Microsoft has issued a statement expressing their support for international industry standards regarding the licensing of essential industry patents. Calling such standards “vitally important” to the further growth of the internet and of the mobile computing industry, Microsoft pledged to license the essential patents it holds on “fair, reasonable and nondiscriminatory terms.”
While FRAND rules are currently in place in Europe and elsewhere requiring companies to license essential patents to others - even major rivals - the rules are somewhat unclear. Microsoft’s statement lays out the company’s plans for working fairly within the current rules. In the statement, Microsoft pledges to adhere to all prior agreements regarding FRAND licensing, and to refrain from taking legal action against other firms on the basis of essential patents. Microsoft also promises to make all their essential patents available to other companies, and promises not to transfer any of their essential patents without securing agreements from the transferees to abide by similar conditions.
Meanwhile, news came to light yesterday of a letter Apple had sent to the European Telecommunications Standards Institute on November 11, 2011. In the letter, Apple asks the ETSI to enforce “a more consistent and transparent application of FRAND, especially related to the licensing of cellular standards essential patents.” The letter calls on the ETSI to implement basic rules for FRAND licensing, including standard appropriate royalty rates, a common royalty base, and prohibiting companies from seeking injunctions against one another over essential industry patents. A copy of Apple’s letter may be seen here. Late last month Cisco, which also owns a significant number of essential patents, posted their own letter to the ETSI expressing their support for Apple's position.
While the kinds of rules that Microsoft has set for itself and Apple is calling on the ETSI to set would not eliminate patent litigation, they would certainly reduce it. That would be good news for a lot of tech companies, including Apple. Apple is currently embroiled in a number of legal battles over patent infringement. Motorola, HTC, and Samsung have all sued - and been sued by - Apple for infringement on a variety of patents. Some of these suits deal with the kind of industry essential patents that these new rules would deal with. The European Union already has FRAND licensing rules in place, but companies are inconsistent in adhering to them. In fact, the European Commission recently announced that it was conducting an investigation of Samsung concerning its violation of FRAND agreements. Though the EC’s announcement did not specifically mention Samsung’s patent war with Apple, that is almost certainly the subject of the investigation.
Meanwhile, Motorola recently won injunctions against Apple’s iCloud service, and against the online sale of several of Apple’s 3G-capable iOS devices, including the iPhone 3GS, the iPhone 4, and the 3G-enabled version of the iPad 2. The injunctions required Apple to remove the infringing devices from their online store in Germany and make changes to the way iCloud handles the delivery of email to users’ devices. While the iCloud injunction remains in place, the one requiring the removal of the 3G iOS devices was quickly overturned, prompting Apple to put the devices back up in the online Apple Store quickly.