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Alfred-Consulting LLC

PATENTS AND STANDARDS FOR TELECOM COMPANIES

Alfred Consulting provides an understanding and a practical program for developing patents and standards. Founded in 2014, we provide telecom companies with a program to develop standards and license patents.

We serve the global telecom community.

Intellectual Property consulting to the telecom industry

  • a. Negotiate licensing & sales deals
    • i. Consider the needs of the participants as the negotiating strategy and tactics are developed..
    • 1. Charles Craver, professor of law at George Washington and author of Effective Legal Negotiation and Settlement, once told a story of two young boys arguing over how to divide and orange. Their father came down and heard the wrangling and decided to cut the orange in two and give it to each boy. What the father did not understand was that one boy wanted the rind and the other wanted the pulp. With a little more discussion and understanding, both boys could have received 100% of what they were seeking. Instead each received 50%.
    • ii. Preparation is important, especially claim charts, a clear idea of your goals and your flexibility in negotiating your terms, but nothing replaces listening to your licensee and understanding their flexibility.
    • iii. A patent negotiation usually proceeds with the licensee denying that they use your patent and even if they do use it, their use is minimal. Only on the third or fourth meeting, when your licensee says, “Prove it”, does the real work of negotiating begin.
    • iv. Quite often the license negotiation occurs before any money has been place in a budget by a product manager to pay the royalty. Understanding how to structure payments is often the key to success.
  • b. Develop a patent and standard policy and practice to promote strategic interests
    • i. The intellectual property press is rife with stories about the revenue that may be generated by the aggressive use of patents. Targets include USD 100 million, USD 500 million or even USD 1 billion every year. From this point of view, the purpose of patents appears to be generating revenue. We are reminded by our financial press that the purpose of business is to generate revenue for shareholders. Lost in this mix is that business might be there to produce goods and services for other businesses and for people who are living their lives. Failure to understand that there is a market out there with competitors waiting to take your customers has been the doom of several enterprises. Yes, of course business produces revenue, at least we hope so, and patents as well, but there is something more important to consider. For a large business, the revenue from products and services is so much greater than the royalty from patents. (see Note 1) To succeed, we need to consider how can we build a better intellectual property department aligned with the strategy of the business that will sustain the business for the long haul.
  • c. Appear for litigation or deposition in cases involving standards
    • i. Standards can be complex. The Long-Term Evolution (LTE) standard comprises more than 700 standards. Many of these standards contain over 1,000 pages. The Standards Table for LTE at Via Licensing contains 79 standards, slightly over ten percent. These 79 standards provide the core functionality used in every smartphone and mobile device.
    • ii. Network provider perspective - Standards are valuable to network providers because they allow for a multi-vendor environment, reducing costs and improving network components by market competition. Standards also allow manufacturers to gain sales by becoming a vendor to a network provider since their products work well with the products of other manufacturers. Standards at best only provide 80% to 85% of the interoperability that network providers seek. The remaining interoperability is achieved by operations forums that reduce the number of options provided by the standards and by network provider certifications of products.
    • iii. A standard-essential patent (SEP) is a patent whose claims are essential to one or more sections of a standard. There is a difference between a SEP that is essential to the core functioning of a technology defined by a standard and a SEP essential to an optional section of a standard. A non-standards patent is not essential to a standard. The owner of a non-standards patent is not subject to FRAND obligations and may charge whatever rate and determine whatever terms they are able to negotiate.
  • d. Write briefs in support of litigation or deposition in cases involving standards
    • i. Beyond appearing in person, a well-written brief can enhance the testimony of an expert appearing in court or at a deposition.

Note 1: According to the World Intellectual Property Organization (WIPO), the United States in 2013 had USD 128 billion in royalty and licensing income. This royalty was 6 percent of the USD 2.28 trillion export trade total. For the world, royalty is 1.5 percent of trade.
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  • “Licensing SEPs – round two” les Nouvelles, international magazine of the Licensing Executives Society, 2019
    My first job in standards was also my first job in intellectual property. I worked for a district manager whose job was full-time standards. When I introduced the idea of FRAND to him, his reaction was, “What other way could there possibly be to license patents except in a fair and reasonable manner?” My response, of course, was, “Why we could license patents in an unfair and unreasonable manner.” While there is some jest in this, there is a fundamental underlying assumption. Patents that are essential to a standard must be licensed in a fair, reasonable, and non-discriminatory manner. If we truly understand the English and legal meaning of these words, there is no wiggle room for so-called super FRAND rates nor for charging a premium for a standards-essential patent (SEP).