Licensing SEPs on FRAND terms is an important

by Tim Tebows timtebows

Licensing SEPs on FRAND terms is an important

"This decision is based on my review of the various policy considerations ... as they relate to the effect on competitive conditions in the US economy and the effect on US consumers," Froman said in his letter.

The ITC ruled that Apple had infringed on a standard-essential patent owned by Samsung for '3G' wireless technology. Froman said that the decision by the Obama administration to disapprove of the sales ban order on certain Apple device models did not signal any view on the ITC's findings in relation to infringement and said it was open to Samsung to "continue to pursue its rights through the courts".

Standards are agreed technical specifications to ensure that a single technology is used across an industry, often with the goal of achieving interoperability of products regardless of the manufacturer. Companies can opt to send experts to help develop standards but, in return, most standards setting organisations insist that companies agree to license any intellectual property they own that is essential to implementation of that standard on fair, reasonable and non-discriminatory terms.

Froman said that concerns both in the relation to the possibility of SEP holders asserting their rights to 'hold-up' the launch of rival products to market and with the practice of SEP users refusing to enter into negotiations for a FRAND licence or pay a pre-determined FRAND royalty had been considered before the decision to overturn the ITC's sales ban was made. He called on the ITC to review "thoroughly and carefully on its own initiative" whether potential remedies to SEP-infringement cases are in the public interest in future cases.

"The Administration is committed to promoting innovation and economic progress, including through providing adequate and effective protection and enforcement of intellectual property rights," Froman said. "Relief available to the owners of intellectual property rights [under US law] is an important facet of achieving that objective. At the same time, standards, and particularly voluntary consensus-bases standards set by SDOs, have come to play an increasingly important role in the US economy."

"Important policy considerations arise in the enforcement of those patents incorporated into technical standards without which such standards cannot be implemented as designed, when the patent holder has made a voluntary commitment to offer to license these SEPs on FRAND terms. Licensing SEPs on FRAND terms is an important element of the Administration's policy of promoting innovation and economic progress and reflects the positive linkages between patent rights and standards setting," the Ambassador added.

The Defense Department may be a small player in the global mobile device market, but its clout with companies like Google and Apple is rising.

Not because these companies are driven by the promise of big federal business. Rather, by meeting DoD security standards, companies see an opportunity to expand their business into other security-conscious sectors.

“If they can get to our level of security, then they can market out to the corporate world for health, banking [and] financial, ... and you’re starting to see that,” said Greg Youst, mobility lead for the Defense Information Systems Agency, at a cybersecurity event last month.

“The drivers for these devices ... is the commercial market,” Youst said. “We’re a drop in the bucket.” But “the market is listening to us,” he said. “Industry is coming to us.”

In sit-down meetings with Defense officials, these companies are asking how they can build devices and operating systems that meet department standards. DoD began talks with Samsung more than a year ago and gave the company guidelines for developing its Android-based Samsung KNOX, Youst said. Samsung KNOX devices were approved for department use in May.

Android-based smartphones make up 80 percent of the global market share, according to data released last week by research firm Strategy Analytics.

But that business is largely driven by consumers not large organizations like federal agencies, banks and hospitals. In a recent overview document about its KNOX product, Samsung cited a 2012 Gartner survey that found less than 10 percent of organizations planned on buying Android devices in the following year because of a “perceived lack of security.”

Samsung is playing up the fact that it submitted KNOX to the government for a compliance review “to enable its use in government and other highly regulated enterprise environments” like health care and finance.

KNOX includes security features developed by the National Security Agency that can separate data and apps on the phone into different domains to contain damage caused by a malicious or flawed app.

Youst said he was contacted by Google and given a week to create a wish list of DoD’s mobile security needs; he has had similar discussions with Apple about security.

“I went nuts,” he said of the Google conversation. He worked with the military services to develop a wish list, which included security requirements for verifying a user’s identity before the user can access a device. “How do we make sure that you are who you are?” he said.

Apple also has taken steps to meet federal security standards. Apple’s iOS 6 operating system meets National Institute of Standards and Technology standards required to encrypt data on mobile devices used in government. This is often referred to as Federal Information Processing Standards certification.

“In many ways, security is migrating from a post-award cost to a competitive advantage,” for companies, said George Holland, a vice president at Juniper Networks.

While DoD is reaping the benefits of security features being built into mobile devices, these upgrades haven’t solved all of the department’s mobile problems.

One of DoD’s main challenges today is that the only way to verify the identity of its mobile users is with a Common Access Card and an additional device that can hold the CAC card in place, connect the card to the device and allow users to access the device. DoD is exploring options for storing the digital identities found on CAC cards inside smartphones on a Subscriber Identity Module card or microSD card or other secure locations that vary depending on the mobile device, said Ben Andreas, vice president of sales for security software company Intercede. Companies like Intercede are working with DoD to explore secure and standard ways of doing this.

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