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Apple asks ETSI standards body to set rules for standards essential patents


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Apple addressed the European Telecommunications Standards Institute in November, asking the organization to set clear polices governing how its member companies license their patents.

According to a report by the Wall Street Journal, Apple complained in a letter that the telecommunications industry lacks consistent policy outlining how manufacturers can license the series of patents required to build devices capable on working on mobile networks.

Apple recommended that the ETSI develop rules for setting appropriate royalty rates related to the portfolio of patents used in implementing its standards. ETSI is involved in the 3GPP standards process related to GSM, UMTS 3G and LTE 4G mobile technologies.

The company asked for transparency in telecom industry patent royalty rates, which are currently being arbitrarily negotiated in secret, making it difficult to determine if so-called FRAND licensing terms are actually "fair, reasonable and nondiscriminatory."

Apple's FRAND

Apple contributes a variety of patents to various international standards bodies, including the ISO's MPEG H.264 as well as HTML5, which Apple has contributed, among other things, royalty free use of patents related to Canvas.

In its letter to ETSI, Apple also noted that it "owns a portfolio of cellular standards essential patents relevant to certain cellular standards of ETSI and other standards setting organizations," noting that since 2007, Apple has committed to license these patents to other companies under FRAND terms.

"It is apparent that our industry suffers from a lack of consistent adherence to FRAND principles in the cellular standards arena," Apple's intellectual property head Bruce Watrous wrote in the letter, embedded below.

Apple also asked that patents that are "standards essential" not be allowed to be used to seek injunctions on sales, as this allows the patent holder undue leverage in negotiating a patent royalty rate.

Unlike non-standards essential patents (such as the user interface, operating system or design patents Apple has argued), in order to be compatible with mobile standards all products would out of necessity be "infringing" in a way that is impossible to avoid or work around.

Apple began publicly calling out Samsung and Motorola for their efforts to effectively monopolize the standards process by leveraging patents the companies had already committed to FRAND licensing in last August.

The purpose of industry standards is to foster interoperability and prevent proprietary boundaries from slowing the progress of technology.

By subverting the standards process to instead be a way to block competitors from selling standards-compatible products, Motorola and Samsung have also invited antitrust investigations by the European Commission.