Apple signs EU complaint decrying FRAND patent abuse related to autonomous cars

Posted:
in General Discussion edited December 2019
Apple and a coalition of tech and automotive companies in a letter to the European Commission this week said patent licensing abuses are stifling innovation of self-driving cars and other connected devices.

Apple Car


A group of 27 companies including BMW, Cisco, Daimler, Dell, Ford, Lenovo and others informed the European Union's antitrust watchdog that unnamed parties are allegedly refusing to license standard essential patents on fair and reasonable terms, The Irish Times reports.

While the report falls short of naming FRAND (fair, reasonable and non-discriminatory) contract laws, the letter's language suggests those issues are in play.

"The practice of some [standard essential patent] owners to grant licenses only to certain companies . . . prevents companies across the internet of things and related innovative technology industries from planning investments in R&D," the letter reads. ""This practice stifles innovation, discourages new market entry, and ties suppliers to established customers. As a result, European businesses and consumers may pay higher prices than they would pay in a more competitive market."

What patents are being held back and by whom is unknown, as the letter fails to identify parties involved. As noted by the report, however, the filing was received by European Commission president Ursula von der Leyen and commissioners Margrethe Vestager and Thierry Breton shortly after Nokia came under fire for its refusal to license components for autonomous vehicles.

Regulators recently promised t investigate the Finnish telecommunications company on complaints from Daimler, supplier Bury and other associated firms. For its part, Nokia has called the allegations "meritless," the report said.

What Apple hopes to gain from a European probe is also unknown, though the tech giant is known to be developing its own self-driving car technology under the auspices of Project Titan.

Apple's ambitious effort to build a branded autonomous vehicle started in 2015 and at one point had over 1,000 employees working on various technologies, the results of which are only now seeing light in patent disclosures. The effort was put on hold in late 2016 after development roadblocks led to disagreements in Apple's upper ranks.

While the iPhone maker continues to rebuild its self-driving car team, and test its platform on California roads, a consumer-ready product is not expected for years, if at all.

Beyond autonomous vehicles, Apple could be angling to protect technology that underpins its valuable mobile device lineup by signing today's reported EU letter. More specifically, and as hinted at by the cohort of tech industry signatories, advances in 5G could be at the heart of the matter. The ultra-fast wireless protocol is important for the operation of self-driving vehicles, but vital for the rollout of next-generation smartphones and mobile computers.

Comments

  • Reply 1 of 14
    gatorguygatorguy Posts: 24,213member
    Daimler this week agreed to enter into binding negotiation on a component-level patent licensing agreement with Nokia. In a bit of a surprise those EU regulators referenced in the article and led by Margrethe Vestager (yup another term)will not be investigating until the negotiations play out. For now they'll be staying out of it.

    At the end of the day Nokia is finally on the defensive, obligated to either come to agreement on a licensing pact that could be used as the basis for other license agreements or allow the negotiations to fail and invite Vestager to step in. 
    edited December 2019
  • Reply 2 of 14
    Interesting article.  But it’s more than a little annoying that the article presents Apple’s autonomous car efforts as facts when, in reality, the examples - 1000+ people working on it, supposed halt due to disagreements - were really just rumors.
    chasm
  • Reply 3 of 14
    lkrupplkrupp Posts: 10,557member
    tjwolf said:
    Interesting article.  But it’s more than a little annoying that the article presents Apple’s autonomous car efforts as facts when, in reality, the examples - 1000+ people working on it, supposed halt due to disagreements - were really just rumors.
    Not just rumors, well  timed and placed FUD designed to throw shade on Apple. Don’t think it doesn’t happen.
  • Reply 4 of 14
    DAalsethDAalseth Posts: 2,783member
    Some companies don't seem to understand what owning a FRAND patent means. If you own a FRAND patent you must license it to anyone willing to pay, and you must have essentially equal terms to all who you license too. Apple has run into this before where company X will license a patent to most companies for $Y but when Apple wants to do the same suddenly it's 2X or 5X or 10X what everyone else is paying. Sorry, but you don't get to do that. That's where the FAIR in FRAND comes from. You also don't get to charge exorbitant fees because you want to make a killing. That's where the Reasonable in FRAND comes from. These are essential patents everyone needs. 
    mwhitetmaychasm
  • Reply 5 of 14
    DAalseth said:
    Some companies don't seem to understand what owning a FRAND patent means. If you own a FRAND patent you must license it to anyone willing to pay, and you must have essentially equal terms to all who you license too. Apple has run into this before where company X will license a patent to most companies for $Y but when Apple wants to do the same suddenly it's 2X or 5X or 10X what everyone else is paying. Sorry, but you don't get to do that. That's where the FAIR in FRAND comes from. You also don't get to charge exorbitant fees because you want to make a killing. That's where the Reasonable in FRAND comes from. These are essential patents everyone needs. 
    All accurate enough, as far as it goes, but this article doesn't really tell us anything about the patents in question (perhaps because the complaint doesn't?).

    FRAND is not something that gets applied to patents automatically just because they're useful, or even foundational. FRAND is shorthand for a specific *private* agreement (not government-mediated or -imposed) between a standards body and a company (or consortium, etc.). Essentially, it is an agreement where the company makes a deal with a standards body to use "Fair, Reasonable, And Non-Discriminatory" terms in its licensing of a patent in exchange for that patent being used in a standard. See the beginning of the relevant wikipedia article for more (https://en.wikipedia.org/wiki/Reasonable_and_non-discriminatory_licensing).

    There is no law requiring that some patents be handled this way. Just because a patent is "essential" does NOT mean it has to be licensed under FRAND terms. And if you're lucky enough to have such a patent and not have a deal with a standards body which requires FRAND terms, you are allowed to charge out the wazoo, or only license to people you like, and nobody else has a legal leg to stand on.

    Monopoly/antitrust laws may or may not intersect with this issue, depending on specific circumstances. The fact that this coalition is making the argument that they do apply here suggests that the patents in question are NOT covered by any FRAND agreement, and they're looking for relief another way. So unless/until info to the contrary is provided, it seems extremely likely that FRAND is a red herring, and not relevant to this matter.
    edited December 2019 SpamSandwichbeowulfschmidt
  • Reply 6 of 14
    JanNLJanNL Posts: 327member
    DAalseth said:
    "That's where the FAIR in FRAND comes from." 
    Isn't it coming from "non-discriminatory"? Fair is about the amount of money?
  • Reply 7 of 14
    chasmchasm Posts: 3,303member
    JanNL said:
    DAalseth said:
    "That's where the FAIR in FRAND comes from." 
    Isn't it coming from "non-discriminatory"? Fair is about the amount of money?
    Nope. FRAND stands for Fair, Reasonable, And Non-Discriminatory. "Fair" addresses access, "Reasonable" addresses pricing, and "Non-Discriminatory" addresses forbidding "Most Favoured Nation" or other side-agreements.
  • Reply 8 of 14
    DAalseth said:
    Some companies don't seem to understand what owning a FRAND patent means. If you own a FRAND patent you must license it to anyone willing to pay, and you must have essentially equal terms to all who you license too. Apple has run into this before where company X will license a patent to most companies for $Y but when Apple wants to do the same suddenly it's 2X or 5X or 10X what everyone else is paying. Sorry, but you don't get to do that. That's where the FAIR in FRAND comes from. You also don't get to charge exorbitant fees because you want to make a killing. That's where the Reasonable in FRAND comes from. These are essential patents everyone needs. 
    All accurate enough, as far as it goes, but this article doesn't really tell us anything about the patents in question (perhaps because the complaint doesn't?).

    FRAND is not something that gets applied to patents automatically just because they're useful, or even foundational. FRAND is shorthand for a specific *private* agreement (not government-mediated or -imposed) between a standards body and a company (or consortium, etc.). Essentially, it is an agreement where the company makes a deal with a standards body to use "Fair, Reasonable, And Non-Discriminatory" terms in its licensing of a patent in exchange for that patent being used in a standard. See the beginning of the relevant wikipedia article for more (https://en.wikipedia.org/wiki/Reasonable_and_non-discriminatory_licensing).

    There is no law requiring that some patents be handled this way. Just because a patent is "essential" does NOT mean it has to be licensed under FRAND terms. And if you're lucky enough to have such a patent and not have a deal with a standards body which requires FRAND terms, you are allowed to charge out the wazoo, or only license to people you like, and nobody else has a legal leg to stand on.

    Monopoly/antitrust laws may or may not intersect with this issue, depending on specific circumstances. The fact that this coalition is making the argument that they do apply here suggests that the patents in question are NOT covered by any FRAND agreement, and they're looking for relief another way. So unless/until info to the contrary is provided, it seems extremely likely that FRAND is a red herring, and not relevant to this matter.
    Thank the gods somebody understands this!  FRAND is a consensual agreement between the patent holder and a standards body (though the standards body in question may be affiliated with a government), not some requirement imposed just because some bozo thinks they shouldn't have to pay what the patent holder wants. 
  • Reply 9 of 14
    gatorguygatorguy Posts: 24,213member
    DAalseth said:
    Some companies don't seem to understand what owning a FRAND patent means. If you own a FRAND patent you must license it to anyone willing to pay, and you must have essentially equal terms to all who you license too. Apple has run into this before where company X will license a patent to most companies for $Y but when Apple wants to do the same suddenly it's 2X or 5X or 10X what everyone else is paying. Sorry, but you don't get to do that. That's where the FAIR in FRAND comes from. You also don't get to charge exorbitant fees because you want to make a killing. That's where the Reasonable in FRAND comes from. These are essential patents everyone needs. 
    All accurate enough, as far as it goes, but this article doesn't really tell us anything about the patents in question (perhaps because the complaint doesn't?).

    FRAND is not something that gets applied to patents automatically just because they're useful, or even foundational. FRAND is shorthand for a specific *private* agreement (not government-mediated or -imposed) between a standards body and a company (or consortium, etc.). Essentially, it is an agreement where the company makes a deal with a standards body to use "Fair, Reasonable, And Non-Discriminatory" terms in its licensing of a patent in exchange for that patent being used in a standard. See the beginning of the relevant wikipedia article for more (https://en.wikipedia.org/wiki/Reasonable_and_non-discriminatory_licensing).

    There is no law requiring that some patents be handled this way. Just because a patent is "essential" does NOT mean it has to be licensed under FRAND terms. And if you're lucky enough to have such a patent and not have a deal with a standards body which requires FRAND terms, you are allowed to charge out the wazoo, or only license to people you like, and nobody else has a legal leg to stand on.

    Monopoly/antitrust laws may or may not intersect with this issue, depending on specific circumstances. The fact that this coalition is making the argument that they do apply here suggests that the patents in question are NOT covered by any FRAND agreement, and they're looking for relief another way. So unless/until info to the contrary is provided, it seems extremely likely that FRAND is a red herring, and not relevant to this matter.
    Thank the gods somebody understands this!  FRAND is a consensual agreement between the patent holder and a standards body (though the standards body in question may be affiliated with a government), not some requirement imposed just because some bozo thinks they shouldn't have to pay what the patent holder wants. 
    Companies can also decide to remove their FRAND-pledged IP from a particular standard after-the-fact. Several companies, at least nine, have notified MPEG-LA they'll be leaving the HEVC standards pool early this next year and taking their IP with them. 
    edited December 2019
  • Reply 10 of 14
    gatorguygatorguy Posts: 24,213member
    DAalseth said:
    Some companies don't seem to understand what owning a FRAND patent means. If you own a FRAND patent you must license it to anyone willing to pay, and you must have essentially equal terms to all who you license too. Apple has run into this before where company X will license a patent to most companies for $Y but when Apple wants to do the same suddenly it's 2X or 5X or 10X what everyone else is paying. Sorry, but you don't get to do that. That's where the FAIR in FRAND comes from. You also don't get to charge exorbitant fees because you want to make a killing. That's where the Reasonable in FRAND comes from. These are essential patents everyone needs. 
    The policy of US regulators regarding FRAND agreements may become much more licensee-friendly in the very near future. As of this past week all three pertinent agencies, the USPTO, the Department of Justice Anti-Trust Division, and the National Institute of Standards and Technology are now in agreement on what remedies should be allowed a company pledging it's IP to a FRAND standard.

    … the USPTO and the DOJ withdraw the 2013 policy statement, and together with NIST issue the present statement to clarify that, in their view, a patent owner’s F/RAND commitment is a relevant factor in determining appropriate remedies, but need not act as a bar to any particular remedy.

    As a general matter, to help reduce the costs and other burdens associated with litigation, we encourage both standards-essential patent owners and potential licensees of standards-essential patents to engage in good-faith negotiations to reach F/RAND license terms. All remedies available under national law, including injunctive relief and adequate damages, should be available for infringement of standards-essential patents subject to a F/RAND commitment, if the facts of a given case warrant them …"

    https://www.justice.gov/atr/page/file/1228016/download


    edited December 2019
  • Reply 11 of 14
    JanNLJanNL Posts: 327member
    chasm said:
    JanNL said:
    DAalseth said:
    "That's where the FAIR in FRAND comes from." 
    Isn't it coming from "non-discriminatory"? Fair is about the amount of money?
    Nope. FRAND stands for Fair, Reasonable, And Non-Discriminatory. "Fair" addresses access, "Reasonable" addresses pricing, and "Non-Discriminatory" addresses forbidding "Most Favoured Nation" or other side-agreements.
    So that's what I said... DAalseth said Fair is about price and you say it's about access.
  • Reply 12 of 14
    gatorguygatorguy Posts: 24,213member
    JanNL said:
    chasm said:
    JanNL said:
    DAalseth said:
    "That's where the FAIR in FRAND comes from." 
    Isn't it coming from "non-discriminatory"? Fair is about the amount of money?
    Nope. FRAND stands for Fair, Reasonable, And Non-Discriminatory. "Fair" addresses access, "Reasonable" addresses pricing, and "Non-Discriminatory" addresses forbidding "Most Favoured Nation" or other side-agreements.
    So that's what I said... DAalseth said Fair is about price and you say it's about access.
    http://www.consortiuminfo.org/standardsblog/articles/everything-you-always-wanted-know-about-frand-didnt-know-who-ask
  • Reply 13 of 14
    Apple’s not in the car business... what do they care?  /s
  • Reply 14 of 14
    gatorguygatorguy Posts: 24,213member
    So to update the agreement between Nokia and Daimler (and their suppliers) is going to be a waste of time and simply a delay tactic. While it's now going back on the German docket for a trial I fully expect Ms Vestager of the EU to step in by March/April and offer her own ideas for solving it. Nokia is hell-bent on avoiding an exhaustive license to the automotive suppliers and Daimler for their FRAND-pledged IP. The "negotiations" were a ruse. 
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