1. Jeju, 13 – 16 May 2013Standards for Shared ICT Update on Activities of the TIA Standards and IPR Policy Committee (SIPC) and the IPR Standing Committee (IPRSC) Since GSC-16 Amy Marasco, TIA SIPC Chair Document No: GSC17-IPR-07 Source: TIA Contact: Amy Marasco (amarasco@microsoft.com)amarasco@microsoft.com Cheryl Blum (cblum@tiaonline.org)cblum@tiaonline.org Brian Scarpelli (bscarpelli@tiaonline.org)bscarpelli@tiaonline.org GSC Session: IPR WG Agenda Item: 4.6 Brian Scarpelli, TIA

2. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT Structure This presentation focuses on important issues that were discussed within two TIA committees: –The TIA Standards & IPR Policy Committee (SIPC) Reports to the TIA Board of Directors Develops and communicates TIA standards and IPR policy positions Increased focus on standards and IPR policy issues worldwide –The TIA IPR Standing Committee (IPRSC) IPRWG’s responsibility is to review and maintain TIA’s IPR Policy and the related Guidelines Document, used within TIA’s standardization process. These are available on TIA’s website: www.tiaonline.org www.tiaonline.org 2

3. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT U.S. Office of Management and Budget (OMB) Request for Information on Federal Agencies’ Standards and Conformity Assessment Related Activities The National Technology Transfer and Advancement Act (NTTAA) directs federal agencies with respect to their use of and participation in the development of voluntary consensus standards. The Act's objective is for federal agencies to adopt private sector-led voluntary consensus standards, wherever possible, in lieu of creating proprietary, non-consensus standards.The National Technology Transfer and Advancement Act OMB Circular A-119 establishes policies on Federal use and development of voluntary consensus standards and on conformity assessment activities. In March 2012, OMB issued a request for comment on current issues regarding Federal agencies’ standards and conformity assessment related activities, specifically to inform OMB’s consideration of whether and how to supplement OMC Circular A- 119 (see http://standards.gov/a119.cfm).http://standards.gov/a119.cfm OMB may issue a revised version of Circular A-119 for public comment in 2013. 3

4. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT U.S. Office of Management and Budget (OMB) Request for Information on Federal Agencies’ Standards and Conformity Assessment Related Activities TIA submitted comments which are available at http://bit.ly/OUfOz0. TIA specifically addressed the issue of “incorporation by reference” or IBR, which refers to the situation when a Federal Agency refers to a standard developed in the private sector in a regulation.http://bit.ly/OUfOz0 Some parties were advocating that any standard IBR should be made freely available on the internet in order to ensure “reasonable access” to all aspects of regulations Excerpts from TIA comments: –“TIA strongly believes that currently, there is reasonable access to standards which are incorporated by reference (‘IBR’), and is not aware of any issues related to lack of access to standards IBR that have arisen in a rulemaking or for stakeholders that require access to such standards. We believe that numerous statements of policy from the Federal government reflect a similar understanding on the part of the Administration and Federal agencies. We urge OMB to consult the December 2011- adopted recommendations of the U.S. Administrative Conference (USAC).” –“TIA wishes to unequivocally state that the term ‘reasonably available’ does not mean that the information must be available ‘for free’ nor does it necessarily mean that must be ‘available to anyone online,’ as it has been recently argued in a petition to the Office of the Federal Register.” 4

5. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT U.S. Office of Management and Budget (OMB) Request for Information on Federal Agencies’ Standards and Conformity Assessment Related Activities IBR-related points continued: –“Implementing a blanket policy that all standards IBR are to be made available for free would seriously jeopardize this ecosystem of trust through which companies and governmental entities can convene to create standards for industry-wide use. The fees charged by SDOs for electronic versions of some standards are used to support the continued activity of those standards organizations. To remove the ability to collect and protect these fees for protected standards referenced – even those potentially referenced without the knowledge or consent of the SDO – would severely curtail the development of further standards to the detriment of the Federal government and all other stakeholders.” –“Significant resources and costs are invested in the development and revision of voluntary standards. While the level of resources and costs required varies from sector to sector, investment in the development of standards generally reflects the importance of standards to that sector. In the case of the ICT industry, standards are crucial to maintaining a competitive marketplace that has proven to be, aside from one of the most dynamic industries in the U.S. economy, a cornerstone for the general health of the economy.” 5

6. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT Office of the Federal Register (OFR) Request for Comments on IBR Petition for Rulemaking In May, the OFR sought comment on a Petition for Rulemaking that requests that regulations be amended to define “reasonably available,” and to include several requirements related to the statutory obligation that material incorporated by reference (IBR) be reasonably available. TIA submitted comments which are available at http://bit.ly/O1pab4. Key points:http://bit.ly/O1pab4 –“TIA holds the position that the text of standards should be made available to any party on a reasonable basis. We emphasize that, consistent with U.S. copyright law, the contents of a standard are the intellectual property of the developing organization, entitling that developing organization to associated rights which cannot be removed without just compensation. Therefore, when a standard is incorporated into some other creation, intellectual property rights attached to it should be viewed no differently than the intellectual property rights of other aspects of the creation.” –“If the Petition is obliged, a great number of voluntary, consensus-based standard development organizations will either (1) be forced to grossly increase membership dues on participants, resulting in much lower participation from member companies and governmental organizations, decreasing and degrading the development of standards; or (2) be forced to completely cease activities due to a lack of resources, depriving those reliant on standards – including the Federal government – of their use.” 6

7. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT The National Academies’ Symposium on Intellectual Property Management in Standard-Setting Processes The National Academies’ Board on Science, Technology, and Economic Policy (STEP) has been commissioned by the U.S. Patent and Trademark Office to prepare a report on how leading national, regional, and multinational standards bodies address issues of intellectual property arising in connection with the development of technical standards and related issues. –See http://sites.nationalacademies.org/PGA/step/IPManagement/index.htm http://sites.nationalacademies.org/PGA/step/IPManagement/index.htm The National Academies held a symposium on these issues on October 3-4, 2012. Report expected by early summer, 2013. 7

8. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT International Telecommunications Union (ITU) Patent Roundtable On October 10, 2012, the ITU held a one-day IPR Roundtable event. –All public statements and materials are available at http://www.itu.int/en/ITU-T/Workshops-and- Seminars/patent/Pages/default.aspx http://www.itu.int/en/ITU-T/Workshops-and- Seminars/patent/Pages/default.aspx –TIA staff attended as an observer The stated purpose of the Roundtable was to “assess the effectiveness of [F/RAND] – based patent policies. The purpose of this initiative is to provide a neutral venue for industry, standards bodies and regulators to exchange innovative ideas that can guide future discussions on whether current patent policies and existing industry practices adequately respond to the needs of the various stakeholders.” 8

9. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT US Federal Trade Commission (FTC) Developments Related to Standard-Essential Patents (SEPs) and RAND Licensing Commitments U.S Federal Trade Commission (FTC) recently entered into two proposed consent agreements (one involving a merger not directly related to the SEP issue), in which the parties (Bosch GmbH in one matter and Google in the other) agreed to significant constraints on their ability to seek injunctions with respect to FRAND-encumbered SEPs: –In the Matter of Robert Bosch GmbH, April 24, 2013, FTC File Number 121- 0081: Finalized consent decree and related comments (see http://www.ftc.gov/opa/2012/11/bosch.shtm) (related materials at http://www.ftc.gov/os/caselist/1210081/index.shtm) http://www.ftc.gov/opa/2012/11/bosch.shtm http://www.ftc.gov/os/caselist/1210081/index.shtm –In the Matter of Motorola Mobility LLC and Google Inc., Jan. 3, 2013, FTC File No. 121:0120: Proposed consent decree and related comments (see http://www.ftc.gov/opa/2013/01/google.shtm (related materials at http://ftc.gov/os/comments/motorolagoogle/index.shtm) http://www.ftc.gov/opa/2013/01/google.shtm http://ftc.gov/os/comments/motorolagoogle/index.shtm FTC Commissioner Ohlhausen dissented from issuance of these decrees, on the ground that the conduct alleged did not violate the FTC Act The FTC has stated that its consent decrees are limited to the specific facts at hand, and do not have precedential value. (see slide 23 for further information on FTC consent decree procedures and legal effect) 9

10. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT FTC Developments Related to Standard-Essential Patents (SEPs) and RAND Licensing Commitments In the Matter of Robert Bosch GmbH, FTC File Number 121-0081 (November 26, 2012): Consent decree finalized April 24, 2013 –“The Consent Order requires Bosch to offer a royalty-free license to all potential implementers for certain enumerated patents for the purpose of manufacturing ACRRR devices in the United States. … The Consent Order further requires Bosch to deliver to the SAE a letter of assurance that makes a binding, irrevocable commitment to license any additional patents that Bosch may acquire in the future that are essential to practicing the [SAE standards] on FRAND terms to any third party that wishes to use such patents to produce an ACRRR device for sale in the United States. Pursuant to its FRAND obligations, Bosch has agreed not to seek injunctive relief against such third parties, unless the third party refuses in writing to license the patent consistent with the letter of assurance, or otherwise refuses to license the patent on terms that comply with the letter of assurance as determined by a process agreed upon by both parties (e.g., arbitration) or a court.” From FTC Analysis to Aid Public Comment in Bosch-SPX, available here: http://www.ftc.gov/os/caselist/1210081/121126boschanalysis.pdfhttp://www.ftc.gov/os/caselist/1210081/121126boschanalysis.pdf 10

11. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT FTC Developments Related to Standard-Essential Patents (SEPs) and RAND Licensing Commitments In the Matter of Motorola Mobility LLC and Google Inc. (FTC File No. 121 0120) – Proposed consent decree announced January 3, 2013 –“Under this Order, before seeking an injunction on FRAND-encumbered SEPs, Google must: (1) provide a potential licensee with a written offer containing all of the material license terms necessary to license its SEPs, and (2) provide a potential licensee with an offer of binding arbitration to determine the terms of a license that are not agreed upon. Furthermore, if a potential licensee seeks judicial relief for a FRAND determination, Google must not seek an injunction during the pendency of the proceeding, including appeals. Nothing in the Order limits Google or a potential licensee from challenging the validity, essentiality, claim of infringement or value of the patents at issue, and either party may object to a court action on jurisdictional or justiciability grounds, or on the ground that an alternative forum would be more appropriate. The Proposed Consent Order also does not prevent Google from pursuing legal claims regarding its FRAND- encumbered SEPs other than a claim for injunctive relief, such as an action seeking damages for patent infringement. The Order does not define FRAND but requires Google to offer, and follow, specific procedures that will lead to that determination.” From FTC Analysis to Aid Public Comment in Google, available here: http://ftc.gov/os/caselist/1210120/130103googlemotorolaanalysis.pdf http://ftc.gov/os/caselist/1210120/130103googlemotorolaanalysis.pdf 11

12. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT U.S. Department of Justice (DOJ) (Antitrust Division)/FTC Testimony on RAND-encumbered SEPs, focusing on Exclusion Orders at the International Trade Commission (ITC) In commenting on the use of orders of exclusion issued by the US International Trade Commission in investigations involving alleged infringement of patents that were essential to implement standards and were subject to voluntary FRAND licensing obligations, Acting Assistant Attorney General for Antitrust Joseph Wayland testified as follows: –“[T]he Department of Justice believes the ITC should continue to gather the types of information necessary to evaluate whether the statutory public interest factors counsel against the imposition of an exclusion order. In considering this issue, the Department of Justice is concerned about the circumstances in which an exclusion order may be inappropriate, in certain cases where a product implementing a standard has been determined to have infringed a valid F/RAND- encumbered patent that is essential to that standard. Federal courts have begun to consider the appropriateness of injunctive relief based on factors laid out in the Supreme Court’s eBay decision and similar considerations could arise in ITC public interest determinations.” 12

13. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT U.S. Department of Justice (DOJ) (Antitrust Division)/FTC Testimony on RAND-encumbered SEPs, focusing on Exclusion Orders at the International Trade Commission (ITC) As the same hearing, Federal Trade Commissioner Edith Ramirez testified as follows: –“A royalty negotiation that occurs under threat of an injunction or an exclusion order may be weighted heavily in favor of the patent holder in a way that is in tension with the RAND commitment. High switching costs combined with the threat of an exclusion order could allow a patent holder to obtain unreasonable licensing terms despite its RAND commitment, whether or not the invention is highly valuable on its own, because implementers are locked into practicing the standard. This is an even bigger problem when the hold-up creates a very high cost for a very small component of the overall product. In these ways, the threat of injunctive relief, including an exclusion order, may allow the holder of a RAND-encumbered SEP to realize royalty rates that reflect patent hold- up, rather than the value of the patent relative to alternatives. This can raise prices to consumers, distort incentives to innovate, and undermine the standard setting process.” 13

14. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT U.S. Department of Justice (DOJ) (Antitrust Division)/FTC Testimony on RAND-encumbered SEPs, focusing on Exclusion Orders at the International Trade Commission (ITC) Acting Assistant Attorney General Wayland’s testimony is available here: http://www.justice.gov/iso/opa/atr/speeches/201 2/at-speech-1207111.htmlhttp://www.justice.gov/iso/opa/atr/speeches/201 2/at-speech-1207111.html FTC Commissioner Ramirez’ testimony is available here: http://www.ftc.gov/os/testimony/120711standardpatent s.pdf http://www.ftc.gov/os/testimony/120711standardpatent s.pdf 14

15. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT DOJ/USPTO Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments On January 8, 2013, the U.S. Department Of Justice (Antitrust Division) and U.S. Patent and Trademark Office (USPTO) jointly issued a Policy Statement on Remedies for Standards-Essential Patents subject to voluntary F/RAND Commitments –This document is available at http://www.justice.gov/atr/public/guidelines/290994.pdfhttp://www.justice.gov/atr/public/guidelines/290994.pdf Excerpted statements: –“In light of [those noted in the Policy Statement] and other potential benefits, the United States continues to encourage systems that support voluntary F/RAND licensing—both domestically and abroad—rather than the imposition of one-size-fits-all mandates for royalty-free or below-market licensing, which would undermine the effectiveness of the standardization process and incentives for innovation.” 15

16. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT DOJ/USPTO Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments Excerpted statements continued: –“However, collaborative standards setting does not come without some risks.… As a result [of possible lock-in], the owner of that patented technology may gain market power and potentially take advantage of it by engaging in patent hold-up, which entails asserting the patent to exclude a competitor from a market or obtain a higher price for its use than would have been possible before the standard was set, when alternative technologies could have been chosen. This type of patent hold-up can cause other problems as well. For example, it may induce prospective implementers to postpone or avoid making commitments to a standardized technology or to make inefficient investments in developing and implementing a standard in an effort to protect themselves. Consumers of products implementing the standard could also be harmed to the extent that the hold-up generates unwarranted higher royalties and those royalties are passed on to consumers in the form of higher prices.” 16

17. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT DOJ/USPTO Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments Excerpted statements continued: –“Although we recommend caution in granting injunctions or exclusion orders based on infringement of voluntarily F/RAND-encumbered patents essential to a standard, DOJ and USPTO strongly support the protection of intellectual property rights and believe that a patent holder who makes such a F/RAND commitment should receive appropriate compensation that reflects the value of the technology contributed to the standard.” –“An exclusion order may still be an appropriate remedy in some circumstances, such as where the putative licensee is unable or refuses to take a F/RAND license and is acting outside the scope of the patent holder’s commitment to license on F/RAND terms.” “For example, if a putative licensee refuses to pay what has been determined to be a F/RAND royalty, or refuses to engage in a negotiation to determine F/RAND terms, an exclusion order could be appropriate.” “Such a refusal could take the form of a constructive refusal to negotiate, such as by insisting on terms clearly outside the bounds of what could reasonably be considered to be F/RAND terms in an attempt to evade the putative licensee’s obligation to fairly compensate the patent holder.” –“An exclusion order also could be appropriate if a putative licensee is not subject to the jurisdiction of a court that could award damages.” –“This list is not an exhaustive one.” (emphasis added) –“[D]eterminations on the appropriate remedy in cases involving F/RAND- encumbered, standards-essential patents should be made against the backdrop of promoting both appropriate compensation to patent holders and strong incentives for innovators to participate in standards-setting activities.” 17

18. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT Various Regulatory/Judicial Cases Involving F/RAND Notable Judicial Decisions: –Microsoft Corp. v. Motorola Mobility, Inc. http://www.scribd.com/doc/138039498/Motorola-Microsoft-RAND-ruling –Microsoft Corp. v. Motorola, Inc., 871 F. Supp. 2d 1089, 2012, aff’d, 696 F.3d 872 (9th Cir. 2012) –Apple, Inc. v. Motorola Mobility, Inc. (No. 11–CV–178–BBC) (W.D. Wis.) (Aug. 10, 2012) –Apple, Inc. v. Samsung Electronics Co., Ltd. (No. 11–CV– 01846–LHK) (N.D. Cal.) (June 30, 2012) –Fractus, S.A. v. Samsung Electronics Co., Ltd. (No. 6:09–CV– 203) (E.D. Tex.) (June 28, 2012) –Apple, Inc. and Next Software Inc., (f/k/a Next Computer, Inc.) v. Motorola, Inc. and Motorola Mobility, Inc. (No. 1:11–CV–08540) (N.D. Ill.) (June 22, 2012) –Microsoft Corporation v. Motorola, Inc., et al. (No. C10– 1823JLR) (W.D. Wash.) (June 6, 2012) –Barnes & Noble, Inc. v. LSI Corporation, et al. (No. C–11–2709 EMC) (N.D. Cal.) (Feb. 2, 2012) 18

19. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT Notable Judicial Decisions: –MedioStream, INC. v. MPEG LA, L.L.C. (No. 5:10–CV– 05979 LHK) (N.D. Cal.) (Jan. 24, 2012) –Motorola Mobility, Inc. v. Microsoft Corporation (No. 11–3136 SC) (N.D. Cal.) (Nov. 21, 2011) –Apple, Inc. v. Motorola, Inc. (S.D. Cal., Case No. 12CV0355 JLS BLM) –Apple, Inc. v. Samsung Electronics Co., Ltd. (District Court – Hague, Netherlands, Case numbers 400367 / HA ZA 11- 2212, 400376 / HA ZA 11-2213 and 400385 / HA ZA 11- 2215) –Huawei v. InterDigital (Del. Ch., No. 6974) –In the Matter of Certain Wireless Communications Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, Inv. No. 337-TA-745 (US-ITC) –In the Matter of Certain Gaming and Entertainment Consoles, Related Software, and Components Thereof, Inv. No. 337-TA-577 (US-ITC) 19 Various Regulatory/Judicial Cases Involving F/RAND

20. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT –In the Matter of Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, Inv. No. 337-TA-745 (US-ITC) –Nokia OYJ (Nokia Corporation) v IPCom GmbH & Co Kg [2012] EWCA Civ 567 (May 10, 2012) http://www.ft.com/cms/s/2/215afb90-e86d-11e1-b724- 00144feab49a.html#axzz23oVdWpxZ http://www.ft.com/cms/s/2/215afb90-e86d-11e1-b724- 00144feab49a.html#axzz23oVdWpxZ –Motorola v Microsoft (Germany) (May 2, 2012) http://www.ft.com/cms/s/2/215afb90-e86d-11e1-b724- 00144feab49a.html#axzz23oVdWpxZ http://www.ft.com/cms/s/2/215afb90-e86d-11e1-b724- 00144feab49a.html#axzz23oVdWpxZ –Landgericht Dusseldorf, Beschluss vom 21.03.2013, Az.: 4b 0 104/12 20 Various Regulatory/Judicial Cases Involving F/RAND

21. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT Updates/Alterations to TIA’s Engineering Manual by its IPRSC Currently, TIA’s IPR policy appears throughout the Engineering Manual in different sections. TIA’s IPRSC is finalizing a standalone document on all IPR- related topics in the Manual. 21

22. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT Thank you! 22

23. GSC17-IPR-07 GSC-17, Jeju / Korea Standards for Shared ICT FTC Consent Decrees Procedure and Legal Effect Under Section 5 of the FTC Act, the Commission may challenge “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce,” usually thorough an administrative adjudication. When the Commission brings an adjudicative challenge, it issues a complaint setting forth its charges. If a party decides to settle, it signs a consent agreement (without admitting to liability), consents to entry of a final order, and waives all right to judicial review or to challenge the validity of the order. When the Commission accepts a proposed consent, it places the order on the record for public comment before determining whether to make the order final. Consent orders are designed to remedy violations arising out of specific factual situations, reflecting the Commission’s assessment of the market and the conduct involved. Much of this information is non-public. Consent orders must be specific enough to be enforceable. While consent orders provide guidance to industry, they do not have precedential value – like settlements in other contexts. 23