This post covers the basic background of telecom patent litigation and gives reasons why there is so much patent litigation across the globe in this specific domain. It provides a difference between essential and non-essential telecom patents and why in the authors opinion telecom patent litigation is expected to increase in India just as it has increased across the globe. Also because telecom patents ultimately concern the use of a mobile phone, it is commonly referred to as phoney litigation.
An ongoing case (TenXC wireless v Andrew Comm Scope, CS(OS) 1993/2010 ) at the Delhi High Court is one of first refined telecom patent case being litigated in India. Some might argue that India’s share of disputes relating to telecom patents started with the Ramkumar patents case, discussed in detail on this blog here. The TenXC litigation is more refined because it deals with substantive patent issues and the patent itself has issued counterpart US and EP patents. The patent in issue in this litigation is a part of patents in the telecom domain that are non-essential patents. A separate post will deal solely with the issues in the TenXC patent litigation.
Some of our readers may have heard of various rounds of litigation currently underway in the US where almost everybody in the wireless industry is suing almost everybody else. There is so much litigation going around that writers have come up with different kinds of flowcharts to explain the litigation more clearly. See for example, type one, two, three and four. The reason of this large amount of litigation is in the nature of a mobile phone, and the way they work seamlessly across different platforms, operating systems, and wireless carriers. We are able to talk, text, send and receive data, play (multiplayer) games, access applications, do some work and even transfer money and make payments over our mobile phones. All this is made possible by design, keeping in view “compatibility” or by “standardization” requirements. Standard essential patents
There are a large number of standards related documents that govern various aspects of the mobile phone usage-right from antenna design, to form and format of text messages to the interaction between a mobile phone and a base station. Needless to say, it is extremely expensive to generate these standard documents. As an example, there are multiple groups that deal with different technologies at 3GPP and it is these groups/members who declare standard essential patents on ETSI. These standard groups regularly define standards for technologies that minutely cover each detail of the device and its functioning. These include, for example the way text is displayed on a mobile screen or the format of sound that each device can play to the way they interact with major operating systems.
The benefits of standardization are immense and as a natural corollary there are costs associated with providing such benefits. These costs include the patent litigation that is related to the use and licensing of these patents. Telecom players spend huge amounts of money on generating the fastest and best technologies consumers can buy.
Most telecom players declare their essential patents and make them available to others on a Fair, Reasonable and Non-discriminatory (FRAND) basis. For example, if a mobile device says that it is Bluetooth(R) compliant, it means that the device follows the procedures as defined in the Bluetooth SIG specification. If a car stereo manufacturer wants to use bluetooth technology in their product, all that they need to do is to license the portfolio of essential patents for Bluetooth(R) from the Bluetooth SIG. Because it is easier to license essential patents, telecoms manufacturers hold extensive portfolios of hundreds or even thousands of patents. For example, the number of declared standard patents can be seen on the ETSI portal.
Standard non-essential patents
Patents other than those that are essential are non-essential patents, which means that they have not been adopted by the standard setting bodies (SSBs). In the authors experience, non-essential patents outnumber essential patents by a factor of ~ four. These non-essential patents are ones that are not mandated by the SSBs. Non-essential patents add value to the portfolio and may be more valuable than essential ones if proved to be valid in a court of law. They also add to an existing portfolio’s value. Finally, they are licensed on terms that are not FRAND.
To summarize, both standard essential and non-essential patents have a role to play in a telecom player’s business strategy and there is no better way than to litigate a patent to test its value. Therefore, players desirous to test the value of a patent in the Indian market are expected to litigate it, thereby resulting in the increased litigation in this domain.