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Role of Standard Setting Organisation (SSO) in Standard Essential Patents

July 31, 2019

Imagine you open a shop for selling lawn tennis rackets, where the handle is patented by a particular company and the string required in the racket is patented by another. So, in order to have a complete racket, you will need a license from both these companies. Now suppose one of them refuses to grant you the license for undisclosed reasons and the other is offering a price too high. Well, you’ll have no option except to not open a shop for selling lawn tennis rackets. But what happens if the same issue comes up with something that we all use in our day to day life!>
In the case of Microsoft Corp. v. Motorola Mobility, Inc[1] the uphill task of defining Standard Essential Patents (SEP) was attempted by the court where they said that, a given patent is essential to a standard if use of the standard requires infringement of the patent, even if acceptable alternatives of that patent could have been written into the standard. This simply means that to reach a specific standard in a product there is a requirement of a certain element within the product which is patented by someone. And to decide what the standard is, there are standard setting organizations (SSO), which see to it that the licensing of those patents happen at fair, reasonable and non-discriminatory (FRAND) prices.>
First let us try to understand the status of SEPs in Indian law from the perspective of last year’s Delhi High Court judgment in the case of
Koninklijke Philips Electronics N.V. vs. Rajesh Bansal And Ors.[2] In this particular case, the patent was on a channel decoding technology used for video playback function in a DVD player that the plaintiff’s claimed was used by the defendants without taking a license from them. The court gave the order in favor of the plaintiff, but certain issues came up which are yet to be answered. Here we will only be focusing on the part of the case that deals with SEP.>
There are two points to begin with. Firstly, the court accepted the standard presented by the plaintiff even though it was not recognized in India, simply on the basis that they could map the patent to the standards. Secondly, the mapping plaintiffs showed was based on their US and EU patents’ mapping to some relevant standard, despite the fact that their patent in India, USA and EU were different. This is something that raised criticism from several legal experts. What made the court accept the two major arguments regarding the standard that the plaintiff presented? It is because there is an unsaid tendency to reside on foreign certification, or as one can relate to the typical Indian mindset, that what is accepted in a foreign country might just be correct. Now the question arises whether Indian SSOs, be it governmental, semi-governmental or private, should reside upon foreign SSOs? A closer look at some of the SSOs will extensively elaborate over this idea. >
So, what happens in this case is that all the competitors in a market sit together and decide what common standard they are going to use, and it should be the same for everyone. Taking an example of the telecom industry, the Code Division Multiple Access (CDMA) and Global System for Mobile Communication (GSM) are two basic technologies in the industry. Now the products they run are electronic chips, keypad, microphone, display, software etc. which are further part of a laptop such as display, keyboard, mouse, camera, Bluetooth, USB port, motherboard, battery, operating system and other application software etc. Enterprises manufacturing telecom products have to develop interoperable products so that finally all products can be assembled together, thereby ensuring vertical and horizontal compatibility. Both technology owners and manufacturers are stakeholders in the standard setting process. A standard is formulated after clearing objections of major stakeholders, and the commercialization takes place accordingly.
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A major issue that arises with standards is that there is no hierarchy on which one should be prioritized over the other, an issue that was seen in the Phillips case. Is it mandatory to have a standard certificate from an Indian SSO or not, and if not then in what circumstances? These are questions that the court was silent upon. Further, several countries like Germany or USA, have adopted specific models to determine standards in a specific industry. Whereas despite endorsing pro-competitive benefits of standards by S Raghavan committee in their report on Enacting Competition Legislation, there was no adoption of a specific policy in India.[4] This is why both public and private standard models seem to be adopted depending upon the convenience, which has raised several competition law issues that in most cases collide with the patent law.

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[1]MICROSOFT CORP. V. MOTOROLA, INC., MOTOROLA MOBILITY, INC., AND GEN. INSTRUMENT CORP. 104 U.S.P.Q.2D 200

[2]CS(COMM) 436/2017

[3]Teece & Sherry, 2002-2003

[4]Paragraph 4.6 of Raghavan Committee Report, available at www.mc.gov.in

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