5G, “FRAND” and the IPR Regime

Recently in 2018, the Court of Appeal Judgement (UK) in Unwired Planet v Huawei Court of Appeal brought down various highlights regarding patent licensing further reflecting that it is truly complex in nature. The judgment further threw light on the necessity of negotiating intellectual property licensing in sectors such as technology and telecom in a flexible, transparent, and level playing field.

The judgment only fulfilled the much-anticipated predictions of turning of tables further redefining the powers of various Multinational Corporations. The case settled that worldwide licensing rates would only be fair, reasonable as well non-discriminatory i.e., “FRAND” considering in mind the complex, expensive, and time-consuming negotiations of multiple patent licenses in the virtual world. Traditionally, power in the hands of the licensee has always given them an upper hand irrespective of where they stand financially. These types of parties are in the position of either hindering or stalling negotiations (holding up) or not obtaining a patent license at all. While obtaining a license in a “FRAND” i.e., fair, reasonable, and non-discriminatory manner as discussed above is not only efficient as well as fair in consideration of their efforts but also allows them to obtain to the core, the full benefit of their technologies.

The much anticipated 5G technology is expected to play the role of a much-needed catalyst supporting various innovations having far-reaching impacts on several sectors such as healthcare, automotive, research, defense, manufacturing as well as many more sectors vital to any economy. Recognizing the 5G R&D fairly will be an essentially critical step in the new era with businesses becoming responsible to appreciate the complexities of the IP regime so as to obtain benefits to the maximum.

How we could re-balance power using the “FRAND” i.e., Fair, Reasonable, and Non-Discriminatory Method?

It is proposed that various negotiations relating to Intellectual Property need to be governed using fair, reasonable, and non-discriminatory, i.e., “FRAND” terms. Referring to various well-defined benchmarks will not only encourage dialogue, offers, and counteroffers, open as well as amicable negotiations but would also reduce litigation to a minimum.

But it would be wrong to be optimistic in the first instance considering in mind the Apple v. Qualcomm battle only further shows the convoluted as well as the ever-so-expensive nature of Intellectual Property licensing.  Apple was sued successfully by Qualcomm who alleged it for infringement of patents, further resulting in a ban on some of Apple’s models of the iPhone in China as well as Germany. The ban however excludes resellers and some of these modes are still for the time being available to some extent. Though, there could be no immediate impact seen on Apple’s sales or public perception. It is critical to keep a check on this situation’s development through 2019. Further, Intellectual Property licensing is no longer limited to hi-tech or technology companies comparing the likes of Huawei, HP, Microsoft, Apple, or Qualcomm. 5G gradually arriving opens doors to various new sectors into the industry who as a priority need to improvise their IP regime.

5G among the Cultural Clashes

5G has shifted vastly from the traditional work of communications which aimed at connections between the internet and electronic devices, it has unlocked various opportunities of importance in vertical sectors. 5G is focused on the development of technologies in various sectors such as healthcare, agriculture, automotive, mining as well as manufacture being industries where business cases that are compelling in nature lie. 2019 is expected to see fruition coming to various innovations further raising complexity and various issues over how crucial components of connected products are to be licensed. Considering car manufacturers, they would have to reach the level of obtaining, researching as well as negotiating each function, chipset, and feature of their cars.

Thus, a cultural clash is sure to be witnessed in 2019 where capitalizing on IP would be the aim of various vertical sectors. The IoT is further expected to know all things about Intellectual Property further becoming technical experts. Failing to expertise in IP and the ‘FRAND’ regime would result in numerous litigations thereby stifling progress.

Is education in IP necessary for efficiency in 5G?

Some of the most innovative ideas which could further lead to socio-economic benefits come from the various vertical sectors that are now entering the Internet of Things. There are many such examples that could be seen in sectors such as healthcare, automobiles, etc.  Many entities in various vertical sectors would have to deal with completely new situations with a new range of experiences. This would require education as well as the guidance of these entities for a well-defined route to IP licensing. For optimum development, various innovations, and out of the box ideas, it thus becomes necessitated that these entities function harmoniously keeping in mind the new rules around the IP regime and its management.

To conclude, the approach brought forward that is Fair, Reasonable, and Non-Discriminatory, i.e., “FRAND” should be applied to its level best to reduce conflicts to a minimum and create a harmonious and smooth environment between and for the IP regime and 5G technology.

Author: Maahi Mayuri, New Law College, Bharati Vidyapeeth Deemed University, Legal Intern at Global Patent Filing. In case of any queries please contact/write back to us at support@globalpatentfiling.com.

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