Patents and Standards, Managing the Challenge

By Cadence

April 27, 2016

One challenge with standards is the desire to avoid unknowingly incorporating patents into standards in a way that gives the patent holder a monopoly to go after everyone using the standard and demand unreasonable licensing terms.

When I was at VLSI Technology, I got involved with patents relating to the main 2G digital mobile standard GSM. When the GSM standards were being created, nobody was very aware of patent issues and as a result a number of patented technologies were incorporated into the standard without it really being regarded as important. For example, Philips had a patent on the specific vocoder used. Once GSM became a huge success, these patent holders wanted a royalty on each phone sold. This became a big issue since there was no patent pool, each royalty was separate, and the sum total demanded was quite large. I think that was the first time that the concept of essential and non-essential patents was defined. An essential patent is one that is inherent in correctly implementing the standard. For example, you don't have a choice of vocoders in GSM, the standard specifies it, and so inevitably any compliant GSM implementation violated that Philips patent. There is actually also a grey area, patents that are not technically essential, but where there is only one cost-effective way of implementing the standard even though the standard doesn't explicitly mandate it. But officially these are non-essential patents.

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