Innovaon and Development: Licensing and antrust

28 October 2016

Dina Kallay Director, Competition & IP Ericsson [email protected]

views expressed are those of the author and do not necessarily represent the views of Ericsson WHAT DOES THE EVIDENCE SHOW?

Compeon and Globalizaon | 28 October 2016 | Page 3 Where there is a competitive problem

Typical Consequences include:

Rising prices

Stagnant innovaon

Limited market entry / Fluctuaon Rising prices?

§ Average mobile subscriber cost per megabyte (2005 - 2013) : -99%

§ Smartphone: USD 40 (July 2016 → as low as USD 4)

§ Network infrastructure cost: - 95%

Boston Consulng Group, The Mobile Revoluon, 2015 Stagnant innovation? § Data-transmial speeds from 2G to 4G: 12,000 mes faster § Health (remote surgery) § Economy (remote educaon, companies based on connecvity) § Security (Nokia, Siemens, Motorola and Alcatel § 2016: if we look “only” at a paral list of mobile phone manufacturers: Apple, Samsung, Huawei, BlackBerry, Google, Xiaomi, Blu, Foxconn (FIH Global), LG, Pantech, Acer, ZTE, Bq, GeeksPhone, Gradiente, Posivo, DataWind, Amoi, BBK, Coolpad, Cubot, Gfive, Gionee, Haier, Hisense, Konka, Letv, Meizu, Qihoo 360, Wasam, Technology Happy Life, Ningbo Bird, Smarsan, Zopo Mobile, Lenovo, Jablotron, Verzo, Jolla, Archos, Wiko, Videocon, Groupe Bull, MobiWire, AEG, Grundig Mobile, Telefunken, Tiptel, Celkon, IBall, Intex Technologies, Karbonn Mobiles, Lava Internaonal, LYF, Micromax Informacs, Onida Electronics, Ringing Bells, Spice Digital, Xolo, YU Televentures, Nexian, Evercoss, MITO, Polytron, Advan, Brondi, NGM, Olive, Onda Mobile Communicaon, TelitKyocera Communicaons, NEC, Panasonic, Sansui, Sharp Corporaon, Sony Mobile Communicaons, DoCoMo, Just5, M Dot, Ninetology, Kyoto Electronics, Lanix, Zonda, Fairphone, John's Phone, Philips, Koryolink, QMobile, Voice Mobile, Advance Telecom, TCT, Dell, Microso, etc: Exploitation? Royalty stacking? Mobile SEP Licensing Fee Revenues and Royalty Yields on Global Handset Market

Yields are total licensing fee revenues lump sums and running royales as a percentage of USD 410 billion in total global handset revenues

Keith Mallinson, WiseHarbor, on cumulave mobile-SEP royales. For IP Finance, 19th August 2015 hp://www.wiseharbor.com/pdfs/Mallinson%20on%20cumulave%20mobile%20SEP%20royales%20for%20IP%20Finance %202015Aug19.pdf Trends in highly compeve increasingly mulnaonal markets › Compeon complaints as a “hold out” strategy

› Internaonal forum shopping amongst naonal antrust agencies

› Misrepresenng naonal compeon law to other jurisdicons

› Solicing support from own naonal compeon agency that is not necessarily grounded in compeon evidence/analysis

› Exploing newer compeon agencies’ lack of intellectual property experse and industry pracce to spread misinformaon

Top 10 MYTHS/misconceponS re patents & standards (1)

T1 That F/RAND assurances are mandatory or aach automacally R F/RAND assurances are voluntary T2 That F/RAND assurances are in place only for the benefit of future technology-users implemenng the standard R They are equally in place to assure adequate compensaon for the contributors developing the standard [and they assure access between the original contributors] T3 That a F/RAND assurance is a commitment to license R F/RAND assures access (= prevents exclusion) Access ≠ license because of the exhauson doctrine

Top 10 MYTHS/misconcepons re patents & standards (2)

T4 That technology inside standards always belongs to those acvely parcipang in their development R No….. especially in SDOs that crib from other SDOs T5 That when a standard is developed, there are always similar soluons/technologies suggested that don’t make it into the standard R No… and somemes similar technologies are proposed for parallel standards that fail in the marketplace T6 That companies are always willing to give F/ RAND assurances R They usually do, unl the standardizaon eco- system begins to break down, e.g. when F/RAND is not defined by a consensus process. See for example….

DECLINES to provide F/RAND assurances Decline in non-duplicate RAND Leers of Assurance for IEEE Standards

Top 10 MYTHS/misconceponS re patents & standards (3)

T7 That patents need to be individually declared to SDOSs as essenal (i.e. declared by patent number) R Many SDO policies allow for “blanket declaraons” for all patent that may become essenal to a standard T8 That contribuon of cung-edge technologies into robust standards will connue R No… e.g. standard development at IEEE is slowing down Somebody has to be willing to invest/contribute T9 That standardized technology is valuable only because it is part of a standard R No… in ICT it is oen valuable because it’s amazing

Top 10 MYTHS/misconceponS re patents & standards (4)

T10 That standards are mostly about interoperability R ICT standards are typically performance standards

See hps://www.youtube.com/watch? v=3wczxzYMT-U

Quesons? Comments?

Dina Kallay Director, Compeon & I.P Ericsson [email protected]