interest and become a signatory to those treaty that India has defacto implemented so that India can participate in their decision making process.<a name="_ftnref30"></a> The central problem here is of course that what is in the countries interest may be open to debate, the Draft Policy does not at any point for example indicate whether or not the Government would consider taking on TRIPS plus obligations, the Draft Policy does not clarify what the Governments general stance on such issues would be.</p>
<p style="text-align: justify; ">The Draft Policy further recommends that important areas of study and research for future policy development be identified, some examples provided are: a) Interplay between IP laws and other laws to remove ambiguities or inconsistencies, b) Interface between IP and competition law and policy, c) Protection of undisclosed information not extending to data exclusivity, d) Guidelines for authorities whose respective jurisdictions impact the administration or enforcement of IPRs such as patents and bio-diversity, e) Exceptions and limitations and f) Exhaustion of IP rights.<a name="_ftnref31"></a> A prominent concern here would be data exclusivity, while the policy uses vague language and only wants these issues to be studied, Data exclusivity among others are demands made by the EU and others in Free Trade Agreements that go beyond our obligation under TRIPS and could harm the public interest.<a name="_ftnref32"></a></p>
<h3 style="text-align: justify; ">Establishing Cost Effective, Efficient and Service Oriented IP Administrative Infrastructure</h3>
<p style="text-align: justify; ">The July 2014 IPR Strategy recommends that IPOs be restructured to aim for ISO 9002 model to increase efficiency, quality and cost effectiveness; that after a review of the need of human resources to enable IPOs to discharged workload efficiently the required amount of manpower be employed; that recruitment training and career development of officials has to be reviewed to recruit and retain best personnel in the IPO; that the possibility of providing advisory services and value added products be studied; and recommends that there should be cooperation with IPOs in other countries in the area of capacity building, human resource development and awareness.<a name="_ftnref33"></a></p>
<p style="text-align: justify; ">The Draft Policy recommends that IPOs be restructured, upgraded and be granted greater responsibility and autonomy taking into account the rapid growth and diversity of IP users and services, it also recommends an increase in manpower according to findings after a review to ensure speedy liquidation of backlog, requirements of global protection systems and productivity parameters. And that the process of recruitment training, cadre structure and career development of officials be studied and reviewed to retain the best talent to enhance efficiency and productivity. The Draft Policy also recommends that the government collaborate with R&D institutions universities, funding agencies, chambers of industry and commerce in providing advisory services which will improve IP creation and management and utilization, promote cooperation with IP offices in other countries in areas of capacity building, HRD, training, access to databases, best practices in search and examinations, use of ICT and user oriented services, enhance international and bilateral cooperation and post IP attaches in select countries to follow IP developments and advice on IP related matters.<a name="_ftnref34"></a></p>
<h3 style="text-align: justify; ">Office of CGPDTM</h3>
<p style="text-align: justify; ">The September 2012 IPR Strategy recommended that Grant/registration procedure to be quickened through recruitment and increasing human resources, that the functioning of IPOs be improved by measures such as: complete digitization of IP records and uploading for public view to improve transparency, communication with applicant/agents to be improved to bring in transparency meticulousness, database to be made searchable so that researchers can conduct effective searches to identify state of the art technology, electronic filing of applications and subsequent examination through electronic mode to be mandatory, Increase in filing fee with specific discounts for identified sectors such as MSEs.<a name="_ftnref35"></a></p>
<p style="text-align: justify; ">The 2012 IPR Strategy observed that the quality of examination of IP applications needs to be improved and suggested reassessment of procedures followed in IPO to reduce timelines toward statutory actions.<a name="_ftnref36"></a></p>
<p style="text-align: justify; ">The July 2014 IPR Strategy recommended that the grant and registration procedure be quickened through recruitment and increasing human resources, and that there be regular meetings between the CGPDTM and the National Biodiversity Authority to resolve issues that arise from implementing guidelines about grant of patents on inventions using genetic resources and TK.<a name="_ftnref37"></a></p>
<p style="text-align: justify; ">The Draft Policy recommended that the government establish close cooperation between IPOs and create a common web portal for ease of access to statutes regulations, guidelines, databases and for better coordination.<a name="_ftnref38"></a></p>
<p style="text-align: justify; ">The Draft policy also recommended that the CGPDTM examine joining centralized access for search and examination (CASE) and WIPO digital access services (DAS), that the CGPDTM fix and adhere to timelines for grant of registration and disposal of opposition matters, create a service oriented culture, include appointing public relations officers who would make the IP office user friendly, that the CGPDTM conduct periodic audits of processes being adopted in IP administration for efficient grant and management of IP rights. <a name="_ftnref39"></a></p>
<p style="text-align: justify; ">The Draft Policy also recommended that the CGPDTM implement quality standards at all stages of operations with the aim to obtain ISO certification and adopt best practices with respect to filing and docketing of documents, maintenance of records and digitizing the same including document workflow and tracking systems, and take steps to expedite digitization of the design office and enable online search and filing in the design office<a name="_ftnref40"></a></p>
<p style="text-align: justify; ">The Draft Policy also recommended that the CGPDTM ensure that public records in IP office are easily available and accessible both online and offline and establish effective coordination between its office and NBA to enable harmonious implementation of guidelines relating to grant of patents on inventions using genetic resources and associated TK, that the CGPDTM remove disparities among different branches of the trademark registries and patent offices and adopt standardized procedures in examination/grant of applications including maintenance of rights, implement centralized priority field wise on a national basis and provide value added services in form of helpdesks, awareness and training materials, patent mapping, licensing and technology transfer support services, ease of remote access of the international patent search mechanisms and other IP related databases. And that the CGPDTM implement incentives for MSMEs to encourage filing by the said sector like waiver of official fee, support of examiners and pro-bono legal help for the first time filing.<a name="_ftnref41"></a></p>
<h3 style="text-align: justify; ">Administrative Departments of Other IP Institutions</h3>
<p style="text-align: justify; ">The September 2012 IPR Strategy and the July 2014 IPR Strategy both generally recommended that the administrative departments of other IP institutions also take up similar actions as the CGPDTM.<a name="_ftnref42"></a></p>
<p style="text-align: justify; ">The Draft Policy however, goes into this with some detail. The Draft Policy recommends that with regard to the office of Registrar of Copyright, the Government take measures to expedite modernization of the office both in terms of office space and infrastructure and in terms of introducing e filing facility including e- applications, electronic processing and issuance of final extracts of registrations etc. It also recommends that all copyright records be digitized and that the government introduce an online search facility and provide necessary manpower and adequate training facilities to personnel in the copyright office. It further recommends that the government take urgent measures for the effective management and administration of copyright societies to ensure transparency and efficiency in the collection and disbursement of royalties in the best interests of rights holders and that the government provide user friendly services in the form of help desks, awareness raising and training materials.<a name="_ftnref43"></a></p>
<p style="text-align: justify; ">The Draft Policy recommends that the registrar of Semiconductor Integrated Circuits Layout Design study the reasons for lack of interest in filings under the Semiconductor Integrated Circuits Layout Design Act, 2000 and suggest appropriate measures.<a name="_ftnref44"></a> The Draft Policy also recommends that the government formalize a consultation and coordination mechanism between the National Biodiversity Authority and the IPOs with a view to harmonious implementation of guidelines for grant of IP rights and access to biological resources and associated traditional knowledge and benefit sharing.<a name="_ftnref45"></a></p>
<h3 style="text-align: justify; ">Institutional Capacity Building</h3>
<p style="text-align: justify; ">The July 2014 IPR Strategy recommended that the RGNIIPM act as a think tank, carry out research on IP matters, formulate and deliver training courses and develop teaching curricular for academic institutions, develop linkages with other national and international institutions involved in similar fields and develop joint training programs and conduct joint research studies on IPRs including programs for plant variety protection and issues related to traditional knowledge and bio resources. And establish IP institutes with state governments for raising awareness and training and teaching.<a name="_ftnref46"></a></p>
<p style="text-align: justify; ">It also recommended that the MHRD IPR chairs provide support to all ministries and departments in policy making law making and negotiations under bilateral or multilateral frameworks.<a name="_ftnref47"></a> The Strategy also recommended that institutes responsible for training customs, police, judiciary, forest research institutes have IP training as an essential part of the curriculum, that National level institutes associated with creation enforcement or commercialization should be encouraged to incorporate IP training and capacity building in their operations and finally that industry, business, IP professional bodies, inventers associations, venture capital funds etc. should be encouraged to develop IP training modules for their members as well.<a name="_ftnref48"></a></p>
<p style="text-align: justify; ">The Draft Policy recommends all this and more and suggests that RGNIIPM Nagpur conduct training for IP administrators , managers in the industry, academicians, R&D institutions, IP professionals, inventors, civil society apart from training the trainers, developing training modules and links with other similar entities at the international level and set up state level institutions.<a name="_ftnref49"></a> Further it recommended that the MHRD IPR Chairs provide high quality teaching and research, develop teaching capacity and curricula and evaluate their work on performance based criteria.<a name="_ftnref50"></a></p>
<p style="text-align: justify; ">The Draft Policy also recommends that the CGPDTM provide continuous training to the IPO staff and update them with developments in procedures, substantive laws and technologies along with the RGNIIPM.<a name="_ftnref51"></a></p>
<p style="text-align: justify; ">The Draft policy also recommends that the government establish national level institutes of excellence to provide leadership in IP, conduct policy and empirical research, examine trends and developments in the field of IP at the national and international level, support the government in strategic development of IP systems and international negotiations, establish links with similar institutes and experts in other countries for exchange of ideas, information and best practices and suggest approaches and guidelines for inter-disciplinary human capital development.<a name="_ftnref52"></a> And that the government facilitate industry associations, inventors and creators associations and IP support institutions to raise awareness of IP issues for teaching, training and skill building.<a name="_ftnref53"></a></p>
<h3 style="text-align: justify; ">Strengthening Institutional Set-up to Improve Enforcement of IPRs and Create Respect for IPRs</h3>
<p style="text-align: justify; ">The September 2012 IPR Strategy and the July 2014 IPR Strategy both recommend that the government encourage small and niche businesses to protect their products through trademarks, the September 2012 Strategy also adds that these businesses should be encouraged to seek international protection to participate in global competition and contribute to international trade activities.<a name="_ftnref54"></a> The Draft Policy recommends increasing awareness of international mechanisms and treaties (e.g. PCT, Madrid and The Hague) to encourage creation and protection of IP in global markets.<a name="_ftnref55"></a></p>
<p style="text-align: justify; ">The 2012 IPR Strategy and the July 2014 Strategy go into further detail, they recommend that the service sector be encouraged to adopt strategies for registration of trademarks to ensure competitiveness and to leverage the goodwill of strong indigenous brands that have acquired traction in international markets. They also recommend that SME clusters be encouraged to develop a comprehensive database of their products to ensure that a parent isn’t issued on unprotected innovations.<a name="_ftnref56"></a></p>
<p style="text-align: justify; ">As far as GI is concerned, both the July 2014 and the September 2012 IPR Strategy recommend that central public bodies such as the development commissioner for handicrafts and handlooms etc. partner with the suitable state, district and Panchayat level entities to educate communities on the benefits of registering GIs, to put in place examination protocols to ensure GI owners comply with quality standards. They further recommend that these bodies develop a roadmap to build brands for better market presence for products registered as GIs and coordinate with relevant state authority on enforcement and provide periodical updates to enforcement taskforce on issues that need redressal.<a name="_ftnref57"></a></p>
<p style="text-align: justify; ">The Draft Policy only recommends that the government encourage registration of GI through support institutions and assist GI producers to define and maintain acceptable quality standards and providing better marketability.<a name="_ftnref58"></a></p>
<p style="text-align: justify; ">As far as designs are concerned, both the July 2014 IPR Strategy and the September 2012 IPR Strategy recommend that the government encourage a move from informal to formal practices of protecting designs by administrative intervention,<a name="_ftnref59"></a> while the Draft Policy recommends the encouraging of creation of design related IP rights by identifying, nurturing, and promoting aspects of innovation protectable under the design law and educating designers to utilize and benefit from their designs , involve the NIDs , NIFTs and other institutions in sensitization campaigns.<a name="_ftnref60"></a></p>
<p style="text-align: justify; ">With regard to plant varieties, both the 2014 and 2012 IPR Strategies recommend awareness generation programmes to encourage filings of new extant and essentially derived varieties.<a name="_ftnref61"></a> While the 2012 IPR Strategy further stated that there was a need to evaluate whether restructuring institutions/merging all IP issues under one umbrella would improve efficiency and a need for centrally managed National IP Enforcement Taskforce that could :a) Maintain database on criminal enforcement measures instituted for trademark infringement and copyright piracy, civil cases filed to be collated also, b) Mandated to deliberate upon operational issues of enforcement with the concerned Central and State agencies, c) Conduct periodic industry wise infringement surveys d) Coordinate capacity building programmes for the central and state enforcing agencies.<a name="_ftnref62"></a></p>
<p style="text-align: justify; ">The Draft Policy recommends that the protection of plant varieties and farmers rights authority should: a) Support increased registration of new, extant and essential derived varieties and streamline procedures, b) Facilitate development of seeds and their commercialization by farmers., c) Establish links with agriculture universities, research institutions, technology development and management centers and Krishi Vikas Kendras, d) Coordinate with other IPOs for training sharing expertise and adopting best practices, e) Augment awareness building, training and teaching programs and modernize office infrastructure and use of ICT.<a name="_ftnref63"></a></p>
<p style="text-align: justify; ">With regard to Traditional Knowledge, the Draft Policy also recommends that the government create a sui generis system for protecting TK which will safeguard misappropriation of traditional knowledge as well as promote further research and development in products and services based on traditional knowledge.<a name="_ftnref64"></a></p>
<h3 style="text-align: justify; ">Creation of New IP Rights to Address Gaps</h3>
<p style="text-align: justify; ">The September 2012 IPR Strategy recommended protection of utility models, utility patents as they have Protection of utility model. Utility patents / models proposed as they have less stringent patentability criteria, faster examination/grant, shorter term of protection as a cost effective way to incentivize incremental innovation and encourage creation of IPRs, with sector specific exemptions to ensure TRIPS compliance. And included a proposal for a predictable recognizable trade secret regime to improve investor confidence and facilitate flow of information.<a name="_ftnref65"></a></p>
<p style="text-align: justify; ">The Draft Policy also recommended that the government facilitate creation and protection of small inventions through a new law on utility models, enact laws to address national needs to fill gaps in protective regimes of IPRs such as utility models and trade secrets to keep up with advancements in science and technology to strengthen IP and innovation ecosystem from example IP created from public funded research, to protect and promote traditional knowledge.<a name="_ftnref66"></a> As pointed out in the CIS Submission to the IPR Think Tank, the creation of utility models should by no means be assumed to be completely uncontroversial, many countries that had this system have now given it up, further this could lead to granting of frivolous patents and thereby harming development.<a name="_ftnref67"></a></p>
<h3 style="text-align: justify; ">Facilitating Commercialization of IPRs</h3>
<p style="text-align: justify; ">Both the July 2014 and the September 2012 IPR Strategies have similar recommendations with respect to facilitating commercialization of IPRs; they both recommend policy interventions to create strong and transparent national strategies to encourage: licensing of rights to another entity for commercialization, cross licensing agreements, leveraging the intellectual assets for future R&D growth and improved services, sale merger acquisition of either IPR or entire business distinguished and appropriately valued by their intellectual capital, patent pooling, reinforcing stability of IP license contracts.<a name="_ftnref68"></a></p>
<p style="text-align: justify; ">And they both recommend that National research laboratories and academia and public institutions to stimulate commercialization of research resultants: intervention in building strengthening institutional capacity of research led organisations to enable utilization of IP.<a name="_ftnref69"></a></p>
<p style="text-align: justify; ">The 2012 IPR Strategy also recommends national level policy changes to encourage development of indigenous technologies, that government fund (grants/loans) demonstration projects of new technologies that require large investment, suitable tax breaks for indigenously developed and commercialized products till attainment of some maturity levels, that qualification requirements during tendering process to accord acceptance to indigenously developed products where heavy development investments have been incurred, strengthening the indigenous R&D ecosystem policy frameworks should provide for flexibility in outsourcing technical expertise in niche areas and type testing of prototypes. Further it visualizes the emergence of open innovation systems and the role of voluntary SSOs.<a name="_ftnref70"></a></p>
<p style="text-align: justify; ">The Draft Policy does all this and more. It recommends that the government establish an IP Promotion and Development Council (IPPDC) as a nodal organization for promotion and commercialization of IPR, the IPPDC is supposed to, among other things, promote licensing and technology transfer of IP, devise suitable contractual and licensing guidelines to enable commercialization of IP, promoting patent pooling and cross licensing to create IP based products and services and also establishing links with similar organisations for exchange of information and ideas as also to develop promotional educational products and services for promotion and commercialization, to facilitate access to databases on Indian IP and global databases of creators/innovators, market analysts, funding agencies, IP intermediaries, to study and facilitate implementation of best practices for promotion and commercialization of IP within the country and outside. IPPDC to establish IP Promotion and Development Units (IPPDU) in various regions<a name="_ftnref71"></a> The IPPDC is also tasked with identifying opportunities for marketing Indian IPR based products and services to a global audience.<a name="_ftnref72"></a></p>
<p style="text-align: justify; ">The government is also recommended to provide statutory incentives like tax benefits linked to IP creation for the entire value chain from IP creation to commercialization, to support financial aspects of IP commercialization by: a)Enabling valuation of IP rights by application of appropriate methodologies including for better accounting as intangible assets, b) Facilitating investments in IP driven industries and services through the proposed IP exchange for bringing investors/funding agencies and IP owners /users together, c) Providing financial support to less empowered groups of IP owners or creators like farmers weavers, artisans, craftsmen etc. through financial institutions like rural banks or cooperative banks offering IP friendly loans, d) Taking stock of all IP funding by the government and suggesting measures to consolidate the same to the extent possible generating scale in funding and avoiding duplication, enhancing the visibility of IP and innovation related funds so that utilization is increased, performance based evaluation for continued funding, c) Regulating IP created through publicly funded research by a suitable law.<a name="_ftnref73"></a></p>
<p style="text-align: justify; ">The Draft policy also recommends that the government promote going to market activities by: a) Creating mechanisms to help MSMEs and research institutions to validate scale and pilot through market testing, b) Providing seed funding for market activities such as participating in trade fairs, industry standards bodies and other forums, c) Providing guidance and support to IPR owners about commercial opportunities of e commerce through internet and mobile platforms.<a name="_ftnref74"></a> And that the government study the role of IPRs in setting standards in various areas of technology, actively participate in standards setting processes at national, international and industry SSO levels and to encourage the development of global standards that are influenced by technologies and IP generated in India<a name="_ftnref75"></a></p>
<h3 style="text-align: justify; ">Facilitating and Encouraging Commercialization of IP Assets</h3>
<p style="text-align: justify; ">The July 2014 IPR Strategy had specific recommendations to make in this regard. It recommended that the government forge links between creators and inventors , universities, industry and financial institutions for commercialization, that the government establish an IP exchange to stimulate trading of IP and creating markets for IP assets, to facilitate MSMEs to identify protect and commercialize their IP, creations through facilitation centers by providing package of services, to encourage technologies acquired under the patent pool of the Technology Acquisition and Development Fund (TADF) and licensed as per provision in manufacturing policy.<a name="_ftnref76"></a></p>
<p style="text-align: justify; ">The Draft IP policy recommends all of these, tasking the IPPDC with most of these tasks and also recommends that the government improve awareness of the value of copyright for creators, the importance of their economic and moral rights and the rationalization of payment mechanisms for them, and to support initiative taken by public sector research entities to commercialize their IPRs for commercialization and lastly to develop skills among scientists to access , interpret and analyze the techno-legal and business information contained in IP documents.<a name="_ftnref77"></a></p>
<h3 style="text-align: justify; ">Enforcement and Adjudication</h3>
<p style="text-align: justify; ">The Draft Policy makes very specific recommendations with regard to enforcement and adjudication, apart from suggestions that go toward creating awareness and sensitizing the public, students, industry and inventors about IP, the policy also recommends that the government establish a Multi-Agency Task Force for coordination between various agencies and providing direction and guidance on enforcement measures, creating a nationwide database of known IP offenders, coordination and sharing intelligence and best practices at the national and international levels, studying the extent of IP violations in various sectors, examining the implications of jurisdictional difficulties among enforcement authorities and introducing appropriate technology based solutions for curbing digital piracy.<a name="_ftnref78"></a></p>
<p style="text-align: justify; ">The government is also tasked with working with state governments in establishing IP cells and including IP crimes under their special laws, increasing manpower and infrastructure of the enforcement agencies and building capacity to check proliferation of digital crimes, providing regular training for officials in enforcement agencies, encouraging application of tech-based solutions in enforcement of IP rights, initiating fact finding studies in collaboration with stakeholders concerned to assess the extent of counterfeiting and piracy and the reasons behind it as well as the measures to combat it and taking up the issue of Indian works and products being pirated and counterfeited abroad with countries concerned.<a name="_ftnref79"></a></p>
<p style="text-align: justify; ">On improving IP dispute resolution, the Draft Policy recommends the designation of specialized patent bench in the High Courts of Bombay, Calcutta, Delhi and Madras, the designation of one IP court at the district level depending on the number of IP cases filed, working with judicial academies to conduct regular workshops for judges, promoting ADRs in the resolution of IP cases by strengthening mediation and conciliation centers and developing ADR capabilities, creating regional benches of the IPAB in all five regions where IPOs are located, increasing the powers of IPAB in its administration including autonomy in financial matters and selection of technical and judicial members and providing necessary infrastructure for its effective and efficient funding and also taking urgent steps to make the copyright board function effectively and efficiently and provide adequate infrastructure and manpower to it.<a name="_ftnref80"></a></p>
<h3 style="text-align: justify; ">Work Plans</h3>
<p style="text-align: justify; ">In addition to all of the above, the July 2014 IPR Strategy also recommends a work plan which includes commissioning a study on schemes and programs financed by the government including under the PP mode for innovation, signing and acceding to the Marrakesh Treaty, the NICE agreement on international classification of goods and services for the purpose of registration of trademarks, assessing the Hague Agreement regarding registration of industrial design vis a vis India’s Designs Act with a view to accede to the treaty, assessing the possibility of accepting facilitation centers run by universities/academic institutions/departments of science and technology as receiving offices for patent applications where there are no patent offices.<a name="_ftnref81"></a></p>
<p style="text-align: justify; ">The Draft IP Policy also makes recommendations to integrate IP with other government Initiatives like Make in India and Digital India,<a name="_ftnref82"></a> and plans to integrate into these government initiatives the different schemes of the Department of Electronics, and IT for IP promotion and global protection.<a name="_ftnref83"></a> It further recommends the establishing of a high-level body in the government to co-ordinate, guide and oversee the implementation and development of IP in India in accordance with the National IP Policy. The body will be responsible for bringing cohesion and coordination among different ministries and departments with regard to how they deal with IP matters, laying down priorities for IP development and preparing plans of action for time bound implementation of national and sector specific IP policies, strategies and programs, monitoring the progress and implementation of the National IP policy linked with performance indicators, targeted results and deliverables, annual evaluation of the overall working of the policy and a major review of the policy ever three years.<a name="_ftnref84"></a></p>
<h3 style="text-align: justify; ">Concluding Observations</h3>
<p style="text-align: justify; ">The National IPR Strategies of 2012 and 2014 contain more or less similar recommendations, the key differences being that the 2014 IPR Strategy emphasizes the need to address IP issues in international fora and in establishing cost effective, efficient and service oriented IP administrative infrastructure. It does not, in contrast to the 2012 IPR Strategy, recommend the introduction of laws on utility models or protection of trade secrets, policy changes to encourage development of indigenous technologies, but it does more specifically address facilitating commercialization of IP.</p>
<p style="text-align: justify; ">The Draft Policy is an important advance over the National IPR Strategy of July 2014 and September 2012. It places makes important new recommendations with regards to publicity and awareness raising, creation of legal regime with regard to traditional knowledge, utility patents and trade secrets, enforcement and adjudication- including the setting up of new courts, creation of the IPPDC and of a new high-level government body to oversee the implementation of the policy. It does however miss out on the chance to help start-ups, MSMEs and individuals in contrast to recommendations of the previous IPR Strategies. And in context of its avowed aim to turn knowledge owned into knowledge shared does little to encourage open access and focuses heavily on IP creation assuming that increase in IP would promote innovation and thereby lead to national development.</p>
<p style="text-align: justify; "><strong><a href="http://editors.cis-india.org/a2k/blogs/comparison-of-national-ipr-strategy-september-2012-national-ipr-strategy-july-2014-and-draft-national-ip-policy-december-2015-1.pdf" class="external-link">Table - Comparison of National IPR Strategy September 2012, National IPR Strategy July 2014 And Draft National IP Policy, December 2014</a><br /></strong></p>
<hr style="text-align: justify; " />
<p style="text-align: justify; "><a name="_ftn1"></a> Sectoral Innovation Council, National IPR Strategy, September 2012, Available at: <a href="http://dipp.nic.in/english/Discuss_paper/draftNational_IPR_Strategy_26Sep2012.pdf">http://dipp.nic.in/english/Discuss_paper/draftNational_IPR_Strategy_26Sep2012.pdf</a> (Hereafter : National IPR Strategy, September 2012)</p>
<p style="text-align: justify; "><a name="_ftn2"></a> National IPR Strategy, July 2014, Available at: <a href="http://dipp.nic.in/English/Schemes/Intellectual_Property_Rights/national_IPR_Strategy_21July2014.pdf">http://dipp.nic.in/English/Schemes/Intellectual_Property_Rights/national_IPR_Strategy_21July2014.pdf</a> (Hereafter: National IPR Policy, July 2014)</p>
<p style="text-align: justify; "><a name="_ftn3"></a> IPR Think Tank, Draft National IP Policy, December 2014, Available at: <a href="http://dipp.nic.in/English/Schemes/Intellectual_Property_Rights/IPR_Policy_24December2014.pdf">http://dipp.nic.in/English/Schemes/Intellectual_Property_Rights/IPR_Policy_24December2014.pdf</a> (Here after: Draft Policy)</p>
<p style="text-align: justify; "><a name="_ftn4"></a> National IPR Strategy, July 2014, p.5</p>
<p style="text-align: justify; "><a name="_ftn5"></a> Draft Policy, p.5</p>
<p style="text-align: justify; ">[5] National IPR Strategy, July 2014, p.5</p>
<p style="text-align: justify; "><a name="_ftn6"></a> Draft Policy, p.5</p>
<p style="text-align: justify; "><a name="_ftn7"></a> National IPR Strategy, September 2012, pp.11 and Draft Policy, December 2014, pp.5</p>
<p style="text-align: justify; "><a name="_ftn8"></a> National IPR Strategy, September 2012, pp.11</p>
<p style="text-align: justify; "><a name="_ftn9"></a> National IPR Strategy, July 2014, pp.5-6,</p>
<p style="text-align: justify; "><a name="_ftn10"></a>Draft Policy, p.6,</p>
<p style="text-align: justify; "><a name="_ftn11"></a> Draft Policy, p.8.</p>
<p style="text-align: justify; "><a name="_ftn12"></a> Draft Policy, p.11.</p>
<p style="text-align: justify; "><a name="_ftn13"></a> Draft Policy, p.13.</p>
<p style="text-align: justify; "><a name="_ftn14"></a> Draft Policy, p.17.</p>
<p style="text-align: justify; "><a name="_ftn15"></a> Draft Policy, p.20.</p>
<p style="text-align: justify; "><a name="_ftn16"></a> Draft Policy, p.23.</p>
<p style="text-align: justify; "><a name="_ftn17"></a> National IPR Strategy, September 2012, pp. 7, 11, 12, 19 20</p>
<p style="text-align: justify; "><a name="_ftn18"></a> National IPR Strategy, September 2012, pp. 21</p>
<p style="text-align: justify; "><a name="_ftn19"></a> Draft Policy, p.6-8</p>
<p style="text-align: justify; "><a name="_ftn20"></a> National IPR Strategy, September 2012, pp.6-7 , 12-13 and National IPR Strategy, July 2014 , pp.6-8</p>
<p style="text-align: justify; "><a name="_ftn21"></a> Draft Policy, p.5, 9-10, 15,18-19</p>
<p style="text-align: justify; "><a name="_ftn22"></a> National IPR Strategy, September 2012, pp. 7, 13-14 and National IPR Strategy, July 2014 , pp.8-9.</p>
<p style="text-align: justify; "><a name="_ftn23"></a> Draft Policy, p.8,11,24</p>
<p style="text-align: justify; "><a name="_ftn24"></a> National IPR Strategy, September 2012, pp.6, 14-15 and National IPR Strategy, July 2014 , pp.9-10</p>
<p style="text-align: justify; "><a name="_ftn25"></a> Draft Policy, p.7-8, 10</p>
<p style="text-align: justify; "><a name="_ftn26"></a> National IPR Strategy, September 2012, pp. 7, 15 and National IPR Strategy, July 2014 , pp.10</p>
<p style="text-align: justify; "><a name="_ftn27"></a> National IPR Strategy, September 2012, pp. 7, 15</p>
<p style="text-align: justify; "><a name="_ftn28"></a> National IPR Strategy, September 2012, pp. 15</p>
<p style="text-align: justify; "><a name="_ftn29"></a> National IPR Strategy, July 2014 , pp.10-12</p>
<p style="text-align: justify; "><a name="_ftn30"></a> Draft Policy, p.12-13,</p>
<p style="text-align: justify; "><a name="_ftn31"></a> Draft Policy, p.13</p>
<p style="text-align: justify; "><a name="_ftn32"></a> Swaraj Paul Barooah, Data Exclusivity back on the table for India, SpicyIP, March 27, 2015, Available at: <a href="http://spicyip.com/2015/03/data-exclusivity-back-on-the-table-for-india.html">http://spicyip.com/2015/03/data-exclusivity-back-on-the-table-for-india.html</a></p>
<p style="text-align: justify; "><a name="_ftn33"></a> National IPR Strategy, July 2014 , pp.11-12</p>
<p style="text-align: justify; "><a name="_ftn34"></a> Draft Policy, p.14</p>
<p style="text-align: justify; "><a name="_ftn35"></a> National IPR Strategy, September 2012, pp. 15-16</p>
<p style="text-align: justify; "><a name="_ftn36"></a> National IPR Strategy, September 2012, pp. 16</p>
<p style="text-align: justify; "><a name="_ftn37"></a> National IPR Strategy, July 2014 , pp. 12-14</p>
<p style="text-align: justify; "><a name="_ftn38"></a> Draft Policy, p. 15-16</p>
<p style="text-align: justify; "><a name="_ftn39"></a> Draft Policy,p. 16</p>
<p style="text-align: justify; "><a name="_ftn40"></a> Draft Policy, p.15</p>
<p style="text-align: justify; "><a name="_ftn41"></a> Draft Policy, p. 15-16</p>
<p style="text-align: justify; "><a name="_ftn42"></a> National IPR Strategy, September 2012, pp.16 and National IPR Strategy, July 2014 , pp.14</p>
<p style="text-align: justify; "><a name="_ftn43"></a> Draft Policy, p.16</p>
<p style="text-align: justify; "><a name="_ftn44"></a> Draft Policy, p.17</p>
<p style="text-align: justify; "><a name="_ftn45"></a> Draft Policy, p.17</p>
<p style="text-align: justify; "><a name="_ftn46"></a> National IPR Strategy, July 2014 , pp.14-15</p>
<p style="text-align: justify; "><a name="_ftn47"></a> National IPR Strategy, July 2014 , pp.15</p>
<p style="text-align: justify; "><a name="_ftn48"></a> National IPR Strategy, July 2014 , pp.15</p>
<p style="text-align: justify; "><a name="_ftn49"></a> Draft Policy, p.24</p>
<p style="text-align: justify; "><a name="_ftn50"></a> Draft Policy, p.24</p>
<p style="text-align: justify; "><a name="_ftn51"></a> Draft Policy, p.24</p>
<p style="text-align: justify; "><a name="_ftn52"></a> Draft Policy, p.23</p>
<p style="text-align: justify; "><a name="_ftn53"></a> Draft Policy, p.24</p>
<p style="text-align: justify; "><a name="_ftn54"></a> National IPR Strategy, September 2012, pp.18 and National IPR Strategy, July 2014 , pp.15-16</p>
<p style="text-align: justify; "><a name="_ftn55"></a> Draft Policy, p.11</p>
<p style="text-align: justify; "><a name="_ftn56"></a> National IPR Strategy, September 2012, pp.17-18 and National IPR Strategy, July 2014 , pp.16-17</p>
<p style="text-align: justify; "><a name="_ftn57"></a> National IPR Strategy, September 2012, pp.19 and National IPR Strategy, July 2014 , pp.16</p>
<p style="text-align: justify; "><a name="_ftn58"></a> Draft Policy, p. 11</p>
<p style="text-align: justify; "><a name="_ftn59"></a> National IPR Strategy, September 2012, pp.19-20 and National IPR Strategy, July 2014 , pp. 17-18</p>
<p style="text-align: justify; "><a name="_ftn60"></a> Draft Policy, p.11</p>
<p style="text-align: justify; "><a name="_ftn61"></a> National IPR Strategy, September 2012, pp. 20 and National IPR Strategy, July 2014 , pp.18</p>
<p style="text-align: justify; "><a name="_ftn62"></a> National IPR Strategy, September 2012, pp. 18</p>
<p style="text-align: justify; "><a name="_ftn63"></a> Draft Policy, p.11</p>
<p style="text-align: justify; "><a name="_ftn64"></a> Draft Policy, p. 12</p>
<p style="text-align: justify; "><a name="_ftn65"></a> National IPR Strategy, September 2012, pp. 20-22</p>
<p style="text-align: justify; "><a name="_ftn66"></a> Draft Policy, p.12</p>
<p style="text-align: justify; "><a name="_ftn67"></a> See, CIS Comments to the First Draft of the National IP Policy, Available at: <a href="http://cis-india.org/a2k/blogs/national-ipr-policy-series-cis-comments-to-the-first-draft-of-the-national-ip-policy">http://cis-india.org/a2k/blogs/national-ipr-policy-series-cis-comments-to-the-first-draft-of-the-national-ip-policy</a></p>
<p style="text-align: justify; "><a name="_ftn68"></a> National IPR Strategy, September 2012, pp. 22 and National IPR Strategy, July 2014 , pp. 18-19</p>
<p style="text-align: justify; "><a name="_ftn69"></a> National IPR Strategy, September 2012, pp.22 and National IPR Strategy, July 2014 , pp.18</p>
<p style="text-align: justify; "><a name="_ftn70"></a> National IPR Strategy, September 2012, pp.23</p>
<p style="text-align: justify; "><a name="_ftn71"></a> Draft Policy, p. 18-19</p>
<p style="text-align: justify; "><a name="_ftn72"></a> Draft Policy, p.19</p>
<p style="text-align: justify; "><a name="_ftn73"></a> Draft Policy, p.10,19</p>
<p style="text-align: justify; "><a name="_ftn74"></a> Draft Policy, p.19-20</p>
<p style="text-align: justify; "><a name="_ftn75"></a> Draft Policy, p. 12-13</p>
<p style="text-align: justify; "><a name="_ftn76"></a> National IPR Strategy, July 2014 , pp.19</p>
<p style="text-align: justify; "><a name="_ftn77"></a> Draft Policy, pp. 10, 18-19.</p>
<p style="text-align: justify; "><a name="_ftn78"></a> Draft Policy, pp. 20-22</p>
<p style="text-align: justify; "><a name="_ftn79"></a> Draft Policy, p. 22</p>
<p style="text-align: justify; "><a name="_ftn80"></a> Draft Policy, p.22-23</p>
<p style="text-align: justify; "><a name="_ftn81"></a> National IPR Strategy, July 2014 , pp.22</p>
<p style="text-align: justify; "><a name="_ftn82"></a> Draft Policy, pp. 25-26.</p>
<p style="text-align: justify; "><a name="_ftn83"></a> Draft Policy, p.26</p>
<p style="text-align: justify; "><a name="_ftn84"></a> Draft Policy, p.27-28</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/comparison-of-national-ipr-strategy-september-2012-national-ipr-strategy-july-2014-and-draft-national-ip-policy-december-2015'>http://editors.cis-india.org/a2k/blogs/comparison-of-national-ipr-strategy-september-2012-national-ipr-strategy-july-2014-and-draft-national-ip-policy-december-2015</a>
</p>
No publisheramulyaIntellectual Property RightsPatentsAccess to Knowledge2016-03-08T01:49:07ZBlog EntryComments on the Guidelines for Examination of Computer Related Inventions (CRIs)
http://editors.cis-india.org/a2k/blogs/comments-on-the-guidelines-for-examination-of-computer-related-inventions-cris
<b>Recently, the Indian Patents Office released the Guidelines for Examination of Computer Related Inventions (“2015 Guidelines/ Guidelines”) in an attempt to clarify examination of software related patents in India. This post is a pure analysis of the 2015 Guidelines. The new Guidelines, essentially, narrow the exclusions of secttion 3(k), thereby enlarging the scope of software related applications eligible for a patent grant. More alarmingly, there is low emphasis on the application of the subject matter test, increased ambiguity on the nature of subject matter and an exclusionary list of examples appended to the document. In the following post, CIS highlights these concerns and presents solutions, and also proposes a definition of "computer programme per se".
Read on to understand how the new guidelines will potentially lead to an increase in software patenting activity by expanding the scope of patentable subject matter – in negation of the legislative intent of section 3(k) of the Indian Patents Act, 1970.</b>
<p style="text-align: justify;">(Prepared with comments from Pranesh Prakash)</p>
<hr />
<p style="text-align: justify;">The <a class="external-link" href="http://www.ipindia.nic.in/iponew/CRI_Guidelines_21August2015.pdf">2015 Guidelines</a> were stuck in the pipeline for a long time. The first draft was released in 2013 and a round of public consultation later, it paved the way for the current guidelines. The guidelines exist to supplement the practices and procedures followed by the Patent Office (as prescribed in the Indian 'Manual of Patent Office Practice and Procedure')<a name="_ftnref1" href="#_ftn1">[1]</a>, with the specific objective of ensuring consistent and uniform examination of CRI applications.</p>
<p style="text-align: justify;">To begin with, the Guidelines have been significantly trimmed down from their draft version. CIS had <a href="http://cis-india.org/a2k/blogs/comments-on-draft-guidelines-for-computer-related-inventions">commented on the Draft Guidelines in 2013</a> and broadly observed/recommended the following:</p>
<ul style="text-align: justify;">
<li>That the explanation to section 3(k) (Para 2.4) include the subject matter test.</li>
<li>That the Guidelines clarify that section 3(k) intending to exclude “<em>computer programs per se</em>” means excluding computer programs <strong>by themselves</strong>.</li>
<li>Supplying clarifications to the meaning of Inventive Step </li></ul>
<p style="text-align: justify;"> Para 5.3 stated: <em>(ja) "inventive step" means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art;</em></p>
<em> </em>
<p>Ambiguity around the terms “technical advance” and “person skilled in the art” persists.</p>
<p> </p>
<ul style="text-align: justify;">
<li>The Guidelines place CRIs in the same pool as other inventions, to the extent of suggesting that CRIs be evaluated on same standards of novelty, non-obviousness and industrial applicability as other inventions. This is problematic, because CRIs are inventions with features such as obsolence and being largely incremental innovations.</li>
<li>That the guidelines prescribing dictionary meanings for undefined terms (in Indian statutes) – was a dangerous prescription to make because the words “firmware”, “software”, “hardware” and “algorithm” have different meanings in different contexts.</li>
<li>That the guidelines had a misguided sense of ordering the paragraphs. The subject matter test (which should be undertaken first) was mentioned after the narrower test for <em>computer programs per se. </em>To ensure correct examination re CRIs the application of the subject matter test should precede all other patent criterion evaluations.<a name="_ftnref2" href="#_ftn2">[2]</a></li></ul>
<p style="text-align: justify;">All the above observations/recommendations still hold true – unfortunately, none of them have been incorporated into the 2015 Guidelines. The few <em>unwanted</em> changes that eventually made their way have nullified the progress the 2013 draft made in terms of providing clarity to section 3(k) and narrowing down the scope of software patents. For instance-</p>
<ul style="text-align: justify;">
<li>Instead of supplying clarity to terms such as “technical effect”, “technical advancement”, the 2015 Guidelines removethe definition of these terms. However, section 6 lists six questions that must be addressed by the examiner to determine the technical advancement of the invention.</li>
<li>Similarly, the explanation to section 3(k) has been deleted in the 2015 text.</li>
<li>The explanation to “inventive step” made reference to the <em>Enercon case</em> (thereby <em>Windsurfing International Inc.</em> and <em>Pozzoli case)</em>, for the determination of inventive step. The explanation has also been discarded in the 2015 Guidelines.</li>
<li>Other changes include providing better definition of Algorithms, making thescope of mathematical model and business method claims under section 3(k) more expansive.</li></ul>
<h2 style="text-align: justify;">Narrowing down excluded subject matter relating to CRIs</h2>
<p style="text-align: justify;">Under the crucial section “<strong>Determination of excluded subject matter relating to CRIs</strong>” (section 5.4 in the draft Guidelines; section 4.5 in 2015 Guidelines), the 2013 draft deemed inventions consisting of computer programmes combined with general purpose computers as non-patentable. However, a computer programme couple with novel hardware was deemed possibly patentable subject matter. That version stated <em>“5.4.6....In cases where the novelty resides in the device, machine or apparatus and if such devices are claimed in combination with the novel or known computer programmes to make their functionality definitive, the claims to these devices may be considered patentable, if the invention has passed the triple test of novelty, inventive step and industrial applicability. ” </em>In the 2015 Guidelines, however, section 4.5 does not shed substantive light on the matter of patentability of software combined with novel hardware. Instead a new section titled “Determinants” has been introduced:</p>
<p style="text-align: justify;"><strong><em>5. Determinants</em></strong></p>
<p style="text-align: justify;"><em> 5.1 For being considered patentable, the subject matter should involve either</em></p>
<p style="text-align: justify;"><em> - a novel hardware, or</em></p>
<p style="text-align: justify;"><em> -a novel hardware with a novel computer programme, or</em></p>
<p style="text-align: justify;"><em> -a novel computer programme with a known hardware which goes beyond the normal interaction with such hardware and affects a change in the functionality and/or performance of the existing hardware.</em></p>
<p style="text-align: justify;"><em> A computer program, when running on or loaded into a computer, going beyond the “normal” physical interactions between the software and the hardware on which it is run, and is capable of bringing further technical effect may not be considered as exclusion under these provisions.</em></p>
<p style="text-align: justify;">And,</p>
<p style="text-align: justify;"><strong> </strong></p>
<p style="text-align: justify;"><strong><em> 6. Indicators to determine technical advancement</em></strong></p>
<p style="text-align: justify;"><em>6.1 While examining CRI applications, the examiner shall confirm that the claims have the requisite technical advancement. The following questions should be addressed by the examiner while determining the technical advancement of the inventions concerning CRIs:</em></p>
<p style="text-align: justify;"><em> (i) whether the claimed technical feature has a technical contribution on a process which is carried on outside the computer;</em></p>
<p style="text-align: justify;"><em> (ii) whether the claimed technical feature operates at the level of the architecture of the computer;</em></p>
<p style="text-align: justify;"><em> (iii) whether the technical contribution is by way of change in the hardware or the functionality of hardware.</em></p>
<p style="text-align: justify;"><em> (iv) whether the claimed technical contribution results in the computer being</em></p>
<p style="text-align: justify;"><em> made to operate in a new way;</em></p>
<p style="text-align: justify;"><em> (v) in case of a computer programme linked with hardware, whether the programme makes the computer a better computer in the sense of running more efficiently and effectively as a computer;</em></p>
<p style="text-align: justify;"><em> (vi) whether the change in the hardware or the functionality of hardware amounts to technical advancement.</em></p>
<p style="text-align: justify;"><em> If answer to ANY of the above questions is in affirmative, the invention may not be considered as exclusion under section 3 (k) of the Patents Act, 1970.</em></p>
<p style="text-align: justify;">It is evident from section 5 that the Patent Office intends to expand the scope of patentable subject matter, and narrow down applicability of section 3(k). The clause “<em>a novel computer programme with a known hardware which goes beyond the normal interaction with such hardware and affects a change in the functionality and/or performance of the existing hardware.” </em>contributes to the expansion. There is no definition as to what will constitute<em>“...normal interaction with such hardware...” </em>Neither do the Guidelines set a standard for assessment of “normal interaction.” Should “normal interaction” be determined from the definition/perspective supplied by the vendor, or from the known universe of interactions possible from that device?</p>
<p style="text-align: justify;">Further, as a stakeholder (<a href="http://ipindia.nic.in/iponew/CRI_Comments_Feedbacks/related_doc/Comments%20to%20Guidelines%20for%20Examination%20of%20CRIs%20-%20Anand%20and%20Anand.pdf">Anand and Anand</a>) in their <a href="http://cis-india.org/a2k/blogs/guidelines-for-examination-of-computer-related-inventions">comments on the 2013 draft</a> pointed out, increasing the threshold to a novel hardware (and not just a general purpose computing machine) would go against the legislative intent as the requirement of a novel hardware was not mentioned anywhere in the Act.</p>
<p style="text-align: justify;">These gaps may pave the path for a rather broad scope of patentable software inventions.</p>
<h2 style="text-align: justify;">Secondary application of the subject matter test</h2>
<p style="text-align: justify;"><em>“...Therefore, if a computer programme is not claimed by “in itself” rather, it has been claimed in such manner so as to establish industrial applicability of the invention and fulfills all other criterion of patentability, the patent should not be denied. In such a scenario, the claims in question shall have to be considered taking in to account whole of the claims. ”</em></p>
<p style="text-align: justify;">The way 3(k) functions is that it's a subject matter test for what an invention is (with non-inventions excluded, since an application that has not been found to be in order may not be granted a patent <br /> under s.43, and to be 'in order', the application has to be "for an invention" (s.6, s.10, etc.)). The tests for novelty, inventive step, and industrial applicability have to in any case be applied, regardless of the subject matter test. So what the above-quoted sentence does is removes the subject matter test, as it uses "in itself" to mean to the exclusion of patentability tests other than subject matter.</p>
<h2 style="text-align: justify;">Proposed definition of “computer programme per se”</h2>
<p style="text-align: justify;">Further, CIS suggests a definition to "computer programme per se":</p>
<p style="text-align: justify;"><em>"Computer programme per se in the relevant clause means (a) any computer programme in the abstract, (b) any computer programme expressed in source code form, including source code recorded on an information storage medium, or (c) any computer programme that can be executed or executes on a general purpose computer, including computer programme object code designed for execution on a general purpose computer that is recorded on an information storage medium." </em><br /> <br /> Furthermore, since the inclusion of computer programmes in a broader application should not render the application ineligible subject matter, CIS previously proposed an addition to the test:</p>
<p style="text-align: justify;"><em>"We propose a new part to the above test to make the clause clearer. The Manual should specify that “the computer programme portions of any claimed invention should be treated as if it were covered by prior art and patentability should thus be determined with respect to the other features of the invention”. This way, we can ensure that an invention which merely uses or implements a computer programme is not granted patent on the basis of the inventiveness of the computer programme </em>per se<em>." </em></p>
<h2 style="text-align: justify;">Issues with illustrative examples</h2>
<p style="text-align: justify;">CIS observes that most of the examples provided in the document are things that should <strong>*not*</strong> be awarded patents as per section 3(k). <br /> <br /> 8.2 describes a computer programme per se, and awarding a patent to this would (additionally has no novelty, no inventive step) <br /> 8.4 describes a computer programme per se. General Purpose Computer. (additionally has no novelty, no inventive step) <br /> 8.5 describes a computer programme per se. The "repeaters", etc., are software. General Purpose Computer. (additionally has no novelty, no inventive step) <br /> 8.6 describes a computer programme per se. (additionally has no novelty, no inventive step) <br /> 8.8 describes a computer programme per se. It can be implemented on any general purpose computer. (additionally has no novelty, no inventive step) <br /> 8.1 is a simple algorithm, and forms the basis of parallel processing in a computer, of which a wireless device is a subset. (additionally has no novelty, no inventive step) <br /> 8.1, 8.3, 8.7 have no novelty, no inventive step, despite not being computer programmes per se.</p>
<p style="text-align: justify;">This issue was also raised by stakeholders in their <a href="http://cis-india.org/a2k/blogs/guidelines-for-examination-of-computer-related-inventions">comments to the IPO on the 2013 draft. </a></p>
<h2 style="text-align: justify;">Conclusion</h2>
<p style="text-align: justify;">The 2015 Guidelines have narrowed the exclusions in section 3(k) – which does not bode well for innovation, especially innovation by startup enterprises. The new guidelines will permit a larger scope of applications to be granted, which will lead to bigger players in the market amassing huger patent portfolios. There is also an urgent need for clarification on “ novel hardware”.</p>
<p style="text-align: justify;">On a broader level, CIS has <a href="http://cis-india.org/a2k/blogs/arguments-against-software-patents">repeatedly argued for discarding patent protection</a> for software inventions, because of the unique nature of such inventions and the repercussions software patenting has on subsequent innovative activity. The 2015 Guidelines disappoint on rolling back and clarifying software patenting in India.</p>
<hr style="text-align: justify;" />
<p style="text-align: justify;"><a name="_ftn1" href="#_ftnref1">[1]</a>Chapter 08.03.05.10 of the Manual, containing provisions pertaining to section 3(k) of the Patents Act, 1970 shall stand deleted with coming into force of these Guidelines for examination of CRIs.</p>
<p style="text-align: justify;"><a name="_ftn2" href="#_ftnref2">[2]</a>The flow chart in the 2013 draft guidelines show a step by step process of examining CRIs. However, the subject matter determination is done towards the end. There is debate on whether there should be a set order for examining patents. However, in the case of CRIs there must be an exception as the statute explicitly prohibits certain types of patents (business method, algorithm etc). As argued earlier, in order to reduce transaction costs, the subject matter test must be made at the very beginning. There should at least be a preliminary determination as to Section 3(k) to reject patent applications for those inventions that can easily be classified under this provision.</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/comments-on-the-guidelines-for-examination-of-computer-related-inventions-cris'>http://editors.cis-india.org/a2k/blogs/comments-on-the-guidelines-for-examination-of-computer-related-inventions-cris</a>
</p>
No publishersinhaSoftware PatentsAccess to KnowledgeIntellectual Property RightsIndian Patents Act Section 3(k)Patents2015-10-27T14:46:24ZBlog Entry'We Need to Proactively Ensure that People Can't File Patents Representative of the Creativity of a FOSS Community'
http://editors.cis-india.org/a2k/blogs/we-need-to-proactively-ensure-that-people-cant-file-representatives-of-the-creativity-of-a-foss-community
<b>Rohini Lakshané attended “Open Innovation, Entrepreneurship, and Our Digital Culture” in Bangalore on August 13, 2015. Major takeaways from the event are documented in this post.</b>
<p class="Textbody" style="text-align: justify; "><b>Speakers:</b> Prof. Eben Moglen, Keith Bergelt, and Mishi Choudhary; <b>Panel discussion moderator</b>: Venkatesh Hariharan. See the <a class="external-link" href="http://pn.ispirt.in/event/open-innovation-entrepreneurship-and-our-digital-future">event page here</a>. The organizers <a class="external-link" href="http://pn.ispirt.in/open-source-leaders-discuss-innovation-entrepreneurship-and-software-patents">republished Rohini's report on their website</a>.</p>
<hr style="text-align: justify; " />
<p class="Textbody" style="text-align: justify; "><b>Prof. Eben Moglen on FOSS and entrepreneurship</b></p>
<ul style="text-align: justify; ">
<li>The culture of business in the 21<sup>st</sup> century needs open source software or free software because there is one Internet governed by one set of rules, protocols and APIs that make it possible for us to interact with each another. The Internet made everybody interdependent on everybody else. Startup culture needs free and open source software (FOSS) because startups are an insurgency, a guerrilla activity in business. The incumbents in a capitalistic world dislikes competition and detests that existing resources, such as FOSS, enable insurgents to circumvent some of the steep curve that they had to climb in order to become incumbents.</li>
<li>Hardware is developing in ways that make the idea of proprietary development of software obsolete. There is no large producer of proprietary software that isn't also dependent on FOSS. Microsoft Cloud is based on deployments that do not use Windows but are based on FOSS. The era of Android as a semi-closed, semi-proprietary form of FOSS is over. Big and small companies around the world are exploiting the open source nature of Android. </li>
<li><b>Free software is a renewable resource not a commodity. </b>Management is needed to avoid over-consumption or destruction of the FOSS ecosystem. Software is to the 21<sup>st</sup> century economic life what coal, steel, and rare earth metals were at the end of the previous century.</li>
<li>FOSS turned out to be about developing human brains. It turned out to be about using human intelligence in software better. Earlier universities, engineering colleges and research institutions were the greatest manufacturers and users of FOSS. Now businesses of all sizes are.</li>
<li>When Richard Stallman and Prof. Eben Moglen set out to make GPL free, they initiated a large public discussion process, the primary goal of which was to ensure that individual developers have as much right to talk and to be heard as loudly as the largest firms in the world. At the end of the negotiation process, 35 or 36 of the largest patent holders in the IT industry accepted the basic agreement to be a part of the commons. --- Incumbents like people to pay for a seat at the table. Paying to have an opinion is a pretty serious part of the landscape of the patent system.</li>
</ul>
<p class="Standard" style="text-align: justify; "><b>Prof. Eben Moglen on Digital India</b></p>
<ul style="text-align: justify; ">
<li><b>Every e-governance project that the Indian government buys should use FOSS.</b> The very nature of the way the citizens and governments interact can come to be mediated by software that people can read, understand, modify, and improve. An enormous ecosystem will come up -- a kind of public–private partnership (PPP) in the improvement of governance and government services, which is far more useful than most other forms of PPP conceptualised in the developed world in the 20<sup>th</sup> century.</li>
<li>Everybody has a stake in the success of this policy. Several corporations are working against this policy as they once stated that they do not need FOSS.</li>
<li>The biggest market for both making and consuming software in the world is in India, because the science done here will dominate global software making, which in turn will define how the Internet works, which in turn will define society. One can't develop the largest society on earth by reinventing the wheel. <b>The government is going to understand that only the sharing of knowledge and the sharing of forms of inventing would enable the largest society in the world to develop itself freely and take its place in the forefront of digital humanity.</b></li>
<li>If every state government's data centre across India is going to be turned into a cloud, one state might have VMWare, another might have AWS, and so on, it would be disastrous. To prevent this, <b>all e-governance activities of every state government and federal agency in India could be conducted in one, big, homogeneous Indian cloud. </b>This would enable utility computing across the country for all citizens, which would also make room for citizen computing to happen. When one moves towards architectures of omnipresent utility computing with large amounts of memory flatly available to everybody, one is going to be describing a national computing environment for a billion people. We can't even begin to model it until we start accomplishing it.</li>
<li>Prof. Eben Moglen's ambition is that there comes a time not very long from now when basic data science is taught in Indian secondary schools. The software is free and all the big data sets are public. A nation of a 100 million data scientists rules the world.</li>
</ul>
<p class="Standard" style="text-align: justify; "><b>Keith Bergelt on the Open Invention Network</b></p>
<ul style="text-align: justify; ">
<li>Over the past 10 years, Open Invention Network (OIN) has emerged as the largest patent non-aggression community in the history of technology. It has around 1,700 participants and is adding almost 2 participants every day. In the last quarter, OIN had approximately 200 licensees.</li>
<li>There is now a cultural transformation where companies are recognising that where OIN members collaborate, they shouldn't use patents to stop or slow down progress. Where members compete, they choose to invent while utilising defensive patents publications. What we are doing is a patent collaboration and a technical collaboration that exists in major projects around the world.</li>
<li>OIN has been making a major effort since January 2015 to spend more time in India and China to be able to ensure that the technological might and expertise represented in the two countries can be a part of the global community, and that global projects can start here. <i>“We can expect to leverage the expertise of the community to be able to drive innovation from here [India and China]. It's not about IBM investing a billion dollars a year since 1999 and having some birthright to driving the open source initiatives around the world or about Google or Red Hat or anyone else. You have the ability to impact major changes and we want to be able to support you in the name of freedom of action as participants.”</i></li>
</ul>
<p class="Standard" style="text-align: justify; "><b>Panel Discussion</b></p>
<p class="Standard" style="text-align: justify; "><b>Patent Wars and Innovation</b></p>
<ul style="text-align: justify; ">
<li>In the past 5 to 7 years, patent wars in the handset segment of the information technology (IT) market have wasted tens of billions of dollars on litigation, and on raising the price of patent armaments. This patent litigation was purely an economic loss to the IT industry and it contributed nothing. If the patent system strangles invention, non-profit groups, non-commercial bodies, free software makers, and start-ups cannot invent freely.</li>
<li>Defensive patent publications, such as those made by IBM, lead to the gross underestimation of the inventive power and output of the company. People are struggling to find something to evaluate the productive output of an entity – startup, micro-industry or macro-industry. Patents are being used inappropriately and it's part of the corruption of the patent system. Any venture capitalist (VC) who believes that either the innovative capacities or the potential success factors of a start-up are tied to its patents should know that there are only a minuscule number of cases where patents are the differentiator. The differentiators required in order to sustain business are how smart the people are, how quickly they innovate, and how quickly they are able to adapt to complex situations. We see a trend in the US of not equating patents with innovation. The core-developer and hacker communities are largely anti-patent.</li>
<li>However, the flip side is that if the FOSS communities do not patent defensively, i.e., acquire and publish patents for their inventions in order to prevent others from getting patents in one jurisdiction or another, patent trolls will eventually encroach on the communities' inventive output. The only people making money out of this whole process are lawyers. It is slowing down the uptake of technology by creating fears and doubts in the system.</li>
<li>FOSS communities didn't qualify everything produced in the 23 years of (Linus') Linux, which would have let the service serve as stable prior art, preventing other people from filing patents. We can debate what is patentable subject matter in general or whether software should be patentable, but in the meantime <b>if we can be proactive and file everything that we have in defensive publications and make it accessible to the patent and trademark offices here and around the world, we will have far fewer patents.</b> <b>We need to be activists in making sure that people can't file patents that are representative of the creativity of a community.</b></li>
<li>The Chinese government has instituted a programme designed to produce defensive publications in order to capture all the inventiveness across their industries, to be able to ensure that the quality of what ultimately gets patented is at least as high.</li>
<li>The US has a massive repository called ip.com, which is with every patent examiner of the USPTO.</li>
<li>India does not grant software patents as per section 3(k) of the Indian Patents Act, but that doesn't mean that no software patents are being granted. One of the empirical studies conducted by the Software Freedom Law Centre (SFLC) in India shows that 98.3% of the [telecom and computing technology] patents granted till 2013 went to multinational corporations. Almost none of the assignees are Indian.</li>
<li>In the context of the ongoing patent infringement law suits filed in the Delhi High Court by Ericsson [<a href="http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india">link</a>]: The Delhi High Court has had a reputation of being very pro-intellectual property from the beginning.</li>
<li>Also, there is pressure from trade organisations. In August 2015, Ericsson along with ASSOCHAM invited the Director General of the Competition Commission of India to present a paper about why patents are good. It is essential to determine how the rules of conflict of interest apply here. This is exactly what the pharmaceutical industry would do. The only bodies who would object are Doctors Without Borders (MSF) or some local organisations who realise that high priced patented drugs is not what India needs and that we do not need to have the same IP policy as the US or Japan. We only need a different policy.</li>
<li>The Special 301 Report of the United States Trade Representative (USTR) is a big sham, and it suggests that India doesn't have strict enforcement of IP law. India does, unlike China.</li>
<li><b>Accenture has been granted a software patent in India.</b> The patent is about an expert present in a remote location transferring knowledge to somebody who is listening in another location. Universities offering MOOCs, BPOs, and many other services would fall under such a patent. SFLC spent four years trying to fight this patent. The first defence of Accenture's battery of lawyers was that they won't use the patent.</li>
<li><b>Patents of very low quality are being bought at very high prices. </b>The tax system or the subsidy system for innovation regards all patents as equal. This is a pricing failure and that should be corrected by other forms of intervention. The pendulum has already begun to swing the other way. Alice Corp was the third consecutive and unanimous ruling by the US Supreme Court that abstract ideas are not patentable. Patent applications pertaining to business methods and algorithms are increasingly being rejected by the USPTO after the ruling.</li>
</ul>
<p class="Standard" style="text-align: justify; "><b>Prof. Eben Moglen on Facebook:</b></p>
<p class="Standard" style="text-align: justify; ">Facebook is a badly designed technology because there is one Man in the Middle who keeps all the logs. The privacy problem with Facebook is not just about what people post. It's about surveillance and data mining of web reading behaviour. It is a social danger that ought not to exist. I have said since 2010 is that we can't forbid it; let's replace it. It means bringing the web back as a writeable medium for people in an easy way. What I see as next-generation architecture could just as well be described as Tim Burners Lee's previous generation architecture.</p>
<p class="Standard" style="text-align: justify; ">You have to be able to trust the Internet. If you can't, you are going to be living in the shadow of govt surveillance, corporate surveillance, the fear of identity theft, and so on. We need to be able to explain to people what kind of software they can trust and what kind they can't. Distributed social networking will happen; it's not that difficult a problem.</p>
<p class="Standard" style="text-align: justify; ">An example of federated networking is <b>Freedombox</b>, a cheap hardware doing router jobs using free software in ways that encourage privacy. The pilot project for Freedombox has been deployed in little villages in Andhra Pradesh and Karnataka. These routers don't deliver logs to a thug in a hoodie in Menlo Park.</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/we-need-to-proactively-ensure-that-people-cant-file-representatives-of-the-creativity-of-a-foss-community'>http://editors.cis-india.org/a2k/blogs/we-need-to-proactively-ensure-that-people-cant-file-representatives-of-the-creativity-of-a-foss-community</a>
</p>
No publisherrohiniOpen SourceAccess to KnowledgeOpen InnovationFOSSPatents2015-09-27T11:51:50ZBlog EntryCIS RTI REQUEST TO DIPP - NUMBER 1 - FEBRUARY, 2015
http://editors.cis-india.org/a2k/blogs/cis-rti-request-to-dipp-number-1-february-2015
<b></b>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/cis-rti-request-to-dipp-number-1-february-2015'>http://editors.cis-india.org/a2k/blogs/cis-rti-request-to-dipp-number-1-february-2015</a>
</p>
No publishernehaaAccess to KnowledgeCopyrightIntellectual Property RightsAccountabilityPatents2015-04-14T17:17:53ZFileNational IPR Policy Series : Comments on the Proposed Intellectual Property Rights Policy to the Department of Industrial Policy and Promotion
http://editors.cis-india.org/a2k/blogs/comments-on-proposed-ip-rights-policy-to-dipp
<b>On 13 November, 2014, the Department of Industrial Policy and Promotion had released a Call for Suggestions for India's proposed National IPR Policy. This is the Centre for Internet and Society's (CIS) submission for the same.</b>
<p style="text-align: justify;">Submitted by CIS with inputs from Pranesh Prakash, Director, Nehaa Chaudhari, Programme Officer, Anubha Sinha, Programme Officer and Amulya P., Intern. <a href="http://editors.cis-india.org/a2k/comments-on-ip-rights-policy-to-dipp.pdf" class="external-link">Click</a> to view the PDF.</p>
<hr />
<h2 style="text-align: justify;">I. Preliminary</h2>
<p style="text-align: justify;">I.1. This submission presents comments from the Centre for Internet and Society (<strong>"CIS"</strong>)<a name="_ftnref1" href="#_ftn1">[1]</a> on the proposed National Intellectual Property Rights Policy <strong>("National IPR policy") </strong>to the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India. <strong>("DIPP"</strong>).</p>
<p style="text-align: justify;">I.2. CIS commends the DIPP for this initiative, and appreciates the opportunity to provide comments on the National IPR Policy. CIS' comments are as stated hereafter.</p>
<h2 style="text-align: justify;">II. Principles</h2>
<p style="text-align: justify;">II.1.1. The characterization of intellectual property rights may be two- fold- <em>first,</em> at their core, intellectual property rights, are temporary monopolies granted to <em>inter alia,</em> authors and inventors; and <em>second, </em>they are a tool to ensure innovation, social, scientific and cultural progress and further access to knowledge. This dual nature and purpose of intellectual property protection is particularly critical in developing economies such as India. Excessive intellectual property protection could result in stunted innovation and negatively impact various stakeholders. <a name="_ftnref2" href="#_ftn2">[2]</a> It is therefore our submission that the development of the IPR Policy be informed by broader principles of fairness and equity, balancing intellectual property protections with limitations and exceptions/user rights such as those for research, education and access to medicines.</p>
<p style="text-align: justify;">II.1.2. These comments will evaluate the recent developments in the intellectual property regime in India and point out instances for possible reform.</p>
<p style="text-align: justify;">II.1.3. These comments have been divided into five sections, dealing with patents, openness, open access to scholarly works, copyright, and negotiating free trade agreements in that order.</p>
<p style="text-align: justify;">III. <strong>Detailed Comments</strong></p>
<p style="text-align: justify;">III.1. <strong>Patents</strong></p>
<p style="text-align: justify;">III.1.1. <strong>Key Issues Regarding Patents</strong></p>
<p style="text-align: justify;">III.1.1.1. The key issues involving patents in India include compulsory licensing, uncertainty in software patenting, slow pace of examination of patent applications, <em>inter alia</em>.</p>
<p style="text-align: justify;">III.1.1.2. CIS submits that the Indian intellectual property regime contains numerous safeguards to ensure that monopolies of intellectual property are not exercised to the detriment of the public and that the National IPR Policy should continue to reflect these ideals.</p>
<p style="text-align: justify;">III.1.2. <strong>Software Patents and Dual Monopoly </strong></p>
<p style="text-align: justify;">III.1.2.1. Presently, software in India may be copyrighted and computer related inventions are patentable. CIS is of the opinion that this results in an ambiguity that could potentially result in a dual monopoly over the same subject matter. This ambiguity around the legality of software patents and the scope of patents on computer related inventions has existed since the Parliament introduced the term "per se" to section 3(k) through the Patent (Amendment) Act, 2002, persisting despite repeated attempts<a name="_ftnref3" href="#_ftn3">[3]</a> to bring about clarity in the law (the most recent one being the Draft Guidelines on Computer Related Inventions, released in 2013 by the Indian patent office).</p>
<p style="text-align: justify;">III.1.2.2. CIS believes that software is currently adequately protected under copyright, and does not merit patent protection. The software industry in its infancy grew by leaps and bounds in the absence of patents, and imposing twenty year monopolies is stunting the development of software, especially, in an industry where technology changes every two to five years.</p>
<p style="text-align: justify;">III.1.2.3. Therefore, CIS is of the opinion that the National IPR Policy should recognise the danger of software patenting, and encourage the adoption of and development of alternatives to a strict intellectual property regime, for instance, Free/Open Source/Libre Software.</p>
<p style="text-align: justify;">III.1.3. <strong>Compulsory Licensing of Patents</strong></p>
<p style="text-align: justify;">III.1.3.1. CIS believes that the current regime allowing for compulsory licensing of patents in India helps achieve a balance between the two concerns of rewarding inventions and making them available to the public during times of need, of the rights of the patent holder with his obligations to ensure availability of products at a reasonable price by allowing third parties who do not own the patent to license the use of the patent during the term of protection.<a name="_ftnref4" href="#_ftn4">[4]</a> CIS believes that such a balance cannot be arrived at merely by market mechanisms. CIS further believes that achieving such a balance is important for a developing country like India as we have special concerns regarding access to healthcare and access to technologies that will protect our national interest.<a name="_ftnref5" href="#_ftn5">[5]</a></p>
<p style="text-align: justify;">III.1.3.2. Therefore CIS submits that the National IPR policy should continue to make positive allowances for government involvement in this space, through the compulsory licensing of patents in certain situations.</p>
<p style="text-align: justify;">III.1.4. <strong>Alternative Licensing Mechanisms</strong></p>
<p style="text-align: justify;">III.1.4.1. CIS believes that government participation in the patenting regime ensures that all interests are taken on board and the social costs of patents are kept in mind. CIS is of the opinion that the National IPR policy should be formed after careful consideration of alternative patent licensing mechanisms that could help achieve a balance between the interests of different stakeholders particularly because as a developing economy we have greater needs for access to medicines and technologies to ensure economic development.<a name="_ftnref6" href="#_ftn6">[6]</a></p>
<p style="text-align: justify;">III.1.4.2. On patent pools: In the interests of ensuring development of technology and innovation while balancing the social costs of patents, CIS submits that the National IPR Policy should consider alternative licensing mechanisms such as patent pools which present an efficient legal arrangement to the different problems that arise when companies have complementary intellectual property rights and these rights are essential to new technologies being used and employed<a name="_ftnref7" href="#_ftn7">[7]</a>. Such a licensing could be done with government participation to ensure standard royalty rates and standard agreements.</p>
<p style="text-align: justify;">III.1.4.3. On tailoring patent strengths: Our patent system provides for a one size first all approach to patent terms. CIS believes that the National IPR Policy could suggest the adoption of a more studied approach to differential patent strengths that properly balances out the benefits of the innovation against social costs of patents both in the form of monopoly pricing and threats to subsequent pricing is required to ensure that our patent system is fair equitable and in our national interest.<a name="_ftnref8" href="#_ftn8">[8]</a></p>
<p style="text-align: justify;">III.1.4.4. On royalty caps: CIS believes that the National IPR policy could encourage bringing back royalty caps for certain sectors as a means of regulating the market and ensuring that access to technologies is unharmed. CIS believes that this will serve the larger national interest and ensure technological development.<a name="_ftnref9" href="#_ftn9">[9]</a></p>
<p style="text-align: justify;">III.2. <strong>Openness</strong></p>
<p style="text-align: justify;">III.2.1. <strong>Free and Open Source Software</strong></p>
<p style="text-align: justify;">III.2.1.1. Free and Open Source Software ("FOSS") has emerged as a key agent in information technology policy making in India. There has been an increased importance of free and open source software in education, governmental agencies, as recently demonstrated by the Indian Government's decision to shift to open source software, in sync with the Digital India initiative.<a name="_ftnref10" href="#_ftn10">[10]</a></p>
<p style="text-align: justify;">III.2.1.2. CIS believes that the IPR policy should encourage free and open software in education, governmental agencies etc. CIS believes that this shift in open source software is necessary to keep our IPR policy in sync with developments in the digital world.</p>
<p style="text-align: justify;">III.3. <strong>Open Access to Scholarly Works</strong></p>
<p style="text-align: justify;">III.3.1. <strong>Open Access Policies and Scientific and Scholarly Works</strong></p>
<p style="text-align: justify;">III.3.1.1. The benefits of implementing an open access policy with regard to scientific and scholarly works are manifold. Providing open access to scholarly research will ensure percolation of cutting edge research into the society. It has been often argued that restricted access to government funded research is unethical, since scientific research conducted by government agencies is partly, if not entirely, funded by the taxpayers' money.</p>
<p style="text-align: justify;">III.3.1.2. <strong>Government Initiatives Towards Open Access</strong></p>
<p style="text-align: justify;">III.3.1.2.1. CIS believes that the steps taken in this regard by the Department of Biotechnology and Department of Science to make scientific research publicly available by developing an open access policy are laudable, especially from the view of increasing access to research undertaken at these institutions.</p>
<p style="text-align: justify;">III.3.1.2.2. There are several other government agencies which have implemented open access policies, namely, the Council of Scientific and Industrial Research, Indian Council of Agricultural Research and Institute of Mathematical Sciences. CIS believes that this is step in the right direction</p>
<p style="text-align: justify;">III.3.1.2.3. Copyright is the key instrument to effect open access policies. CIS believes that the work should be appropriately copyrighted to allow for free and open access to any interested person.</p>
<p style="text-align: justify;">III.4. <strong>Copyright</strong></p>
<p style="text-align: justify;">III.4.1. <strong>Exceptions for Fair Dealings</strong></p>
<p style="text-align: justify;">III.4.1.1. The 2012, Amendment Act extended fair dealing exceptions in several ways; to sound recordings, videos, to the making of three dimensional works from two dimensional works,<a name="_ftnref11" href="#_ftn11">[11]</a> to storing of electronic copies at non-commercial public libraries, <a name="_ftnref12" href="#_ftn12">[12]</a> to rights of commercial rental.<a name="_ftnref13" href="#_ftn13">[13]</a> While the Act touched upon some of the burning issues with regard to limitations and exceptions to copyright, CIS believes that it did miss out on laying down clear rules for issues like exceptions for educational institutions, libraries and archives which is currently being negotiated at the standing committee of the WIPO as an international instrument,<a name="_ftnref14" href="#_ftn14">[14]</a> parallel importation of books for non-commercial libraries, and extending the current exceptions for education to distance education and digital education. CIS is of the opinion that while this was a step in the right direction the IPR policy should continue the trend of extending exceptions for fair dealing and should encourage forming general guidelines for fair dealings as it would help achieve goals of education and scientific and cultural progress.</p>
<p style="text-align: justify;">III.4.1.2. CIS believes that it would be beneficial if general guidelines for fair dealing were provided for. These guidelines must not take away from existing fair dealing exceptions under the law, but should act as a framework to understand what constitutes fair dealing. CIS submits that this coupled with support for the International Treaty for Limitations and Exceptions for Libraries and Archives<a name="_ftnref15" href="#_ftn15">[15]</a> and for International Treaty for Limitations and Exceptions for Educational and Research Institutions <a name="_ftnref16" href="#_ftn16">[16]</a>would help serve national interest as it would help reduce the freezing effect by reducing the costs of using copyrighted work legitimately and ensure social and cultural progress. CIS submits that the National IPR policy should encourage the international instruments aimed at providing for exceptions and limitations for fair dealings.</p>
<p style="text-align: justify;">III.4.2. <strong>Exceptions for Government Produced Works</strong></p>
<p style="text-align: justify;">III.4.2.1. CIS believes that the current exceptions for use of government produced works are far too limited and taxpayers must be free to use the works that they have paid for.<a name="_ftnref17" href="#_ftn17">[17]</a> CIS submits that the National IPR policy should encourage the broadening of exceptions with regard to government produced works.</p>
<p style="text-align: justify;">III.4.3. <strong>Compulsory Licensing</strong></p>
<p style="text-align: justify;">III.4.3.1. The Act allowed for compulsory licensing of foreign works<a name="_ftnref18" href="#_ftn18">[18]</a> and put in place statutory licenses for broadcasters<a name="_ftnref19" href="#_ftn19">[19]</a> CIS believes that this was a positive step that will encourage cultural and scientific education in India. CIS submits that compulsory licenses for copyrighted works help achieve goals of education, of scientific and cultural progress. CIS submits that the National IPR policy should encourage compulsory licensing of copyrighted works in certain situations for the promotion of access to knowledge and information.</p>
<p style="text-align: justify;">III.4.4. <strong>Protection of Authors/ Performers Rights</strong></p>
<p style="text-align: justify;">III.4.4.1. The Act allowed for protection of author's rights regarding storing of their work in electronic medium<a name="_ftnref20" href="#_ftn20">[20]</a> and for protection of rights of performers both commercial <a name="_ftnref21" href="#_ftn21">[21]</a> and moral.<a name="_ftnref22" href="#_ftn22">[22]</a> CIS believes that while this is in itself a positive step, there is need to ensure that such moral rights are not abused by authors or rights holders to stop discourse or to stop fair use and adequate measures to ensure the same must be put in place to avoid excessive intellectual property rights. CIS submits that the National IPR policy should discuss limitations to moral rights of authors and performers to make room for fair dealings.</p>
<p style="text-align: justify;">III.4.5. <strong>Users Rights Regarding Cover Versions Of Songs</strong></p>
<p style="text-align: justify;">III.4.5.1. The Act allows for users to make cover versions of a sound recording required provided they comply with rules regarding notices and royalties. CIS believes that this is potentially problematic as even recording companies have acknowledged that the non-commercial cover versions help in increasing the popularity of the original and therefore help in the growth of the film and music industry and this new law could possibly stop individuals from making such cover versions due to fear of violating the law and therefore harm the film and music industry. Therefore, CIS believes that the National IPR policy should consider measures to provide more rights to the users in order to ensure development of the music and film industry; CIS believes that this is an instance of excessive intellectual property and is harmful to all stakeholders involved.</p>
<p style="text-align: justify;">III.4.6. <strong>Relinquishment of Copyright and Creative Commons</strong></p>
<p style="text-align: justify;">III.4.6.1. The amended Section 21 of the Act now only requires a simply public notice from the author to relinquish his copyright as opposed to an application to the registrar of copyrights. CIS believes that this is a positive step as now the requirement under the rules can easily be satisfied by using a Creative Commons Zero license.<a name="_ftnref23" href="#_ftn23">[23]</a> CIS submits that the National IPR policy should undertake similar steps to encourage the usage of creative commons licenses and thereby facilitate access to knowledge.</p>
<p style="text-align: justify;">III.4.7. <strong>Term of Protection of Copyrights</strong></p>
<p style="text-align: justify;">III.4.7.1. The Act provided for an extension of term of copyright for photographs to almost double its earlier duration, <a name="_ftnref24" href="#_ftn24">[24]</a> CIS believes that this is possibly harmful as it could lead to copyrighted works not entering the public domain for unnecessarily long periods of time and thereby harm progress in science and culture. In this regard CIS further believes that since the term of protections provided under our copyright law for all works extends beyond our international obligations, The National IPR policy should try to ensure that scientific and cultural development are not hindered by excessive terms of protection that go beyond the minimum owed under our international obligations.</p>
<p style="text-align: justify;">III.4.8. <strong>Protection Of Rights Management Information</strong></p>
<p style="text-align: justify;">III.4.8.1. The amendment Act provided for protection of rights management information (RMI) and provided for both criminal and civil remedies in instances of unauthorised alteration or removal of RMIs.<a name="_ftnref25" href="#_ftn25">[25]</a> CIS believes that these provisions are unnecessary as India does not have obligations to do so under international treaties and there is no actual demand for these rights as it is yet unclear how these rights help authors or performers. CIS submits that these provisions increase the costs for users who want to legitimately break these digital locks to obtain accessible formats for the information and that so long as the rights holder does not have an obligation to ensure that their works are accessible, provisions such as these cripple creativity and stunt industry growth.<a name="_ftnref26" href="#_ftn26">[26]</a> Therefore CIS submits that the National IPR policy should help achieve a balance of concerns of users who want to legitimately break these digital locks on the one hand and the need to prevent digital piracy on the other.</p>
<p style="text-align: justify;">III.4.9. <strong>Intermediary Liability</strong></p>
<p style="text-align: justify;">III.4.9.1. CIS submits that due to the IT (Intermediary Guidelines) Rules, 2011, there is a freezing effect on free speech on the internet as these rules are procedurally flawed and go against the principles of natural justice.<a name="_ftnref27" href="#_ftn27">[27]</a> CIS believes that such a restraint on free speech harms creativity and innovation, to this end CIS submits that the National IPR policy should ensure free speech is not unfairly hindered by rules regarding copyright infringement.</p>
<p style="text-align: justify;">III.4.10. <strong>Criminalization of Copyright Infringement</strong></p>
<p style="text-align: justify;">III.4.10.1. Individual non-commercial infringement of copyright is a crime under Section 63A of the Copyright Act <a name="_ftnref28" href="#_ftn28">[28]</a> and is punishable by imprisonment which can extend to three years or a fine that can extend up to rs. 2,00,000/- CIS believes that this is an instance of excessive intellectual property protection; CIS is of the opinion that the civil remedies available for copyright enforcement are enough for copyright protection and that the criminal remedies under the Copyright Act, 1957 function only to ensure that there are obstacles to free and legitimate use of copyrighted material. CIS believes that such provisions are harmful for innovation within India and impose unnecessary costs on users.<a name="_ftnref29" href="#_ftn29">[29]</a> Therefore CIS believes the National IPR policy should reconsider the question of criminalisation of copyright infringement and should ensure that any penal consequences are proportional to the act committed.</p>
<p style="text-align: justify;">III.4.11. <strong>Concluding Remarks on Copyrights</strong></p>
<p style="text-align: justify;">III.4.11.1. In conclusion while India has what some call the most balanced approach to intellectual property law in the world today, <a name="_ftnref30" href="#_ftn30">[30]</a> one that balances both the interests of the author and the copyrights holder as well as the end user and the overall public interest, there is room for improvement as far as adapting to the internet age is concerned, especially considering the easy appeal of forming an intellectual property regime that is excessive and in the end harms all the concerned stakeholders.</p>
<p style="text-align: justify;">III.5. <strong>Free Trade Agreements (FTAs)</strong></p>
<p style="text-align: justify;">III.5.1. <strong>Need for Transparency Regarding FTA Negotiations</strong></p>
<p style="text-align: justify;">III.5.1.1. India has lately been negotiating Free Trade Agreements with several developed nations, these are closed door negotiations and the texts of the meetings are not available to the public. CIS believes that these texts should be made available to the public to ensure transparency and to ensure all stakeholders know of any developments, CIS believes that public knowledge of the positions of various actors in any negotiation process will help ensure that such positions are taken keeping in mind the interests of all stakeholders and will ensure that any outcome from such negotiations will be in national interest.<a name="_ftnref31" href="#_ftn31">[31]</a> CIS therefore submits that the National IPR policy should encourage transparency with regards to negotiations for free trade agreements.</p>
<p style="text-align: justify;">III.5.2. <strong>FTAs with Developed Nations and TRIPS Plus Standards</strong></p>
<p style="text-align: justify;">III.5.2.1. Leaked drafts of the European Union- India FTA negotiations have revealed that provisions on intellectual property protection were extensive and affected the pharmaceuticals sector, these provisions, if agreed upon, could go well beyond India's obligations under the WTO and under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. In fact, developed countries including the US <a name="_ftnref32" href="#_ftn32">[32]</a> and EU<a name="_ftnref33" href="#_ftn33">[33]</a> have tried time again and again to encourage developing countries to adopt standards of IP protection in bilateral or regional trade investment agreements that go beyond TRIPS <a name="_ftnref34" href="#_ftn34">[34]</a></p>
<p style="text-align: justify;">India has repeatedly indicated to the WTO that it was not willing to commit to an agreement beyond TRIPS.<a name="_ftnref35" href="#_ftn35">[35]</a> These commitments could include data exclusivity protection measures, ever-greening of patents etc. <a name="_ftnref36" href="#_ftn36">[36]</a></p>
<p style="text-align: justify;">CIS believes that despite the growing pressure from developed nations regarding various FTAs,<a name="_ftnref37" href="#_ftn37">[37]</a> India must hold its ground and ensure that concerns about India's national interest and the difference in the development levels of the European Union or other developed countries and developing countries like India are kept in mind while negotiating obligations under international agreements. Therefore CIS believes that the National IPR policy should ensure that TRIPS plus standards are not acceptable to India as they will undermine our national interest and hinder development at the national level.<a name="_ftnref38" href="#_ftn38">[38]</a></p>
<p style="text-align: justify;">III.5.3. <strong>Shift from Multilateral Forums to Bilateral FTA negotiations</strong></p>
<p style="text-align: justify;">III.5.3.1. CIS believes that the trend of shift in negotiations from a multilateral forum such as the WIPO or the WTO to a bilateral or a regional forum <a name="_ftnref39" href="#_ftn39">[39]</a> is harmful as certain flexibilities are built into the TRIPS and therefore multilateral negotiations based on TRIPS will help pursue India's interests better. And therefore when possible, India must prefer negotiations at multilateral forums as opposed to bilateral or regional treaties, CIS believes that the National IPR policy should reflect the same preferences. <a name="_ftnref40" href="#_ftn40">[40]</a></p>
<p style="text-align: justify;">IV. <strong>Concluding observations</strong></p>
<p style="text-align: justify;">IV.1. On patents, CIS submits that the National IPR policy reconsider software patenting, that encourage open source software, continue and strengthen that compulsory licensing and consider and study alternative licensing mechanisms as means to achieve a balancing of the interests of different stakeholders.</p>
<p style="text-align: justify;">IV.2. On openness, CIS submits that the IPR policy should encourage free and open software in education, governmental agencies etc.</p>
<p style="text-align: justify;">IV.3. On open access to scholarly work, CIS commends the work done by government agencies so far and submits that the IPR policy should encourage open access to scholarly works.</p>
<p style="text-align: justify;">IV.4. On copyright, CIS submits that the IPR policy work toward strengthening and extending fair dealings provisions, supporting international instruments that strengthen fair dealing, encourage compulsory licensing. CIS submits that the IPR policy should work towards ensuring that protections for copyright such as terms of protection, intermediary liability, protection of rights management information, criminalisation of copyright infringement etc., do not harm other legitimate interests of users or unnecessarily restrict free speech.</p>
<p style="text-align: justify;">IV.5. On FTAs, CIS submits that the IPR policy encourage transparency with regard to FTA negotiations, ensure that TRIPS plus standards are not accepted as they would harm national interest and to encourage multilateral negotiations over bilateral free trade agreements.</p>
<p style="text-align: justify;">IV.6. CIS welcomes the initiative of the DIPP to form a National IPR policy, CIS believes that it is essential that such an IPR policy avoid excessive intellectual property rights protection and is formed keeping in mind goals of development and national interest.</p>
<p style="text-align: justify;">IV.7. CIS is thankful to the DIPP for the opportunity to provide comments on the National IPR policy and would be privileged to work with the government on this and other matters in these areas.</p>
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<p><a name="_ftn1" href="#_ftnref1">[1]</a> <a href="http://www.cis-india.org">www.cis-india.org</a> (Last Accessed: 30/11/14).</p>
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<p><a name="_ftn2" href="#_ftnref2">[2]</a> The Washington Declaration on Intellectual Property and Public Interest concluded after the Global Congress on Intellectual property and Public Interest in August 2011 attended by over 180 experts from 32 countries articulate this position perfectly. Available at: <a href="http://infojustice.org/wp-content/uploads/2011/09/Washington-Declaration.pdf"> http://infojustice.org/wp-content/uploads/2011/09/Washington-Declaration.pdf </a> (Last Accessed:29/11/14)</p>
</div>
<div id="ftn3">
<p><a name="_ftn3" href="#_ftnref3">[3]</a> Shashank Singh, Guidelines for Examination of Computer Related Inventions: Mapping the Stakeholders' Response, Available at: <a href="http://cis-india.org/a2k/blogs/guidelines-for-examination-of-computer-related-inventions"> http://cis-india.org/a2k/blogs/guidelines-for-examination-of-computer-related-inventions </a> (Last Accessed: 30/11/14).</p>
</div>
<div id="ftn4">
<p><a name="_ftn4" href="#_ftnref4">[4]</a> N.S. Gopalakrishnan, Compulsory License Under Indian Patent Law, MPI Studies on Intellectual Property and Competition Law, Vol.22, 2015, pp.11-42.</p>
</div>
<div id="ftn5">
<p><a name="_ftn5" href="#_ftnref5">[5]</a> Raadhika Gupta, Compulsory Licensing under TRIPS: How Far it Addresses Public Health Concerns in Developing Nations, Journal of Intellectual Property Rights, Vol.15, September 2010, pp.357-363. Available at: <a href="http://nopr.niscair.res.in/bitstream/123456789/10211/1/JIPR%2015(5)%20357-363.pdf"> http://nopr.niscair.res.in/bitstream/123456789/10211/1/JIPR%2015(5)%20357-363.pdf </a> (Last Accessed: 30/11/14).</p>
</div>
<div id="ftn6">
<p><a name="_ftn6" href="#_ftnref6">[6]</a> Id.</p>
</div>
<div id="ftn7">
<p><a name="_ftn7" href="#_ftnref7">[7]</a> Nehaa Chaudhari, Pervasive Technologies: Patent Pools, Available at: <a href="http://cis-india.org/a2k/blogs/patent-pools">http://cis-india.org/a2k/blogs/patent-pools</a> (Last Accessed: 30/11/14).</p>
</div>
<div id="ftn8">
<p><a name="_ftn8" href="#_ftnref8">[8]</a> One of the measures along which we could have differential patent strengths could be the time for the invention to reach the market, see, Benjamin N Roin, The case for Tailoring Patent Awards Based on the Time-to-Market of Inventions, UCLA Law Review, Vol.61, 2013, Available at: <a href="http://dash.harvard.edu/bitstream/handle/1/10612849/Case%20for%20Tailoring%20Patent%20Awards%203-15-13.pdf?sequence=1"> http://dash.harvard.edu/bitstream/handle/1/10612849/Case%20for%20Tailoring%20Patent%20Awards%203-15-13.pdf?sequence=1 </a> (Last Accessed: 30/11/14).</p>
</div>
<div id="ftn9">
<p><a name="_ftn9" href="#_ftnref9">[9]</a> Sunil Abraham, Patented Games, Available at: <a href="http://cis-india.org/a2k/patented-games">http://cis-india.org/a2k/patented-games</a> (Last Accessed: 30/11/14.</p>
</div>
<div id="ftn10">
<p><a name="_ftn10" href="#_ftnref10">[10]</a> See Nabi Hasan, Issues and Challenges in Open Source Software Environment with Special Reference to India, Available at: <a href="http://crl.du.ac.in/ical09/papers/index_files/ical-43_144_317_1_RV.pdf"> http://crl.du.ac.in/ical09/papers/index_files/ical-43_144_317_1_RV.pdf </a> (Last Accessed: 30/11/14).</p>
</div>
<div id="ftn11">
<p><a name="_ftn11" href="#_ftnref11">[11]</a> Section 52(1), the Copyright (Amendment) Act, 2012.</p>
</div>
<div id="ftn12">
<p><a name="_ftn12" href="#_ftnref12">[12]</a> Section 52(1) (n), the Copyright (Amendment) Act, 2012.</p>
</div>
<div id="ftn13">
<p><a name="_ftn13" href="#_ftnref13">[13]</a> Zakir Thomas, Overview of Changes to the Indian Copyright Law, Journal of Intellectual Property Rights, Vo.17, July 2012, pp.324-334.</p>
</div>
<div id="ftn14">
<p><a name="_ftn14" href="#_ftnref14">[14]</a> See conclusions of the chair at the 23<sup>rd</sup> session of the Standing Committee on Copyright and Related Rights at the WIPO, Available at: <a href="http://www.eifl.net/wipo-sccr23-conclusions">http://www.eifl.net/wipo-sccr23-conclusions</a> (Last Accessed: 30/11/14).</p>
</div>
<div id="ftn15">
<p><a name="_ftn15" href="#_ftnref15">[15]</a> For draft proposal of the treaty see IFLA, Treaty proposal on Limitations and Exceptions for Libraries and Archives, Available at: <a href="http://www.wipo.int/edocs/mdocs/copyright/en/sccr_27/sccr_27_2_rev.pdf"> http://www.wipo.int/edocs/mdocs/copyright/en/sccr_27/sccr_27_2_rev.pdf </a> (Last Accessed: 30/11/14).</p>
</div>
<div id="ftn16">
<p><a name="_ftn16" href="#_ftnref16">[16]</a> See The Draft WIPO Treaty on Exceptions and Limitations for the Persons with Disabilities, Educational and Research Institutions, Libraries and Archives, proposal by the African Group (document SCCR/22/12).Available at: <a href="http://www.wipo.int/edocs/mdocs/copyright/en/sccr_22/sccr_22_12.pdf"> http://www.wipo.int/edocs/mdocs/copyright/en/sccr_22/sccr_22_12.pdf </a> (Last Accessed: 30/11/14).</p>
</div>
<div id="ftn17">
<p><a name="_ftn17" href="#_ftnref17">[17]</a> See Section 52(q) of the Copyright Act, 1957.</p>
</div>
<div id="ftn18">
<p><a name="_ftn18" href="#_ftnref18">[18]</a> Section 31 and 31A, the Copyright (Amendment) Act, 2012.</p>
</div>
<div id="ftn19">
<p><a name="_ftn19" href="#_ftnref19">[19]</a> Section 31D, the Copyright (Amendment) Act, 2012.</p>
</div>
<div id="ftn20">
<p><a name="_ftn20" href="#_ftnref20">[20]</a> Section 14(1), the Copyright (Amendment) Act, 2012.</p>
</div>
<div id="ftn21">
<p><a name="_ftn21" href="#_ftnref21">[21]</a> Id.</p>
</div>
<div id="ftn22">
<p><a name="_ftn22" href="#_ftnref22">[22]</a> Section 38B, the Copyright (Amendment) Act, 2012.</p>
</div>
<div id="ftn23">
<p><a name="_ftn23" href="#_ftnref23">[23]</a> CIS, Comments on Draft Copyright Rules, 2012, available at: <a href="http://cis-india.org/a2k/feedback-to-draft-copyright-rules-2012">http://cis-india.org/a2k/feedback-to-draft-copyright-rules-2012</a> (Last Accessed: 29/11/14).</p>
</div>
<div id="ftn24">
<p><a name="_ftn24" href="#_ftnref24">[24]</a> See Pranesh Prakash, Analysis of the Copyright (Amendment) Bill, 2012, Available at: <a href="http://cis-india.org/a2k/blogs/analysis-copyright-amendment-bill-2012"> http://cis-india.org/a2k/blogs/analysis-copyright-amendment-bill-2012 </a></p>
</div>
<div id="ftn25">
<p><a name="_ftn25" href="#_ftnref25">[25]</a> Section 65B, The Copyright (Amendment) Act, 2012.</p>
</div>
<div id="ftn26">
<p><a name="_ftn26" href="#_ftnref26">[26]</a> Pranesh Prakash, Technological Protection Measures in the Copyright (Amendment) Bill, 2010, Available at: <a href="http://cis-india.org/a2k/blogs/tpm-copyright-amendment">http://cis-india.org/a2k/blogs/tpm-copyright-amendment</a> (Last Accessed: 29/11/14).</p>
</div>
<div id="ftn27">
<p><a name="_ftn27" href="#_ftnref27">[27]</a> Rishabh Dara, Intermediary Liability in India: Chilling Effects on Free Expression on the Internet, 2011, Available at: <a href="http://cis-india.org/internet-governance/intermediary-liability-in-india.pdf"> http://cis-india.org/internet-governance/intermediary-liability-in-india.pdf </a> (Last Accessed: 30/11/14).</p>
</div>
<div id="ftn28">
<p><a name="_ftn28" href="#_ftnref28">[28]</a> Section 63A, Copyright Act 1957.</p>
</div>
<div id="ftn29">
<p><a name="_ftn29" href="#_ftnref29">[29]</a> See Right to Share: Principles on Freedom of Expression and Copyright in the Digital Age, Article19, Available at: <a href="http://www.article19.org/resources.php/resource/3716/en/">http://www.article19.org/resources.php/resource/3716/en/</a> (Last Accessed: 29/11/14).</p>
</div>
<div id="ftn30">
<p><a name="_ftn30" href="#_ftnref30">[30]</a> V Premanath, S Sivaram, Intellectual Property Systems in India: Progressing towards Greater Maturity and Diversity, Available at: <a href="http://iimahd.ernet.in/users/anilg/files/Articles/Emerging%20IPR%20Consciousness,%20vikalpa.pdf"> http://iimahd.ernet.in/users/anilg/files/Articles/Emerging%20IPR%20Consciousness,%20vikalpa.pdf </a> (Last Accessed: 29/11/14).</p>
</div>
<div id="ftn31">
<p><a name="_ftn31" href="#_ftnref31">[31]</a> Jan Wouters, Idesbald Goddeeries, Bregt Natens etc, Some Critical Issues in the EU -India Free Trade Agreement Negotiation, Working Paper No.102,KU Leuven Centre for Global Governance Studies, <a href="https://ghum.kuleuven.be/ggs/publications/working_papers/new_series/wp101-110/wp102-wouters-goddeeris-natens.pdf"> https://ghum.kuleuven.be/ggs/publications/working_papers/new_series/wp101-110/wp102-wouters-goddeeris-natens.pdf </a> , February 2013, p.16.</p>
<p>Monika Ermert, Lack of Transparency in EU-India FTA Talks Spurs Requests for Halt, ip-watch, Available at: <a href="http://www.ip-watch.org/2010/09/03/lack-of-transparency-in-eu-india-fta-talks-spurs-requests-for-halt/"> http://www.ip-watch.org/2010/09/03/lack-of-transparency-in-eu-india-fta-talks-spurs-requests-for-halt/ </a> .</p>
</div>
<div id="ftn32">
<p><a name="_ftn32" href="#_ftnref32">[32]</a> The current policy of the US Trade Representative is seen to be reflected in the 2002 Trade Act available here: <a href="http://www.gpo.gov/fdsys/pkg/BILLS-107hr3009enr/pdf/BILLS-107hr3009enr.pdf"> http://www.gpo.gov/fdsys/pkg/BILLS-107hr3009enr/pdf/BILLS-107hr3009enr.pdf </a> See HR3009.</p>
</div>
<div id="ftn33">
<p><a name="_ftn33" href="#_ftnref33">[33]</a> The current trade strategy for the EU can be found here <a href="http://trade.ec.europa.eu/doclib/docs/2014/july/tradoc_152643.pdf">http://trade.ec.europa.eu/doclib/docs/2014/july/tradoc_152643.pdf</a> .</p>
</div>
<div id="ftn34">
<p><a name="_ftn34" href="#_ftnref34">[34]</a> Commission on Intellectual Property Rights, Integrating Intellectual Property Rights and Development Policy, Available at: <a href="http://www.iprcommission.org/papers/pdfs/final_report/ciprfullfinal.pdf"> http://www.iprcommission.org/papers/pdfs/final_report/ciprfullfinal.pdf </a> , p.174.</p>
</div>
<div id="ftn35">
<p><a name="_ftn35" href="#_ftnref35">[35]</a> C. Correa, 'Negotiation of a Free Trade Agreement European Union-India: Will India Accept Trips-Plus</p>
<p>Protection?', (2009) Oxfam Deutschland and Evangelischer Entwicklungsdienst Analysis,</p>
<p><a href="http://www.oxfam.de/files/20090609_negotiationofafreetradeaggrementeuindia_218kb.pdf"> http://www.oxfam.de/files/20090609_negotiationofafreetradeaggrementeuindia_218kb.pdf </a> .</p>
</div>
<div id="ftn36">
<p><a name="_ftn36" href="#_ftnref36">[36]</a> S. Sharma, 'the EU-India FTA: Critical Considerations in a Time of Crisis', (2009) Centad Working Paper.</p>
</div>
<div id="ftn37">
<p><a name="_ftn37" href="#_ftnref37">[37]</a> Asit Ranjan Mishra, India to negotiate FTAs with emerging market nations, Livemint, Available at: <a href="http://www.livemint.com/Politics/RlJNxUXovjNVaRzQt9KXmO/India-to-negotiate-FTAs-with-emerging-market-nations.html"> http://www.livemint.com/Politics/RlJNxUXovjNVaRzQt9KXmO/India-to-negotiate-FTAs-with-emerging-market-nations.html </a> .</p>
</div>
<div id="ftn38">
<p><a name="_ftn38" href="#_ftnref38">[38]</a> Sisule F Musungu and Graham Dutfield, Commission Multilateral Agreements and a TRIPS -Plus Word: the World Intellectual Property Organisation (WIPO), Available at: <a href="http://www.iprsonline.org/ictsd/docs/WIPO_Musungu_Dutfield.pdf">http://www.iprsonline.org/ictsd/docs/WIPO_Musungu_Dutfield.pdf</a>.</p>
</div>
<div id="ftn39">
<p><a name="_ftn39" href="#_ftnref39">[39]</a> For Trends, See Beginda Pakpahan, Deadlock in the WTO: What is next? Available at: <a href="http://www.wto.org/english/forums_e/public_forum12_e/art_pf12_e/art19.htm"> http://www.wto.org/english/forums_e/public_forum12_e/art_pf12_e/art19.htm </a> .</p>
</div>
<div id="ftn40">
<p><a name="_ftn40" href="#_ftnref40">[40]</a> See Amit Sengupta, Do not trade away our lives, Vo.9, No.2, Indian Journal of Medical Ethics, 2012, Available at: <a href="http://www.issuesinmedicalethics.org/index.php/ijme/article/view/88/1047"> http://www.issuesinmedicalethics.org/index.php/ijme/article/view/88/1047 </a> .</p>
</div>
</div>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/comments-on-proposed-ip-rights-policy-to-dipp'>http://editors.cis-india.org/a2k/blogs/comments-on-proposed-ip-rights-policy-to-dipp</a>
</p>
No publishernehaaCall for CommentsAccess to KnowledgeCopyrightIntellectual Property RightsPatents2015-04-12T11:39:16ZBlog EntryInterviews with App Developers: [dis]regard towards IPR vs. Patent Hype – Part II
http://editors.cis-india.org/a2k/blogs/interviews-with-app-developers-dis-regard-towards-ipr-vs-patent-hype-2013-part-ii
<b>The following is a second post within a series reporting on interviews conducted with 10 of Bangalore's mobile app developers and other industry stakeholders. Within this research, CIS attempts to understand how they engage with the law within their practice, particularly with respect to IP. Here we examine how these developers responded to a question on legal protection for their works.</b>
<p align="justify">Before one can identify the solution, one must first identify the problem. Yet, in order to understand the problem, we must first understand the individuals involved and the how the problem affects these individuals. We hope that the findings of this preliminary research initiative will provide sufficient groundwork to understand the problems that exist and the different ways of approaching them before determining the most suitable prospective option in changes at the policy level. In this case, the individuals under study are the key contributors to the mobile app space within India; and the problem, being those faced by them as they attempt to navigate an emerging and ambiguous ecosystem.</p>
<p align="justify">Previously, we looked at responses that were given across these mobile app developers interviewed which revealed how they orient notions of intellectual property within their practice and own products, specifically. Findings that were made included deductions that the majority of those interviewed developed mobile app products for clients, and in turn assigned ownership of their products to their clients. Just as well, they commonly shared an interest in leaving the services sector to create products of their own, with some of them already having made the transition within their business model.</p>
<h3><b>Question 2: “How is your IP protected?”</b></h3>
<p align="justify">Next, we asked how they go about protecting their intellectual property to get a feel of who is protecting their apps and who is not. In asking this question, we hoped to learn how they go about protecting their work via legal means. Across their various responses, we observed many patterns and contradictions which are conveyed here with reference to comments made across interviews. It is important to note, however, that no causal relations intend for be argued for, only suggested correlations.</p>
<p><b>How they responded</b></p>
<p align="justify">When asked, those interviewed responded with a variance in answers. Some simply stated that their work is not protected, while a few mentioned that they acquired trademark or intend to apply for trademark protection. One interviewee had a patent pending in India and the US, as well. In many of our conversations, developers mentioned that their code for their apps is under open source licenses, and a couple others entailed sharing that the content is under creative commons licenses, “individual licenses,” or joint copyright. Additionally, within one interview, one mentioned the use of encryption tools as a technical means of protection for their work.</p>
<div class="pullquote" style="text-align: justify; ">“The concept of securing IP is relatively new within the Indian context... it becomes a question of priority between innovation and protection" — Aravind Krishnaswamy, Levitum</div>
<p align="justify">Of the developers interviewed, many exhibited some sort of confusion or misunderstanding related to the protection of their works by means of intellectual property rights (IPR). Those interviewed seemed to either express an interest to acquire IPR in the future for their products in the forms of patent or trademark protection, or expressed their appreciation for openness source licensing—or both! Beneath these immediate responses, however, many repeated patterns, as well as contradictions, are revealed. Conversations that followed within these interviewed entailed the opportunity to hear from personal experiences and opinions on different areas within their practice intersecting IPR.</p>
<p><b>Reasons for IPR protection</b></p>
<p align="justify">If a startup or SME is bootstrapped with very little cash flow to begin with, what would provoke or inspire one to pursue the process of acquiring patent protection then? Aravind Krishnaswamy of startup, <a class="external-link" href="http://levitum.in/">Levitum</a>, considers “the concept of securing IP is relatively new within the Indian context.” So if this is the case, why did so many developers interviewed express an interest in IPR?</p>
<p align="justify">For those who did express interest in acquiring IPR as protection for their mobile app products, most seemed to express an interest in proving ownership over their work, or preventing problems in the future. One developer's commented on how the mobile app market is a “new and potentially volatile area for software development.” For this reason, it was imperative that he and his team attempted to avoid trouble in the future, and ensure that they going about mobile app development the right and moral way.</p>
<p align="justify">Within another interview, developer, John Paul of mobile app SME, Plackal, explains his motives for seeking to acquire patent protection, the application for which is currently pending in India and the US: "For us, applying for a patent is primarily defensive. And if it does get infringed upon, it would give us a good opportunity to generate revenue from it." For the company's trademark, they sought to be able to enforce their ownership over their product's brand: “As a precautionary, we've trademarked the app so that should there be a situation where the app is pirated, we can claim ownership for that app.”</p>
<p><b>Security not so easily attainable</b></p>
<div class="pullquote">“To some extent, IPR law is only accessible after moving away from the startup phase."—John Paul, Plackal</div>
<p align="justify">However, for the startup especially, such protection does not come without a cost. For this reason, IPR is generally perceived as a gamble or tradeoff. It becomes a “question of priority between innovation and protection,” says Krishnaswamy. He continues in saying that, "I feel like even if it’s a great idea if someone else copies it, that’s some level of validation, but as a small company I’d rather be nimble in terms of how we build it up and get it to a certain point. We're trying to move fast and get something going, and then figure it out.” For Krishnaswamy and his team, securing a patent on an area where they feel they feel they have unique work is on their list of things to do, “It's something for us to revisit in the future.”</p>
<p align="justify">Paul explains that he and his team didn't always have IPR within reach: “To some extent, IPR law is only accessible after moving away from the startup phase.” So what discourages startups from acquiring IPR, or simply seeking it out?</p>
<p align="justify">Patent attorney and IP consultant, Arjun Bala explains that “there is a lot to figure out. One aspect is filling it out, the other is how you write it so that it is easily granted and gives you the right sort of patent protection you are looking for. It is a very complex process that requires a lot of technical and legal expertise.” But even if one successfully manoeuvres the IPR system, is protection guaranteed?</p>
<p align="justify">Business Financial Strategist of Out Sourced CFO & Business Advisory Services, Jayant Tewari, illustrates the lack of security for the SME in the patent system, specifically, in saying, “Since a patent becomes public domain on filing, it can be effectively infringed based on the filing, even before it is granted.” Tewari continues in stressing the irrelevance of patents for SMEs due to the difficulty of enforcement: “the infringement will be adjudicated after 2 years at an immense cost to the SME patent-holder, who will go commercially belly-up due to the infringement. The regime does not protect the SME at all.”</p>
<div class="pullquote" style="text-align: justify; ">“It is easy to say 'this is the method and no once can copy', but unless the look and feel is the same, it is very hard to demonstrate that you have been infringed on.” <br />—Samuel Mani, Mani Chengappa & Mathur</div>
<p><b>Nevermind enforcement...</b></p>
<p align="justify">Not only did our interviews shed light on the difficulty for a startup developer to apply for and be granted protection for their intellectual property, but also for the enforcement of such. Partnering Lawyer, Samuel Mani, of technology-focused law firm, <a href="http://editors.cis-india.org/a2k/blogs/www.mcmlaw.in" class="external-link">Mani Chengappa & Mathur</a>, speaks to us about the extensive procedure required to prove one's ownership over their IP: “To demonstrate copyright infringement, it requires going into millions of lines of code—unless it is the interface that is copied, which is easily visible.” Mani continues on the enforcement of patent protection by saying, “For a patent, the scope is even wider. It is easy to say 'this is the method and no once can copy', but unless the look and feel is the same, it is very hard to demonstrate that you have been infringed on.”</p>
<p><b>Planting the initial seed</b></p>
<p align="justify">If there is arguably so much risk associated with applying for IPR protection, as well with enforcement, what specifically gets startups thinking about IPR initially within their practice? What experiences help them formulate their opinions on the matter, and which forms of IPR do they seek out?</p>
<p align="justify">Across interviews conducted, one particular observation entailed the tendency for developers to have worked in the past for corporate employers that have dealt with cases of infringement or have acquired IP protection. Almost half of those interviewed shared the fact that they worked for a corporate employer and became better familiar with different notions of intellectual property through that experience. It may not be too farfetched to suggest, then, that for the developer the idea of acquiring IPR protection is one that may be reinforced from previous employers or other successful development companies with IPR of their own.</p>
<p align="justify">Cofounder and developer for a medium-sized software development enterprise, Anoop[1] explained that it wasn't until after the success of his enterprise's first application with $1 million in sales, that they started thinking about intellectual property and began to understand the value of it. This newly attained understanding, however, had not been enough to sufficiently equip his team with the knowledge to properly secure protection. For them, going after patent protection turned out to be a pursuit in vain.</p>
<p><b>Loss of faith in patents for SMEs</b></p>
<p align="justify">Anoop shares his disappointing experience after attempting to secure a patent for one of their mobile apps:</p>
<p class="callout"><i>“We burned our fingers with patents. We spent a lot of money for a game we invented about 3 years ago. We had a law firm in the US to help us. We applied for it, and it went through 3-4 revisions, costing us $25-30,000. We finally closed the file when we could not get it due to an existing patent. We were really surprised." </i></p>
<p>After much disappointment from not being successful in their attempts to acquire patent protection, however, Anoop came out of the experience with a new outlook on patents and their role for SMEs:</p>
<p class="callout"><i>“They're meant for large companies as means to bully your competitor. Only big players with the capacity to file for a patent as soon as it takes off benefit. The existing system doesn’t really work for startup companies. In India and anywhere. It’s an expensive process. If you’re a startup who’s just bootstrapping, there’s no guarantee that you will get it. It’s going to take you years.”</i></p>
<p align="justify"><b>Patent hype</b><br />Anoop is a prime example of developers in the startup space that fall victim to the promises of the patent system—only to be spat back out having exhausted their time and earnings. Already being aware of the probability for failure, Mani strongly discourages going after patent protection as a means of staying in the race. “With people spending millions on litigation, it is a recipe for disaster, especially considering the inherent delay of the Indian system.” For this reason, Mani stresses the importance of applying for the <i>right </i>protection.</p>
<p align="justify">Mani also suggests that the patent debate is driven by self-interest—people who simply make money off of application filing, regardless of whether or not the case succeeds. As a lawyer in the IT space, Mani claims to have turned away several prospective clients looking to patent their products when he insisted that such means of protection was not suitable for their product and interests...which brings us to an additional area of heated debate: the patentability of mobile apps.</p>
<p><b>Can mobile apps be patented?</b>[2]</p>
<p align="justify">One concept that seemed to receive contested responses across interviews is that of the patentability of mobile apps in the first place. When asked if mobile apps could be patented, former lawyer and startup founder, Vivek Durai, of HumblePaper, put it blatantly in responding, “absolutely not.” Others offered explanations of the Indian Patent Law nuances regarding when a mobile app is patentable and when one is not.</p>
<p align="justify">While consulting a SME with their own patent application, Bala explains their approach to ensure the mobile app's eligibility for patent protection, while providing some insight into the Indian patent system:</p>
<p class="callout"><i>“One approach that we've taken to getting a patent in India is it's not just a pure software, but a software plus a hardware—as in it requires a specific hardware to function. If [the software] makes the hardware perform better, then it has a technical effect... In which case, we have a better chance of getting a patent in India. If your software is agnostic to hardware, however, it is much more difficult to receive a patent in India.” </i></p>
<p align="justify"><b>To patent or not to patent? (or any IPR for that matter)</b><br />To Tewari, on the other hand, the question of whether a mobile app can be patented is one entirely irrelevant. The question Tewari introduces into the developer's market strategy is not 'can I patent my app?' but instead, '<i>should </i>I do so?' In response to which; he would predominantly reply: <i>No</i>.</p>
<p align="justify">“How [startup] mobile app developers regard IP laws—or better yet, disregard—is fine for their sake,” argues Tewari. Alternatively, he suggests developers learn how to maneuver the laws, to prevent themselves from arriving at any sticky situations after unknowingly using another's code. To his clients who have mobile apps of their own, he advises to use an open source equivalent of a piece of code if they do not have the rights to it. Doing so will help keep infringement upon others at a minimal and prevent litigation against oneself.</p>
<div class="pullquote" style="text-align: justify; ">“How [startup] mobile app developers regard IP laws—or better yet, disregard—is fine for their sake."—Jayant Tewari, Out Sourced CFO & Business Advisory Services</div>
<p align="justify">Not all developers interviewed, however, aspired to acquiring patent protection. In fact, some strongly opposed software patents, while expressing their appreciation for openness across the developer community. The other side to the IPR-Open Source dichotomy will be examined in the blog post to follow, after which, we will then look at accounts of infringement and threats of litigation across mobile app developers interviewed.</p>
<p><b>To recap<br /></b></p>
<p align="justify">By looking closely at the individual experiences across mobile app developers interviewed, we hope to begin to map out the mobile app ecosystem and the ways in which industry players engage with each other regarding their IPR. We also hope to begin to shed light on the different attitudes towards the law within one's practice, and how they shape their decisions related to their work. Only after doing so, may we be able to sufficiently assess how India's current IP laws govern this landscape.</p>
<p align="justify">Stay tuned for the next in this blog series! We hope that you may benefit from our findings in your own practice as a mobile app industry player or enthusiast, as well.</p>
<p align="justify"><b>Notes:</b><br />[1] <i>Name changed to protect the interviewee's identity</i></p>
<p align="justify">[2] In conducting interviews, our goal was not to test the legitimacy of responses, but instead, to map them out across various industry stakeholders. For this reason, this blog series will not be able to sufficiently respond to legal question, such as whether or not mobile apps are patentable to begin with. We intend to, however, undergo legal analysis of the Indian IPR system at its intersection with the mobile app space in India at a later stage in this project.</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/interviews-with-app-developers-dis-regard-towards-ipr-vs-patent-hype-2013-part-ii'>http://editors.cis-india.org/a2k/blogs/interviews-with-app-developers-dis-regard-towards-ipr-vs-patent-hype-2013-part-ii</a>
</p>
No publishersamanthaAccess to KnowledgeCopyrightPervasive TechnologiesResearchPatents2014-08-19T03:51:39ZBlog EntryPatent Valuation and License Fee Determination in Context of Patent Pools
http://editors.cis-india.org/a2k/blogs/patent-valuation-and-license-fee-determination-in-context-of-patent-pools
<b>The focus of this research paper is on an extremely limited though important aspect of patent pools — that of patent valuation and license fee determination. It is important to bear in mind that the concept of patent valuation and license fee determination as it exists independently is modified when it is applied in context of patent pools. </b>
<h2 class="WordSection1">I. Introduction</h2>
<p class="WordSection1" style="text-align: justify; ">A patent pool is essentially “An agreement between two or more patent owners to aggregate (pool) their patents and to license them to one another or third parties. Pools usually offer standard licensing terms to licensees and allocate a portion of the licensing fees (royalties) to patent owners according to a pre-set formula or procedure.<a href="#fn1" name="fr1">[1] </a></p>
<p class="MsoNormal" style="text-align:justify; ">A patent pool particularly faces intense scrutiny by way of competition/ antitrust law and each step of structuring of a patent pool has to be done keeping the prevalent norms of antitrust law in context. This article merely brushes with the antitrust aspect, as a discussion on that topic is beyond the scope of this particular article. However, suffice is to say that like other aspects of structuring of a patent pool, patent valuation and licensing fee determination is also subject to antitrust law concerns.</p>
<p class="MsoNormal" style="text-align:justify; ">Part II of this research paper is a discussion as regards factors which determine patent value in context of a patent pool. Similarly, Part III is a discussion as regards factors that determine license fee in context of a patent pool. Thereafter, Part IV discusses the methods which are applied for patent valuation and license fee determination. A number of these methods are independent evaluation methods and hence their dynamics when applied in context of patent pools may need to be altered in light of the discussion in Parts II and III. Part V discusses certain aspects of actual patent pools in the technological field to better understand the principles which have been discussed in Parts II-IV. Finally, Part VI concludes this research paper.</p>
<h2 class="MsoNormal" style="text-align: justify; ">II. Determination of Patent Value in a Patent Pool</h2>
<p class="MsoNormal" style="text-align: justify; ">One of the prominent pillars of a patent pool is an appropriate patent valuation process. Patent valuation is a difficult and subjective task.<a href="#_ftn3" name="_ftnref3"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[2]</span></span></span></a> Moreover, the result of a patent valuation independently outside of a pool might be quite different from when it is part of a pool transaction. A “pool regularizes the valuation of individual patents - making, as the United States Supreme Court put it, ‘a division of royalties according to the value attributed by the parties to their respective patent claims’”.<a href="#_ftn4" name="_ftnref4"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[3]</span></span></span></a> However, this value attribution process is not an arbitrary one but incredibly dynamic, and constantly evolving. This difficulty is furthered by the fact that the term “patent value” itself is subject to interpretation. Patent value essentially comprises of the economic benefit that the patent can bestow.<a href="#_ftn5" name="_ftnref5"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[4]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">A number of factors as discuss hereinafter determine the value of a patent. It is not necessary though that all the factors would come into play in context of every exercise of valuation of a patent in a pool. The factors determining patent value can be largely classified into a discussion as regards the types of patents in a patent pool in context of their relative importance and other complementary factors which further affect such importance.</p>
<h3 class="MsoNormal" style="text-align: justify; ">A. Categories of Patents in a Patent Pool</h3>
<p class="MsoNormal" style="text-align:justify; ">Patents in a pool can be classified based on their necessity and quality. Thus, arises the concept of essential and non-essential patents and strong and weak patents.<i><span> </span></i></p>
<p class="MsoNormal" style="text-align:justify; "><b><i><span><span> </span></span></i>Essential and Non-Essential Patents<br /></b>As the terms indicate, essential patents are those which are imperative for the success of pool creation and thus naturally have considerably more value. Non-essential patents on the other hand are patents which though not imperative may bring efficiency advantages to the pool. However, what exactly comprises an essential patent is a subjective and constantly evolving definition determined by each patent pool according to its commercial needs and capabilities. For example, the number of patents in the MPEG-2 pool, all of which are declared to be essential to the MPEG-2 standard, increased from 27 in 1997 to more than 900 in 2010.<a href="#_ftn6" name="_ftnref6"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[5]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">Essential patents naturally have more economic value than non-essential patents.<a href="#_ftn7" name="_ftnref7"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[6]</span></span></span></a> “A pool that includes non-essential patents can increase prices for some consumers, while decreasing prices for other consumers.”<a href="#_ftn8" name="_ftnref8"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[7]</span></span></span></a> Also, inclusion of inessential patents can raise potential concerns about foreclosure of alternative technologies and higher royalties for some licenses than would have occurred if these patents were excluded from the pool.<a href="#_ftn9" name="_ftnref9"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[8]</span></span></span></a> These concerns though should be balanced against the costs of excluding potentially essential patents from the pool.<a href="#_ftn10" name="_ftnref10"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[9]</span></span></span></a> Such concerns were raised in context of the DVD 3C patent pool.<a href="#_ftn11" name="_ftnref11"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[10]</span></span></span></a> Thus, it has to be decided on a case by case scenario as to whether the patent pool will include only essential patents or both essential as well as non-essential patents.</p>
<p class="MsoNormal" style="text-align:justify; ">“<span>Whether a patent pool improves a market’s transactional efficiency depends on the competitive characteristics of the patents included within the pool’s offering.”<a href="#_ftn12" name="_ftnref12"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[11]</span></span></span></a> Properly demarcating all required patents for a technology is important during patent pool formation. Otherwise it may create a “hold out” problem where a patent owner will “hold out” for higher royalties, “knowing that the manufacturer has individually negotiated for and already acquired the rest of the necessary … patent licenses, and that the value of all those licenses depends on obtaining a license to its own patent.”<a href="#_ftn13" name="_ftnref13"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[12]</span></span></span></a> </span>Essentiality of a patent can be determined based on certain characteristics of patents:</p>
<p style="text-align: justify; ">a. Blocking Patents<br />Blocking patents comprise of improvement patents on an existing technology. Thus, the improvement patent is deemed to be “subservient” to the earlier, “dominant’ patent”<a href="#_ftn14" name="_ftnref14"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[13]</span></span></span></a> and the subservient and dominant patents are said to block one another.<a href="#_ftn15" name="_ftnref15"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[14]</span></span></span></a> This is so because, the subservient patent cannot be exploited without infringing upon the dominant patent.<a href="#_ftn16" name="_ftnref16"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[15]</span></span></span></a> Likewise, the dominant patent cannot be developed in the improved embodiment without permission from the subservient patentee.<a href="#_ftn17" name="_ftnref17"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[16]</span></span></span></a> For example, the Wright brothers patents for aeroplane wings were improved upon by Glenn Curtiss and Alexander Graham Bell by using a set of wing flaps, or ailerons. The Curtiss patent, however, was found to infringe upon the Wright patent. As a result, Curtiss had no legal right to make, use, or sell his ailerons without a license from the Wright brothers, and the Wright brothers had no legal right to make, use, or sell Curtiss's commercially successful form of the stabilizing device. Their patents mutually infringed and blocked one another and they had to form a patent pool.<a href="#_ftn18" name="_ftnref18"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[17]</span></span></span></a> Similarly, public key encryption method was devised and patented at Stanford University, and licensed to Cylink. Soon thereafter, a team of scientists at the Massachusetts Institute of Technology developed and patented an algorithm, and licensed its use to RSA. The RSA algorithm was successfully commercialized and became an industry standard. Cylink and RSA constituted blocking rival patents and the issue was resolved by formation of a patent pool.<a href="#_ftn19" name="_ftnref19"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[18]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">b. Complementary Patents<br />Complementary patents cover technologies that are largely lacking or inefficient absent a license to a separate patented product.<a href="#_ftn20" name="_ftnref20"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[19]</span></span></span></a> They occur as a consequence of independent invention. Thus, value of <span>complementary patents increases when combined with a separate patented invention;</span> they act synergistically, each increasing the value of the other.<a href="#_ftn21" name="_ftnref21"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[20]</span></span></span></a> “Two products or technologies are complements if an increase in the price of one of them reduces the demand for the other.”<a href="#_ftn22" name="_ftnref22"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[21]</span></span></span></a> For example, production of a light bulb requires patent rights to both the vacuum bulb as well as the filament.<a href="#_ftn23" name="_ftnref23"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[22]</span></span></span></a> A patent pool that only contains complementary patents may have substantial market power if the pool does not face competition from alternative or substitutable technology.<a href="#_ftn24" name="_ftnref24"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[23]</span></span></span></a> This though, could lead to the occurrence of royally stacking i.e. double-marginalization, which can occur when firms sell or license complementary products or technologies and demand is sensitive to price.<a href="#_ftn25" name="_ftnref25"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[24]</span></span></span></a> It refers to the addition of successive mark-ups by suppliers in a vertical relationship.<a href="#_ftn26" name="_ftnref26"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[25]</span></span></span></a></p>
<div class="WordSection1">c. Competing Patents</div>
<p class="MsoNormal" style="text-align:justify; ">Competing patents result when there exist totally novel products or processes that provide market substitutes for patented goods, or when inventors sufficiently modify existing patented goods so that the original patent is deemed “invented around” and not infringed.<a href="#_ftn27" name="_ftnref27"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[26]</span></span></span></a> “Two products or technologies are substitutes if an increase in the price of one of them increases the demand for the other.”<a href="#_ftn28" name="_ftnref28"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[27]</span></span></span></a> A patent pool may obtain market power by obtaining control over substitutable patents too.<a href="#_ftn29" name="_ftnref29"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[28]</span></span></span></a> An individual who acquires the rights to a competing patent eliminates or significantly lessens his need for competing patents within or outside of the pool.<a href="#_ftn30" name="_ftnref30"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[29]</span></span></span></a> Thus, the value of a pool consisting of competing patents increases with acquisition of substitute patents.<a href="#_ftn31" name="_ftnref31"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[30]</span></span></span></a></p>
<p style="text-align: justify; "><b>Strong and Weak Patents<br /></b>A patent pool can comprise of strong as well as weak patents. The value accorded to the patents would naturally be in accordance with its “strength.” “‘Low patent quality’ is shorthand for such problems as overlapping claims, inappropriately broad claims, slow patent prosecution, and patents on obvious inventions.”<a href="#_ftn32" name="_ftnref32"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[31]</span></span></span></a> Patents are “probabilistic rights”<a href="#_ftn33" name="_ftnref33"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[32]</span></span></span></a> Their scope and extent often remains probabilistic until their claim determination which may often be done only upon adjudication. Similarly in situations of a patent flood,<a href="#_ftn34" name="_ftnref34"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[33]</span></span></span></a> the overall quality of patents may become lower.<a href="#_ftn35" name="_ftnref35"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[34]</span></span></span></a> The additional protection of the pool affords a weak patent enforcement rights that it may not have secured standing alone.<a href="#_ftn36" name="_ftnref36"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[35]</span></span></span></a> Thus, even weak and invalid patents become important and can be used to exclude competitors, for example for litigation threats.<a href="#_ftn37" name="_ftnref37"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[36]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">Some patent pools contain explicit agreements to support weak patents, such as covenants not to challenge patents, joint defense agreements, and allocation of patent rights to parties who are best able to defend them.<a href="#_ftn38" name="_ftnref38"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[37]</span></span></span></a> Some patent pools achieve a similar effect not by explicit agreements, but by creating an institutional environment where patentees find that it is mutually advantageous to recognize each other’s patents.<a href="#_ftn39" name="_ftnref39"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[38]</span></span></span></a></p>
<h3>B. Other Factors Determining Patent Value in Context of Patent Pool</h3>
<p>Besides the patents themselves, other complementary criteria impact on patent value. These comprise of the holistic environment in which the patents subsist, as discussed hereinafter.</p>
<p class="MsoNormal" style="text-align:justify; "><b>Subject matter of Invention<br /></b>“Value is highly dependent upon the subject matter of the invention.”<a href="#_ftn40" name="_ftnref40"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[39]</span></span></span></a> Certain subject matter fields or innovations do not have sufficient commercial importance or market demand to warrant investments.</p>
<p class="MsoNormal" style="text-align:justify; "><b>Scope of Invention<br /></b>A particular subject where there is extensive minefield of patents already in existence is less likely to have considerable patent value due to the limited patent scope as opposed to a field where patents are relatively lacking and there is possibility of a broader patent scope.<b> </b>Analogously, “value of a patent is derived from an ability to preclude others from practicing the unique innovation described by the words of the patent’s claims.”<a href="#_ftn41" name="_ftnref41"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[40]</span></span></span></a> “Generalizing, a patent employing broad claim language is typically more valuable than a patent of narrowly written claims in the same technology arena.”<a href="#_ftn42" name="_ftnref42"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[41]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b>Size of Patent Pool<br /></b>The size of a patent pool i.e. the number of its members and their patents is an important facet in determining the value of patents involved. Greater the number more are the governance issues as well as royalty determination issues, which in turn affect the valuation of the patents. This though does not imply that pools should be of a specific size, only that their size should meet efficiency demands.</p>
<p class="MsoNormal" style="text-align:justify; "><b>Value of Patent Pool<br /></b>The patents under the purview of a patent pool determine the pool’s value which in turn determines the value of the patents within as well as out of the pool. Value of a patent pool may be limited if certain holders of essential patents are not members.<a href="#_ftn43" name="_ftnref43"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[42]</span></span></span></a> This may occur due to various reasons such as if it was perceived that the patent may have more value as an independent entity, or due to strategic interests, or choice of joining different pools.<a href="#_ftn44" name="_ftnref44"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[43]</span></span></span></a> Correspondingly, if the patent pool does not contain all the patents it cannot curtail royalty stacking issues for the users. For example, Alcatel-Lucent pursued infringement claims for patents that it alleged covered the MPEG-2 standard and were not in the pool.<a href="#_ftn45" name="_ftnref45"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[44]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">While it is evident that collecting all necessary patents where the end product or standards is determined is extremely difficult, it becomes considerably more difficult where there is no predetermined or identifiable end-product.<a href="#_ftn46" name="_ftnref46"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[45]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>Patent Portfolio</span></span></span><br /></b>Certain academic studies are of the opinion that “the real value of patents lies not in their individual significance, but instead in their aggregation into a patent portfolio: a strategic collection of distinct-but-related individual patents that, when combined, confer an array of important advantages upon the portfolio holder.”<a href="#_ftn47" name="_ftnref47"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[46]</span></span></span></a> This theory has been applied to explain the patent paradox where the patent intensity, i.e. patents obtained per research and development dollar has risen dramatically even as the expected value of individual patents has diminished.<a href="#_ftn48" name="_ftnref48"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[47]</span></span></span></a> Thus, greater the control of an entity over a portfolio of patents, more would be its negotiation power in context of valuation.</p>
<p class="MsoNormal" style="text-align:justify; "><b>Signaling<br /></b>It has been opined that the value of patents inheres not so much in the exclusivity they confer upon inventors, but rather in their ability to serve as credible signals.<a href="#_ftn49" name="_ftnref49"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[48]</span></span></span></a> Firms use patents to credibly convey information about the invention to the market who otherwise might not be willing to expend the costs necessary to obtain the information.<a href="#_ftn50" name="_ftnref50"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[49]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><span> </span></p>
<p class="MsoNormal" style="text-align:justify; "><b><i> </i>Defensive Aspect<br /></b>Patent value is also ascertained based on its use to serve as an insurance, whereby competing firms use them as “bargaining chips” to negotiate and secure certain niches in the marketplace.<a href="#_ftn51" name="_ftnref51"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[50]</span></span></span></a> This is so especially from the negotiation as well as the litigation viewpoint.</p>
<p class="MsoNormal" style="text-align:justify; "><b>Valuation Dynamics<br /></b>In context of certain subject matters, inability of the patents to be valued or possibility of dynamic changes in value creates problems in structuring the patent pool, or it might lead to issues of according over-value or under-value. For example, in the process of biological research, where hypotheses are often adjusted and experimentation continually refined, it is impossible to anticipate the particular value of a given research tool for an investigative procedure.<a href="#_ftn52" name="_ftnref52"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[51]</span></span></span></a> Similarly, in context of the Human Genome Sciences, the patent for the gene that encodes CCR5 protein, was likely not valued very highly, because of unsurity of its utility, which changed when independent research established its importance in the fight against HIV.<a href="#_ftn53" name="_ftnref53"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[52]</span></span></span></a></p>
<h3 class="MsoNormal" style="text-align: justify; ">C. Role of Independent Evaluator</h3>
<p class="MsoNormal" style="text-align:justify; ">Often, independent experts in the relevant technology are employed for patent valuation purposes. Their role includes the responsibility of providing a mechanism for determining the market value of each participating patent for the purpose of setting appropriate royalty rates within the patent pool.<a href="#_ftn54" name="_ftnref54"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[53]</span></span></span></a> Also, they would evaluate the current state of the art and determine which patents are essential and which aren’t.<a href="#_ftn55" name="_ftnref55"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[54]</span></span></span></a> An evaluator’s is a continuing responsibility throughout the existence of the duration of the patent pool to monitor developments in the field so as to ensure each patent’s essentiality and incorporate additional patents if necessary.<a href="#_ftn56" name="_ftnref56"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[55]</span></span></span></a> Concerns though have been expressed as regards the expert’s ability and impartiality<span>.</span><a href="#_ftn57" name="_ftnref57"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[56]</span></span></span></a></p>
<h2><span><span class="MsoFootnoteReference"><span>III. Determination of License Fee for a Patent Pool</span></span></span></h2>
<p class="MsoNormal" style="text-align:justify; "><span>Theorists, have suggested criteria to gauge viability of patent pools.<a href="#_ftn58" name="_ftnref58"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[57]</span></span></span></a> The various elements involved in structuring of a patent pool do not function in a vacuum. Each has an impact on the other and ultimately they determine in totum, the licensing fees.</span></p>
<h3><span>A. Pool Dynamics</span></h3>
<p class="MsoNormal" style="text-align:justify; ">The factors catalyzing pool creation impact on the licensing fee that is set. A patent pool may primarily be structured due to government influence,<a href="#_ftn59" name="_ftnref59"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[58]</span></span></span></a> court influence,<a href="#_ftn60" name="_ftnref60"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[59]</span></span></span></a> commercial and business perspective,<a href="#_ftn61" name="_ftnref61"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[60]</span></span></span></a> to achieve or pursuant to standard setting,<a href="#_ftn62" name="_ftnref62"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[61]</span></span></span></a> and social objectives.<a href="#_ftn63" name="_ftnref63"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[62]</span></span></span></a> Accordingly, riders may be placed on creation of the pool and setting of licensing fees.</p>
<p class="MsoNormal" style="text-align:justify; ">Analogously, members comprising the patent pool affect royalty determinations. Different perspectives can be observed in commercial entities as opposed to research entities or voluntary organizations. Similarly, the negotiation capabilities are different for established commercial conglomerates as opposed to entrepreneurs, or smaller entities.<a href="#_ftn64" name="_ftnref64"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[63]</span></span></span></a> Similarly, patent pools may distinguish between patent contributing licensees and mere licensees in fixing royalty rates.<a href="#_ftn65" name="_ftnref65"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[64]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">Furthermore, pool governance as well as nature of the pool would have an impact on royalty determination. Pools can essentially be of two types based on regulation of members or licensing- open and closed.<a href="#_ftn66" name="_ftnref66"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[65]</span></span></span></a> Correspondingly, the patent holders themselves may have different perspectives or expectations of their rights.</p>
<p class="MsoNormal" style="text-align:justify; ">The negotiating entity too has an impact on royalty determination. “Agreements between the members of the patent pool and third parties can be established directly through patentees and licensees or indirectly through an entity specifically created to administer the pool.”<a href="#_ftn67" name="_ftnref67"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[66]</span></span></span></a> There are a considerable number of business models involved in context of a patent pool that define the parameters of the relationship between what are primarily classified as IP creators and IP consumers.<a href="#_ftn68" name="_ftnref68"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[67]</span></span></span></a> These dynamics have considerably altered with the strong and prolific emergence of IP intermediaries; they in turn affect the royalty rate negotiations.<a href="#_ftn69" name="_ftnref69"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[68]</span></span></span></a></p>
<h3 class="MsoNormal" style="text-align: justify; ">B. Negotiation Dynamics</h3>
<p class="MsoNormal" style="text-align:justify; ">License negotiations involve complicated factors, such as uncertain outcomes, asymmetric information about the values of technologies and the contributions of licensees to a technology's value, the credibility of disagreements, differential bargaining power and skill, and the individual circumstances of licensors and licensees.<a href="#_ftn70" name="_ftnref70"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[69]</span></span></span></a> Royalty determination depends on “the bargaining skills of patentees, their licensing objectives, the qualities of their patents, opportunity costs that patentees may have if they choose not to license their patents, the likelihood of injunctions, and the methods that courts apply to calculate infringement damages.”<span class="MsoFootnoteReference"> <a href="#_ftn71" name="_ftnref71"><span class="MsoFootnoteReference"><span>[70]</span></span></a></span> Pool members act strategically to maximize their share of the pool’s revenues.<a href="#_ftn72" name="_ftnref72"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[71]</span></span></span></a> “The defining characteristic of patent ownership has been described as the right to extract royalties ‘as high as [one] can negotiate with the leverage’ of exclusivity.”<a href="#_ftn73" name="_ftnref73"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[72]</span></span></span></a> <span>“The patent holder can ask for a high starting price; the potential infringer can counter by pointing to potential substitute technologies; and ultimately the process should yield a price that accurately reflects the marginal advantages of the patented technology.”<a href="#_ftn74" name="_ftnref74"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[73]</span></span></span></a> </span>Again, negotiation strategies include deploying a number of tactics by corporates to whittle down an independent inventor’s patience and his price, thus reducing the licensing fee from the desired amount.<a href="#_ftn75" name="_ftnref75"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[74]</span></span></span></a> <span>Correspondingly, there is no average length of time or amount of money needed for successfully creating a patent pool; it depends on the number of members involved in the negotiations and their commitment and willingness to negotiate an appropriate price.<a href="#_ftn76" name="_ftnref76"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[75]</span></span></span></a></span></p>
<p class="MsoNormal" style="text-align:justify; ">Timing of the license negotiation too has an impact on determination of the royalty scheme. Licensing can occur in two primary settings: ex ante licensing, i.e. prior to pool formation; and ex post, i.e. post pool formation. In ex ante licensing, the manufacturer has a choice to alter existing products to incorporate the patented features, and can thus perform a rational cost-benefit analysis prior to making any product alterations.<a href="#_ftn77" name="_ftnref77"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[76]</span></span></span></a> Analogously, a holdout who demands royalties prior to the final organization of the pool can only demand a royalty that reflects the additional value that his new patent adds to the collection.<a href="#_ftn78" name="_ftnref78"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[77]</span></span></span></a> If he demands more than this value, the pool will work around the holdout’s patent by adopting a different standard, adjusting the patent pool to cover slightly different technology, or dissolving itself.<a href="#_ftn79" name="_ftnref79"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[78]</span></span></span></a> In ex post licensing, on the other hand, a holdout is in a stronger negotiating position, and can demand not only the marginal value of his patent, but also the switching costs that would be incurred if the established standard or licensing regime were limited by a court injunction.<a href="#_ftn80" name="_ftnref80"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[79]</span></span></span></a> Complicating this situation are <span>licenses that are granted ex ante but negotiated ex post.</span></p>
<p class="MsoNormal" style="text-align:justify; ">Furthermore, patent pools are generally voluntary collaborations; however, it is also possible to compel parties to join the pool or risk losing revenue from a large segment of the industry.<a href="#_ftn81" name="_ftnref81"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[80]</span></span></span></a> Depending on the situation, the negotiation dynamics and hence the royalty scheme would be affected.</p>
<p class="MsoNormal" style="text-align:justify; ">Rules governing damages for patent infringement also affect patentees’ decision to join a pool or to license independently, as the threat of injunctive relief can provide a patentee with bargaining power that can be disproportional to the number of patents he owns.<a href="#_ftn82" name="_ftnref82"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[81]</span></span></span></a></p>
<h3 class="MsoNormal" style="text-align: justify; ">C. Terms of License</h3>
<p class="MsoNormal" style="text-align:justify; ">The terms of the license considerably influence royalty determination. These include, nature of licensed products,<a href="#_ftn83" name="_ftnref83"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[82]</span></span></span></a> character of license- whether exclusive or non-exclusive,<a href="#_ftn84" name="_ftnref84"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[83]</span></span></span></a> granting clause, geographic scope of the license, field of use governed by the license, provision of sublicensing, grantback provisions, future usage governance, non-assertion clauses, reach-through provisions, termination clause, and licensee’s ability to challenge patents in the pool.</p>
<p class="MsoNormal" style="text-align:justify; ">Included herein too would be the treatment of after-acquired patents, which in turn can be classified into two types: (1) improvement patents based on a patented technology licensed by another member of the patent pool; and (2) patents unrelated to patented technologies licensed to the members of the patent pool.<a href="#_ftn85" name="_ftnref85"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[84]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">License governance in context of graduated and progressive licensing would also influence royalty determination. This would include “provisions for pool members to license their patents without licensing all the patents in a pool”<a href="#_ftn86" name="_ftnref86"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[85]</span></span></span></a> And the freedom “to license their patents bilaterally, i.e., outside of the pool structure.”<a href="#_ftn87" name="_ftnref87"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[86]</span></span></span></a></p>
<h2 class="MsoNormal" style="text-align: justify; ">IV. Methods for Patent Valuation and License Fee Determination</h2>
<p class="MsoNormal" style="text-align:justify; ">There are three basic methods of valuation: the cost method,<a href="#_ftn88" name="_ftnref88"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[87]</span></span></span></a> the market method,<a href="#_ftn89" name="_ftnref89"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[88]</span></span></span></a> and the income method.<a href="#_ftn90" name="_ftnref90"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[89]</span></span></span></a> In context of patent valuation, these methods find varied expressions. “A truly accurate assessment of patent value requires intensive legal and technical evaluation of individual patents.”<a href="#_ftn91" name="_ftnref91"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[90]</span></span></span></a> The economics literature, however, has also proposed several proxies for patent value based on objective and readily available information.<a href="#_ftn92" name="_ftnref92"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[91]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">In context of patent pools the dynamics of patent valuation methods is altered and they need to be viewed through the prism of factors discussed in Part II. This doesn’t imply that approaches to objective patent valuation are not relevant.<a href="#_ftn93" name="_ftnref93"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[92]</span></span></span></a> “However, such valuation approaches focus only on characteristics of patents at the time of issue and neglect to consider what happens afterwards.”<a href="#_ftn94" name="_ftnref94"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[93]</span></span></span></a> <span>“Technology developments or price fluctuations, among many factors, may alter the relationship between two patents … In turn, this may decrease the value of any static analysis conducted by experts.”</span><a href="#_ftn95" name="_ftnref95"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[94]</span></span></span></a><span> </span></p>
<p class="MsoNormal" style="text-align:justify; ">Determination of the licensing fee of a patent pool is based on the joint affect of certain transactions. Again, as with patent valuation, so also with licensing fee determination, in context of patent pools, the factors discussed in Part III need to be given heed. The transactions influencing licensing fee determination essentially comprise of valuation of the patent, which in turn is used to set a royalty rate pertaining to allocation of various fees received by licensing of the pool patents. Thus, royalty payment is comprised of two components: a royalty rate and a royalty base, upon which the rate is applied.<a href="#_ftn96" name="_ftnref96"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[95]</span></span></span></span></a></p>
<h3 class="MsoNormal" style="text-align: justify; ">A. Determining an Appropriate Royalty Base</h3>
<p class="MsoNormal" style="text-align:justify; ">The scope of the royalty base can be determined in two principal ways- apportionment and entire market value rule.</p>
<p class="MsoNormal" style="text-align:justify; ">The apportionment principle implies that when a patent reads on the entirety of an infringing product, the royalty base should be the total value of the sales (or use) of that product.<a href="#_ftn97" name="_ftnref97"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[96]</span></span></span></a> When the patent at issue covers only a component of the infringing product, the value of the sales or uses of that item must be apportioned between the patented invention and the remaining unpatented components.<a href="#_ftn98" name="_ftnref98"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[97]</span></span></span></a> Thus, the principle aims at allocating awards in proportion to contribution, and is not based on any value attributable to the infringer’s or third parties’ inventions.<a href="#_ftn99" name="_ftnref99"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[98]</span></span></span></a> Thus, essentially, a licensor garners a royalty fee in proportion to the number of infringed patents owned by him.</p>
<p class="MsoNormal" style="text-align:justify; ">The entire market value rule, recognizes that the economic value added to a product by a patented component may be greater than the value of the component alone.<a href="#_ftn100" name="_ftnref100"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[99]</span></span></span></a> Thus, this rule focuses on whether the patented component drives demand for the entire product, and if it is so, then the patentee may treat all revenue from the infringing product as an appropriate royalty base.<a href="#_ftn101" name="_ftnref101"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[100]</span></span></span></a></p>
<h3 class="WordSection1">B. Setting Royalty Rates</h3>
<p class="MsoNormal" style="text-align:justify; ">Royalty rates are typically a percentage rate and thus reflects the proportion of the base value that the patented technology contributes.<a href="#_ftn102" name="_ftnref102"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[101]</span></span></span></a> Various approaches have emerged in determining royalty rates; these could be adapted in context of patent pools.</p>
<p class="MsoNormal" style="text-align:justify; "><b>Rule of Thumb<br /></b>This approach suggests that the licensor should receive 25 percent of the licensee’s gross profit from the licensed technology.<a href="#_ftn103" name="_ftnref103"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[102]</span></span></span></a><sup> </sup>Thus, this rule’s purpose is not the valuation of a technology per se, but rather the apportionment of a technology’s value between the licensor and licensee.<a href="#_ftn104" name="_ftnref104"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[103]</span></span></span></a> The percentage split between the licensor and licensee should be adjusted upwards or downwards to take into account the parties’ respective investment and risk in the licensed technology.<a href="#_ftn105" name="_ftnref105"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[104]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b>Numerical Proportionality<br /></b>According to this approach, royalty entitlement of the holder of patents essential to a standard should be calculated in light of the proportional contribution of that patent owner’s essential patents compared to the total contribution of all other essential patents reading on the standard.<a href="#_ftn106" name="_ftnref106"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[105]</span></span></span></span></a> This method rests on the proposition that every patent is of equal value.<a href="#_ftn107" name="_ftnref107"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[106]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b>Industry Standards / Market or Comparable Technology Method<br /></b>Under this approach, the worth of a patent is determined by examining the royalty rates garnered in similar past transactions.<a href="#_ftn108" name="_ftnref108"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[107]</span></span></span></a></p>
<p style="text-align: justify; "><b>Discounted Cash Flow<br /></b>This approach proposes that patent price can be expressed as the present value of the future stream of economic benefits derived from ownership, which includes projected sales of products (or components) based on the patent over its expected life or any increased share of sales as compared to competitors, net of any capital requirements of production.<a href="#_ftn109" name="_ftnref109"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[108]</span></span></span></span></a> To implement it, one must determine (1) the future cash flows generated by the patent in question and (2) an appropriate discount rate.<a href="#_ftn110" name="_ftnref110"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[109]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b>Ranking<br /></b>This approach compares the intellectual property asset to be valued to comparable intellectual property assets on a subjective or objective scale.<a href="#_ftn111" name="_ftnref111"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[110]</span></span></span></a> There are five components to a ranking method: (i) scoring criteria; (ii) scoring system; (iii) scoring scale; (iv) weighting factors; and (v) decision table; these components are used to calculate a composite score for an asset, which is then compared to the average score for a comparable intellectual property asset to determine the relative value.<a href="#_ftn112" name="_ftnref112"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[111]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b>Cost-based Rate Setting<br /></b>This approach proposes that the patent holder’s cost of obtaining the invention and its patent forms the basis of the royalty rate; a profit margin is simply tacked onto the innovation cost.<a href="#_ftn113" name="_ftnref113"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[112]</span></span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b>Surrogate Measures<br /></b>Surrogate measures value patents by reference to the patents themselves.<a href="#_ftn114" name="_ftnref114"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[113]</span></span></span></a> They can be largely categorized into: (1) the number of patents issued to a company; (2) payment of patent maintenance fees i.e. patents which are regularly renewed are more valuable; (3) prior art citations i.e. more a patent is cited, more is its value; (4) characteristics of litigated patents i.e. patents which are the subject matter of litigation are more valuable.<a href="#_ftn115" name="_ftnref115"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[114]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b>Disaggregation Methods<br /></b>There are two basic types of disaggregation methods - value disaggregation and income disaggregation.<a href="#_ftn116" name="_ftnref116"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[115]</span></span></span></a> The former apportions some fraction of total value to intellectual property assets by setting the value of intangible assets equal to the value of a firm minus the firm’s monetary and tangible assets from to determine the value of the intangible assets.<a href="#_ftn117" name="_ftnref117"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[116]</span></span></span></a> The latter apportions some fraction of total earnings of a firm, based upon various factors, to intellectual property assets.<a href="#_ftn118" name="_ftnref118"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[117]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b>Option Methods<br /></b>This approach views an investment in intellectual property as an option to develop the intellectual property further, or to abandon the intellectual property, depending upon future technical and market information.<a href="#_ftn119" name="_ftnref119"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[118]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><b>Competitive Advantage Valuation (R)<br /></b>The major premise of the CAV method is that intellectual property assets have no inherent value; the value of intellectual property assets resides entirely in the value of the tangible assets which incorporate them.<a href="#_ftn120" name="_ftnref120"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[119]</span></span></span></a> The minor premise of the CAV method is that the value of a given intellectual property asset can best be measured by the competitive advantage which that asset contributes to a product, process, or service.<a href="#_ftn121" name="_ftnref121"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[120]</span></span></span></a> In its most general form, CAV method consists of following six basic steps<a href="#_ftn122" name="_ftnref122"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[121]</span></span></span></a>:</p>
<ol>
<li style="text-align: justify; ">The intellectual property asset to be valued (IPA) is associated with a product and the product’s net present value is calculated.</li>
<li style="text-align: justify; ">The product's net present value is apportioned among tangible assets, intangible advantages and intellectual property assets. (There are three groups of intellectual property assets: technical [utility patents, functional software copyrights and technical trade secrets]; reputational [trademarks, service marks and brand names]; and operational [business method patents and proprietary business processes].</li>
<li style="text-align: justify; ">The product is associated with competition parameters which can be used to compare the product to substitute products and competition parameter weights are calculated. (There are three groups of competition parameters: technical [price and performance], reputational [recognition and impression], and operational [cost and efficiency]. Weights are calculated for each parameter group and for individual parameters within each group).</li>
<li style="text-align: justify; ">The IPA is associated with an individual competition parameter and the IPA's competitive advantage relative to substitute intellectual property assets is calculated. (Substitute intellectual property assets are assets which are incorporated in substitute products and associated with the same competition parameter as the IPA).</li>
<li style="text-align: justify; "><span> </span>The IPA is associated with complementary intellectual property assets and the IPA's competitive advantage relative to complementary intellectual property assets is calculated. (Complementary intellectual property assets are assets which are incorporated in the same product and associated with the same parameter group as the IPA).</li>
<li style="text-align: justify; "><span> </span>The value of the IPA is calculated by apportioning a share of the product's intellectual property asset value to the IPA based upon the IPA's competitive advantage contribution relative to substitute and complementary intellectual property assets. If the IPA is associated with multiple products, the IPA's relative competitive advantage contribution to each product is calculated and these contributions are summed to calculate the total value of the IPA. If the IPA is associated with multiple parameters, the IPA's relative competitive advantage contribution for each parameter is calculated and these contributions are summed to calculate the total value of the IPA.</li>
</ol>
<p><b>Georgia Pacific<br /></b>The fifteen factors enumerated in the Georgia Pacific case, several of which repeat approaches discussed above, are used in royalty rate determination:<a href="#_ftn123" name="_ftnref123"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[122]</span></span></span></a></p>
<ul>
</ul>
<ol>
<li style="text-align: justify; "><span> </span>The royalties received by the patentee for the licensing of the patent in suit, proving or tending to prove an established royalty.</li>
<li style="text-align: justify; "><span> </span>The rates paid by the licensee for the use of other patents comparable to the patent in suit.</li>
<li style="text-align: justify; "><span> </span>The nature and scope of the license, as exclusive or non-exclusive; or as restricted or non-restricted in terms of territory or with respect to whom the manufactured product may be sold.</li>
<li style="text-align: justify; "><span> </span>The licensor’s established policy and marketing program to maintain its patent monopoly by not licensing others to use the invention or by granting licenses under special conditions designed to preserve that monopoly.</li>
<li style="text-align: justify; "><span> </span>The commercial relationship between the licensor and licensee, such as, whether they are competitors in the same territory in the same line of business; or whether they are inventor and promoter.</li>
<li style="text-align: justify; "><span> </span>The effect of selling the patented specialty in promoting sales of other products of the licensee; the existing value of the invention to the licensor as a generator of sales of its non-patented items; and the extent of such derivative or convoyed sales.</li>
<li style="text-align: justify; "><span> </span>The duration of the patent and the term of the license.</li>
<li style="text-align: justify; "><span> </span>The established profitability of the product made under the patent; its commercial success; and its current popularity.</li>
<li style="text-align: justify; "><span> </span> The utility and advantages of the patent property over the old modes or devices, if any, that had been used for working out similar results.</li>
<li style="text-align: justify; "><span> </span>The nature of the patented invention; the character of the commercial embodiment of it as owned and produced by the licensor; and the benefits to those who have used the invention.</li>
<li style="text-align: justify; "><span> </span>The extent to which the infringer has made use of the invention; and any evidence probative of the value of that use.</li>
<li style="text-align: justify; "><span> </span>The portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions.</li>
<li style="text-align: justify; "><span> </span>The portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer.</li>
<li style="text-align: justify; "><span> </span>The opinion testimony of qualified experts.</li>
</ol>
<ul>
</ul>
<p class="MsoNormal" style="text-align:justify; "><span> </span>The amount that a licensor (such as the patentee) and a licensee (such as the infringer) would have agreed upon (at the time the infringement began) if both had been reasonably and voluntarily trying to reach an agreement; that is, the amount which a prudent licensee-which desired, as a business proposition, to obtain a license to manufacture and sell a particular article embodying the patented invention-would have been willing to pay as a royalty and yet be able to make a reasonable profit and which amount would have been acceptable by a prudent patentee who was willing to grant a license.</p>
<p class="MsoNormal" style="text-align:justify; ">Academics have prescribed modification to the approach towards these factors analyzing that the relevant questions in calculating a reasonable royalty fall into four basic categories: (1) whether the patentee in fact produces a product in the market; (2) the contribution made by the patented technology compared to the next best alternative; (3) the number and importance of other inputs necessary to make that technology work; and (4) evidence of how the market has actually valued the patent, to the extent it differs from the outcome of (1), (2), and (3).<a href="#_ftn124" name="_ftnref124"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[123]</span></span></span></a></p>
<h2><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>V. Patent Pool Examples<br /></span></span></span></h2>
<p class="MsoNormal" style="text-align:justify; ">The following discussion highlights certain aspects of patent pools from real world examples. These examples are restricted to the technological field. Study of these aspects is of value in understanding the concepts discussed hereinbefore.</p>
<h3 class="MsoNormal" style="text-align: justify; ">A. Manufacturers Aircraft Association (MAA)</h3>
<p class="MsoNormal" style="text-align:justify; ">The MAA was formed in 1917 in U.S.</p>
<p class="MsoNormal" style="text-align:justify; ">Apart from the “foundational” patents of Glenn Curtiss and the Wright Brothers, which had substantial royalty rates, most licensing was conducted on a royalty-free basis, with mutual forbearance from infringement suits as the real payment for the exchange.<a href="#_ftn125" name="_ftnref125"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[124]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><span>The MAA was open to anyone who wished to use the Wright-Curtiss designs for a $1000 initiation fee and a licensing fee of $200 per aircraft built; these funds were to be distributed primarily between the Wright and Curtiss interests until each received a sum of $2,000,000 or their key patents expired.<a href="#_ftn126" name="_ftnref126"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[125]</span></span></span></a> </span>MAA retained $ 25 (12.5%) to cover its administrative expenses, $ 135 (67.5%) was paid to the Wright-Martin Aircraft Corporation and $ 40 (20%) was paid to the Curtiss-Burgess Airplane & Motor Corporation.<a href="#_ftn127" name="_ftnref127"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[126]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">Patents added to the pool after its formation were divided into two classes- normal patents were licensed into the pool for all to use, with no special royalty payout going to the inventor or firm; exceptional patents earned ongoing royalties, in an amount determined by a formal arbitration procedure.<a href="#_ftn128" name="_ftnref128"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[127]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><span>The MAA also included a grant-back provision that applied to after-acquired patents.<a href="#_ftn129" name="_ftnref129"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[128]</span></span></span></a></span></p>
<p class="MsoNormal" style="text-align:justify; ">MAA’s members could license their patents to non-members if the terms were no more favorable than to members and any MAA member could withdraw at any time, but its patents in the pool at the time of withdrawal would remain.<a href="#_ftn130" name="_ftnref130"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[129]</span></span></span></a></p>
<h3><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>B. Moving Picture Experts Group (MPEG)</span></span></span></h3>
<p class="MsoNormal" style="text-align:justify; ">MPEG technology allows for transmission and storage of digital video and audio signals.<span> It was formed by the Trustees of Columbia University, Fujitsu Limited, General Instrument Corp., Lucent Technologies Inc., Matsushita Electric Industrial Co., Ltd., Mitsubishi Electric Corp., Philips Electronics N.C., Scientific Atlanta, Inc., and Sony Corp. in 1997. The patent pool for the MPEG-2 standard is administered by a common license administrator- MPEG-LA</span></p>
<p class="MsoNormal" style="text-align:justify; "><span>MPEG-LA is required to grant licenses to any potential licensees, without discrimination and at a reasonable royalty rate.</span></p>
<p class="MsoNormal" style="text-align:justify; ">MPEG LA offers a portfolio of MPEG-2 systems licenses with a fixed royalty for each licensed mobile MPEG-2 systems signal receiver and a different fixed royalty for all other MPEG-2 systems devices.<a href="#_ftn131" name="_ftnref131"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[130]</span></span></span></a> Additional patents, not included in the portfolio, are available for specific implementations.<a href="#_ftn132" name="_ftnref132"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[131]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">The pool offers a standardized five-year license to all prospective licensees.<a href="#_ftn133" name="_ftnref133"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[132]</span></span></span></a> The licensing royalties do not change if patents are added to the portfolio during the five-year licensing period, although the royalty rate may increase by up to 25% in a license renewal.<a href="#_ftn134" name="_ftnref134"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[133]</span></span></span></a> Each patent in the pool is valued equally.<a href="#_ftn135" name="_ftnref135"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[134]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><span>The license has a grant-back provision that requires the licensee to grant to the licensor and other portfolio licensees a nonexclusive license, under fair and reasonable terms and conditions, on any essential patent that the licensee has a right to license.<a href="#_ftn136" name="_ftnref136"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[135]</span></span></span></a> </span></p>
<p class="MsoNormal" style="text-align:justify; ">There exists a partial termination right given to licensors, who may request that MPEG-LA terminate the license of that licensor’s IPR to a particular licensee, if that licensee has sued the licensor for infringement of an MPEG-2 essential or “related” patent or refused to license a related patent on fair and reasonable terms.<a href="#_ftn137" name="_ftnref137"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[136]</span></span></span></a></p>
<h3 class="MsoNormal" style="text-align: justify; ">C. DVD</h3>
<p class="MsoNormal" style="text-align:justify; ">Sony, Philips and Pioneer organized the DVD3C patent pool in 1998 <span>for the licensing of patents that are “essential” to comply with the DVD-Video or DVD-ROM standard specifications.</span></p>
<p class="MsoNormal" style="text-align:justify; ">Royalty payments are allocated under guidelines set by the Ground Rules for Royalty</p>
<p class="MsoNormal" style="text-align:justify; ">Allocation rather than on subjective analysis by an expert.<a href="#_ftn138" name="_ftnref138"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[137]</span></span></span></a> The royalty rate in standard licenses is not related to fluctuations in the market price of a licensed product; also, the royalty rate is not computed on a per-patent basis and does not fluctuate as patents are added or removed, therefore, the same royalty rate is payable when using one essential patent as when using several.<a href="#_ftn139" name="_ftnref139"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[138]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; "><span>Hitachi</span><span>, Matsushita, Mitsubishi, Time Warner, Toshiba, and Victor organized the DVD6C patent pool in 1999 again for the licensing of patents that are “essential” to comply with the DVD-Video or DVD-ROM standard specifications.</span></p>
<p class="MsoNormal" style="text-align:justify; ">The DVD6C pool is also governed by the “Ground Rules for Royalty Allocation” guidelines.<a href="#_ftn140" name="_ftnref140"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[139]</span></span></span></a> The royalties are 4% of the net selling price of the product or U.S. $4.00 per product, whichever is higher. Royalties for DVD decoders are 4% of the net selling price of the product or U.S. $1.00 per product, whichever is higher.<a href="#_ftn141" name="_ftnref141"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[140]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">The DVD6C agreement contains a grant-back clause, which, requires licensees to grant each of the licensing companies of DVD6C (and their licensees) a non-exclusive license on fair, reasonable and non-discriminatory terms to use any of their patents that are deemed essential for the manufacture, use or sale of DVD Products; this grantback is restricted only to those DVD products actually licensed to the licensee.<a href="#_ftn142" name="_ftnref142"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[141]</span></span></span></a></p>
<h3 class="MsoNormal" style="text-align: justify; ">D. 3G Mobile Telephony</h3>
<p class="MsoNormal" style="text-align: justify; ">The 3G Patent Platform Partnership was formed in 1999. The purpose of the 3G Patent Platform Partnership is to allow for “fair, reasonable, and nondiscriminatory” access to rights essential for implementing the W-CDMA 3GPP standard.<a href="#_ftn143" name="_ftnref143"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[142]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">There are three form contracts associated with the Platform: the Framework Agreement, the Standard License, and the Interim License.<a href="#_ftn144" name="_ftnref144"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[143]</span></span></span></a> The Framework Agreement gives each member the choice either to license its essential patents according to the Standard License or to negotiate terms directly with a licensee.<a href="#_ftn145" name="_ftnref145"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[144]</span></span></span></a> The Standard License prescribes standardized royalties for licenses, to be determined by an independent commission.<a href="#_ftn146" name="_ftnref146"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[145]</span></span></span></a> If the patent owner foregoes the Standard License and fails to come to terms in bilateral negotiations, the Interim License comes into effect which has the same royalty terms as the Standard License.<a href="#_ftn147" name="_ftnref147"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[146]</span></span></span></a></p>
<h3 class="WordSection1">E. Bluetooth Special Interest Group (SIG)</h3>
<p class="MsoNormal" style="text-align:justify; ">The Bluetooth SIG was formed in 1997 to provide a technology for interconnection of mobile phones, computers, laptops, printers, PDAs, and other devices via a short-range radio frequency band; SIG oversees the development of Bluetooth standards and its licensing.<a href="#_ftn148" name="_ftnref148"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[147]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">SIG’s member companies are divided into three different classes- (1) promoter company, which are intensely engaged in the strategic and technical development of Bluetooth wireless technology; they include Agere, Ericsson, Intel, Lenovo, Microsoft, Motorola, Nokia, and</p>
<p class="MsoNormal" style="text-align:justify; ">Toshiba; (2) associate members, who are licensed to use Bluetooth specifications and trademarks; (3) adopted members, which use published specifications and trademarks, but do not influence the specification process, nor do they have early access to unpublished specifications.<a href="#_ftn149" name="_ftnref149"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[148]</span></span></span></a></p>
<p class="MsoNormal" style="text-align:justify; ">SIG licenses to member companies on a royalty-free basis, but, associate members pay an annual fee based on their company’s annual revenue, with “small” associates (less than $100 million USD/year) paying $7,500 USD/year and “large” associates (more than $100 million USD/year) paying $35,000 USD/year; adopted members are not required to pay an annual fee.<a href="#_ftn150" name="_ftnref150"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[149]</span></span></span></a></p>
<h2><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>VI. Conclusion<br /></span></span></span></h2>
<p class="MsoNormal" style="text-align:justify; ">As is evident, patent valuation and license fee determination are extremely subjective and case based. Moreover, their dynamics alter according to the situation, as in the context of patent pools. This dynamism is furthered by the fact that there are no strict or universal formulas or procedures which can be applied in such determinations. Furthermore, such determinations cannot be made in a vacuum but are subject to the cascading effect of a multitude of factors comprised of the holistic technological environment that may not be just restricted to the innovation in question.</p>
<div>
<hr align="left" size="1" width="100%" />
<div id="ftn2">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref2" name="_ftn2"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[1]</span></span></span></span></a><span> Krista L. Cox, The Medicines Patent Pool: Promoting Access and Innovation for Life-Saving Medicines Through Voluntary Licenses 4 Hastings Sci. & Tech. L.J. 293 (Summer, 2012) citing <i>IGWG Briefing Paper on Patent Pools: Collective Management of Intellectual Property--The Use of Patent Pools to Expand Access to Essential Medical Technologies</i>, Knowledge Ecology International, (June 3, 2007) quoting Robert P. Merges, Institutions for Intellectual Property Transactions: The Case of Patent Pools, in Expanding the Boundaries of Intellectual Property, Innovation Policy for the Knowledge Society 123 (Rochelle Cooper Dreyfuss et al. eds., 2001).</span></p>
</div>
<div id="ftn3">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref3" name="_ftn3"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[2]</span></span></span></span></a><span> Jer Rutton Kavasmaneck v Gharda Chemicals Ltd. and Ors. (Suit No.2932 of 2011; Decided On: 20.03.2012) Bombay H.C. (Intellectual Property Rights (IPRs) including the patent right is valuable right for all the commercial purposes. These intangible assets play important role in any financial assessment of the trade/commercial or the market. It changes from time to time, market to market, person to person based upon the situations. If valuation is always a complex and flexible issue and a matter of discussion and debate in business strategies. The patent valuation involves many described and undescribed elements).</span></p>
</div>
<div id="ftn4">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref4" name="_ftn4"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[3]</span></span></span></span></a><span>Robert P. Merges, Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organizations 84 Calif. L. Rev. 1293 (October 1996) citing Standard Oil Co. v. United States, 283 U.S. 163, 171 (1931). </span></p>
</div>
<div id="ftn5">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref5" name="_ftn5"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[4]</span></span></span></span></a><span> Michael S. Kramer, Valuation and Assessment of Patents and Patent Portfolios Through Analytical Techniques 6 J. Marshall Rev. Intell. Prop. L. 463 (Spring, 2007). </span></p>
</div>
<div id="ftn6">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref6" name="_ftn6"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[5]</span></span></span></span></a><span> Richard J. Gilbert, Ties That Bind: Policies to Promote (Good) Patent Pools 77 Antitrust L.J. 1 (2010) MPEG LA Business Review Letter from Joel I. Klein, Ass’t Att’y Gen., U.S. Dep’t of Justice, to Garrard R. Beeney, Esq., Sullivan & Cromwell LLP (June 26, 1997), available at http://www.usdoj.gov/atr/public/busreview/215742.pdf; MPEG LA, MPEG-2 Patent Portfolio License Briefing (Aug. 4, 2010).</span></p>
</div>
<div id="ftn7">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref7" name="_ftn7"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[6]</span></span></span></span></a><span> See Kramer, <i>supra</i> n.4 at 463 (essential patents of technical standards are more valuable, on average, than the general population of patents).</span></p>
</div>
<div id="ftn8">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref8" name="_ftn8"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[7]</span></span></span></span></a><span> Gilbert, <i>supra</i> n.5.</span></p>
</div>
<div id="ftn9">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref9" name="_ftn9"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[8]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn10">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref10" name="_ftn10"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[9]</span></span></span></span></a><span> <i>Id.</i> </span></p>
</div>
<div id="ftn11">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref11" name="_ftn11"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[10]</span></span></span></span></a><span> <i>Id.</i>citing DVD 3C Business Review Letter from Joel I. Klein, Ass't Att'y Gen., U.S. Dep't of Justice, to Garrard R. Beeney, Esq., Sullivan & Cromwell LLP (Dec. 16, 1998), available at http://www.usdoj.gov/atr/public/busreview/2121.pdf.</span></p>
</div>
<div id="ftn12">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref12" name="_ftn12"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[11]</span></span></span></span></a><span>R. Justin Koscher, A Patent Pool's White Knight: Individual Licensing Agreements And The Procompetitive Presumption 20 DePaul J. Art Tech. & Intell. Prop. L. 53 (Fall, 2009). </span></p>
</div>
<div id="ftn13">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref13" name="_ftn13"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[12]</span></span></span></span></a><span> Daniel Lin, Research versus Development: Patent Pooling, Innovation And Standardization In The Software Industry 1 J. Marshall Rev. Intell. Prop. L. 274 (2002).</span></p>
</div>
<div id="ftn14">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref14" name="_ftn14"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[13]</span></span></span></span></a><span> Steven C. Carlson, Patent Pools and the Antitrust Dilemma 16 Yale J. on Reg. 359 (Summer, 1999).</span></p>
</div>
<div id="ftn15">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref15" name="_ftn15"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[14]</span></span></span></span></a><span> <i>Id.</i> </span></p>
</div>
<div id="ftn16">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref16" name="_ftn16"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[15]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn17">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref17" name="_ftn17"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[16]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn18">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref18" name="_ftn18"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[17]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn19">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref19" name="_ftn19"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[18]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn20">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref20" name="_ftn20"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[19]</span></span></span></span></a><span> <i>Id.</i> </span></p>
</div>
<div id="ftn21">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref21" name="_ftn21"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[20]</span></span></span></span></a><span> Michael A. Sanzo, Antitrust Law And Patent Misconduct In The Proprietary Drug Industry 39 Vill. L. Rev. 1209 (1994). </span></p>
</div>
<div id="ftn22">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref22" name="_ftn22"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[21]</span></span></span></span></a><span> Gilbert, <i>supra</i> n.5. </span></p>
</div>
<div id="ftn23">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref23" name="_ftn23"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[22]</span></span></span></span></a><span> Carlson, <i>supra</i> n.13. </span></p>
</div>
<div id="ftn24">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref24" name="_ftn24"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[23]</span></span></span></span></a><span> Philip B. Nelson, Patent Pools: An Economic Assessment Of Current Law And Policy 38 Rutgers L. J. 539 (Winter, 2007). </span></p>
</div>
<div id="ftn25">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref25" name="_ftn25"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[24]</span></span></span></span></a><span> Gilbert, <i>supra</i> n.5.</span></p>
</div>
<div id="ftn26">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref26" name="_ftn26"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[25]</span></span></span></span></a><span> <i>Id.</i> </span></p>
</div>
<div id="ftn27">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref27" name="_ftn27"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[26]</span></span></span></span></a><span> Carlson, <i>supra</i> n.13.</span></p>
</div>
<div id="ftn28">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref28" name="_ftn28"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[27]</span></span></span></span></a><span> Gilbert, <i>supra</i> n.5.</span></p>
</div>
<div id="ftn29">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref29" name="_ftn29"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[28]</span></span></span></span></a><span> Nelson, <i>supra</i> n.23.</span></p>
</div>
<div id="ftn30">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref30" name="_ftn30"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[29]</span></span></span></span></a><span> David S. Taylor, The Sinking Of The United States Electronics Industry Within Japanese Patent Pools 26 GW J. Int'l L. & Econ. 181 (1992). </span></p>
</div>
<div id="ftn31">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref31" name="_ftn31"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[30]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn32">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref32" name="_ftn32"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[31]</span></span></span></span></a><span> Michael J. Meurer, Business Method Patents and Patent Floods 8 Wash. U. J.L. & Pol'y 309 (2002).</span></p>
</div>
<div id="ftn33">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref33" name="_ftn33"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[32]</span></span></span></span></a><span> Mark A. Lemley & Carl Shapiro, Frontiers of Intellectual Property: Patent Holdup and Royalty Stacking 85 Tex. L. Rev. 1991 (June, 2007). </span></p>
</div>
<div id="ftn34">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref34" name="_ftn34"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[33]</span></span></span></span></a><span> Meurer, <i>supra</i> n.31 (A patent flood occurs when many inventors apply for patents on similar inventions during an interval of a few years).</span></p>
</div>
<div id="ftn35">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref35" name="_ftn35"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[34]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn36">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref36" name="_ftn36"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[35]</span></span></span></span></a><span> Robert P. Greenspoon and Catherine M. Cottle, Don't Assume A Can Opener: Confronting Patent Economic Theories With Licensing And Enforcement Reality 12 Colum. Sci. & Tech. L. Rev. 194 (2011). </span></p>
</div>
<div id="ftn37">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref37" name="_ftn37"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[36]</span></span></span></span></a><span> Meurer, <i>supra</i> n.31. </span></p>
</div>
<div id="ftn38">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref38" name="_ftn38"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[37]</span></span></span></span></a><span> Gilbert <i>supra</i> n.5 citing the cross-licensing arrangement between the Singer Manufacturing Company and Gegauf, contained provisions by which each of the parties agreed not to bring any infringement action against the other. United States v. Singer Mfg. Co., 374 U.S. 174, 178 (1963).</span></p>
</div>
<div id="ftn39">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref39" name="_ftn39"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[38]</span></span></span></span></a><span> Gilbert <i>supra</i> n.5.</span></p>
</div>
<div id="ftn40">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref40" name="_ftn40"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[39]</span></span></span></span></a><span> Kramer, <i>supra</i> n.4. </span></p>
</div>
<div id="ftn41">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref41" name="_ftn41"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[40]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn42">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref42" name="_ftn42"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[41]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn43">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref43" name="_ftn43"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[42]</span></span></span></span></a><span> Jorge L. Contreras, Standards, Patents, and the National Smart Grid 32 Pace L. Rev. 641 (Summer Issue, 2012). </span></p>
</div>
<div id="ftn44">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref44" name="_ftn44"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[43]</span></span></span></span></a><span> Gilbert, <i>supra</i> n.5 (To the extent that a patent pool successfully lowers total royalties relative to independent licensing, this leaves ‘headroom’ available for an independent licensor outside the pool to charge a high royalty for its patent).</span></p>
</div>
<div id="ftn45">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref45" name="_ftn45"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[44]</span></span></span></span></a><span> <i>Id.</i><i> </i>citing Multimedia Patent Trust v. Microsoft Corp., et al., 525 F. Supp. 2d 1200 (S.D. Cal. 2007). </span></p>
</div>
<div id="ftn46">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref46" name="_ftn46"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[45]</span></span></span></span></a><span> Chase A. Marshall, A Comparative Analysis: Current Solutions To The Anticommons Threat 12 J. High Tech. L. 487 (2012); Damien Geradin and Anne Layne-Farrar, Patent Value Apportionment Rules for Complex, Multi-Patent Products 27 Santa Clara Computer & High Tech. L.J. 763 (2010 / 2011) (the typical semiconductor chip likely involves hundreds, perhaps more, patents. In turn, that chip may be intended for use in a laptop computer, the other components of which involve hundreds, or more, patents. Without knowing how many patents actually read on a product, and how many have holders who will actively seek licensing fees, it can be exceedingly difficult to assign the contributed value to those that are known). </span></p>
</div>
<div id="ftn47">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref47" name="_ftn47"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[46]</span></span></span></span></a><span> Gideon Parchomovsky and R. Polk Wagner, Patent Portfolios 154 U. Pa. L. Rev. 1 (November, 2005); Elizabeth M. Bailey, Gregory K. Leonard and Mario A. Lopez, Making Sense Of “Apportionment” In Patent Damages 12 Colum. Sci. & Tech. L. Rev. 255 (2011) (combining patented technologies typically creates value that is greater than the sum of the parts. For example, patent pools often bring together various technologies that are necessary to create the product in question. The stand-alone value of any one patent in the pool may be low or close to zero unless combined with the other patents in the pool). </span></p>
</div>
<div id="ftn48">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref48" name="_ftn48"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[47]</span></span></span></span></a><span> Parchomovsky and Wagner, <i>supra</i> n.46.</span></p>
</div>
<div id="ftn49">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref49" name="_ftn49"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[48]</span></span></span></span></a><span> <i>Id.</i> </span></p>
</div>
<div id="ftn50">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref50" name="_ftn50"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[49]</span></span></span></span></a><span> <i>Id.</i> </span></p>
</div>
<div id="ftn51">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref51" name="_ftn51"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[50]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn52">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref52" name="_ftn52"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[51]</span></span></span></span></a><span> Scott Iyama, The USPTO's Proposal of a Biological Research Tool Patent Pool Doesn't Hold Water 57 Stan. L. Rev. 1223 (March, 2005). </span></p>
</div>
<div id="ftn53">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref53" name="_ftn53"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[52]</span></span></span></span></a><span> Bradley J. Levang, Evaluating the Use of Patent Pools For Biotechnology: A Refutation to the USPTO White Paper Concerning Biotechnology Patent Pools 19 Santa Clara Computer & High Tech. L.J. 229 (December, 2002). </span></p>
</div>
<div id="ftn54">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref54" name="_ftn54"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[53]</span></span></span></span></a><span> Courtney C. Scala, Making the Jump From Gene Pools to Patent Pools: How Patent Pools Can Facilitate the Development of Pharmacogenomics 41 Conn. L. Rev. 1631 (July, 2009). </span></p>
</div>
<div id="ftn55">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref55" name="_ftn55"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[54]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn56">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref56" name="_ftn56"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[55]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn57">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref57" name="_ftn57"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[56]</span></span></span></span></a><span> R. Justin Koscher, A Patent Pool's White Knight: Individual Licensing Agreements And The Procompetitive Presumption 20 DePaul J. Art Tech. & Intell. Prop. L. 53 (Fall, 2009) citing DVD-6 Business Review Letter from Joel I. Klein, Assistant Attorney General, to Carey R. Ramos, Esq., of Paul, Weiss, Rifkind, Wharton & Garrison (June 10, 1999), available at http://www.usdoj.gov/atr/public/busreview/2485.htm.</span></p>
</div>
<div id="ftn58">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref58" name="_ftn58"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[57]</span></span></span></span></a><span> Alexander Lee, Examining the Viability of Patent Pools for the Growing Nanotechnology Patent Thicket, 3 Nanotechnology L. & Bus. 317 (2006) suggests that to determine the viability of using a patent pool in a market, companies should ponder the following list of nine criteria: (1) product development driven by standards; (2) moderate fragmentation of patent landscape; (3) at least five pool members; (4) each member working on specific subcomponent of a product; (5) willingness of patent holders to negotiate; (6) commitment by members to create the pool; (7) an industry that is in the later stages of product development; (8) certainty of patent ownership; and (9) a patent pool clear of potential antitrust violations.</span></p>
</div>
<div id="ftn59">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref59" name="_ftn59"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[58]</span></span></span></span></a><span> See Gilbert, <i>supra</i> n.5 discussing the Manufacturers Aircraft Association, where the U.S. government used the threat of compulsory licensing to compel the pioneers of the aircraft industry to form a patent pool in 1917. The industry was enmeshed in litigation over the scope and validity of patents, and some patentees, particularly the Wright-Martin Company, were demanding royalties that the government and other aircraft manufacturers deemed excessive. Creation of the Manufacturers Aircraft Association patent pool resolved the litigation chaos. The government negotiated a portfolio license from the pool with a royalty of $ 200 per aircraft, which was a fraction of the royalty that Wright-Martin was demanding for a single patent ($ 1,000 per aircraft). </span></p>
</div>
<div id="ftn60">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref60" name="_ftn60"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[59]</span></span></span></span></a><span> See Carlson, <i>supra</i> n.13 discussing that pool agreements are frequently employed as a means of settling existing litigation, and citing examples including patent pools in the laser eye surgery, and the public key encryption industries;</span></p>
<p class="MsoNormal" style="text-align:justify; "><span>also see Lemley & Shapiro, Frontiers of Intellectual Property, <i>supra</i> n.32 discussing that the average royalty rate granted in all reasonable-royalty cases is 13.13% of the price of the infringing product, which is much higher than that of patent licenses negotiated without litigation.</span></p>
</div>
<div id="ftn61">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref61" name="_ftn61"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[60]</span></span></span></span></a><span> See Greenspoon and Cottle, <i>supra</i> n.35 discussing the value of patents as a form of currency that can be used to further goals unrelated to market creation or entry. Such goals can be to improve a firm's competitive position when trying to acquire start-up funds, to improve negotiating terms when licensing other patents, and to reduce the chance of paying excessive royalties to external patent owners;</span></p>
<p class="MsoNormal" style="text-align:justify; "><span>also see, Gilbert, <i>supra</i> n.5 discussing how different business strategies can cause firms to pool their patents with some firms, but not with others, citing the example of emergence of two pools to license DVD patents as a consequence of differing approaches to industry standards. One explanation offered for the existence of two separate pools is that the two groups could not reach an accord about their respective shares of joint royalty payments. </span></p>
</div>
<div id="ftn62">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref62" name="_ftn62"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[61]</span></span></span></span></a><span> See Gilbert, <i>supra</i> n.5 discussing how some pools license their patents royalty-free or at royalties that are deliberately held below profit-maximizing levels in an effort to promote adoption of new technologies covered by their patents, citing the example of the Bluetooth Special Interest Group and the Multimedia Home Platform. The article also discusses patent pools formed to license patents that are necessary to implement a defined standard, such as MPEG encoding, DVDs, or mobile telephony. </span></p>
</div>
<div id="ftn63">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref63" name="_ftn63"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[62]</span></span></span></span></a><span> See Gilbert, <i>supra</i> n.5 discussing pools that limit royalties to promote social objectives rather than to profit from new products citing examples of companies, universities, and research organizations such as Syngenta- an agricultural technology company, the Public Intellectual Property Resource for Agriculture, the SARS IP Working Group, and the UNITAID pool for AIDS medications.</span></p>
</div>
<div id="ftn64">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref64" name="_ftn64"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[63]</span></span></span></span></a><span> Yuichi Watanabe, Patent Licensing And The Emergence Of A New Patent Market 9 Hous. Bus. & Tax L.J. 445 (2009) (The current state of affairs shows that the patent licensing market strongly favors larger corporations over smaller ones, enabling the larger corporations to reap much of the market opportunities and benefits while limiting them to smaller patentees).</span></p>
</div>
<div id="ftn65">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref65" name="_ftn65"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[64]</span></span></span></span></a><span> Roger B. Andewelt, Practical Problems In Counseling And Litigating: Analysis Of Patent Pools Under The Antitrust Laws 53 Antitrust L.J. 611 (October 11, 1984/October 12, 1984) (Pools typically contain restrictions on those who join the pool by contributing patents and/or those who take licenses under the pooled patents).</span></p>
</div>
<div id="ftn66">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref66" name="_ftn66"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[65]</span></span></span></span></a><span>Chase A. Marshall, A Comparative Analysis: Current Solutions To The Anticommons Threat 12 J. High Tech. L. 487 (2012).</span></p>
</div>
<div id="ftn67">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref67" name="_ftn67"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[66]</span></span></span></span></a><span> Ann Weilbaecher, PSY.D., Diseases Endemic in Developing Countries: How to Incentivize Innovation 18 Ann. Health L. 281 (Summer, 2009).</span></p>
</div>
<div id="ftn68">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref68" name="_ftn68"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[67]</span></span></span></span></a><span> Greenspoon and Cottle, <i>supra</i> n.35 identify five general types of entities that license and enforce patents: (1) Individual inventors with a single patent; (2) Individual serial inventors; (3) Non-Practicing Entities; (4) Operating companies who practice inventions acquired from others; and (5) Operating companies who practice inventions developed in-house.</span></p>
</div>
<div id="ftn69">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref69" name="_ftn69"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[68]</span></span></span></span></a><span> See, Raymond Millien and Ron Laurie, A Survey Of Established & Emerging IP Business Models 9 Sedona Conf. J. 77 (2008) discussing various models, viz. Patent Licensing and Enforcement Companies, Institutional IP Aggregators/Acquisition Funds, IP/Technology Development Companies, Licensing Agents, Litigation Finance/Investment Firms, IP Brokers, IP-Based M&A Advisory Firms, IP Auction Houses, On-Line IP/Technology Exchanges, Clearinghouses, Bulletin Boards, and Innovation Portals, IP-Backed Lending, Royalty Stream Securitization Firms, Patent Rating Software and Valuation Services, University Technology Transfer Intermediaries, IP Transaction Exchanges & Trading Platforms/IP Transaction Best Practices Development Communities, Defensive Patent Pools, Funds and Alliances, Technology/IP Spinout Financing, and Patent-Based Public Stock Indexes.</span></p>
</div>
<div id="ftn70">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref70" name="_ftn70"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[69]</span></span></span></span></a><span> Richard J. Gilbert, Deal or No Deal? Licensing Negotiations In Standard-Setting Organizations 77 Antitrust L.J. 855 (2011).</span></p>
</div>
<div id="ftn71">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref71" name="_ftn71"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[70]</span></span></span></span></a><span> Gilbert, <i>supra</i> n.5 </span></p>
</div>
<div id="ftn72">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref72" name="_ftn72"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[71]</span></span></span></span></a><span> Merges, Contracting into Liability Rules, <i>supra</i> n.3. </span></p>
</div>
<div id="ftn73">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref73" name="_ftn73"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[72]</span></span></span></span></a><span> Alan Devlin, Standard-Setting And The Failure Of Price Competition 65 N.Y.U. Ann. Surv. Am. L. 217 (2009) citing Brulotte v. Thys Co., 379 U.S. 29, 33 (1964). </span></p>
</div>
<div id="ftn74">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref74" name="_ftn74"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[73]</span></span></span></span></a><span>Doug Lichtman, Understanding The Rand Commitment 47 Hous. L. Rev. 1023 (2010). </span></p>
</div>
<div id="ftn75">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref75" name="_ftn75"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[74]</span></span></span></span></a><span> Peter N. Detkin, Leveling The Patent Playing Field 6 J. Marshall Rev. Intell. Prop. L. 636 (Summer, 2007). </span></p>
</div>
<div id="ftn76">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref76" name="_ftn76"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[75]</span></span></span></span></a><span> Lee, <i>infra</i> n.57. </span></p>
</div>
<div id="ftn77">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref77" name="_ftn77"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[76]</span></span></span></span></a><span> Kelce Wilson, The Four Phases of Patent Usage 40 Cap. U.L. Rev. 679 (Summer, 2012). </span></p>
</div>
<div id="ftn78">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref78" name="_ftn78"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[77]</span></span></span></span></a><span>Gavin D. George, What is Hiding in the Bushes? eBay's Effect on Holdout Behavior in Patent Thickets, 13 Mich. Telecomm. Tech. L. Rev. 557 (2007). </span></p>
</div>
<div id="ftn79">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref79" name="_ftn79"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[78]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn80">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref80" name="_ftn80"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[79]</span></span></span></span></a><span> <i>Id</i></span></p>
</div>
<div id="ftn81">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref81" name="_ftn81"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[80]</span></span></span></span></a><span>Daniel R. Cahoy and Leland Glenna, Private Ordering and Public Energy Innovation Policy 36 Fla. St. U.L. Rev. 415 (Spring, 2009). </span></p>
</div>
<div id="ftn82">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref82" name="_ftn82"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[81]</span></span></span></span></a><span> Gilbert, <i>supra</i> n.5; See for example, Merges, Contracting into Liability Rules, <i>supra</i> n.3 describing how in the airplane cross-licensing agreement, it provides that a board of arbitrators may decide in any case what reward should be paid to individual patent owners and this is based not upon the official determination of patentability by the Patent Office, but upon the unofficial determination of the importance of the invention by a board of arbitrators.</span></p>
</div>
<div id="ftn83">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref83" name="_ftn83"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[82]</span></span></span></span></a><span> See Andewelt, <i>supra</i> n.64 (The scope and variety of patents included vary considerably from pool to pool. Some pools are limited to patents covering a single commercial device. Others contain numerous and diverse patents relating to different devices in different markets).</span></p>
</div>
<div id="ftn84">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref84" name="_ftn84"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[83]</span></span></span></span></a><span> See, Scala, <i>supra</i> n.53 discussing how the non-exclusive character of a license is particularly important for those firms holding patents whose full utility is unascertainable at the time of the formation of the pool.</span></p>
</div>
<div id="ftn85">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref85" name="_ftn85"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[84]</span></span></span></span></a><span> Dustin R. Szakalski, Progress In The Aircraft Industry And The Role Of Patent Pools And Cross-Licensing Agreements 2011 UCLA J.L. & Tech. 1 (Spring 2011). </span></p>
</div>
<div id="ftn86">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref86" name="_ftn86"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[85]</span></span></span></span></a><span> Ed Levy, et. al, Patent Pools And Genomics: Navigating A Course To Open Science? 16 B.U. J. SCI. & TECH. L. 75 (Winter, 2010). </span></p>
</div>
<div id="ftn87">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref87" name="_ftn87"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[86]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn88">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref88" name="_ftn88"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[87]</span></span></span></a> Ted Hagelin, Technology and Legal Practice Symposium Issue: Valuation of Intellectual Property Assets: An Overview 52 Syracuse L. Rev. 1133 (2002) (The cost method of valuation measures the value of an asset by the cost to replace the asset with an identical or equivalent asset. The assumption underlying the cost method of valuation is that the cost to purchase or develop a new asset is commensurate with the economic value that the asset can provide during its life).</p>
</div>
<div id="ftn89">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref89" name="_ftn89"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[88]</span></span></span></a> <i>Id.</i><i> </i>(The market method values an asset based upon comparable transactions between unrelated parties).</p>
</div>
<div id="ftn90">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref90" name="_ftn90"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[89]</span></span></span></span></a><span> <i>Id.</i> (The income method values an asset based upon the present value of the net economic benefit (net future income stream) expected to be received over the life of the asset).</span></p>
</div>
<div id="ftn91">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref91" name="_ftn91"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[90]</span></span></span></span></a><span> Sannu K. Shrestha, Trolls Or Market-Makers? An Empirical Analysis Of Nonpracticing Entities 110 Colum. L. Rev. 114 (January, 2010). </span></p>
</div>
<div id="ftn92">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref92" name="_ftn92"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[91]</span></span></span></span></a><i><span>Id.</span></i><span> </span></p>
</div>
<div id="ftn93">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref93" name="_ftn93"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[92]</span></span></span></span></a><span>Colleen V. Chien, From Arms Race to Marketplace: The Complex Patent Ecosystem and Its Implications for the Patent System 62 Hastings L.J. 297 (December, 2010). </span></p>
</div>
<div id="ftn94">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref94" name="_ftn94"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[93]</span></span></span></span></a><span> <i>Id.</i> </span></p>
</div>
<div id="ftn95">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref95" name="_ftn95"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[94]</span></span></span></span></a><span>R. Justin Koscher, A Patent Pool's White Knight: Individual Licensing Agreements And The Procompetitive Presumption 20 DePaul J. Art Tech. & Intell. Prop. L. 53 (Fall, 2009). </span></p>
</div>
<div id="ftn96">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref96" name="_ftn96"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[95]</span></span></span></span></a><span> Geradin and Layne-Farrar, <i>supra</i> n.45. </span></p>
</div>
<div id="ftn97">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref97" name="_ftn97"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[96]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn98">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref98" name="_ftn98"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[97]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn99">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref99" name="_ftn99"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[98]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn100">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref100" name="_ftn100"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[99]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn101">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref101" name="_ftn101"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[100]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn102">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref102" name="_ftn102"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[101]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn103">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref103" name="_ftn103"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[102]</span></span></span></span></a><span> Hagelin, <i>supra</i> n.87; also see, Geradin and Layne-Farrar, <i>supra</i> n.45.</span></p>
</div>
<div id="ftn104">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref104" name="_ftn104"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[103]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn105">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref105" name="_ftn105"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[104]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn106">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref106" name="_ftn106"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[105]</span></span></span></span></a><span> Geradin and Layne-Farrar, <i>supra</i> n.45. </span></p>
</div>
<div id="ftn107">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref107" name="_ftn107"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[106]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn108">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref108" name="_ftn108"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[107]</span></span></span></span></a><span> Hagelin, <i>supra</i> n.87; also see, Geradin and Layne-Farrar, <i>supra</i> n.45.</span></p>
</div>
<div id="ftn109">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref109" name="_ftn109"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[108]</span></span></span></span></a><span> Geradin and Layne-Farrar, <i>supra</i> n.45. </span></p>
</div>
<div id="ftn110">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref110" name="_ftn110"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[109]</span></span></span></span></a><span> Malcolm T. "Ty" Meeks & Charles A. Eldering, PhD, Patent Valuation: Aren’t We Forgetting Something? Making the Case for Claims Analysis in Patent Valuation by Proposing a Patent Valuation Method and a Patent-Specific Discount Rate Using the CAPM 9 Nw. J. Tech. & Intell. Prop. 194 (Fall, 2010).</span></p>
</div>
<div id="ftn111">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref111" name="_ftn111"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[110]</span></span></span></span></a><span> Hagelin, <i>supra</i> n.87.</span></p>
</div>
<div id="ftn112">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref112" name="_ftn112"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[111]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn113">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref113" name="_ftn113"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[112]</span></span></span></span></a><span> Geradin and Layne-Farrar, <i>supra</i> n.45. </span></p>
</div>
<div id="ftn114">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref114" name="_ftn114"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[113]</span></span></span></span></a><span> Hagelin, <i>supra</i> n.87.</span></p>
</div>
<div id="ftn115">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref115" name="_ftn115"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[114]</span></span></span></span></a><span> <i>Id.</i>; Meeks & Eldering, <i>supra</i> n.109.</span></p>
</div>
<div id="ftn116">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref116" name="_ftn116"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[115]</span></span></span></span></a><span> Hagelin, <i>supra</i> n.87. </span></p>
</div>
<div id="ftn117">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref117" name="_ftn117"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[116]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn118">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref118" name="_ftn118"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[117]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn119">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref119" name="_ftn119"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[118]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn120">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref120" name="_ftn120"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[119]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn121">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref121" name="_ftn121"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[120]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn122">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref122" name="_ftn122"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[121]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn123">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref123" name="_ftn123"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[122]</span></span></span></span></a><span> Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970). </span></p>
</div>
<div id="ftn124">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref124" name="_ftn124"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[123]</span></span></span></span></a><span> Daralyn J. Durie and Mark A. Lemley, A Structured Approach To Calculating Reasonable Royalties 14 Lewis & Clark L. Rev. 627 (Summer, 2010). </span></p>
</div>
<div id="ftn125">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref125" name="_ftn125"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[124]</span></span></span></a> Merges, Contracting into Liability Rules, <i>supra</i> n.3.</p>
</div>
<div id="ftn126">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref126" name="_ftn126"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[125]</span></span></span></a> Michael Mattioli, Communities Of Innovation 106 Nw. U.L. Rev. 103 (Winter, 2012).</p>
</div>
<div id="ftn127">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref127" name="_ftn127"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[126]</span></span></span></a> Szakalski, <i>supra</i> n.84.</p>
</div>
<div id="ftn128">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref128" name="_ftn128"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[127]</span></span></span></a> Merges, Contracting into Liability Rules, <i>supra</i> n.3.</p>
</div>
<div id="ftn129">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref129" name="_ftn129"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[128]</span></span></span></a> Mattioli, <i>supra</i> n.125.</p>
</div>
<div id="ftn130">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref130" name="_ftn130"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[129]</span></span></span></a> Szakalski, <i>supra</i> n.84.</p>
</div>
<div id="ftn131">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref131" name="_ftn131"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[130]</span></span></span></a> Gilbert, <i>supra</i> n.5.</p>
</div>
<div id="ftn132">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref132" name="_ftn132"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[131]</span></span></span></a> Carlson, <i>supra</i> n.13.</p>
</div>
<div id="ftn133">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref133" name="_ftn133"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[132]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn134">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref134" name="_ftn134"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[133]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn135">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref135" name="_ftn135"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[134]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn136">
<p class="MsoFootnoteText"><a href="#_ftnref136" name="_ftn136"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[135]</span></span></span></a> Lin, <i>supra</i> n.12.</p>
</div>
<div id="ftn137">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref137" name="_ftn137"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[136]</span></span></span></a> Dorothy Gill Raymond, Benefits and Risks Of Patent Pooling For Standard-Setting Organizations 16 Antitrust ABA 41 (Summer, 2002).</p>
</div>
<div id="ftn138">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref138" name="_ftn138"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[137]</span></span></span></span></a><span> David Serafino, Survey of Patent Pools Demonstrates Variety of Purposes and Management Structures, KEI Research Note 2007:6, Knowledge Ecology International, 4 June 2007.</span></p>
</div>
<div id="ftn139">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref139" name="_ftn139"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[138]</span></span></span></span></a><span> <i>Id.</i> </span></p>
</div>
<div id="ftn140">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref140" name="_ftn140"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[139]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn141">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref141" name="_ftn141"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[140]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn142">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref142" name="_ftn142"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[141]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn143">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref143" name="_ftn143"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[142]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn144">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref144" name="_ftn144"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[143]</span></span></span></a> Michael R. Franzinger, Latent Dangers in a Patent Pool: The European Commission's Approval of the 3G Wireless Technology Licensing Agreements 91 Calif. L. Rev. 1693 (December, 2003).</p>
</div>
<div id="ftn145">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref145" name="_ftn145"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[144]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn146">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref146" name="_ftn146"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[145]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn147">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref147" name="_ftn147"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[146]</span></span></span></span></a><span> <i>Id.</i></span></p>
</div>
<div id="ftn148">
<p class="MsoNormal" style="text-align:justify; "><a href="#_ftnref148" name="_ftn148"><span class="MsoFootnoteReference"><span><span class="MsoFootnoteReference"><span>[147]</span></span></span></span></a><span> David Serafino, Survey of Patent Pools Demonstrates Variety of Purposes and Management Structures, KEI Research Note 2007:6, Knowledge Ecology International, 4 June 2007.</span></p>
</div>
<div id="ftn149">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref149" name="_ftn149"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[148]</span></span></span></a> <i>Id.</i></p>
</div>
<div id="ftn150">
<p class="MsoFootnoteText" style="text-align:justify; "><a href="#_ftnref150" name="_ftn150"><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span>[149]</span></span></span></a> <i>Id.</i></p>
</div>
</div>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/patent-valuation-and-license-fee-determination-in-context-of-patent-pools'>http://editors.cis-india.org/a2k/blogs/patent-valuation-and-license-fee-determination-in-context-of-patent-pools</a>
</p>
No publishervikrantFeaturedPatentsAccess to KnowledgePervasive Technologies2014-07-09T09:46:16ZBlog EntryCultural Interests vs. Modernization: Robert Shapiro on IPR & Innovation in India
http://editors.cis-india.org/a2k/blogs/cultural-interests-v-international-economy-robert-shapiro-on-ipr-innovation-in-india
<b>Last Friday March 28, 2014, prominent economist and chairman of Sonecon, llc, Dr. Robert Shapiro, lead a discussion on the roles of IPR and FDI in innovation. Within his research findings, Shapiro argues for India to adopt a stricter IP regime in order to attract higher rates of FDI in pharmaceuticals and other industries, and in turn, to spur a more successful economy.</b>
<p align="JUSTIFY">The closed door round-table discussion had been organized by policy research and advocacy organization, <a href="http://takshashila.org.in/">T</a><a href="http://takshashila.org.in/">he Takshashila </a><a href="http://takshashila.org.in/">Institute</a>, and hosted by <a href="http://cobaltblr.com/">Cobalt</a>, a recently opened co-working space in Bangalore. The event's speaker, Robert Shapiro, has advised U.S. President Bill Clinton, British Prime Ministers Tony Blair and Gordon Brown, and U.S. Vice President Albert Gore, as well as AT&T, Exxon-Mobil and Google, on economic policy and security matters. Recently he co-authored an economic research paper, titled, <em>How India Can Attract More Foreign Direct Investment, Create Jobs and Increase </em>GDP, which can be accessed <a href="http://www.sonecon.com/docs/studies/FDI_IP_and_the_Pharmaceutical_Sector_in_India-Shapiro-Mathur-Final-January2014.pdf">here</a>.</p>
<p align="JUSTIFY">Within this paper, Shapiro and Dr. Aparna Mathur of the American Enterprise Institute argue that the most effective way for India to attract “further investment and job creation for improving the innovation environment in India” is by respecting the intellectual property rights of foreign investors—specifically within the pharmaceutical sector. The main points made by Shapiro within his session and research paper will be looked at closer to follow.</p>
<h3 align="JUSTIFY">FDI to spur innovation</h3>
<p align="JUSTIFY">Shapiro started the session by introducing the controversy over the role of innovation in economic processes. Contrary to the belief that the majority of economists share—that innovation happens outside the economy incidentally “because someone happens to have a bright idea”—Shapiro suggests that innovation plays a much more integral role within an economy, and even goes as far as considering innovation the most powerful underlying factor (possibly more so than education). Shapiro asserts that without innovation, “every economy has to stall out,” and what prevents this is new capital changing productivity and growth rates; and in India's case: through foreign direct investment (FDI).</p>
<p align="JUSTIFY">With reference to China's manufacturing sectors, Shapiro depicts the immense benefits stemming from FDI. As a direct effect, he states that not only do new technologies come in but new ways of financing and management are brought in as well. The bulk of the impact of FDI, however, is an indirect function, resulting from a “spillover effect” at a regional level as more and more companies begin to adopt the ways of the new enterprises. The impact of innovation, however, is an exclusive function of how <em>effectively </em>it is applied. In order to maximize foreign investment, Shapiro stresses the need to eradicate any barriers to new businesses so that they may adopt and adapt to the new incoming technologies.</p>
<p align="JUSTIFY">On several occasions within his address and the accompanying discussion, Shapiro had asserted India as being an outlier in terms of FDI, with emphasis on India's FDI rates being half of those of Malaysia and Thailand (countries implied to be incomparable to India in an economic sense). He admits that he does not understand the reasons for this discrepancy, as standard economic factors alone cannot explain this; such as a country's market size, availability of labour, and quality of infrastructure (despite India's room for improvement here).</p>
<p align="JUSTIFY">In order to understand India's FDI rates then, Shapiro offers the importance of considering the political factors at play to the same extent as the economic ones (if not, more) with some of such factors being: the state's attitudes towards property rights, bankruptcy regime, levels of corruption, and the enforcement of contracts and intellectual property rights.</p>
<p align="JUSTIFY">And it is supposedly here, at this last factor, where the central issue lies for India.</p>
<h3 align="JUSTIFY">IP as a product of cultural decisions</h3>
<p style="text-align: justify;">As new ideas continue to dwarf the value of physical capital, economies are increasingly composite of these intangible assets (intellectual property)—such as patents, copyright, software and name brands—or at least within the US economy anyway. These intellectual asset-intensive economies are not limited to industries such as pharmaceuticals, software, and IT hardware (as one might initially suspect); rather, those of media, automobiles, beverages and tobacco and other consumer goods. In 2011, Shapiro states, half of US industries equalled or exceeded the three former industries in intellectual assets. These industries, which had formerly been sectors based on production, have now outsourced their production schemes to India and China.</p>
<p style="text-align: justify;">Shapiro explains these economic trends as a function of a repeated set of choices in support of American values of growth, prosperity, and individualism. He continues in saying that cultural values are also important to consider when trying to undergo modernization. A country with more traditional values would be wrong to strive to modernize at the same rate as that of the US, for example. In such a case, modernizing at a much slower rate is advisable, and if this is unfavourable, Shapiro alternatively suggests that “you can sometimes change culture by changing the law.”</p>
<p style="text-align: justify;">But how are US and Indian industries comparable, then, if India's economy is arguably a platform for production of US-owned intellectual assets? What are the odds that Indian companies will actually own their resulting innovations stemming from foreign investments? Presumably not very high.</p>
<p style="text-align: justify;">And what sets of choices has India made to reflect its own sets of cultural values and principles in contrast to those of the US?</p>
<h3 align="JUSTIFY">Consequences of a weak IP regime and over-regulation</h3>
<p align="JUSTIFY">Within his recent <a href="http://www.sonecon.com/docs/studies/FDI_IP_and_the_Pharmaceutical_Sector_in_India-Shapiro-Mathur-Final-January2014.pdf">research paper</a>, Shapiro recounts Indian laws related to IPR over the years and how the country's weak international IP regime has paved the way for its thriving generic pharmaceutical industry. Through enforcing restrictions on patent filings, shorter patent terms, and compulsory licensing, the Indian Patent Office enabled the manufacturing of domestic pharmaceutical products without having to pay outgoing royalty (or to a lesser degree) in promotion of increased access to medicines for Indians at much more affordable prices.</p>
<p align="JUSTIFY">Shapiro argues that this disregard for foreign IPR discourages foreign companies from wanting to enter the Indian market in the future for fear of imitation products coming about to their detriment. Shapiro argues that if India adopted stronger IP rights and enforcement, FDI to the country's pharmaceutical industry would increase drastically; more so, if India adopted an IP system comparable to the US, FDI flows could even rise by 83 per cent per year, making it a centre for innovative pharmaceutical R&D. Just as well its access to new innovative drugs would increase by 5 per cent, contributing to a higher life expectancy and a larger work force (Shapiro, p. 3, 2014).</p>
<p align="JUSTIFY">An IP regime comparable to the US and Europe, Shapiro suggests, promotes both endogenous and exogenous growth while bringing about competitive markets “with pockets of monopolies throughout.” Such [patent] regimes have evolved over decades and “simply work well,” he states. Also, in requiring patent applicants to publish all secrets—that which makes the invention novel—others are given the ability to benefit from such knowledge.</p>
<p align="JUSTIFY">So then, is India wrong in making decisions in accordance with its own set of cultural values and principles if they are not necessarily in accordance with those of the US?</p>
<p align="JUSTIFY">Arguably not. However, as Shapiro demonstrates, such decisions may bare consequence in India's pursuit to modernize as a member of the World Trade Organization (WTO) that is not exactly in compliance with Trade Related Aspects of Intellectual Property (TRIPS) standards. India may also be missing out on greater importation of technologies if foreign companies fear that their products will be imitated by local companies. According to Shapiro, India's services sector (including banking, insurance, outsourcing, R&D, courier and technology testing services) contribute to 60 per cent of the country's GDP, yet have declined in FDI for several reasons including the country's weak IP regime, as well as government regulations capping the maximum investments of foreign companies (Shapiro, p. 37, 2014).</p>
<p align="JUSTIFY">Which brings us to the notion of market deregulation as a mechanism of promoting FDI. Shapiro suggests this to be essential for India to enable a more even playing ground for new and emerging players to compete. A regulatory issue arises when new companies are up against companies receiving government subsidies. In this way, such regulations may also prohibit companies from reorganizing to implement new technologies or practices, undermining the spillover effects that FDI can bring about.</p>
<h3 align="JUSTIFY">IPR adoption vs. innovation</h3>
<p align="JUSTIFY">Shapiro stresses the importance in not only allowing companies to implement new technologies, but to encourage them to do so as well. A common mistake developing countries make, he says, is trying to be the <em>source</em> of innovation: “Although it's nice to be the source of innovation, what is more important is to adopt innovation of others.” In response, a contribution to discussion made by a fellow attendee commented on the inclination of developing countries to first duplicate, then adapt, and then innovate for themselves.</p>
<p align="JUSTIFY">So what is India left to do then? How do Indian companies navigate along the fine line distinguishing between <em>adopting</em> new technologies and <em>duplicating</em> them? And if innovation is so integral to a country's economy, will merely adopting and adapting to emerging foreign technologies suffice for the country's economy? Or can India only progress away from “duplication” with stricter IPR enforcement?</p>
<p align="JUSTIFY">While citing studies based in Europe, Shapiro illustrates the relationship between IP regimes and inventions. The study's findings displayed that while there is no relationship between IPR and <em>occurrences</em> of inventions, there is correlation between IPR and the <em>kinds</em> of inventions. Jurisdictions with strict IP laws and greater IP protection were likelier to bring about inventions with significant business value, while the inventions of other jurisdictions without IPR did not entail the same level of business value—one cannot simply reverse-engineer a food invention for study, he says.</p>
<p align="JUSTIFY">This is not as to say that Indian companies cannot innovate. “India has a lot of innovators,” Shapiro says, “but they're in California and New York and Washington.” Even in these hubs for innovation, the Indian demographic is highly disproportionate, and estimated to be 20-40 per cent of the workforce, suggesting the potential of Indians in terms of innovation. Shapiro poses the question: “Why are they leaving?” and stresses the importance in India understanding this phenomenon.</p>
<h3 align="JUSTIFY">The modernization tradeoff</h3>
<p align="JUSTIFY">Is the departure of some of India's innovators another consequence of the country's path to modernization whilst maintaining cultural values? Just as some foreign pharmaceutical companies may stay far away from the Indian market?</p>
<p align="JUSTIFY">If so, is India truly better off in striving for redemption from under the close watch of the US and in pursuit of foreign direct investment? What opportunities or cultural values might be abandoned within the domestic market in favour of foreign bodies, then? And more specifically, what would a stricter IP regime mean for the future of the generic pharmaceutical industry, and in turn, the cost of access for medicines that are presently only affordable through the bypassing of international IP standards?</p>
<p align="JUSTIFY">Just as Shapiro gives importance to the consideration of political and cultural factors at play within one's economy, it is, then, essential to look beyond what the US wants for India economically to factor in what India wants for its own economy and the cultural and political reasons for such<em>. </em>I think we can both agree on the significance of India considering the consequences of resulting economic decisions (i.e., regarding market regulating and IP enforcement) from proxies inclusive of Indian consumers, as well as international bodies to the extent of the global systems that India is implicated in.</p>
<p align="JUSTIFY">But what about the question of innovation for India's economy? In the tradeoff between innovation (and prosperity) versus duplication (and accessibility), is a country of 1.2 billion people with different cultural values and economic needs really fair game to be idealized as “comparable to the US” in terms of its economic laws? Economist Robert Shapiro seems to think so.</p>
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For more details visit <a href='http://editors.cis-india.org/a2k/blogs/cultural-interests-v-international-economy-robert-shapiro-on-ipr-innovation-in-india'>http://editors.cis-india.org/a2k/blogs/cultural-interests-v-international-economy-robert-shapiro-on-ipr-innovation-in-india</a>
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No publishersamanthaEconomicsPatentsAccess to Knowledge2014-04-03T10:54:08ZBlog EntryThe Game of IPR: Insights from the 6th Global Intellectual Property Convention in Hyderabad
http://editors.cis-india.org/a2k/blogs/the-game-of-ipr-insights-from-the-6th-global-intellectual-property-convention-in-hyderabad
<b>IP practitioners and IP creators were among the 1700 participants to gather at the Hyderabad International Convention Centre earlier this month. Here, CIS had the opportunity of listening in on perspectives around the “Optimization of economic value of innovation & IPR in the global market” while attending numerous talks and sessions that were held over the course of the convention’s three days.</b>
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<p><img src="http://editors.cis-india.org/a2k/blogs/NarendraSabharwal.JPG/image_large" alt="Narendra Sabharwal" class="image-inline" title="Narendra Sabharwal" /></p>
<p class="discreet">One of the event's speakers, Mr. Narendra Sabharwal, IPR-Chair of FICCI, speaks of the immense value of IPR, while serving as protection as well as collateral for investors. (Photo credit: GIPC 2014)</p>
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<p style="text-align: justify;">This year’s Global Intellectual Property Convention (GIPC) was held in Hyderabad January 16-18, 2014 by ITAG Business Solutions Ltd. in association with the Institute of International Trade (iitrade). As the 6th of its kind, the event was held in hopeful contribution “towards society with the active support and cooperation of the IP fraternity,” says ITAG Founder and Director, Dr. D. R. Agarwal, while offering a “good opportunity for learning and business networking through one to one interaction in a pre-arranged manner under a conducive environment.”</p>
<p style="text-align: justify;">The theme at bay had been “<em>Optimizing the economic value of innovation & IPR in global market</em>.” In respect of this central focus, common themes across panel discussions and workshops included IP management, monetisation, application drafting, and litigation, with particular emphasis on India’s ‘Pharma’ industry. Over 100 speakers and panelists shared their personal knowledge from experience in the industry, and largely consisted of representatives from law firms, IP consultancies, pharmaceutical companies, and business organisations; all of which from India, Europe and the USA. As an attendee representing the Centre for Internet & Society (CIS), a research institute that works to address issues related to intellectual property (IP) reform, I had the privilege of listening to such perspectives on intellectual property from an alternative outlook.</p>
<p style="text-align: justify;">On the other hand, if exploiting too much by “abusing one’s monopoly, you are [setting] certain conditions, which are neither germane nor connected to the patent, and more than what is statutory permissible.” Kumaran stresses the necessity for the intellectual property right (IPR) holder to comply to the rights given by statutory law.</p>
<blockquote style="text-align: justify;" class="pullquote">The name of the game is the quality of drafting. It is the first and last chance." <span class="discreet">Vaidya D.P., </span><br />
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<div align="right"><span class="discreet">Lakshmi Kumaran & Sridharan</span></div>
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<p style="text-align: justify;">Mr. Narendra Sabharwal, Panellist and IPR-Chair for the Federation of Indian Chambers of Commerce (FICCI), sought to demonstrate the immense value of innovation and IPR in technology, arts and culture globally, in explaining that a large portion of the EU’s GDP (39%), and employment (26%) are derived from IP-intensive industries (See study by European Patent Office <a class="external-link" href="http://www.novagraaf.com/en/news?newspath=/NewsItems/en/ip-contributes-just-under-40-percent-eus-gdp">here</a>). Also argued was that enterprises and institutions can increase value through licensing of products and services, while also serving as protection, and which can then become “excellent collateral for investors,” he says. Among other points made, Sabharwal mentioned the need for more incubators in India. Currently, India acquires 200 new incubators each year compared to China’s 8000 new incubators annually. Opening more incubators will encourage innovation, he argues, leading to more marketable products and solutions.</p>
<p><span class="discreet"> </span></p>
<p style="text-align: justify;">Mr. William H. Manning, Partner of Robins, Kaplan, Miller & Ciresi L.L.P (USA), took on the role of the story teller while sharing particularly interesting cases of previous clients. Manning had explained the necessity to ask one question over and over throughout the entire IPR application process; that question being: “What difference does the invention make?”</p>
<p style="text-align: justify;">In doing so, Manning was even able to take what would have been an ‘incremental’ patent—which is just distinct enough from prior art to get by—and turn it into a ‘foundational’ patent—generally adopted by the industry for 10-20 years before moving to a different technology. The better of these two types, however, is the ‘pioneering’ patent, an inventive leap in itself. This client success story definitely affirmed Speaker and Director of Lakshmi Kumaran & Sridharan, Vaidya D. P., when he said that “the name of the game is the quality of drafting. It is the first and last chance.” Manning had also claimed that 99.9% of patent in India are said to be incremental patents, with none being pioneering—at least not from the patent applications he’s seen in his 34 years of experience, anyway.</p>
<p style="text-align: justify;">Also a rule of this game is the “Take now—pay later” rule, according to Manning, in which enterprises may “ignore the problem for now and move ahead with the product. If somebody sues you for patent litigation…. Take now—pay later.” Here, he makes reference to the judgements enterprises may make when misusing or infringing upon an IPR, while assessing the worth of doing so with the risks that may lie ahead. Often, an enterprise may find that it is more worthwhile to misuse or infringe and reap the benefits in the “now” while knowing there may be a chance they will have to “pay later.”</p>
<p style="text-align: justify;">Throughout the convention, what I expected to be the elephant in the auditorium was surprisingly addressed quite often. Best said by Panellist, Mr. Mohan Dewan, “IPR only becomes an asset when it is misused or infringed upon.” Principal to R K Dewan & Co., Dewan compares IP rights with car insurance, which can only be cashed in when the car is stolen.</p>
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<div align="center"><img src="http://editors.cis-india.org/a2k/blogs/pacman.png/image_preview" title="Pacman" height="329" width="274" alt="Pacman" class="image-inline" /></div>
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<p style="text-align: justify;" class="discreet">Applying for an IPR is a game in itself, that requires much knowledge of how it is played. Grab those power-ups or get eaten.</p>
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<p style="text-align: justify;">He then posed the question “how can we increase the economic value of an asset?”—presumingly so that one can capitalize when opportunity comes knocking—and responded to it in recommending the following measures: 1) ensuring one’s IPR is as strong as possible by drafting it according to national standards, 2) optimal protection—it is easier to register more than one at once! 3) diligence in auditing and licensing, and 4) staying alert and questioning what people are doing around you.</p>
<p style="text-align: justify;">These are only a few excerpts of the event’s many talks and panel discussions, yet these insights alone help to reveal the nature of the system where intellectual property rights reign. This is surely a system to be familiar with if it is within one’s interest to receive IPR for protection, yet I find it difficult to stop at the word “protection.” When you must learn how to play the game to ensure that you stay in it, I would say that IPR can extend well beyond protection, to be better off referred to as <em>strategy</em>.</p>
<p style="text-align: justify;">A strategy that enables you to reach a higher level and protects you from your opponents’ wrath. The higher the level, the more power-ups in reach and the higher you go. All the while undermining their chances of climbing up to where you are, and knocking them to even lower levels when possible. Lucky for you the majority of players are still stuck at level 1, but the nasty ones may be right behind you.</p>
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For more details visit <a href='http://editors.cis-india.org/a2k/blogs/the-game-of-ipr-insights-from-the-6th-global-intellectual-property-convention-in-hyderabad'>http://editors.cis-india.org/a2k/blogs/the-game-of-ipr-insights-from-the-6th-global-intellectual-property-convention-in-hyderabad</a>
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No publishersamanthaPatentsIntellectual Property RightsCopyrightAccess to Knowledge2014-01-31T09:56:10ZBlog Entry