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Microsoft v. Motorola Trial in Seattle, Day 4 - Motorola's Opening Statement ~pj Updated
Saturday, November 17 2012 @ 02:47 AM EST

Our reporters were in the courtroom again Friday at the Microsoft v. Motorola trial in US District Court in Seattle, trying to figure out what Microsoft should pay Motorola for its FRAND patents.

Today was the day Motorola presented its opening statement. It had asked to do it as it began its side's presentation. Microsoft has presented, including today, 10 witnesses. Today, Motorola began its side of the story. Phil Dawson summarizes Motorola's opening statement like this:

Microsoft wants low pool rates based on multilateral ex ante negotiations. This does not reflect real-world negotiations. This model does not consider the strength of Motorola's contributions. Other important patent holders rejected the MPEG LA pool. Motorola seeks to simulate a real-world negotiation that would have happened. Motorola will compare the strength of their patents vs. Microsoft patents. Multiple witnesses from multiple companies will attest to how bilateral negotiations would work.


Here is Phil Dawson's report:

Judge James Robart - Room 14106 - Friday, 11/16/12 - Day 4

Issue of Sealing Documents:

Discussion of letter from Motorola. Judge uses “3 blind men and an elephant” metaphor about how they are feeling their way around the problem of what to do with sealed evidence and each is feeling a different thing. Judge sees it as Motorola's problem. It is some of the most important evidence though. Judge accepts new and improved redacted materials. Court will continue to not display confidential docs on the large courtroom screen, and companies can remain unnamed, but judge says that company names matter as to context. Deals with smaller companies do not fairly compare to deals with companies like IBM, Google, Apple, etc. Judge will consider an appeal advisory before he publishes.

Motorola replies to judge's comments. Counsel makes a remark about how he feels like he is "in the lions' den." Judge says he's glad he did not call it a zoo. (Chuckles in court.) No witnesses today that will discuss sealed matters. Judge says he will allow avoiding naming company names--using "numbered exhibits".

Counsels can still appeal to Federal Circuit about matters the judge intends to publish in his ruling.

Motorola counsel said they would expedite that request to speed things up for the judge.

Judge said that expediting may not matter because it will take him until at least springtime before his decision is published.

Prospect of separately sealed portion on Tuesday is discussed. Judge says this is not needed.

Microsoft says issue is comparability--will need to discuss specific products to determine that.

Motorola asks if materials can be kept out of the record. Short answer is once submitted, it's in the record. Don't submit it if you don't want it in the record.

Microsoft's 9th Witness, Prof. Timothy Simcoe:

C.V. submitted. Asst. Prof at Boston University. His focus is on standards-setting organizations (SSOs). Published many articles. SSOs have an interest in wide implementations and would like to avoid hold-ups and stacking.

Refers to Gibson testimony from yesterday. Companies have people work on committees to determine how to get standards to work. Those people may not know (usually do not know) what patents are involved. Patents are considered essential even if they only cover a small portion of the standard. Patents cannot be considered essential prior to the standard being published. There is no mandatory search process to find patents that may relate to the standard.

LOAs are requested as much in advance as possible to assure patents used in standards will be available under RAND terms. Pools require at least one essential patent for patent owner to join the pool. Pools usually hire independent experts to determine if given patents are essential.

Discussed difference between the MPEG engineering group and the MPEG LA pool group. Exhibit on eligibility for joining the pool. Patents must be available "without undue constraints."

FTC notice on SSOs discussed; it mentions RAND commitment. Motorola interjects that the phrase quoted said "will attempt..." to get to RAND terms, not a hard requirement.

Exhibit showing earlier statement made by Motorola about stacking, saying it can make pricing prohibitive. That doc proposes "aggregated reasonable terms" and proportionality. These are not new principles—they were clarifications of existing RAND rules.

IEEE operations manual discussed, which says patents should be made available at "nominal competitive cost."

Background on some patents Motorola acquired. Motorola LOAs and blanket LOA from Motorola on 802.11 patents discussed. More Motorola LOAs admitted into evidence. Collective License Agreements (CLAs) are synonymous with patent pools. Docs on other CLA proposals in which Motorola participated. Motorola said pool terms are comparable with their earlier proposal. Reviewed Motorola statement of terms about the need to strike a balance, reflecting that licensors can also be licensees. But Motorola has also criticized pools as keeping rates too low so as to avoid antitrust issues. Antitrust agencies have reviewed modern patent pools—mentions a review by DOJ. Witness says that patents considered essential are "complementary inputs." Antitrust rules do not require pools to charge low rates. Discussion of pricing structure of pools--caps, volume discounts, etc., and different prices for "field of use." Firms benefit even if no royalties are collected when standards allow wider product adoption and increased sales. Allows other products to inter-operate. A company's decision to not join a pool does not necessarily imply that their patents are more valuable.

Motorola Cross-examination of Simcoe:

Witness is here as an expert on economics and SSOs. He has never negotiated a RAND license or a patent license. He has never testified in a patent case. No opinion on Georgia-Pacific case. Asks if witness's views are not the views of IEEE or ITU. Witness says his opinions are based on his experience which includes discussions with members of those SSOs. Counsel refers to deposition to reinforce the answer that his opinions are not based on any SSO member's writings. Refers to deposition, which states it is his interpretation, not knowledge of how SSOs interpret RAND.

Does not have an opinion on whether or not the VIA pool is an appropriate benchmark of good RAND terms. Does not have an opinion on whether or not Motorola licenses constitute hold-up, but responds that licenses made after the standard is set have a potential to cause hold-up.

FRAND and RAND are interchangeable terms. Tries to get witness to admit he cannot define what RAND means. Refers to a blog entry from witness that states no one knows what the FR in FRAND means. Witness explains his comments were made to provoke a discussion. Further blog statement that the FR part of FRAND is mainly there to absolve SSOs from antitrust concerns. Counsel refers to published paper, with witness' statement that RAND and FRAND are unclear--that all it means is a commitment to negotiate, and this will not prevent hold-up and stacking.

Counsel refers to a peer-reviewed paper witness authored stating RAND is not a solution to assuring reasonable prices. Witness says that he speaks to a consensus of opinion of what RAND is. Counsel refers to witness' comments made to FTC saying it is not clear that a RAND promise makes any commitment to licensees. Refers to another witness comment that SSOs fear antitrust concerns. RAND terms leave licensors with considerable leeway to pursue aggressive pricing strategies. IEEE and ITU do not specify how to set RAND--and do not use an incremental value approach. Pools do not use incremental value approach.

Microsoft interjects to introduce other lawyers not named earlier.

Break.

Motorola continues:

RAND can be negotiated in many ways. Counsel asks if it is true that witness has no examples of royalty stacking or hold-up in any industries. Witness states that is true, but it is hard to know as these agreements are secret. SSOs are worried about antitrust concerns if all negotiations are ex ante. Refers to earlier exhibit with Motorola statements regarding RAND.

Clarifications were requested of ITSE, but those suggestions were rejected. Counsel suggests that witness cannot assess the quality of VIA or MPEG LA pools as a benchmark. Witness agrees that a price higher than the pool rate can still be RAND.

Witness has not done any work to count patents in this case. Witness believes that pools use patent counting as a pragmatic solution. Asks about SSOs determining reasonableness of licenses. Witness says they do not. Refers to paper authored by witness that became a book chapter. Backs up earlier statements that SSOs assume FRAND if agreements are reached.

Microsoft Redirect of Simcoe:

Refers back to Motorola doc to ITSE. Says they are signaling to judges that FRAND terms must be reasonable.

Motorola recross:

To that same doc, mentions again that those proposals to ITSE were not adopted.

Microsoft's 10th Witness, Dr. Matthew Lynde (pronounced "lined"):

CV submitted. Educational background. Works for Cornerstone Research. Specializes in IP disputes. Has testified in court and is an expert in IP valuation. Demonstrative on value of Motorola patents, showing 0.2 cents per unit for H.264, and 5 to 6 cents per unit for 802.11. Was done in cents per unit form because that is what pools use. Percentage basis does not work as well due to multiple-component nature of some products.

Exhibit on Motorola patents; 63 world-wide patents, 16 in U.S. Microsoft has 3 times as many world-wide and 64 in the U.S. Used MPEG LA as best benchmark. Was ex ante, multilateral negotiation. Says this is the best available objective evidence.

Defines ex ante and ex post at the judge's request.

Admits exhibit, list of patents in MPEG LA pool. Mentions many pool companies that obtain most or all of their revenue from IP licensing. Discussions of attraction of the pool and the need to balance revenue vs. adoption--that the standard may not be successful if it is too costly to adopt. Specific member companies mentioned, including Apple.

Comment from witness about Apple being THE technology company. Microsoft counsel suggests their client may not agree. (Laughter in court.)

Testifies about Motorola participation in pool discussions and that Motorola did not argue for higher royalties and did not argue that their patents should be valued higher. Refers to internal Motorola doc on pool participation that says rates are reasonable.

Google is licensee of H.264 pool, and adds that Google is now Motorola's parent company. Refers to Google's own license for MPEG LA pool. Presumes terms are FRAND. Corroborates that terms are reasonable.

Witness says there is no pool that contains all relevant patents for one standard. Exhibit of patents submitted in LOAs that are not in the MPEG LA pool.

Discusses blanket LOAs from major tech companies. Analyzed rates Google would pay to Motorola if MPEG LA pool rates were used--just under 0.2 cents per unit. Rate would be lower if other non-pool patents were added to the pool. Rate would be just over 0.2 cents if pool rates were raised by 10%. Says pool rates have not been raised though. Rates would be just over 0.06 cents based on Google grant-back provision. Defines grant-back provision.

Motorola objects to question about Motorola and Google on licensing agreement. Sustained.

Calculations in pool accounts for patent expirations. Exhibit of Motorola 802.11 patents they put forth as essential; 263 world-wide, 64 in U.S. Mentions VIA 802.11 pool, smaller than MPEG LA pool. This pool was created more ex post than ex ante; would tend to push the rates up. Summary of patents in 802.11 excluding VIA, Motorola, and Microsoft patents. Thousands of patents involved. 90 companies with blanket disclosures. Graph shown of declared essential patents for 802.11.

Judge asks about weighting on prior exhibit. Witness mentions that geography plays a role in that patents in the U.S. get higher weighting.

Lunch.

Microsoft resumes with Dr. Lynde:

Explains how royalties are distributed in pools. This is done by patent count but weighted by geography. I.e., U.S. patents get more weight. Explains how he modified his VIA pool analysis; it was adjusted to account for the low participation. Explains that his assumptions are favorable to Motorola. Calculations presented of Motorola RAND royalties using his assumptions. Mentions some Motorola patents will expire in 2013 & 2014. France Telecomm has dropped out of the VIA pool, but this would not affect his calculations. Further explanations of why he thinks his calculations are reasonable. Marvell charges $3-$4 for their Wi-Fi chip.

Explains difference between device-level cost vs. chip-level costs. Mentions ASIC chips. Motorola objects as no foundation laid. Microsoft adds foundation. Objection removed.

Discussion of ARM holdings. Earnings on a per unit basis is 5 to 9 cents for ARM patent licenses. Asserts that 5 to 6 cents would be an upper limit on what a Motorola RAND rate should be for 802.11.

Looked at internal Motorola assessment of licensing fees. Doc was from 2003, which was when Wi-Fi was taking off. Motorola had assumed royalty rate of 0.1% of retail sales cost. Intecap--consulting firm used to assess value of IP. Doc discusses stacking, that there were 50 companies involved (more are involved now). Motorola had used this lower rate structure in at least one negotiation with Gateway, suggesting 0.1% rate. Suggests that this rate is too high as it assumed that Motorola owned 25% of all of the IP in 802.11, which is overly generous to Motorola. Discussion of hold-up; refers to doc stating a “bullet analogy”--in that all it takes is one key patent to cause hold-up.

Motorola Cross-examination of Dr. Lynde:

Judge makes a remark about the Lorax—the Dr. Seuss character that "speaks for the trees," who would not be happy at all of the paper being used. (There are MANY binders on the witness stand.)

Says witness is not an expert in SSOs. Has testified many times, but not on SSOs. Witness has never negotiated a RAND contract or patent license. Refers to Microsoft letter to FTC. Witness did not speak to Microsoft execs who signed the letter. Letter was sent after the suit was filed. Letter states there is little evidence that patent hold-up is a problem today.

Witness rebuts that many people feel there is a big potential for problems. Details about Microsoft doc about bilateral discussions for licenses. Witness analysis did not include any current Motorola actual licenses.

Discusses deposition that stated hold-up and stacking are not an issue. Exhibit of article by Damien (missed the last name) that states there can be a discount with cross-licenses. Details about patent pool analysis. Another paper exhibited, states that companies with stronger patents are less likely to join pools.

Witness asked if pools favor companies with large numbers of minor patents. Not always--there are other factors to consider.

Witness asked if RAND agreements can include negotiating cost. Yes. Counsel tries to say that his comparison to pool costs is invalid because it does not account for costs of the negotiations. Agrees that no one can or should be forced to join a pool.

Witness has not heard of complaints from IBM or Nokia about their Motorola licenses, but states he has no info on those licenses. Reads statement from deposition that witness did not ask Microsoft about why it did not join the VIA pool. Microsoft interjects that the statement from deposition is out of context -- reads following statement.

Reviews Microsoft doc saying that Microsoft prefers to enter into bilateral negotiations.

Counsel compares Microsoft not joining VIA pool to Motorola not joining MPEG LA pool.

Discussion of smallest salable unit (SSU). Too long of a discussion about whether or not the chip is the SSU. Wrestles with economic vs. tech/legal definition of SSU that practices the “full 802.11 function.” [I'm sure the point that Motorola was trying make is that the Marvell chip acting alone cannot do all of the functions of 802.11 in the Xbox—because of the earlier testimony that the Wi-Fi pass-phrase is stored in the Xbox's flash memory.]

Back to ARM reference; witness did not look at any ARM license agreement and it is not submitted in evidence. Witness did not determine restrictions in those licenses. Discussion about restrictions making it a less valuable license. Microsoft interjects that deposition quoted was out of context, and read the rest of his comment read about the ARM license. Reference to Intecap analysis, that witness did not assess strength of patents, and many patents in litigation were not included in the Intecap doc. Witness agrees that there is a range of rates that would be considered RAND.

RAND is not part of the calculation of damages considered in patent damages litigation. “Entire market value” rule is used in patent damages cases. In the real world it can be difficult to audit license compliance. Agrees that unit product cost is used often in license agreements.

Counsel ask if witness' analysis considered the extent to which Microsoft products use the function Motorola patents provide. No. Agrees it is possible to have a RAND license based on product prices. Further states that you risk having license issues if you don't use SSU. Counsel refers to IEEE doc that mentions product price as being a basis for royalties. Counsel refers to previous testimony witness gave on a separate case that said product price basis is commonly used.

[Comment: This was a very obtuse witness. Counsel asked numerous straightforward questions requiring a “yes/no” answer that witness would answer with a long exposition. When pressed by counsel for a “yes/no” answer, witness sometimes stated: “I think it was an accurate answer.”]

Break

Microsoft redirect of Dr. Lynde:

Refers to Intecap analysis and the fact that many licenses were not referenced. Mentions assumption of Motorola owning 25% of patents for 802.11. Says that inflated his compensation estimates for Motorola. Witness states that if everyone asked for the 2.25% product cost rate that Motorola asked for, he thinks that would result in hold-up.

Motorola no further questions.

Microsoft asks about number of witnesses and time left. Motorola says they will have to curtail witnesses but cannot say which ones will or will not testify. Judge suggests that Motorola tell Microsoft by 4:30 pm on Saturday. Judge says that if Motorola knows a witness is out, they will tell Microsoft ASAP.

Motorola opening statement:

Microsoft wants low pool rates based on multilateral ex ante negotiations. This does not reflect real-world negotiations. This model does not consider strength of Motorola's contributions. Other important patent holders rejected the MPEG LA pool. Motorola seeks to simulate a real-world negotiation that would have happened. Motorola will compare the strength of their patents vs. Microsoft patents. Multiple witnesses from multiple companies will attest to how bilateral negotiations would work.

Judge comments that he can't consider potential cross-licenses.

Motorola's First Witness, Ajay Luthra:

Education background. Works for Motorola. Advanced technology manager supporting digital video processing. Involved in MPEG standards setting. Was H.264 co-chair.

List of H.264 Motorola patents. Is inventor of some of their patents. Paper on H.264 he authored. Refers to Microsoft testimony on early version of H.264 standard and says that interlaced coding tech is not included. Motorola was interested in interlaced because they supported satellite TV products that needed interlaced support. Presented proposals at MPEG conference. Interlaced remains ubiquitous in TV media.

Describes benefit of using interlaced, including coding efficiencies, keeping video in its native coding format. Refers to development time-line of H.264 used earlier. Agrees that some compression efficiencies were made before Motorola's involvement, but their input did create additional efficiencies.

Gave details on proving they made coding efficiencies. Reviewed paper he coauthored, showing H.264 “L” version was not better than the current standard and that further efficiencies can be made. Next paper mentions interlaced coding tools.

Tech details on vector motion prediction, which Motorola has patent on. Another patent discussed. Details on coding efficiencies. Document on testing of compression of interlaced.

Another doc he coauthored reviewed. VCEG test results says it needed more work.

Motorola worked on PICAFF and MBAFF improvements. Large board exhibit presented on macroblock adaptive coding. [Tons of acronyms!] More graphs. Another paper he coauthored. Another paper, this one submitted by Sony, recommending Motorola proposal be adopted. Showed 11-18% improvements. Motorola patented this technique.

Another JVT doc he coauthored. Tech details, including 20-30% bit rate savings. JVT adopted Motorola improvement; patent granted. Motorola scan patents. Another JVT proposal. 7% bit rate savings. Samsung doc showing higher bit rate savings and recommending adoption of Motorola proposal. Also same for Sony doc. Motorola scan proposal adopted in 2004. Two patents on this. Sony proposed alternate scan solution. JVT doc he coauthored discussed the alternative Sony option but showed that Sony's option needed larger gains in efficiency.

Witness finished.

Third parties wanted to speak. Judge demurs.

Judge on schedule. Time remaining to Microsoft 4+ hours, Motorola 5+ hours. Court would also like to know witnesses remaining when they are determined (referring to the earlier Saturday afternoon deadline he set).

Judge sets meeting at 8:45 am on Monday to cover third party issues.

Judge is asked if third parties are allowed to to make submissions. Judge says they are welcome.

Our second reporter will send notes in more detail over the weekend, but he shares some thoughts right away on the day:
MT spent a bunch of time with the econ guy about 'you said this slightly different thing during your deposition to this slightly different question' and getting 'I think I just said that' , and honestly I was bit unclear on why since I'd hope the judge would be able to read econ guy's answer as the 'no I didn't do that research' MT shaved head lawyer was trying to get. This was even for a "You didn't look at why MS didn't join these pools" "No" "Was there a reason you didn't look for a reason" "It wasn't necessary for the analysis" vs deposition "I don't know". I think it burned up a lot of MT time, I think MS 2:00 MT 3:30 (with the last witness being MT's).

[PJ: This wasn't a waste of time *legally*. And you'll see in the closing statement what it was all for. You don't always immediately see what a lawyer is reaching for, but he knows and depending on the answer he gets, which he already expects and knows what is coming, he'll use it at the end. In this case, closing arguments will be in briefs, not orally.]

The interesting numbers will come out M/T if at all. Looking for more briefings on using code names for the companies in oral argument at least, as MS is saying the names will be relevant to them. Judge thinks names are relevant to court as Mom and Pop software vs big company. But there are briefs due tomorrow I think on that issue. He's going to talk to MS, MT and third parties Monday 8:45 am, 3rd parties can file briefs.

Update: And here are our second reporter's notes, as a 22-page PDF. He's going to try to get a text version for us over the weekend. In any case, I appreciate his notes. He's the one who notices quirky geeky things, like that there were 34 people behind the gate when he arrived at the courtroom and later that the judge blew his nose right into the mic.

: D

So a big thank you to our reporters for a week that was really hard to cover, and they did a great job. I understand very well now that what Microsoft wants is to devalue Motorola's patents, by saying they should be valued kind of like patent pools, not like standard-essential patents. But people don't have to use the product of patent pools. You can avoid them by using something else. And companies don't have to join patent pools. But standard-essential means there is no workaround. So it's apples and oranges.


  


Microsoft v. Motorola Trial in Seattle, Day 4 - Motorola's Opening Statement ~pj Updated | 397 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here
Authored by: SpaceLifeForm on Saturday, November 17 2012 @ 02:59 AM EST


---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | # ]

Comes docs here
Authored by: SpaceLifeForm on Saturday, November 17 2012 @ 03:00 AM EST


---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | # ]

News Picks commentary here
Authored by: SpaceLifeForm on Saturday, November 17 2012 @ 03:01 AM EST


---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | # ]

OT here
Authored by: SpaceLifeForm on Saturday, November 17 2012 @ 03:02 AM EST


---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | # ]

Uncertainty could turn Windows 8 into the next Vista - Paul Thurrott
Authored by: SilverWave on Saturday, November 17 2012 @ 04:39 AM EST
Windows 8 Sales Well Below Projections, Plenty of Blame to Go Around

Wow there is some good stuff in this article:
Microsoft blames the PC makers. My source cited to me the PC makers’ “inability to deliver, ...”
Lingering questions about Sinofsky. While Steven Sinofsky was removed from Microsoft because of his divisiveness and his ostracizing of far too many valuable executives and employees, many will continue to wonder if some failing in Windows 8 (and Windows RT) is what in fact led to his ouster. ...
It’s the economy, stupid. Microsoft launched Windows 8 at a time of great economic uncertainty and midstream in business deployment of the product’s predecessor, Windows 7. ...
Confusing range of device types. Faced with a reimagined, touch-focused Windows that is more at home on mobile devices than traditional PCs, and responding to increasingly hysterical pleas from Microsoft to innovate more, PC makers attempted to do in hardware what Microsoft did in Windows 8’s software: Create hybrid devices that could serve all needs. Unfortunately, the result is a mess ...
Windows 8. It’s a floor wax. No, it’s a dessert topping... Microsoft’s new whatever-the-F-it-is operating system is a confusing, Frankenstein’s monster mix of old and new that hides a great desktop upgrade under a crazy Metro front-end...
Windows RT. Imagine Apple announcing a major new version of iOS and then releasing a new tablet that runs Mac OS X instead of that new iOS version. Doesn’t make a lick of sense, does it? ...
There is also a echo of the mind set of a windows guy, its strange to see this....
Intel. If you’ve decided to skip Windows RT—which I think is wise, for now—you now face a strange choice on the Intel side. You can go with traditional “Ivy Bridge” type systems, providing the familiar performance and compatibility you’ve come to expect from PCs. Or you can go with new Atom “Clover Trail” systems, which can and do resemble Windows RT devices in ways both good—they’re thin, light, and get great battery life—and bad—they’re also resource constrained, with 2 GB of RAM and tiny storage allotments. This further muddies the water for consumers, triggering yet another “wait” reaction.
His fascination with Intel and specifications looks so dated, ARM is cool these days grandad. ;-)

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Worrisome
Authored by: Gringo_ on Saturday, November 17 2012 @ 08:39 AM EST
One of the biggest issues I have with press reports on the issue of
FRAND is that they rarely provide the full context. The reports will talk
about Motorola or Google "abusing FRAND" without telling their readers

this is just a defense against Microsoft's patent agression. That is the
problem. That is what came first. That is what the FTC needs to be
looking into - Microsoft's trollish shakedown of Android OEMs.

So then we come to this trial that shouldn't be happening, where the
judge is taking it upon himself to determine what FRAND rates should
be, a task that Judge Crabb determined was "unrealistic".

I thought to myself, I would hope at least the judge will see the fuller
context as I have described above.

Now our court room reporter has just confirmed my worst fears. He
reports, " Judge comments that he can't consider potential cross-
licenses."

[ Reply to This | # ]

Cross-licensing
Authored by: tknarr on Saturday, November 17 2012 @ 11:41 AM EST

When the judge says he can't consider cross-licensing, I think that's a major problem right there: a very large part of the FRAND process is cross-licensing. The negotiations, as Motorola point out, almost always take into account not just the patents being licensed but the patents the other side is offering to cross-license in return. You can't analyze the negotiation that would've occurred if you rule out considering a major part of those negotiations. How would the judge sound if he said "I can't consider the amount of money paid for the license."?

[ Reply to This | # ]

Thanks to the Reporters
Authored by: Anonymous on Saturday, November 17 2012 @ 12:33 PM EST

We all really appreciate you efforts.

And to all those who might be able to attend Monday or Tuesday, in an
earlier post PJ said we have no one booked to attend. If you can show up
for either day please email PJ!

If no one is at the trial I won't be able to get my fix :(

Wayne
http://madhatter.ca

[ Reply to This | # ]

Microsoft and MPEG LA show their hand
Authored by: Ian Al on Saturday, November 17 2012 @ 01:14 PM EST
Microsoft:
Patents cannot be considered essential prior to the standard being published
Please bear in mind, with the following quotes, that ISO, ITU and IEC are three specialist agencies of the United Nations that are the three biggest international standards organisations in the world.

They live to promote technology standards that can be used freely around the world thus reducing the cost of the technology and increasing interoperability of competing technology products.

Guidelines for Implementation of the Common Patent Policy for ITU-T/ITU-R/ISO/IEC (23 April 2012) (no link - it's a 24 page pdf)
Patent disclosure

As mandated by the Patent Policy in its paragraph 1, any party participating in the work of the Organizations should, from the outset, draw their attention to any known Patent or to any known pending Patent application, either its own or that of other organizations.

In this context, the words “from the outset” imply that such information should be disclosed as early as possible during the development of the Recommendation | Deliverable.

This might not be possible when the first draft text appears since at this time, the text might be still too vague or subject to subsequent major modifications. Moreover, that information should be provided in good faith and on a best effort basis, but there is no requirement for patent searches.
Many of the IEEE standards, including IEEE 802.11 are offered to ISO and the ITU for inclusion as a world-wide standard.
Understanding Patent Issues During IEEE Standards Development

Patented Technology in IEEE standards

This guide offers information concerning the IEEE Standards Association and its patent policies but does not state the patent policy. Definitive statements of the IEEE Standard Association's policies and procedures concerning patents can be found in the IEEE-SA Standards Board Bylaws and the IEEE-SA Standards Board Operations Manual.

...

1. What is an Essential Patent Claim?

An Essential Patent Claim means any Patent Claim [including claims in issued patent(s) or pending patent application(s)] the use of which was necessary to create a compliant implementation of either mandatory or optional portions of the normative clauses of the [Proposed] IEEE Standard when, at the time of the [Proposed] IEEE Standard‟s approval, there was no commercially and technically feasible non-infringing alternative.

An Essential Patent Claim does not include any Patent Claim that was essential only for Enabling Technology or any claim other than that set forth above even if contained in the same patent as the Essential Patent Claim. See clause 6.1 of the IEEE-SA Standards Board Bylaws at http://standards.ieee.org/develop/policies/bylaws/sect6-7.html#6.1.

2. Does the IEEE determine whether a patent is essential when seeking a Letter of Assurance?

No.

Call for Essential Patents Claims at IEEE Standards Developing Meetings

3. What is a call for patents?

A call for patents is a reminder made by the chair, or the chair‟s designee, at an IEEE standards developing meeting. The chair or the chair‟s designee informs the participants that if any individual believes that Patent Claims might be Essential Patent Claims, that fact should be made known to the entire working group and duly recorded in the minutes of the working group meeting.

4. How often should a Working Group Chair issue a call for potential Essential Patent Claims?

A Working Group Chair or his or her designee shall issue the call at every Working Group meeting. If the Working Group does not meet face to face or telephonically, the Working Group should be issued a call via e-mail or letter on a regular basis. It is strongly recommended that the IEEE Patent Committee- developed slide set be used. Note that a call for patents shall be made at every standards developing meeting. This includes, but is not limited to, working group and task force meetings.
Microsoft, on Day 1 of the trial, from our reporter's notes:
Microsoft 2nd Witness, Garrett Glanz

General manager of Licensing in Microsoft IP group—for all patents. Has been there 12 years, 2 years in this position. Manages inbound and outbound licensing Was Microsoft's rep to the MPEG LA pool. Discusses timeline of pool development, including Motorola's decision to not join the pool.

May 2003 H.264 adopted. Starts with call for patents. Initial meeting, and MPEG LA coordinates the meeting. MPEG LA collects/distributes royalties. At this time, H.264 was not used much. Competing technology then included Real Video, MPEG4, Windows Media Video. MPEG LA issued press release saying licensing terms were reached. 20 cents/unit after 100,000 units, lower afterwards. Free if under 100,000 units. There is a royalty grace period. Companies involved were listed in the press release, and included Motorola. VIA licensing was also doing a patent pool for a video standard. Microsoft and Motorola participated in that one too. Paul Bawell was the Motorola rep.

Pool process description: MPEG LA created a “straw man,” then attendees proposed adjustments. MPEG LA had an external expert determine what patents were essential. Many patent holders were licensees as well. Motorola had mobile phones, set-top boxes for cable TV, that would use the H264 codec. Microsoft had Windows and other products that would use it. Garrett made notes at the “pool meetings” and shared with others at Microsoft, including Will Spencer. His notes were reviewed; gave background on how they were captured, etc. Slides of the pool meeting were presented, then discussed in comparison to his notes. Concern at the pool meetings was that if royalty rates were set too low, patent holders would not contribute their patents. But if rates were set too high, competing codecs might be used instead by licensees.
That shared patents policy was already in place within the ITU well before 2010. So, Microsoft knew that Motorola had essential patents prior to the 'call for patents' at the beginning of whatever the MPEG LA pool process was actually about. As you can see from the ITU shared essential patents policy, the declarations of essential patents had to be made before ITU Recommendation H264 was published.

Was Microsoft deliberately giving the judge the impression that they and the MPEG LA bunch created the H264 standard? What could they possibly mean by 'May 2003 H.264 adopted'? Why would they need a 'call for patents' when Motorola had already given their declaration to the ITU and the ITU had listed the essential patents in the Recommendation? How else would Microsoft know about the Motorola patent and that Motorola had made a FRAND promise to the ITU before it was published?

Could it be that MPEG LA's only interest in whatever patents had been declared via the IEEE or the ITU was that they could use them for practically nothing, even if they bothered to get a licence at all! MPEG LA were looking for previously unknown US patents that could be used to monopolise the ITU and IEEE standards in the US. They had already imprisoned ITU Recommendation H264 by 2010 and they had more targets for their US Bastille.

The Groklaw article Infrastructures, by xkcd - It says it all has this report from 2010:
Indeed, Larry Horn, CEO of MPEG LA, the consortium that controls the AVC/H.264 video standard, tells me that the group is already looking at creating a patent pool license for VP8....For what it’s worth, Google seems to believe that it has done its due diligence here and has the necessary patent clearance for VP8. Said Google product manager Mike Jazayeri: “We have done a pretty thorough analysis of VP8 and On2 Technologies (VP8’s developer) prior to the acquisition and since then, and we are very confident with the technology and that’s why we’re open sourcing.”
MPEG LA had already got their monetizing grip on the ITU Recommendation H264 way back in 2010 and they put out a further 'call for patent' in the hope of adding to the pool and killing Google's open and free VP8 standard.

Do you think that Microsoft and the MPEG LA cronies are trying to fool the judge into thinking that they were responsible for establishing the essential patents prior to the ITU and the IEEE publishing them complete with essential patent Declarations ITU/ISO) and Letters of Assurance (IEEE)?

You can see that what they were doing was quite the reverse. They weren't interested in the patents that actually went into the making of the standards: they were interested in the submarine patents owned by patent trolls that could be used to destroy the attempts of honest standards organisations like the ITU, the IEC, the ISO and the IEEE to publish vital and open international standards.

---
Regards
Ian Al
Software Patents: It's the disclosed functions in the patent, stupid!

[ Reply to This | # ]

Why might Motorola want to ditch MPEG LA?
Authored by: Ian Al on Sunday, November 18 2012 @ 04:25 AM EST
Microsoft, on Day 1 of the trial, from our reporter's notes:
Microsoft 2nd Witness, Garrett Glanz

General manager of Licensing in Microsoft IP group—for all patents. Has been there 12 years, 2 years in this position. Manages inbound and outbound licensing Was Microsoft's rep to the MPEG LA pool. Discusses timeline of pool development, including Motorola's decision to not join the pool.

May 2003 H.264 adopted. Starts with call for patents. Initial meeting, and MPEG LA coordinates the meeting. MPEG LA collects/distributes royalties. At this time, H.264 was not used much. Competing technology then included Real Video, MPEG4, Windows Media Video. MPEG LA issued press release saying licensing terms were reached. 20 cents/unit after 100,000 units, lower afterwards. Free if under 100,000 units. There is a royalty grace period. Companies involved were listed in the press release, and included Motorola. VIA licensing was also doing a patent pool for a video standard. Microsoft and Motorola participated in that one too. Paul Bawell was the Motorola rep.

Pool process description: MPEG LA created a “straw man,” then attendees proposed adjustments. MPEG LA had an external expert determine what patents were essential. Many patent holders were licensees as well. Motorola had mobile phones, set-top boxes for cable TV, that would use the H264 codec. Microsoft had Windows and other products that would use it. Garrett made notes at the “pool meetings” and shared with others at Microsoft, including Will Spencer. His notes were reviewed; gave background on how they were captured, etc. Slides of the pool meeting were presented, then discussed in comparison to his notes. Concern at the pool meetings was that if royalty rates were set too low, patent holders would not contribute their patents. But if rates were set too high, competing codecs might be used instead by licensees.
On the day that the IEEE published their IEEE 802.11 standard and the ITU/ISO published their Recommendation H264, they had already insisted that the engineers designing the standards
from the outset, draw their attention to any known Patent or to any known pending Patent application, either [their] own or that of other organizations
and the IEEE insisted that the engineers
issue the call [for patents] at every Working Group meeting.
So all of the owners of essential patents used in H264 and IEEE 802.11 had issued a FRAND declaration to the ITU in Switzerland and/or a Letter of Assurance to the IEEE, including Motorola, by the time the standards were published. That was the case even if the patent owner was not actually serving on the standard Working Group.

As you can see from the court notes, the MPEG LA company put out another call for patents after the ITU had published Recommendation H264, looking for trolls with anything that would pass muster in the US courts to imprison the ITU Recommendation. Of the major partners in MPEG LA, only Motorola had put engineering expertise into H264. We know that because non of the rest considered themselves obliged by a Declaration or Letter of Assurance to offer their 'essential' patents on a FRAND basis.

Our reporter noted just that
Concern at the pool meetings was that if royalty rates were set too low, patent holders would not contribute their patents. But if rates were set too high, competing codecs might be used instead by licensees.
At this point, I need to refresh your memory. The United Nations is directly financed by the member country governments. In other words, it is paid for with the taxes of the citizens. The United Nations specialist standards agencies are financed by those same taxpayers by stipend from the UN and direct help from the individual governments. The standards agencies are also supported by resources in and from the national standards agencies such as the American National Standards Institute and the British Standards Institute, both of which are the government nominees for national and international standards.

Those national standards institutes are largely supported, directly or indirectly, by the taxpayer. In a very real sense, all national and international standards are the property of the world's taxpayers.

The overriding interest of the standards organisations is to prevent anti-trust activities by national trade groups and to promote competition through effective standards and interoperability of devices and installations of competing companies across the globe. The reason is that the taxpayer is the sponsor of the standards and also benefits from free trade and healthy competition.

If the IEEE, the ITU and ISO found that Motorola was joining a US trade organisation that was bypassing all of the United Nations safeguards and indulging in anti-trust activities, then they could have all of the standards in which they held essential patents, rescinded together with any representation on UN standards organisations. Actually, the IEEE have told the courts that they are all in favour of patent aggression, so cut them from that list.

As the only member of MPEG LA who had contributed patented inventions to ITU Recommendation H264 on a FRAND basis, Motorola had the most to lose.

Perhaps they recognised that MPEG LA were pirating H264 from the world's citizens at an early stage and quickly withdrew. Whatever are they like in LA? Oh yes, Hooray for Hollywood!

I mentioned anti-trust activity. I have a further comment in preparation which details this and also explains the danger to the US government and the citizens of the rest of the world.

---
Regards
Ian Al
Software Patents: It's the disclosed functions in the patent, stupid!

[ Reply to This | # ]

Could the judge and the US Government become complicit?
Authored by: Ian Al on Sunday, November 18 2012 @ 07:29 AM EST
One of the MPEG LA group is a serial anti-trust offender both in the US and around the world. The US Government is well aware of this.

This quote from a landmark case explains what contitutes anti-trust action under US law. From STATE OF NEW YORK, et al., v. MICROSOFT CORPORATION (with citations deleted):
The district and appellate courts accepted Plaintiffs’ theory of competition despite the fact that “neither Navigator, Java, nor any other middleware product could [at that time], or would soon, expose enough APIs to serve as a platform for popular applications.”...

Four-Part Test for Liability

Having concluded that the district court properly identified the relevant market as the market for Intel-compatible PC operating systems and properly excluded middleware products from that market, the appellate court turned its attention to the issue of whether Microsoft responded to the threat posed by middleware in violation of § 2 of the Sherman Act. Specifically, the appellate court set out to determine whether Microsoft “maintain[ed], or attempt[ed] to . . . maintain, a monopoly by engaging in exclusionary conduct.” The appellate court recounted that the district court answered that inquiry in the affirmative, finding “Although certain Web browsers provided graphical user interfaces as far back as 1993, the first widely-popular graphical browser distributed for profit, called Navigator, was brought to market by the Netscape Communications Corporation (‘Netscape’) in December 1994.”

Microsoft liable for violating § 2 of the Sherman Act:

...

In order to review the district court’s findings on this point, the appellate court outlined a four-part test for determining whether particular conduct can be said to violate antitrust law.

“First, to be condemned as exclusionary, a monopolist’s act must have an ‘anticompetitive effect.’ That is, it must harm the competitive process and thereby harm consumers.”

Second, the plaintiff must “demonstrate that the monopolist’s conduct harmed competition, not just a competitor.”

Third, “the monopolist may proffer a ‘procompetitive justification’ for its conduct.” If this justification stands unrebutted by the plaintiff, the monopolist may escape liability.

Therefore, the fourth prong of the inquiry requires that the plaintiff “demonstrate that the anticompetitive harm of the conduct outweighs the procompetitive benefit.” The appellate court stressed that, although evidence of intent is relevant “to understand the likely effect of the monopolist’s conduct,” when assessing the balance between the anticompetitive harm and the procompetitive effect, the trial court should focus on the “effect of [the exclusionary] conduct, not the intent behind it.”
Of course, both this and the later Novell v. Microsoft was Microsoft harming the competitive process by exclusionary conduct using trade secrets against middleware. The later EU court case against Microsoft added a new element of exclusionary conduct. Microsoft excluded the access to SMB networking (a de facto monopoly in Windows networks) by withholding the interworking standards. They claimed that SMB was built using Microsoft 'essential' patents.

In this current case, MPEG LA are using the US legal concept of patent abuse or patent misuse as the exclusionary conduct. Here is what Wikibooks says about patent misuse:
Patent misuse

Patent misuse refers to the use of a patent to illegally stifle competition: it is closely tied to antitrust law. The doctrine was first applied in Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917), where manufacturers licensed a film projector patent under the condition that the projectors must be licensed to end users so that they could only be used with films covered by the manufacturers' patent. A finding of patent misuse renders the entire patent unenforceable until the misuse is purged.

Generally, patent misuse prohibits the misuse of a patent through prolonging the duration of the patent beyond its expiration and tying the products not covered by the a patent's claims to the patent. For example, requiring a licensee of a patent to accept a contract duration for royalty payments over a 25 year term when only 10 years remain on a patent's term would be prohibited extension of the patent beyond its expiration. An example of tying misuse would be requiring licensees to sell certain accessories with a patented product and requiring licensees to pay royalties on the accessories that are not non-covered by the patent's claims.
MPEG LA are misusing patents that they falsely claim as essential to standards to exclude the competitive process of manufacturing to those standards. I explain this in my previous comment 'Microsoft and MPEG LA show their hand'. You will also find this specific example in that comment:
Indeed, Larry Horn, CEO of MPEG LA, the consortium that controls the AVC/H.264 video standard, tells me that the group is already looking at creating a patent pool license for VP8....For what it’s worth, Google seems to believe that it has done its due diligence here and has the necessary patent clearance for VP8. Said Google product manager Mike Jazayeri: “We have done a pretty thorough analysis of VP8 and On2 Technologies (VP8’s developer) prior to the acquisition and since then, and we are very confident with the technology and that’s why we’re open sourcing.”
But, why would MPEG LA want to exclude competition on H264? Both Microsoft and Apple have a whole series of patent-encumbered, video codecs already. This article explains that Apple, Microsoft and MPEG LA actually want to exclude world-wide competition with the HTML5 Internet technology.
Shortly after Steve Jobs delivered his "Thoughts on Flash" missive to the world last week, Microsoft's general manager for the Internet Explorer browser mentioned that the huge software company is putting its muscle behind the H.264 standard for HTML5 video content. Apple, of course, has been promoting the H.264 standard for video content in HTML5 as a replacement for Flash-based video content.
The competition of Flash video and all the other competitive video technologies has been killed by Apple's exclusionary conduct and Microsoft want to make the exclusion complete by imprisoning both H264 and HTML5 in their patent Bastille. Let's see what W3C, the html standards body, say about themselves:
The World Wide Web Consortium (W3C) is an international community where Member organizations, a full-time staff, and the public work together to develop Web standards. Led by Web inventor Tim Berners-Lee and CEO Jeffrey Jaffe, W3C's mission is to lead the Web to its full potential. Contact W3C for more information.
They are a world-wide standards setting commercial company with a CEO. Nevertheless, the world implements the W3C standards for the Internet. Since video is now a vital component of Internet services, the adoption of HTML5 together with the ITU Recommendation H264 as a world-wide standard means that MPEG LA are exercising exclusionary conduct on the Internet within the US on the basis of bogus submarine patents.

Only in America? Well, no for a raft of reasons. America imports the technology using patented inventions. Inventions like Samsung's Retina display, memory chips and ARM SOC fabs. MPEG LA and its associate companies are excluding world trade by restrictive trade practices and the US government is fully aware that, for one member, this is just one more example in a long line of similar practices.

The International Trade Administration (part of the US Department of Commerce) had this to say about free trade agreements.
Free Trade Agreements (FTAs) have proved to be one of the best ways to open up foreign markets to U.S. exporters. Trade Agreements reduce barriers to U.S. exports, and protect U.S. interests and enhance the rule of law in the FTA partner country. The reduction of trade barriers and the creation of a more stable and transparent trading and investment environment make it easier and cheaper for U.S. companies to export their products and services to trading partner markets. Forty-one percent of U.S. goods exports went to FTA partner countries in 2010, with exports to those countries growing at a faster rate than exports to the rest of the world from 2009 to 2010, 23% vs. 20%.
In the 2008 G-20 Washington summit, President Bush said the G20 reaffirmed their commitment to free market principles. In later years, the World Trade Organisation made repeated pleas for the G20 to stick to the commitment.

The DOJ were aware of the MPEG LA actions back in 2010 and chose to do nothing. The US Government is dependent on free trade agreements. The US Government may be about to look the other way on illegal restrictive trade practices that affect the whole of the world because they affect the whole of the internet. In particular, they would be looking the other way on restrictive trade practices against their free trade partners who wish to continue to supply the US with their technological goods.

But, the MPEG LA restrictive practices wouldn't really affect Johnny Foreigner, would they? Yes they would. We have seen with the MegaUpload case that abusive IP holders can prevail on the FBI and the CIA to jail people for IP on servers on the far side of the world.

Gary McKinnon only avoided extradition at the last moment on medical grounds. The US wanted to extradite him for things he did in the UK. Supposing you were sub-subpoenaed by a US court over the MPEG LA bogus patents and you refused to attend because you lived thousands of miles away and had not broken any of your countries laws? What if the judge issued a bench warrant? Do the Gary McKinnon and MegaUpload cases give you any cause for comfort just because you live and acted outside of US jurisdiction?

Christopher Tappin, 65, was extradited from the UK to the US and threatened with the rest of his life in jail for acting in the UK as an intermediary in the sale of batteries. IIRC, it was entrapment by the US authorities. The US authorities did not need to present a prima facie case of wrongdoing to the UK authorities: they just had to say why they wanted to extradite him to the US to face charges under US law for actions in the UK.

So, supposing US citizens watched a video that you put on a European server and encoded in the ITU Recommendation H264 standard and MPEG LA wanted to stop you and put you in jail? Are you confident that they could not get away with it?

The judge and the US government seem to see this as a US contract law issue just involving the US. In my comment 'A meeting of minds' I explain how, even if the standards organisations were US based and dealing with just national standards, they could not enter contractual agreements with third party beneficiaries by the standard setting process and declarations that were undertaken.

The US Government seem to be blindly entering into a breach of their international trade agreements of massive proportions that will destroy all hope of an economic recovery.

The judge appears to be on the verge of allowing a serial anti-trust company to violate the Sherman Act and the patent laws in the most dramatic way, to date.

Hence, my subject line:'Could the judge and the US Government become complicit?'

---
Regards
Ian Al
Software Patents: It's the disclosed functions in the patent, stupid!

[ Reply to This | # ]

More flim flam for the judge·
Authored by: Ian Al on Tuesday, November 20 2012 @ 04:11 AM EST
It is a bit hard to work out what is being said, here, because of the acronyms. For instance, there is this:
Microsoft Redirect of Simcoe:

Refers back to Motorola doc to ITSE. Says they are signaling to judges that FRAND terms must be reasonable.

Motorola recross:

To that same doc, mentions again that those proposals to ITSE were not adopted.
I have not been able to establish who the ITSE are and why they would be receiving proposals, but I think it is all part of the general objective of Microsoft to pull the wool over the judge's eyes. Neither the IEEE nor the ITU make any reference to the ITSE in setting their standards setting policies.

Also, Microsoft make it clear that they are presenting experts in patent misuse and not engineering experts who are highly skilled in the art of invention in this particular field:
Microsoft's 9th Witness, Prof. Timothy Simcoe:

C.V. submitted. Asst. Prof at Boston University. His focus is on standards-setting organizations (SSOs). Published many articles. SSOs have an interest in wide implementations and would like to avoid hold-ups and stacking.

Refers to Gibson testimony from yesterday. Companies have people work on committees to determine how to get standards to work. Those people may not know (usually do not know) what patents are involved. Patents are considered essential even if they only cover a small portion of the standard. Patents cannot be considered essential prior to the standard being published. There is no mandatory search process to find patents that may relate to the standard.

LOAs are requested as much in advance as possible to assure patents used in standards will be available under RAND terms. Pools require at least one essential patent for patent owner to join the pool. Pools usually hire independent experts to determine if given patents are essential.

Discussed difference between the MPEG engineering group and the MPEG LA pool group. Exhibit on eligibility for joining the pool. Patents must be available "without undue constraints."

FTC notice on SSOs discussed; it mentions RAND commitment. Motorola interjects that the phrase quoted said "will attempt..." to get to RAND terms, not a hard requirement.

Exhibit showing earlier statement made by Motorola about stacking, saying it can make pricing prohibitive. That doc proposes "aggregated reasonable terms" and proportionality. These are not new principles—they were clarifications of existing RAND rules.

IEEE operations manual discussed, which says patents should be made available at "nominal competitive cost."
I think the FTC is the Federal Trade Commission.

Here is what the IEEE insists upon well before they will accept a Letter of Assurance (LOA) and publish a standard.
Call for Essential Patents Claims at IEEE Standards Developing Meetings

3. What is a call for patents?

A call for patents is a reminder made by the chair, or the chair‟s designee, at an IEEE standards developing meeting. The chair or the chair‟s designee informs the participants that if any individual believes that Patent Claims might be Essential Patent Claims, that fact should be made known to the entire working group and duly recorded in the minutes of the working group meeting.

4. How often should a Working Group Chair issue a call for potential Essential Patent Claims?

A Working Group Chair or his or her designee shall issue the call at every Working Group meeting. If the Working Group does not meet face to face or telephonically, the Working Group should be issued a call via e-mail or letter on a regular basis. It is strongly recommended that the IEEE Patent Committee- developed slide set be used. Note that a call for patents shall be made at every standards developing meeting. This includes, but is not limited to, working group and task force meetings.
Here is what the owner of Recommendation H264, the ITU, insists upon:
Patent disclosure As mandated by the Patent Policy in its paragraph 1, any party participating in the work of the Organizations should, from the outset, draw their attention to any known Patent or to any known pending Patent application, either its own or that of other organizations. In this context, the words “from the outset” imply that such information should be disclosed as early as possible during the development of the Recommendation | Deliverable.
In other words, the world engineering experts that understand the state of the art involved in the proposed standards must establish all the essential patents before the standard can be published. The culmination of the call for patents process is that Letters of Assurance must be sent to the IEEE and FRAND Declarations must be sent to the ITU before they will agree to publish the standard. Note that the IEEE standards in this suit have been offered to and adopted by the ITU as published Recommendations and so are subject to both organisations' scrutiny. The ITU don't just accept standards from national standards groups just because they seem to be an honest bunch of engineers.

So, what is Microsoft's 9th Witness, Prof. Timothy Simcoe, saying, here?:
Refers to Gibson testimony from yesterday. Companies have people work on committees to determine how to get standards to work. Those people may not know (usually do not know) what patents are involved. Patents are considered essential even if they only cover a small portion of the standard. Patents cannot be considered essential prior to the standard being published. There is no mandatory search process to find patents that may relate to the standard.
He is saying that the acknowledged world engineering experts in the field usually don't know what engineering inventions have been made in their field of expertise and are unable to establish which of those inventions are essential to the standard on which they are working.

That is because both Gibson's and Simcoe's expertise is not in the engineering inventions within the standards. They are expert in patent pools holding standards to ransom. When he says that 'LOAs are requested as much in advance as possible to assure patents used in standards will be available under RAND terms' he is telling the truth about the IEEE and that is also the truth for any subsequent ITU standards and the related Declarations. However, Simcoe immediately moves on to the skill of the art of standard imprisonment:
Pools require at least one essential patent for patent owner to join the pool. Pools usually hire independent experts to determine if given patents are essential.
The IEEE and the ITU don't have patent pools: Only the pirates have patent pools. Immediately after this point, Simcoe says that engineers can be helpful in the imprisonment process:
Discussed difference between the MPEG engineering group and the MPEG LA pool group. Exhibit on eligibility for joining the pool. Patents must be available "without undue constraints."
Do what! What has the MPEG engineering group got to do with standards setting in the IEEE and the ITU? The MPEG LA pool group are the legal experts in patent and standards banditry.

Microsoft tell us that the US Federal Trade Commission determine the licence conditions for all of the world's standards setting organisations (SSO) including the United Nations specialist agency for standards setting; the ITU. That's good of them!
FTC notice on SSOs discussed; it mentions RAND commitment. Motorola interjects that the phrase quoted said "will attempt..." to get to RAND terms, not a hard requirement.
Of course, it could be that the acronymistic hell in court has made it difficult for our excellent reporters to pick up precisely what the witnesses are saying. However, on the past behavior of Microsoft in courts of law, I believe they are deliberately misleading the court into believing that MPEG LA is a legitimate standards setting organisation and not a bunch of bandits. They are deliberately conflating the open standards measures taken by the official world standards organisations, the IEEE and the ITU, with the measures taken to imprison those standards within the US (and, with Dotcom in mind, the rest of the world).

---
Regards
Ian Al
Software Patents: It's the disclosed functions in the patent, stupid!

[ Reply to This | # ]

Microsoft v. Motorola Trial in Seattle, Day 4 - Motorola's Opening Statement ~pj Updated
Authored by: TemporalBeing on Tuesday, November 20 2012 @ 01:42 PM EST
Interesting...it seems to be me this is very much like the SCO litigations where
SCO pulled out tons of witnesses who said they knew a lot but turned out not to
have been involved at the key points where decisions were actually made, while
IBM and Novell pulled out the people who actually made the decisions.

In this case, Microsoft seems to be pulling out people with nice credentials who
have reviewed stuff but have no experience in the field that is actually being
litigated. And Motorola in its first witness pulls out the one of the main guys
behind setting the standard.

Hmm...I wonder how much more of these types of people Motorola has lined up. It
certainly will make the case interesting.

[ Reply to This | # ]

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