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Parallel Importation & Intellectual Property Protection

by Charl Goussard, NAIP Legal Research

Parallel importation has long been both an opportunity and threat for companies. Today, due to the massive size and increasing complexity of markets, as well as growing competition globally, parallel importation has become an even greater issue of concern for not just businesses, but also patent holders. It is for this reason that we have decided to have a closer look at the impact of Parallel Importation on Intellectual Property Right (IPR) owners.

Firstly, What is Parallel Importation?

The World Health Organization describes parallel imports (also referred to as "grey market" imports) as “…imports of a patented or trademarked product from a country where it is already marketed….”

Parallel imports mainly occur when there are price discrepancies of the same product in different markets. These price discrepancies are most prevalent in the markets for medicine and high technology goods.

For instance: Taitiger Ltd. (Taiwanese) manufactures a notebook and exports it to Europe where its designated, exclusive agent sells the notebook for 500 EURO per unit. The same notebook however is sold by Taitiger's agent in Australia for 350 EURO per unit. Consequently, Kangaroo Exports, an opportunistic Australian trader, seizes the opportunity and buys Taitiger notebooks in Australia which he then exports to France and re-sells for 450 EURO per unit, 50 EURO cheaper than what Taitiger’s European agent sells the notebooks for, but still makes a profit.

From this example, we see parallel importation benefits some and adversely affects others. In general, however, companies prefer to maintain control over products, distributors and prices. As a result, companies go to many lengths to deal with and prevent parallel importation.

Do Patents Provide any Protection Against Parallel Importation?

In a word: Yes!

The purpose of obtaining a patent or an exclusive right to practice a patent is to legally fix a monopoly over the utilization of the whole or a part of the patent for an area in which the patent is registered.

For the sake of clarity, let us briefly review what a patent is and what kinds of rights it gives to its owners:

A patent is a collection of exclusive rights granted by a state to an inventor or his assignee for a fixed period of time in exchange for a disclosure of an invention. The exclusive right granted to a patentee in most countries is the right to prevent or exclude others from: making, using, selling, offering to sell or importing the invention.

So, is it possible for a patent owner to use his/her rights to prevent parallel imports?

From the definition above, one can deduct that a patent owner may nip parallel imports in the bud by monopolizing the 1. selling; 2. offering to sell; and 3. the importation of the invention. In addition, the patent owner may extend his rights to others by way of a license. Usually these licenses take the form of a patent license agreement, an agent or distribution agreement, or a manufacturing agreement. Some of these agreements may even grant the licensee the Exclusive or Sole right to practice the specific right pertaining to the patent.

In the example above, we assume that Taitiger's notebook is covered by patents in some European Countries – UK, France, Germany and The Netherlands. The right to import, offer to sell and resell has been exclusively licensed to Taitiger's European Agent. If Taitiger's Agent becomes aware of Kangaroo's parallel imported Taitiger notebooks in one of the mentioned countries, the Agent or Taitiger can prohibit Kangaroo from further importation and sales in the European Union (such a prohibition can be enforced on a national level by way of patent infringement litigation – or by way of Border Detention measures) .

However, the monopoly an IPR holder has over the sale and importation of patented goods is not absolute… One of its limitations can be found in Doctrine of Exhaustion.

What is the Doctrine of Exhaustion?

The Doctrine of Exhaustion is a limitation of intellectual property rights (IPRs). Once a product which is protected by IPRs has been sold by either the IPR owner or by others with his/her consent, the IPRs over this given product, as far as commercial exploitation is concerned, are exhausted. Sometimes this limitation is also called the First Sale Doctrine, since the rights of commercial exploitation (sale or offer for sale) for a given product end with the product's first sale. Subsequent acts of resale, rental, lending or other forms of commercial use by third parties can thus no longer be controlled by the IPR holder.

The Doctrine of Exhaustion can be applied on a national, community or international level. Each level affects sales and importation rights over patented goods differently.

Under national exhaustion, exclusive rights for commercial exploitation terminate upon the first sale of a product within the national boundaries, but IPR holders maintain the right to exclude parallel importers. The United States is an example of a country that follows the Doctrine of Exhaustion on a national basis (applied to patents, copyrights and trademarks). In our example above, Taitiger would be able to prohibit Kangaroo from importing notebooks into the US if Taitiger were the holder of US patents contained in the notebook. However, once Taitiger’s notebooks have been sold in the US by their agent, their IP rights are exhausted and Taitiger has cannot exercise any of its IPRs over subsequent commercial exploitation.

In the European Union, things work a bit differently. For parallel imports, the EU applies a system of community exhaustion. IPR holders may exclude parallel imports from outside the European Union, but the rights for commercial exploitation for patented goods, imported or not, are exhausted upon their first sale in any country within the Union.

To complicate the issue, Patents in Europe are enforced on a national basis. This discrepancy between the nationally imposed patents and the Community imposed Doctrine of Exhaustion creates great opportunities for traders and headaches for patent right holders within the European Union. Importers can easily dodge the net of exclusivity if the IPRs holder has selected only a few countries in Europe for patenting.

For example in the EU, once the parallel imported products are cleared by customs they may be freely traded within the EU. Kangaroo may thus decide to import the parallel goods from Australia to a country within the EU in which Taitiger has not registered their patents (any EU country except for France, Germany, UK or The Netherlands). Thus, if Kangaroo imports the goods through Italy, has Italian customs clear the notebooks, and distributes the notebooks from there, Taitiger would have no legal recourse because Taitiger has not registered their notebook patents in Italy. Taitiger has to assert their patents against Kangaroo's grey imports before these imports are customs cleared. Taitiger cannot, for instance, institute patent infringement litigation against Kangaroo in Paris – since the goods were imported and cleared in Italy.

(Please note that Switzerland is NOT a member of the European Union and that it applies the Doctrine of Exhaustion on a national basis.)

Lastly, some countries, such as Japan, apply the Doctrine of Exhaustion on an international basis. Under this system, exclusive rights are exhausted "internationally" upon first sale. Japanese IPR holders are thus without recourse against a parallel importers – good news for traders!


As seen above – Patenting an invention gives some monopoly over the commercial exploitation of that invention. The exclusive rights to sell and import the patented goods may be retained by the patentee or licensed to third parties.

HOWEVER: These exclusive rights are limited to the territories which the patent covers. The Doctrine of Exhaustion furthermore limits these monopolistic rights in the various territories as determined by the national/community laws applicable for such territory.

It is therefore vital that future patentees familiarize themselves with the commercial risks posed by Parallel Imports in the various markets prior to planning an elaborate marketing strategy!


Merry Christmas & Happy Holidays from NAIP!


12/19/2008 IP News & Blog Round-Up

  • What is The Price of Forgoing Basic Research? - An argument that claims basic research conducted by industry has, contrary to popular belief, has been in decline. Additionally, academia has begun a subtle but significant shift toward applied, "industry-relevant" research. So what do these trends portend for innovation? Unless they are corrected soon, nothing very promising.... (from BusinessWeek)
  • Trademark attorneys in China will soon be able to celebrate with Taiwan Beer. - Or maybe not. In February 2009, Taiwan Beer will finally be sold in Mainland China, but does that mean the trademark issues surrounding it will be solved? Maybe not. A brief history is available here. (from IP Dragon)
  • Traditional Knowledge, IP Law & Biopiracy. - When knowledge from centuries of culture points towards solutions that are eventually patented, do those cultures benefit? Unfortunately, no. For example, "121 patented drugs globally are made from plants, 74 percent of which were 'discovered pursuing claims from native fables.'" Yet drug firms reap and keep all the benefits, and even sue to prevent the innovations from being used in those regions. (from Harvard International Review)
  • What's the Cost of Misconduct in a Patent Lawsuit? - This one has an answer: Almost US$17 million. Two pharmaceutical companies looking to produce generic versions of a popular anti-diabetic drug attempted to play the invalidity game and paid for it dearly. Download the brief here. (from Patent Baristas)


12/12/2008 IP News & Blog Round-Up

  • Do Patent Pools Encourage Innovation? (Un)Surprisingly, No. - This paper released by the Economics department at Standford looks at the Sewing Machine patent pool that lasted from 1857 to 1877 and finds that innovation slowed as soon as the pool was form. After the pool dissolved, innovation picked up.
  • A rare font copyright case goes to court in China. - Founder Electronics claims that Proctor & Gamble used their "Qian" and "Cartoon" fonts without permission and therefore are asking for 1.478 million RMB. The news article can be found here. (from IPKat)
  • Forget about 2008, 2007 was a banner year for patent lawsuits. - Data released by the Stanford Law School shows 78,000 patent, trademark and tradesecret suits in 2007, which may be attributed to holding companies rushing file suit before any patent reform legislation takes effect. (from The Prior Art)


An Introduction to the European Patent System

by Charl Goussard, NAIP Legal Research

For even the most practiced professionals, the European Patent System is an extremely complex system. Yet for those who manage to navigate its complexities, a market of almost 500 million people (versus 300 million in the US) and an economy with an estimated GDP of $18.5.trillion for 2008 (versus $14.5 trillion in the US) awaits. As a result we will attempt to detangle this complex system in a series of articles targeted at businesses and companies who are interested in patents in Europe. We will begin with this brief introduction to the system and then follow up with more in-depth discussions on specific areas.

European Patent System: Historic Overview

In 1973 Belgium, West-Germany, France, Luxembourg, Netherlands, Switzerland, and the UK agreed to a multilateral treaty called the European Patent Convention (EPC). The purpose of the convention—as indicated by its previous name, "Convention of the Grant of European Patents" (and also sometimes referred to as the Munich Convention)—was to form a unified patent system in Europe.

The EPC lead to the establishment of the European Patent Office, and in 1978, the EPO received its first patent application. Currently, the Convention is in force in 34 countries and as of 1 January 2009, Macedonia will be the 35th member state.

Important to remember is that the EPC is not linked to the European Union (EU). The EPC consists of different member states. Croatia, Iceland, Liechtenstein, Monaco, Norway, Switzerland and Turkey are all EPC member states, but are not members of the EU.

Filing Options & Routes

Let us clear up another common misconception: no single patent provides protection across the whole of Europe. Each country grants and enforces its own patents. Consequently, obtaining patent protection in Europe means registering for patents individually in each desired territory. This method is commonly called the National Route.

Fortunately, if applying for patents in multiple European countries, a simpler option exists: the European Patent Office route. The European Patent Office grants the so-called "European Patent", which is nothing more than a simplified way of prosecuting patents in EPC member states. This "European Patent" may be enforced once it is validated in the individual countries designated during application.

Putting a discussion of the advantages and disadvantages of each route aside, the National Route is advisable if patent protection is needed in only one area. The EPO route is advisable if you wish to have a patent registered in more than one European country. In today's globalizing economies and markets, most businesses and inventors pursue protection in multiple countries. Consequently, this article will focus on the EPO route.

The European Patent: A Simplified Way of Prosecution

A reminder: don't be confused by the term "European Patent".

The term "European Patent" does not carry the same meaning as its equivalents in other countries like the US, Japan or China. European Patents were created to simplify the prosecution of patents for EPC member states. A European Patent is indeed prosecuted and granted. However, they are not enforceable unless they have been further validated by individual member states. Once validated, these "European Patents" become nothing more than National Patents which then must be enforced on a National basis.

Aside from this one major difference in function, the fundamental patent application process at the EPO is similar to the processes at most other patent offices: the application is searched, and then published; thereafter it is examined and then finally granted.

Patent applications may be filed at the EPO office in Munich or at one of its branches in The Hague or Berlin. Some National Offices may also accept EPO applications.

The Language Minefield / La langue des champs de mines/ Die Sprache Minenfeld

EPO applications may be filed in any of the official languages of the EPC member states, but the official languages for prosecution and communication are English, French and German. Thus, if an application is filed in any European language other than English, French, or German, a translation has to be filed at a later stage for prosecution purposes. Furthermore, the claims section of each European Patent has to be translated into all three official EPO languages.

At the national stage, however, patent claims must be translated into the official language of the member state. An applicant who has designated multiple countries would therefore have to translate the claims into the official language of each designated country.

To make things easier and more cost effective for applicants, several countries signed the London Agreement, which entered into force on 1 May 2008. These countries now accept claims in one of either English, French or German, although they retain the right to request a translation if desired. This and other changes has reduced translation costs considerably and made the European Patent application procedure more cost attractive and less time consuming.

Opposition and Revocation

Once a European Patent is granted, the EPC provides for centralized opposition, limitation, and revocation procedures. Within 9 months from grant, any third party may oppose such grant at the EPO. While the EPO hears the opposition, infringement litigation may be instituted on a national level in an EPC member state and national courts may decide to stay the proceedings pending the outcome of the EPO opposition procedure.


Currently there is no distinct, centrally enforceable patent or enforcing entity for the whole of Europe. European Patent enforcement of ownership, validity, and infringement is conducted on a country-by-country basis and only in the countries where the patent has been validated.

For a brief period in the 1990s some European Courts issued cross border injunctions—the so-called Pan-European relief—but this practice has been seized by an order from the European Court of Justice. It is thus not possible to get cross border enforcement of patents. Each needs to be individually enforced.

Because of the difficulty and costs of enforcements, most patentees have protection in only a selected number of EPC member states. The choice as where to instigate litigation is predominantly motivated by market factors, applicable judicial procedures, the language of the courts, and legal procedure in various member states.


The European Patent System has come a long way since its initiation in 1973. Much reform however, is planned to make this system even more efficient and cost effective.

On the minds of all concerned with the European Patent System is the possibility of a European Community Patent–a single patent covering all EPC contracting states–with centralized application, opposition, limitation, revocation and infringement procedures. Indeed an EPO work group that aims at a unified Patent Litigation System has drafted the European Patent Litigation Agreement consisting of proposals for a single European Patent Court, a European Patent Court of Appeals and Administrative Committee. Whether the EPC countries sign the agreement is another issue, but regardless of what happens, Europe remains a vital market because of its well developed systems for IP development, enforcement, and commercialization.


11/28/2008 IP News & Blog Round-Up

  • Think Godzilla's Scary? Meet His Lawyers. - A fascinating article detailing some of the lengths that Godzilla trademark and copyright holder Toho has gone to protect the cult classic monster's image--and the company's profits. (from Wired)
  • Do big corporations secretly support Patent Trolls? - In a way, yes. According to this article, patent trolls, or NPEs, are not just easy scapegoats and targets for negative media, but are also helping make it harder for small companies to compete. (from Patent Fools)
  • How To Go To China For Innovation. - A summary of a Business Week article here, that suggests four steps to keeping pace with innovation in Asia: 1) Globalize your research and innovation; 2) Devise a "talent strategy" up front; 3) Protect intellectual property; and 4) Shift R&D responsibilities away from your home country to global centers. (from China Law Blog)
  • IP is a key to an Indian and Chinese challenge of US leadership. - IAM blogs that India and China will only fulfill their potential if they can match the US on IP--something a recent report released by the US National Intelligence Council (NIC) reports is still a long way off--although they may match the US in some areas in a few as 10 years. Download the NIC report here. (from IAM Magazine)


This week RPX released a wealth of new details about its business model on its website, and much discussion is already occurring on the web (and likely in business board meetings as well). Read the updates here.


11/21/2008 IP News & Blog Round-Up

  • China Gets Grilled on Copyright Law. - And by the US, Japan, EU and Canada. As part of its ascension to the WTO, China undergoes an annual Transitional Review Mechanism (TRM) by the TRIPs Council. IP Dragon reports on some the QA session. (from IP Dragon)
  • What if geniuses just got lucky? - Malcolm Gladwell brings new attention to the argument that many geniuses are more the product of society than their own talent. See how he applies this theory to inventors and IP in an earlier article here. (from Newsweek)
  • One of Obama's transition team members has strong ideas on the US Patent System. - Among them: completely scrapping the system. Slashing the number of patents granted by 90%. And tripling the USPTO budget. (From 271 Patent)


Photos from SIPO
In another step toward stronger economic relations between China and Taiwan, a historic conference on cross-strait patent issues is being held this week at the National Center for Traditional Arts in Ilan, Taiwan.

From November 16th to 23rd, members of China's State Intellectual Property Office (SIPO), Taiwan's Intellectual Property Office (TIPO), IP scholars and industry professionals will convene for informal discussions and a formal two-day forum on cross-strait patent issues.

Nine high-ranking officials from SIPO, including Deputy Director Li Yuguang have flown to Taiwan to join the conference. TIPO officials, including Director Wang Mei Hua will also participate, marking the first time these high-ranked officials will have met for face-to-face discussions.

The stated goals of the conference include enabling better understanding of each side's IP protection and regulation systems; sharing experiences with patent examination, examiner training, and quality control issues; and building a channel for communication.

At the forum and during discussions, the two sides will put forward and discuss three topics: mutual recognition of patent examination results; mutual recognition of priority rights; and allowing Taiwanese citizens to participate in the qualifying examination for Mainland China patent agents.

However, during this meeting, officials expect only to first proceed with administrative-related issues, including formal establishment of cross-strait relations within the offices; beginning formal correspondence and business relations; creating a channel for exchange of documents, and so on.

The forum, held on November 18th to 19th, and the discussions, ending on the 23rd, were organized and run by Taiwan's Chinese National Federation of Industries (CNFI) on behalf of the Ministry of Economic Affairs.


11/14/2008 IP News & Blog Round-Up

  • As an attempt at reducing backlogs and duplication of work, Patent office teamwork intensifies. - The patent offices of the US, Europe, Japan, Korea and China has recently joined forces to improve efficiency in the time, quality and amount of patents prosecuted at the various patent offices. For more on the activities planned by this cooperation, read here.
  • Hopes for a single European patent jurisdiction fading fast. - The clock is ticking away for France's European Presidency (ends 31st of December) and the prospect of having a single European Patent under French rule is dull. To make things even more complicated, the Spanish are adamant about language issues regarding such proposed community patent and smaller states are worried about the fee structure of the community patent. Read here for more on the status of the European Community Patent.
  • Keep up with amendments to the Implementing Regulations to the European Patent Convention. - For a concise discussion of the amendments taken by the Administrative Council on the 21st of October 2008, read here.


Photo by Redvers: http://www.flickr.com/photos/j-no/2876709608/
By Jeffrey Chang

(Updated with new details from RPX 11/27/2008)

The past few years has seen the introduction of several controversial participants to the global patent ecosystem. The most well known, Intellectual Ventures (IV), has already grown to become a several billion-dollar operation, and just recently has announced an expansion into Asia. 2008 has also seen organizations like Allied Security Trust (AST) and RPX emerge, with both boasting substantial capital funding.

Who exactly are these participants? They call themselves patent trusts, patent acquisition services companies and patent investment funds. Others have called them patent trolls, anti-patent trolls, patent buying cooperatives, and so on. But regardless of who they are and what they are called, they are undoubtedly a growing power in the global IP industry—major players who will shape the future of IP.

"Non-Traditional Participants"

In contrast to "traditional" participants (such as inventors, engineers, agents and lawyers), IV, AST and RPX are more similar to non-practicing entities (NPE), patent pools and other “non-traditional” participants. Yet because these organizations are relatively new, they do not settle cleanly into these existing classifications.

    Intellectual Ventures
Founded in 2002 by former Microsoft CTO Nathan Myrvhold, Intellectual Ventures claims to be an "Invention Company" whose purpose is "highlighting the business of invention and providing a means for inventors to be fairly compensated for their work." IV does not manufacture or produce any products (the patent or patent portfolio is the product), and develops patents internally or acquires them through (often clandestine) deals. The IV website states that eventually they will market and assert their patents on a "broad and non-exclusive basis."

Details are scarce as to where IV acquires funding for these activities, but major contributors include Microsoft, Intel, Sony, Google and so on. These mega-corporations signed on initially due to IV's unique proposition: IV would apply for and acquire patents as a preventative measure against patent trolls. The corporations would additionally be required to license any patents they used, but they would also share in the profits this "patent hedge fund" would produce.

    Allied Security Trust
In 2008, a group consisting of Verizon, Cisco, Google, Telefon AB L.M., Ericssson, HP and five other major high tech heavyweights founded the Allied Security Trust. AST's stated purpose is to address "the increasing need for innovative companies to defend against costly patent law suits." Like Intellectual Ventures, AST does not produce or manufacture. But unlike IV, AST only purchases patents, and does so in order to grant the member companies non-exclusive licenses. AST has stated it will not assert patents against other companies and all patents are resold into the market after a period of time.

Corporations become a part of AST by paying US$500,000 membership fee and contributing US$5 million into a fund to purchase patents. Profits are not a goal. In fact, AST is attempting to inoculate its member companies from potential infringement suits.

    Rational Patent Exchange
RPX made a big splash in September of 2008 by announcing it had acquired funding from top investment firms Charles River Ventures and Kleiner Perkins Caufield & Buyer. Few had known about RPX prior to the announcement, and many were surprised to hear a number of details, including: 1) the founders are ex-Intellectual Ventures bigwigs John Amster and Geoffrey Barker; 2) they plan to purchase US$100 million in patents & patent applications; 3) they already have US$30 million.

RPX, a "patent acquisition services" company, has not elucidated its business model, but according to statements from Amster and the company's own communication materials, RPX will acquire patents to prevent NPEs from asserting them against operating companies. RPX will not develop these patents, but neither will it assert them against other companies. Instead RPX will generate revenues from licensing and selling the patents, which will be critical to their continued operation because RPX "does not expect to seek other direct equity investments either from venture capitalists or high tech companies."

(Update 11/27/2008)
RPX describes its business as "Defensive Patent Aggregation" club. RPX will act independently to purchase patents that would presumably otherwise be purchased and asserted by NPE / Patent trolls. Then companies pay an "annual fee to have a license to all patents and associated rights in the aggregation." This fee is between $35,000 and US$4.9 million a year, dependent on the company's operating income. Over time, a member would eventually gain rights to patents in perpetuity, whether they continue to pay membership or not (they may also purchase the rights for a one time fee).

Founder John Amster as stated that RPX "needs at least 20 members to remain cash-flow positive." Currently, mega-corporations IBM and Cisco have signed up, significantly raising the RPX's credibility. RPX will focus on IT, software, e-commerce, mobile communications, networking, and consumer electronics device patents.

Compared Against Existing Non-Traditional Participants
Intellectual Ventures (IV) is most like...
Non-Practicing Entities
A patent owner who does not manufacture or use the patented invention, but rather than abandoning the right to exclude, an NPE seeks to enforce its right through the negotiation of licenses and litigation..Holds tens of thousands of patents
.Manages patents into "funds" for investors
.Licensees can also buy into these patent funds
.Has not yet engaged in litigation

RPX is most like...
Patent Holding Companies
Companies set up to administer, consolidate and license patents or otherwise enforce patent rights, such as through litigation.Will offer services on behalf of, but not be a part, of any specified company
.Major investors are a group of venture capitalists, not patentees
."An affordable service model that reduces the threat of assertion and litigation and provides efficient patent protection to subscribing companies."
*See updates

Allied Security Trust (AST) is most like...
Patent Pools
Consortiums of at least two companies agreeing to cross-license patents relating to a particular technology..Acquiring mutually-beneficial patents, not cross-licensing, is the main goal
.Non-exclusive licensing rights of patents purchased are granted to members
.Patents are re-sold into the market
.Does not engage in litigation


What really sets each of these entities apart from previous "non-traditional participants", however, is the purpose and intent of their existence. Each has, at one point or another, (including IV) been hailed or proclaimed itself as the Anti-Patent Troll. One of the principle philosophies behind companies like IV and AST was that buying (or innovating) critical patents would be taking a potential weapon-of-mass-litigation out of the market equation. This position helped these organizations raise hundreds of millions of dollars from corporations.

But for all the rhetoric, many remain suspicious. Indeed, patents are not being removed from any equation; they are just changing hands from unknown variable to known variable. Intellectual Ventures, which was initially called the "Patent Defense Fund", eventually dropped the moniker and business model in favor of "Intellectual Ventures" and a private equity model. Today IV holds over US$5billion worth of patents and extracts hundreds of millions in licensing fees a year. Recent news reports have suggested the licensees are not very happy 1 and Internet blogs and forums constantly post fears of licensing Armageddon.

When AST emerged publicly in 2008, and seemingly in response to IV, they sought to allay similar fears through its self-described "Catch & Release" model. After purchasing a patent and granting its members non-exclusive licenses to it, the patents are resold into the market. AST members, in effect, would be inoculated to any potential infringement cases.

However, in this arena, AST competes directly with IV, who has moved more quickly, independently, and often secretly, in purchasing patents. In contrast, industry insiders say AST does not yet have the procedures to act as quickly or efficiently. IAM magazine reports that "purchases have to be given the green light by members before they can happen – something that could potentially mean long delays and lost opportunities." 2

What remains to be seen is the role RPX will serve. Having promised not to assert patents it acquires, and also not rely on VC or corporate funding, the question is how RPX will operate. RPX claims details will come in October 2008, although as of this article's publishing, none have been released.

(Update 11/27/2008)
With respect to some of the shortcomings of both IV and AST, RPX does attempt to address the litigation issue by promising not to assert patents. Also, because RPX will act independently in purchasing patents, they would likely be able to react more quickly to certain "hot" patents than AST. However, RPX's subscription model does raise questions, such as the free-rider problem, which Amster discusses here.


The emergence of Intellectual Ventures, Allied Security Trust, and Rational Patent Exchange is just the beginning of a new era in IP. Today the market views IP ever more as an asset that can be traded and as a weapon that can be astonishingly effective. As a result, traditional participants in the industry have had to make adjustments, sometimes difficult ones, to adapt to the rise of NPEs, patent holding companies and patent pools and now, new organizations like IV, AST and RPX.

The next logical questions then, concern the effect these organizations will have on the industry. How will large corporations, who have financed these entities, react to ever increasing licensing payments? What of small inventors and businesses? Are these entities a form of anti-competitive measures by big business, as theorized by one blogger?3 Or will they provide inventors with better, fairer compensation? Will this ultimately provide consumers with more choices and lower prices because corporations have better access to technologies and fewer litigation suits? Or will it mean fewer choices and higher prices because corporations will be paying licensing fees that they may have traditionally ignored in the past. And finally, for our readers, what will be the affect in Asia, especially now since IV has expanded into the region.

Whatever the answers, all players and participants in the IP industry would be wise to keep an eye on the shift that is occurring—one that is already changing the way we look at innovation and intellectual property, and already changing the foundations of the IP industry.

Relevant Links:



11/07/2008 IP News & Blog Round-Up

  • What IP challenges face Barack Obama? Well, appointment of a new USPTO director and IP Czar, the Patent Reform Act and USTR Special 301, among many others. This article lists some of the most pressing issues and also links to Obama's official statement on technology here. (from IAM)
  • For those interested in EU, How to get a European patent - Pt 2. Recently updated, this "Euro-PCT Guide" covers procedure when the EPO acts as a receiving office, international searching authority, international preliminary examining authority, or designated/elected office. Find out more in Pt. 1
  • Despite the downward spiraling economy, "It's No Time to Forget About Innovation". An article with a treasure trove of quotes, including "The last thing you want to do with innovation is just throw money at it. It’s a very tricky balance", "hard times can be the source of innovative inspiration" and a personal favorite, "Creativity doesn't care about economic downturns.” (from NYTimes)
  • Production slowing you down? Try self replication. By coating micrometer-sized particles of metal, glass or plastic with specially-encoded DNA, scientists have discovered a way to "induce" those particles to self-assemble in to complex shapes and structures. And since each coated particle has these instructions, production is easily scaled up exponentially. (from New Scientist)


10/31/2008 IP News & Blog Round-Up

  • Your next battery may be organic and environmentally-friendly. - A Taiwanese professor has invented a chlorophyll battery powered by water that contains no toxic substances and extremely cheap to manufacture. ( from Taiwan CNA)
  • If No One Sees It, Is It an Invention? - No, not a warning on early publication... but an article on how an inventor used the power of the Internet--specifically, YouTube--to promote his ideas and a job in the process. ( from NYT)
  • Keep up with the changes in China's Patent Law. - A series of articles detailing and dissecting China's new patent regulations. This week's covers all three type of patents and also infringement issues. (from ChinaBio Today)


Photo by Karen EliotBy Charl Goussard, NAIP Legal Researcher


An increasing number of Asian companies are applying for patents from the EPO. But many patent rights holders (patentees as well as exclusive licensees), while accustomed to US International Trade Commission (ITC) seizure procedure, are unaware of the powerful customs regulations that exist in the European Union. One such regulation is Border Detention.

Border Detention is often a vital part of an intelligent IP business and strategy. The sensational San-Disk case, in which Sisvel (an Italian patentee) effectively blocked all San-Disk MP3 players from being sold or even entering the EU without a Sisvel license, is one example. A recent customs raid at IFA, also prompted by Sisvel, likely caused an untold number of sales contracts for companies like Hyundai and MSI to be lost to competitors, not to mention the public embarrassment.

The Border Detention regulation stems from the European Patent Convention, and is a powerful tool designed to protect the intellectual property rights (IPR's) of European Community members. As a result, the protection it offers patent rights holders should be a major consideration for registering patents with the EPO.


In order to facilitate and promote trade between member countries, the EU functions as a Customs union. Therefore when importing into the EU, as soon as the goods are cleared by any EU Customs office, they are free to move throughout the EU regardless of national borders. Goods may also be moved between various EU member states and stored without being Customs cleared, although such goods have to be cleared at some point if they are to be traded within the EU.

However, to prevent IPR infringement, EU member states are encouraged to promote cooperation between their respective customs authorities. Hence the introduction of the EPC Border Detention practice, governed by Regulation 1383/2003 EC, which provides for the detention of goods not yet cleared by Customs - the so-called transit regimes. Patent rights holders should thus apply for a Border Detention order against goods which may possibly infringe on their patents, before goods are cleared. This application may be logged at the customs office where the goods are first to enter the EU, where they are stored, or where they are eventually inspected. The patent rights holder need only prove that he/she has the right to the registered patent in the country where the allegedly infringed goods will enter the EU, be in transit, or be cleared. Compared to obtaining a seizure of imported goods from the ITC in the USA, it is much easier to get a border detention order against an alleged infringer within the EU (see fig. 1).

Fig. 1 Differences in Procedure between US ITC Seizure & EC Border Detention
US ITC SeizureEC Border Detention
Legal proceedings before the ITC resulting in a judgment before EXCLUSION ORDERAdministrative procedure to obtain Border Detention order - thereafter litigation and judgment
Administrative Judge decides on infringement and validity of patentNo administrative decision as to the infringement or validity of the patent
Applicant needs to prove that domestic industry will be harmed by infringing goodsNo requirement to prove harm to domestic industry
Appeal possible - Court of Appeals Federal CircuitNo appeal - administrative procedure
Only foreign produced products may be excludedDetention order available to prohibit both import or export of infringing goods

Ultimately, Border Detention is a particularly powerful tool in the European Union (EU). It is advisable for the patentee to seek patent protection in countries where the infringing products are likely to enter the EU or in the countries where those products will be cleared.


Firstly, in order to successfully apply for a detention of infringing products, the patent rights holder will have to supply the relevant Customs authority with the following facts:
    • characteristics of the infringing products,
    • origin of infringing products,
    • expected time and port of arrival in the EU,
    • possible distribution routes within the EU, and
    • proof of ownership or an exclusive license of the infringed patent.

No technical infringement details are required in the request to the Customs authorities ( i.e. The patent rights holder does not have to prove infringement).
Regulation 1383/2003 makes provision for ex-officio inspection and detention of goods by the Customs officials, but due to the technical complexity of patent cases, it is improbable that Customs officials will search for alleged patent infringements without patent rights holder’s instructions.

Next, the Customs authority will consider the documentation, and usually grant the patent rights holder’s request within a few weeks and issue a detention order for the goods.

The next step involves detaining the goods: Once the suspect goods have been located at the Customs office, the detention order will be attached. The Customs officials will then inform the patent rights holder of such detention. Patent rights holders are allowed to inspect the goods and to take samples for technical investigation. In addition, Customs officials will supply patent rights holders with the name and address of the consignee of the goods.

From the start of the detention, the patent rights holder will have 10 working days to file suit against the infringer. The national law of the country where the goods are detained will also apply for the infringement litigation. If an infringement suit is not filed within the given time, the detention order will be lifted and the goods will be cleared.

The detention order will be valid until the outcome of the patent litigation. The detained goods will then be disposed of as ordered by the national court.

Goods may however be released by Customs upon payment of security by the owner of the goods. Nevertheless, parties more than often reach settlements before courts adjudicate the matters.

Border Detention Procedure
Step 1.Step 2.Step 3.Step 4.
ApplicationCustoms ReviewDetentionLitigation
• Applicant supplies Customs with info on products• Customs receive info from applicant• Goods located & order attached• Applicant files suit at National level
• Proves ownership of patent• Border Detention ordered within two weeks• Customs informs applicant / consignee• File suit in country or countries who granted BD orders

• Applicant may inspect & retain samples of detained goods

• 10 DAY period
Preparation phase: goods not attachedGoods attached: infringement must be proved

*Goods may be released by customs upon payment of a security by the proprietor of the goods

Practical Advice: Apply for patents in the Netherlands

For patent rights holders, a valuable venue for border detention orders is the Netherlands. Both Rotterdam harbor and Schiphol airport are major ports for the EU. Furthermore, the Dutch Customs officials are well experienced and highly effective in granting border detentions.

To add to this, the Netherlands have a sophisticated patent court in The Hague. Due to the procedural rules and the court’s renowned productivity, a ruling on patent infringement in the court of first instance may be handed down within only 12 months.

Holders of Dutch patent rights are thus guaranteed of an experienced team of Customs officials, swift and efficient border detentions against infringers, and a relatively quick infringement litigation process.


Border Detention in EU countries is a cost effective and a powerful tool available to patent rights holders. Along with market intelligence of issues such as competitors’ distribution channels, it can be very effective in keeping them at bay by obstructing infringing products from entering or leaving the EU. Therefore IP strategists should work closely with all members of management to fully utilize Border Detention for their company's benefit.

Relevant Links:
EPC Regulation 1383/2003 (pdf)


10/24/2008 IP News & Blog Round-Up

  • Protecting trademarks around the globe. - Directed at US businesses, this article lists out some basic steps on how to begin protecting trademarks globally. Most important to note: trademark applications in China may take up to 3+ years, so the results may not be immediate, but as a first-to-file system, it is still best to take quick action. (from China Law Blog)
  • Despite being a part of China, with regards to IPR, Hong Kong is very different. - For one, all IPR (with the exception of copyright) must be registered separately in China and HK. Additionally, in HK legal proceedings may be conducted in English, compared to Chinese-only for China. More can be found in this article by Danny Friedman of IP Dragon.
  • In the US 1 out of every 3 companies will be sued for IP infringement. - Compare this with only 21% of companies having initiated an infringement suit. Also of note, 52% of tech firms and manufacturers have been sued in the past three years. A report on litigation trends provides an insightful look into the state of IP infringement. Download the study (registration required) here.
  • Who has the spirit of innovation? - Many companies do, according to their CEOs and marketing companies. But for the real innovators, listen to Businessweek, who, each week from now until the end of 2008 will profile a new individual who truly embodies innovation. (from Businessweek)


By Dean Tan
Translated by Jeffrey Chang

The IPR Holders listed in this index are categorized by the following technologies:
    6. RFID

The 59 IPR Holders indexed here are further classified into types:
    Patent Pools: 1, 2, 3, 5, 6, 7, 11, 13, 14, 16, 17, 19, 21, 25, 34, 35, 36, 41, 43, 46, 54, 58, 59
    Patent Holding Companies: 4, 12, 31, 40, 49, 50, 51, 52, 53, 56, 57
    Large Enterprises: 8, 9, 10, 15, 18, 20, 22, 23, 24, 26, 28, 29, 30, 32, 33, 38, 39, 42, 44, 45, 47, 48, 55
    Individual Inventors: 27, 37

    1. MPEG LA
Patents on: MPEG-2, ATSC, AVC/H.264, VC-1, MPEG-4 VISUAL, 1394; in-development technologies such as: Blue Ray Disc, DRM.

    2. Sisvel
Patents on telcom technologies, including: MPEG audio, TOP teletext, DVB-T, WSS; in-development technologies such as: DVB-H, CDMA 2000, DMP, Digital Media Project.

    3. Audio Video Coding Standard Workgroup of China
A Mainland Chinese organization

    4. DivX
Patents on high-definition digital media format technologies for PCs, mobile devices and televisions, including: high-definition DivX codec, DivX player, h.264.

    5. Sipro Lab Telecom
Patents on telcom technologies, including: G.729, G.723.1, G.729.1, G.711.1; in-development technologies such as: ITU-T G.729.1, ITU-T G.729.1.

    6. VoiceAge
Patents on speech and audio compression technologies, including: AMR (Adaptive Multi-Rate), G.722.2, AMR-WB+ (3GPP), G.729; G.723.1, ACELP®.net, VMR-WB, EVRC, etc....

    7. Thomson
Patents on MP3 encoding/decoding/software/broadcasting/streaming, including: MPEG-1/MPEG-2 Layer 3 (mp3), mp3PRO, mp3surround.

    8. Dolby Laboratories
Patents on lossy audio compression, including: Dolby® Digital (AC-3), Dolby® Digital Plus, Dolby® TrueHD, Dolby® Digital Live, etc....

    9. Qualcomm
Patents on an extremely broad range of wireless technologies, including: cdmaOne, CDMA2000, WCDMA, CDMA TDD, GPRS/EDGE, OFDMA, microprocessors for commercial wireless devices, encryption technology, mobile OFDMA technology, Mobile Multicast Media Technologies, Interferometric Modulation (IMOD) display technology, etc….

    10. Ericsson
Patents on a broad range of mobile and broadband Internet technologies, including: 3GPP IMS (IP Multimedia Subsystem), GSM/GPRS, TD-SCDMA, WCDMA/HSPA, cdma2000, MBMS (Multimedia Broadcast Multicast Service), DVB-H (Digital Video Broadcasting - Handheld), etc....

    11. Open Patent Alliance
Patents on wireless, in-development technologies such as: WiMAX, IEEE 802.16e.

    12. Wi-Lan
Patents on broadband wireless technologies, including: CDMA, DOCSIS, DSL, Wi-Fi, WiMAX (4G) – IEEE 802.16, V-chip.

    13. NGMN
Patents on broadband wireless technologies, including: Next Generation Mobile Networks.

    14. 3G Licensing Limited
Patents on 3G technologies, including: W-CDMA related products.

    15. Interdigital
Patents on a broad range of wireless communication technologies, including: dual mode modem technology with high-performance HSDPA and HSUPA, 2G baseband solution, 3G baseband solution, dual mode baseband ASIC, TDMA and CDMA wireless systems, etc....

    16. Variety of Wireless Companies
Patents on next generation wireless networking, in-development technologies, such as: Long-Term Evolution (LTE) technology.

    17. United License for Digital Age
Patents on Digital TV Tuner/electronic program guides, including: Association of Radio Industries and Business (Arib) Standards.

    18. Macrovision Solutions
Patents on Digital Home Entertainment Protection/Enhancement/Distribution/Management, including: Interactive Program Guides (IPGs), ACP technology (copy protection).

5. OPTICAL STORAGE MEDIA - DVD/ HD DVD/ Blue-Ray Disc/ CD Back to Top
    19. DVD6C Licensing Agency
Patents on DVD hardware/software technologies, including: DVD-ROM, DVD-Video, DVD-Audio, DVD-R, DVD-RAM, DVD-RW, DVD Video Recording, +R/+RW Discs.

    20. Philips
Patents on a broad range of technologies, including: Mp3, AVC/H.264, MPEG-2, MPEG-4 Audio, UMTS, VC1, Blue-Ray Disc Player, Blue-Ray Disc Recordable Disc, CD Disc, CD Player, CD-RW Disc, DVD, HD DVD, etc….

6. RFID Back to Top
    21. RFID Consortium
Patents on RFID reader and label products (working with Via Licensing), and in-development technologies such as: UHF RFID.

    22. Microsoft IP Licensing
Patents on a broad range of IT-related technologies, including: algorithms & theories, hardware development, human-computer interaction, machine learning, adaptation and intelligence, multimedia and graphics, security and cryptography, social computing, system, architecture, mobility and networking, information search and retrieval.

    23. Microsoft Windows Media Licensing
Patents on Windows Media Related Products and Services, including: Windows media DRM, PlaysForSure-verified, Windows Media Technologies for Consumer Electronic Devices, windows media audio decoder and encoder, Windows Media Encoder, etc….

    24. Intertrust Technologies
Patents on DRM and Trusted Computing technologies, including : Marlin, OMA DRM.

    25. SOI Industry Consortium
Patents on silicon-on insulator (SOI) innovation in Semiconductor Manufacturing.

    26. Mosaid Technologies
Patents on semiconductor and telecom technologies, including: Wireless technology, Pseudo-SRAM, DRAM, SDRAM, Multi-level DRAM, Computational memory and graphics, Embedded DRAM, Networking.

    27. Gertrude F. Neumark
Patents on fundamental low resistivity semiconductor doping methods; able to make high spectral range LEDs, such as blue and green, commercially feasible.

    28. Freescale Semiconductor
Patents on a wide variety of IC/Semiconductor technologie; Working with IBM on CMOS and SOI, low-power and high-performance technologies; over 5500 patent families.

    29. Tessera
Patents on semiconductor packaging, interconnect and consumer optics technologies, including: CSP, µPILR Interconnect Platform, MCP, Wafer-Level Camera, Wafer Level Packaging (WLP), Micro-Optic Fabrication, Camera Lens Focusing, OptiML™ UFL solution, OptiML™ Zoom solution.

    30. Rambus
Patents on a broad range of technologies in Chip Interfaces, System Design, and Packaging, including: logic and controller interfaces, memory architecture, high-speed parallel and serial links, low-power signaling technologies, XDR DRAM device for HDTV, and others.

    31. Alliacense
Patents on a broad range of fundamental patents in microprocessor, Digital Signal Processor, embedded processors, and System-on-Chip; logic circuits; and flash read/write technology, including software, firmware, hardware, and mechanical designs, including: Moore Microprocessor Patent™, CORE Flash™, Fast Logic™, multicore processors, flash media storage, microprocessor architecture, high-speed logic circuits.

    32. ARM
Provides turnkey solutions in various licensing options such as foundry license, implementation license, architecture license, etc.., including: 32-bit embedded RISC microprocessors - microprocessor architecture (turnkey), system-on-chip.

    33. Alcatel-Lucent
Over 25,000 active patents and patents on a broad range of telecommunication technologies, including: multimedia and convergent services and applications, new service delivery architectures and platforms, wireless and wireline, broadband access, packet and optical networking and transport, network security, enterprise networking and communication services, fundamental research in nanotechnology, algorithmic, and computer sciences.

    34. Cablelabs
Non-profit R&D consortium with patents in cable telecommunications technologies, including: DOCSIS® modems technology, PacketCable-compliant products, DFAST for UDCP, VOD metadata technology.

    35. S2 Licensing
Patents on Digital satellite transmission specification, including: DVB-S2.

    36. Allied Security Trust
Patents on a broad range of IT-related and telecommunications technologies

    37. Ronald A. Katz
Patents on inventions related to toll free numbers, automated attendant, interactive call processing services, automated call distribution, voice response unit, computer telephone integration and speech recognition.

    38. Aware
Patents on DSL technologies used in CO and CPE applications, including: DSL chip set, VDSL2, ADSL+, ADSL2, ADSL.

    39. Nokia Intellisync
Patents on communication data synchronization infrastructures, including : Intellisync PIM Platform, mobility infrastructure and synchronization platform, Intellisync Mobile Suite Platform.

    40. Burst
Patents on video and audio delivery software for IP networks

    41. MSF Campaign for Access to Essential Medicines
Patents on AIDS medicine, antiretroviral drugs.

    42. GE Life Sciences
Patents on cellular biology applications for visualizing proteins within living cells without the need for chemical staining, including: Green fluorescent Proteins (GFPs), Screening & lead profiling for cellular assays, Track proteins in living cells, Functional genomics.

    43. Utek
Patents on a very broad range of life sciences technologies.

    44. Unidym
Patents on mass production of carbon nanotubes, including: compostion of matter for high-purity CNTs, derivatized CNTs, electrical conductors containing CNTs, CNT ropes, CNT composites, CNT dispersions, CNT arrays and CNT fibers, CNT Synthesis, post-synthesis treatment of CNTs, modification and manipulation of CNTs, Articles of Manufacture for CNT-containing products, etc....

    45. Dendritic Nanotechnologies
Patents on manufacturing precise nanostructures having high surface area to volume ratio, including: Priostar dendrimers.

    46. Geron
Patents on animal cloning technologies, including: nuclear transfer cloning technology.

    47. Dow Chemical
Patents on petrochemical technologies, including: Polypropylene, Ethylene Oxide/Glycol, Low Pressure Oxo, purified terephthalic acid, Ceramics, lasma, and others.

    48. Exxon Mobil
Patents on petrochemical technologies, including: Selective Cracking Optimum Recovery (SCORE) ethylene process, aromatics production, zeolite catalysts, steam cracking technology, furnace technology, SCORE ethylene process, low density polyethylene technology, polypropylene technology.

    49. Industrial Technology Research Institute
Main goal is to help technology companies from Taiwan to compete globally. Patents on: Communication & Optoelectronics, Precision Machinery and MEMS, Materials and Chemical Engineering, Biomedical Technology, Sustainable Development, Nanotechnology.

    50. Massachusetts Institute of Technology
Patents on: RNAi (Tuschl Patents), Optical Communications, Computer Security Software Technology, Software Technology, Reagents & Materials, and others.

    51. University of Texas at Austin
Patents on: computing technologies, life sciences, nanotechnologies, physical sciences, and 211 other titles.

    52. Stanford University
Patents in the life sciences industry: agriculture, computer, diagnostic, genomics, healthcare; physical science industry: chemical, communications, computer, internet, material, MEMS, nanotechnology, photonics, semiconductor, recombinant DNA cloning, chimeric receptors, fluorescent conjugates for analysis of molecules, functional antigen-binding proteins, fiber optic amplifier, FM sound synthesis, and more. http://www.iphandbook.org/handbook/ch17/p13/

    53. University of California
Patents in: Biotechnology, Chemicals, Computer Hardware, Energy, Advanced materials, Pharmaceuticals, Photonics, Computer Software, Telecommunications & Internet, Transportation, and more.

    54. Via Licensing
Patents on multimedia distribution and broadcasting, including: IEEE 802.11, Multimedia Home Platform, MPEG-2 AAC, MPEG-4 Audio, OpenCable Applications Platform (OCAP), TV-Anytime TVA-1; in-development technologies such as: Agora C, UHF-RFID, Digital Radio Mondiale, IEEE 802.11 Networking, IEEE 802.16 Networking, MPEG-4 Audio, Near Field Communication.

    55. IBM
Patents on a broad range of IT technologies, including: Display, Network Computing, Microelectronics, Storage, Software, Server.

    56. Acacia Technologies
Over 97 patent portfolios on a broad range of technologies, including: semiconductor, MEMS, audio/video, computer, database, DRAM, image processing, flash memory, microprocessor, peer to peer communications, pointing device, projector, and more.

    57. Federal Laboratory Consortium for Technology Transfer
Patents on a broad range of technologies, including: advanced scientific computing, basic energy, biological science, environmental research, fusion energy, nuclear physics, vehicular propulsion, sensors, aeronautical systems, microfludics, nanoelectronic, hydrogen-from-coal, clean coal, oil and natural gas, gas storage technology, and more.

    58. Spark IP
Patents on a broad range of technologies with over 8900+ technologies for licensing.

    59. Exploit-IP
Patents on a very broad range of technologies ; supported by the Singapore Ministry of Trade & Industry


An Index of IPR Holders - Part I: Introduction

By Dean Tan
Translated by Jeffrey Chang
Original article available here (Chinese)

In today's high tech industries, so-called "patent pools" or "patent holding entities" are becoming increasingly common. As these types of intellectual property rights (IPR) holders grow in both number and size, they have also begun developing and commercializing their patent collections, thereby growing in influence as well. Consequently, these intellectual property holdings have not only encouraged the rapid development of high-tech industries and other emerging technologies, but also become a subject IP professionals cannot ignore.

To help our reader's avoid unintentional infringement of patents, or just to provide a single, convenient reference resource for important patent information, this article has collected and listed below an extensive set of links to major IPR holders in high-tech and other advanced technology industries. The links are classified as such: general and wireless communications/information technology, Internet (including multi-media broadcasting network), digital TV/home entertainment, optical storage media (including Blu-ray Disc), mass communication, semiconductor processes, biotechnology/genomics technology, integrated circuit manufacturing, nanotechnology and other emerging technologies.

IPR Holders in the Index

Here we will briefly introduce the types of IPR holders who comprise the index:

Patent pools are usually a consortium of patent holders who have brought together or cross-licensed their patents in order to create a single large "pool" that can generate considerable synergies. A potential licensee would therefore need only deal with a single transaction, yet obtain the right to use the technologies from multiple patent holders.

A licensing transaction like the one above possesses more reasonable, transparent, equitable and user-friendly conditions, and as a result has largely replaced the traditional approach of negotiating a separate patent license with each rights holder. Another advantage is that members of the patent pool have mutually agreed to allow the use of each other's patents without the need for licensing fees.

Another type of IPR holder is a "Patent Holding Company or Entity", usually a company set-up by a single large enterprise or research institution to consolidate and administer a large number of related patents. The collection will usually create significant synergies. As with patent pools, potential licensees will only need deal with a single transaction for the right to use the technologies legally.

In addition to patent pools and patent holding companies, another type of IPR holder listed is the large multinational technology company that focuses on "high quality" R&D , and who as accumulated a large patent portfolio as a result. Usually since these companies have little interest in commercializing these technologies, they are happy to bundle the patents and license them out for development by others.

Lastly, the index includes a small number of individual inventors who may not hold many patents, but the ones they do hold are important and are essential patents.

Essential Patents & Complementary Patents

Whether facing patent pools, patent holding entities, or an international corporation with a huge patent portfolio, a patent licensee must research in advance what essential or complementary patents reside in these entities' portfolios. Through this way can a licensee can then legally acquire and utilize the appropriate patent rights.

What defines an "essential patent"? According to the European Telecommunications Standards Institute (ETSI), an essential patent is:
an IPR which has been included within a standard and where it would be impossible to implement the standard without making use of this IPR. The only way to avoid the violation of this IPR in respect of the implementation of the standard is therefore to request a license from the owner.
What defines a "complementary patent"? When the claims of two patents (or more) cover the same areas, and utilizing the technologies of one cannot be done without utilizing the technologies of the other, these are called complementary patents.

Here we have elaborated on essential and complementary patents in order to remind those engaged in research that, in addition to concentrating on creating the best features for the product, to also keep a longer-term perspective. When collecting information to design-around patents, also consider the development of future products that may rely on the technology and the potential for complementary patents. Doing this will allow licensees to easily and effectively utilize the patent and its technologies.

Continue to Part II--the Index >


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