Sunday, December 07, 2008

IEEE to get into the patent pool business?

Rick Merritt writes: The IEEE Standards Association has struck a two-year agreement with Via Licensing Corp. to create one or more patent pools around some of the group's communications standards. If all goes well, the two organizations hope to set up a handful of such patent pools to help drive IEEE specs into the market.

Also: Patent pools have become increasingly popular in recent years to handle licensing in cases of relatively large numbers of patent holders and licensors. The pools can help lower transaction costs and reduce uncertainty and time spent negotiating deals, sometimes with competitors across barriers of language and geography. Technology holders in areas ranging from MPEG compression to WiMax have adopted the approach.

The move responds to input from some of the 132 members who have joined the IEEE as part of a corporate membership program started in 2003. "What we've been hearing [from them] is a desire to address needs beyond the publication of standards," said Rashba.

Although patent pools are not new (see discussion of the sewing machine patent pool of the 19th century) or innovative, one has the following text:

"IP issues related to technology standards are complicated and have lead to a number of highly publicized disputes in recent years," said Mike Mclean, vice president of professional services at Semiconductor Insights, part of United Business Media which publishes EE Times. "It makes sense for the IEEE to outsource this activity as it is not core to its mandate and should help minimize one of the barriers to standards adoption," he added.

It "appears to be yet another innovative pooling of intellectual property, joining the likes of Intellectual Ventures, RPX Corp. and Allied Security Trust," said Rich Belgard, a Silicon Valley patent consultant. Although details of the program are still sketchy, the IEEE's presence is significant and means "existing and potential patentees and licensees had better take notice," he said.

Truly out of touch with history.

***posted at PatentHawk***

The World War I patent pool in aviation produced a lot of airplanes that weren't used in World War I, and profits for the pool members, at the expense of innovation. Content with the results of the pool, Curtiss went into the Florida real estate business. Separately, the Stanford economists seem to equate "number of patents" with innovation, which is hardly reasonable, especially when a pool exists. For a different problem with a different Stanford economist, see 8 JMRIPL 80 (2008).

[IPBiz post 4500]


Blogger Robert Z. Cashman said...

The prospect of another company (or organization) entering the "patent pooling" business is not unexpected. The patent pooling business model in my opinion is quite effective, profitable, and certainly poses more of a threat to infringing companies who would otherwise be hesitant to take a license where they were clearly infringing certain patents.

One topic I foresee as a future issue which I would enjoy reading in one of your future blogs is the idea of "tying" in regard to companies being coerced to take licenses to patents they don't need and wouldn't want. I would say that is a possible and realistic outcome of these big companies with litigation and licensing muscle entering the patent world.

7:42 AM  

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