Groups push for action on intellectual property

Vodafone, T-Mobile, Telefónica and other large telecoms groups will on Tuesday demand an overhaul of the way Europe’s main telecoms standard-setter deals with intellectual property rights.

The groups’ criticism is directed at the European Telecommunications Standards Institute, the body responsible for standardisation of information and communication technology in Europe. ETSI’s biggest success to date has been the creation of the GSM mobile phone standard, but more recently the body has been attacked for its allegedly lax rules on intellectual property rights [IPRs].

The telecoms groups have now tabled a proposal for today’s general assembly of ETSI members warning that the body’s current IPR rules leave companies exposed to “unsustainable” and “excessive” demands for royalties. They even warn that the “benefits of standardisation are being eroded”.

The European Commission has already demanded that ETSI tighten its rules to ensure that none of its members can pull off a so-called “patent ambush”.

The practice usually involves companies trying to turn their patented technology into an industry standard without telling other companies about their patent claim. If their technology is accepted as a new standard, companies can then demand royalties from other groups forced to use the patented technology.

Last month, Nokia and other leading handset makers formally complained to Brussels about Qualcomm, the US mobile chipmaker. They alleged that Qualcomm had unfairly used its patents on third-generation technologies to squeeze excessive royalties and licensing deals out of the industry.

Vodafone and its allies want ETSI to improve its policies so as to avoid similar disputes in the future. They suggest that IPR terms should be agreed before a standard is even set, and argue in favour of putting a cap on the “maximum royalty payment from individual IPR users to the combined IPR holders”.

Their proposal, seen by the Financial Times, states: “Cumulative patent royalties/‘patent stacking’ can raise the licence burden to an extent unbearable to our industry.”

It adds: “IPR licence fees have become a commercial issue that is limiting the industry’s ability to continue to drive down costs. The issue has the potential to limit competition through direct and indirect impact on pricing.”

Vodafone and the other groups point out that the problems outlined in their proposal not only affect third-generation, but technologies such as MP3 and copy protection.

The proposal’s other sponsors are Alcatel, Hutchison Europe, Orange, Portugal Telecom, Research in Motion, SFR, Swisscom, TDC, Telecom Italia, Telenor and TeliaSonera.