IEEE Waves Through Controversial Patent Policy
In my view IEEE is doing the right thing here, we can’t continue to pay exorbitant ransoms for simple bits of logic, devices, and concepts. If the Internet of things is to thrive, some of these barriers to innovation must fall. Smart phones should be falling in prices over time like transistor radios did, not increasing.
IEEE’s new standard on patents that lowers royalty fees is making some members angry.
The IEEE’s decision to approve a bitterly contested change to its patent policy, has, perhaps unsurprisingly, caused bitter divisions among its members. The revised rules would see the royalty fees large vendors have to pay reduced significantly, particularly in the wireless sector.
The IEEE-SA (Standards Association) also anticipates fewer high profile patent disputes as under the new rules, companies contributing patents to industry standards bodies would have to limit the types of demands that can be put on licensees, and to not seek court orders to block sales by recalcitrant companies.Compensation for a company’s IPR would now be based on a percentage of component price rather than the whole device, as is generally the norm.
Another consequence of the revised approach to royalties is a more realistic definition of what represents Fair, Reasonable and Non-Discriminatory (FRAND) when it comes to valuing a company’s standards-essential patents (SEP) such that the inventors get a fair return on sometimes huge investments into developing innovations, while at the same time not building barriers to entry for new products and new suppliers.