Revealed Apple

February 9, 2012 by staff 

Revealed Apple, In November Apple wrote to the European Telecommunications Standards Institute suggesting an overhaul of the whole FRAND system of licensing patents fairly and reasonably.

The letter was sent to the Director General of ETSI, the premier standards body within Europe, and signed by Apple’s VP of intellectual property – it’s dated November 11 but has only just come to light. It lays out three principles that Apple believes are necessary for FRAND to work properly, and commits Apple to following FRAND principles.

When a body such as ETSI creates a communications standard it asks if anyone has patents they believe are essential to devices conforming to that standard. The owners of such “essential” patents are asked if they’ll agree to Fair, Reasonable and Non-Discriminatory (FRAND) licensing, and if they won’t then the standard will be altered to avoid infringement.

The problem is that one man’s reasonable is another’s extortionate, and the rules don’t specify lots of details. Apple’s letter, reproduced in its entirety by our old friend Florian Mueller, suggests three of the most important could be clarified.

Firstly, Apple asks, that a licensing rate should reflect the proportion of the technology the patent covers. So a patent on a priority-calling aspect of GSM services might be “essential” to comply with the standard, but only makes up a tiny part of that standard and, Apple argues, should thus only warrant a tiny royalty.

Next the company wants everyone to agree on what’s actually being licensed. Some licences require a percentage of the final product to be paid, but if the final product is, say, a car which has a GSM module built in, then it seems excessive to ask for a percentage of the retail value of the whole vehicle.

Lastly Apple would like the threat of injunction removed from all FRAND patents, so no one could use a FRAND patent to have anyone else’s products removed from the shelf.

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