Patent Challenges for Standard-Setting in the Global Economy Lessons from Information and Communications Technology (2013) / Chapter Skim
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8 IPR and Standards in Emerging Economies
8 IPR and Standards in Emerging Economies
Pages 121-140
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From page 121... ...
Unlike Japan's industrial development and to a lesser extent South Korea's, where standards development was seen by many observers as strictly a tool of industrial policy, the recent development experiences of China, India, and Brazil are conditioned by their membership in the WTO and the necessary 121
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From page 122... ...
All three countries have been challenged, therefore, to build capabilities for intellectual property creation and standards development in order to alter the terms of the relative gains and capture more value from engagement with the global economy. This objective has inevitably led to questions about the respective roles of the state and industrial enterprises in building those capabilities, and about the compatibilities of national technological development efforts with international, especially WTO obligations.
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From page 123... ...
China's experience from the two decades of reform and engagement with the international economy after 1980 led it to conclude that control over standards, and the intellectual property contained therein, conferred considerable market power, while being solely an IPR-poor "standards taker" put it at a considerable economic disadvantage especially with regard to royalty payments. Hence, major new initiatives were begun after 2000 to develop national standards and IP strategies (Ernst, 2011; Suttmeier and Yao, 2011)
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From page 124... ...
In striving for institutional reconciliation of markets and government, Chinese approaches to standards have also sought to find the proper balance among protecting the interests of private parties who have made investments in technological development and intellectual property, establishing standards on sound technological foundations, and achieving some sort of equity in the distribution of the benefits of standards development. In developing its standards regime, the judgments reached on how to reconcile state versus market roles in standardization and achieve that balance among competing needs has not always accorded with the values and experience of foreign governments and companies, and have, at times, left China in an uncomfortable position vis–a-vis foreign stakeholders in established international standardization and IPR regimes (An, 2012)
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From page 125... ...
NDRC and MOST play important roles in promoting China's innovation strategy through subsidies, R&D support, and other policy preferences for standardization and intellectual property development work. SASTIND plays an important role in promoting standards development in military related industries, and SCITO and the Ministry of Public Security have been important in areas of information security standards.
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From page 126... ...
The policy did not distinguish between essential and nonessential patents, provided for compulsory patent pool participation in the case of mandatory standards, and imposed on foreign companies' obligations which had the effect of privileging Chinese companies. Not surprisingly, it was not well received by foreign stakeholders operating in China, who were given only limited access to Chinese standardization working groups.
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From page 127... ...
"necessary claim") for key terms in the policies, an explication of the conditions for understanding IPR contributions to the standardization process, guidance on disclosure requirements, and suggested licensing options (FRAND-RF, patent pool, FRAND)
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From page 128... ...
In November 2009, in the face of a growing concern that there was little policy consistency in the SSO approaches to IPR matters, in spite of the CESI and CCSA initiatives, a revised "Proposed Regulations for the Administration of the Formulation and Revision of Patent Involving National Standards" was issued by SAC. While noting improvements, comments from international stakeholders again called attention to provisions in the draft which seemed to be at odds with provisions found in the policies of international SSOs and which failed to provide adequate protection to the rights of IPR owners, especially with regard to licensing terms and to compulsory licensing in the case of mandatory standards (Willingmyre 2009, 2010)
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From page 129... ...
It has also commented on Chinese reluctance to recognize as "international standards" those standards developed by U.S.-based firms which have not been approved by ISO, ITU, and IEC in spite of the fact that they are often otherwise globally accepted and meet WTO requirements for international standards. Like the European Chamber, AmCham has also expressed concern about rights of participation in some Chinese technical committees in spite of SAC regulations intended to allow foreign invested enterprises registered in China to participate and vote in technical committees.
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From page 130... ...
the patent. China's Antimonopoly Law has also been a matter of concern to foreign companies who fear that they could be held in violation of that law for failing to license technology that may be needed for the innovation needs of a third-party, potentially establishing market dominance under Chinese definitions (AmCham, 2012)
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From page 131... ...
These suits alleged that the latter had used its dominant market position to deny licenses to Huawei on FRAND terms. In the first case, Huawei alleged that InterDigital had a dominant market position in China and the United States in the market for the licensing of essential patents it owned and abused its market power by engaging in differentiated pricing, tying, and refusal to deal.
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From page 132... ...
While detailed reform proposals have yet to appear, it is likely that a number of the institutions involved with standardization and intellectual property policies will be affected. In addition to this institutional uncertainty, approaches to standardessential patents may also be affected by changing attitudes towards intellectual property.
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From page 133... ...
Unlike China, however, India had, until recently, shown less of a strategic orientation towards developing its own standards and intellectual property, preferring instead to rely on established international standards, and on international practice for developing policies affecting patents in standards. More recently, though, awareness that its huge market and distinctive social and physical conditions present interesting technological opportunities has prompted much more attention to Indian standards development and the creation of Indian intellectual property.
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From page 134... ...
It maintains regular interaction with ETSI and the ITU and participates in a number of other international standards setting bodies, such as ITU-T, the WiMAX forum, IETF, IEEE, and the like. As with standards bodies under BIS, it appears that TEC also does not have a well-established IPR policy.
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From page 135... ...
, Association of Unified Telecom Service Providers of India (AUSPI) , Tejas Networks, TCOE India, CEWiT, Ericsson, Qualcomm, Nokia Siemens Networks, IIT Bombay, IIM Ahmedabad.
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From page 136... ...
. Most recently, the government of India announced the development of the Telecom Standards Development Society, India (TSDSI)
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From page 137... ...
As indicated in the National Telecom Policy, however, there seems to be a growing appetite for government supported indigenous Indian standards development efforts incorporating Indian intellectual property. India is thus at an interesting transitional point where the reconciliation of emerging Indian industrial policy objectives and harmonization with international practices are likely to face new challenges.
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From page 138... ...
Given the growing size and importance of these economies, the ways in which they approach the development of their domestic IPR and standards regimes will have important implications for the norms and institutions by which international standardization and IPR affairs are governed. In each of the countries reviewed, we see interesting tensions between tendencies toward harmonization with international norms and practices and tendencies towards more techno-nationalist agendas supporting the protection of national industries and the building of national champions.
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From page 139... ...
government can contribute to the development of these standards regimes, the fact that they are all in varying stages of formation suggests that there are possibilities for mutually beneficial interactions, especially with regard to education, training and raising awareness as to the importance of developing IPR policies in the early stages of building SSO capabilities. As the AVS case illustrates, an awareness of international practices combined with good counsel from knowledgeable foreign experts can lead to the development of positive policies and procedures which avoid pitfalls experienced by others.
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From page 140... ...
140 Patent Challenges for Standard-Setting in the Global Economy Representative, and the National Institute of Standards and Technology should closely monitor and report on continuing developments in these countries and other major emerging economies regarding standard-setting and the management of intellectual property.
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