Category Archives: IP Licensing

Emerging Trends in IP

Intellectual Property has seen numerous modifications. Different Intellectual Properties have come about to exist, which some would say is the impact of IP Maximalism and some would regard them as a matter of necessity of changing times, which reminds me of Victor Hugo, he spoke in a speech and I quote, “no power on earth can stop an idea whose time has come.” This is very well the era IP evolution. Where software is expressly ousted from patent protection, CRIs come to their rescue. New types of intellectual property rights are on the rise, for example, Data Exclusivity, Orphan Drug Exclusivity, Standard Essential Patents etc. India lags behind in several of these emerging trends, partly because of the lack of legislature in several issues and partly because of its mixed priorities. Legal framework needs to substantiate these issues more coherently, while maintaining India’s pro public-benefit approach towards IP.

Invention in softwares

While identifying what kind of protection is to be granted to an IP, one needs to identify on what is the “intellectual” in that property, is it an invention or a literary work?Software i.e. computer programme has found its mode of protection in the Indian Copyright Act, 1957. S2(ffc) defines computer programme as “a set of instructions expressed in words, codes, schemes or in any other form, including a machine readable medium, capable of causing a computer to perform a particular task or achieve a particular result”. These are as such included in “literary work” defined in S.2 (o) of the Act, “literary work includes computer programmes, tables, and compilations including computer literary databases.”

On the other hand, the Indian Patents Act, 1970 expressly excludes computer programmes from the ambit of patentable subject- matter, visavis including it in Section 3 what are not inventions, S. 3 (k) a mathematical or business method or a computer programs  per se or algorithms; and S.3 (m) a mere scheme or rule or method of performing mental act or method of playing game; expressly excludes computer programs from patentable subject matter.[1]

However, the Patent Office prescribes guidelines to outline various regulations and explanations regarding patentability of computer related inventions (CRIs), last updated on 30 June, 2017.[2]

The legislative intent to attach the suffix per se to computer programme is evident by the following view expressed by Joint Parliamentary Committee while introducing Patents (Amendment) Act, 2002:

“In the new proposed clause (k) the words “per se” have been inserted. This change has been proposed because sometimes the computer programme may include certain other things, ancillary thereto or development thereon. The intention here in not to reject them for grant of patent if they are inventions. However, the computer programmes as such are not intended to be granted patent. This amendment has been proposed to clarify the purpose”.[3]

Example:

1. In re Accenture Global Service GMBH Vs. The Assistant Controller Of Patents & Designs[4], relates to Indian patent application number 1398/DELNP/2003, which is now a granted patent as patent number 256171, whose present legal status at the patent office database is, “Enforce with Due date of next renewal as 21/02/2017”. This patent application was initially refused for patent registration by patent office under the provisions of Section 3(k) of the Indian patents act.

However, the patent applicant appealed before the IPAB and as per the Controller’s decision, it was held that the instant invention as claimed is not software per se but, a system is claimed which is having the improvement in web services and software. Accordingly, it was held that the invention since not falling in the category of section 3(k), viz software per se, corresponding objection was waived and the patent was granted.

2. Nissan Motor filed a series of patent applications in 2017 with respect to the computer softwares inter alia a travel control device and method for vehicle[5] comprising: a target acquisition means for acquiring target information which includes the location of an avoidance target that exists near a vehicle, a vehicle information acquisition function for acquiring information which includes the location of a vehicle, and drive assist device[6] which is a driving assistance device for assisting driving when a host vehicle is changing lanes wherein the device is provided with; a position measurement means for measuring the position of the host vehicle; a detection means provided to the host vehicle the detection means detecting the conditions around the host vehicle; a database for recording map information.

The aforementioned claims of Nissan Motor are claims concerning Computer Related Inventions (CRIs) which mean to perform the function as mentioned above and hence are termed as means + functions defined in the Guidelines for Examination of Computer Related Inventions.[7]

In light of the guidelines published by the Indian patent office for examination of software patents / computer related inventions (CRIs), software patents can be applied in India by way of combination of hardware and software features, which are novel, inventive and possess industrial applications. It may be categorized as Hardware based inventions: apparatus/ system/ device, Method/process based, Computer program product/ computer readable medium. Unless the software is a computer program per se, it may be granted a patent in India, and hence Nissan stands a fair chance to be granted the aforementioned patents. However, in the case of any conflict between The Indian patents Act and the said Guidelines, the Act is to prevail and for such instances, it is essential to have rules with the effect of laws incorporating CRIs in patentable subject matter.

On the same lines European Patent Convention expressly excludes computer programs, per se, from the purview of patentable subject matter.

Whereas in USA, there is no specific exclusion of software or business methods from patentable subject matter.  The law states that the subject matter, to be patentable, must be a useful process, machine, manufacture or composition of matter. According to the US Supreme Court, the Congress intended the statutory patentable subject matter to include “anything under the sun made by man,” but the laws of nature, natural phenomena and abstract ideas are three specific areas which are not patentable.[8]

Emerging new IPs

SEPs and FRAND Licensing

A patent that protects technology essential to a standard is called a standard-essential patent.[9] A standard is a document that sets out requirements for a specific item, material, component, system or service, or describes in detail a particular method or procedure.[10] For example, a modern laptop computer implements around 251 interoperability standards.[11]

The concept of SEPs evolved in India when Ericson in 2011 objected to the importation of handsets by Kingtech Electronics (India), claiming that the handsets infringed several of their SEPs in AMR Codec (Adaptive Multi-Rate) technology. The Indian Patents Act, 1970 does not contain any special provision for SEPs. Although, the same have been recognized by the jurisprudence, SEP is defined as …for a technology that forms a part of a standard, the patent is regarded as an essential patent for such standard.An essential patent can be said to be a patent that corresponds to an industry standard. The same standard is mutually agreed by various service providers, equipment manufacturers etc to be mandatorily implemented for a particular technology (such standards are recognized and implemented by the concerned government authority as well). It is meant to ensure that complete compatibility is achieved. It is impossible to claim compatibility with a technology (as defined by the concerned standards) without actually infringing the specific patent (and hence the requirement to obtain a license).[12]

 Following cases in India,

  1. Ericsson and Micromax case,
  2. Ericsson and Intex case
  3. Ericsson and Best It World (India)
  4. Ericsson and Xiaomi Technology
  5. Ericsson and Lava International Private Limited
  6. Telefonaktiebolaget lm Ericsson (publ) v.Competition Commission of India and another,

have established clearly that the necessary steps to be taken by any company/ legal entity, intending to incorporate any technology in its product that is standardized by any SSO (Standard Setting Organisation). It has to,

1.Incorporate the patent which is essential to obtain that standard.

2. To enable themselves of the use of aforesaid patent, without infringing it, they require obtaining a license from the holder of the aforesaid patent.
However, such a situation can have an obvious monopolistic outcome in the hands of the patent holder, and to curb such a situation before-hand, the patent holder has its commitments as a member of the SSOs, these commitments are known as FRAND commitments. Whereas the question remains as to what are the clear boundaries of fair, reasonable and non-discriminatory license terms, is to be determined by the consensus reached by the parties, and if the parties are unable to reach such consensus, they may appoint a mediator for the purpose, and yet if the party seeking the license considers the license terms to be abusive of the dominant powers of the patentee, the CCI holds proper jurisdiction to inquire and investigate into the same.

Data Exclusivity

Data Exclusivity is a TRIPs Plus element that is much debated in India. It arises from the interpretation of the Article 39 of the TRIPs agreement, “Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use [13]wherein the big Pharmaceuticals and countries like USA interpret, “protection against unfair commercial use” to obviously mean, “protection of clinical data required to be submitted to a regulatory agency to prove safety and efficacy of a new drug, and prevention of generic drug manufacturers from relying on this data in their own applications.” USTR (United States Trade Representative) has been negotiating bilateral agreements enforcing the said interpretation of TRIPs, which is beyond the actual agreement and is thus referred to as a TRIPs Plus clause, with India. The Drugs and Cosmetics Act, 1940 provides for data exclusivity for a “new drug” under section122E for a total period of 4 years from the date of approval. There were considerations in November, 2016 that this period of four years to be increased to ten years.[14] Such exclusivity is itself a protection and does not depend upon the validity of the patent associated to the same drug, so even if the patent associated to the drug stands invalidated, the exclusivity stands unaffected and the drug remains out of the reach of the generic producers. There is no evidence that the four years of protection, already provided, was insufficient, and neither is there any protocol necessitating India to increase the said period. Such provision would delay market access of drugs at reasonable prices to the common people. Although, USA itself provides for 7 years of data exclusivity but the economic and developmental status of India, would suffer with such an amendment to the section.

Orphan Drug Exclusivity

An orphan drug is a pharmaceutical agent that has been developed specifically to treat a rare medical condition. India currently has no regulations for orphan drug manufacturing or selling. Treating rare or orphan diseases is important to India but very costly, which increases the patient burden. In India, 72,611,605 people are suffering from rare diseases, and 6,000–8,000 rare diseases can be found, including LeishmaniasisNorrie disease,ArthrogryposisCystic FibrosisWilson Disease, etc., many of which still do not have any cure and are mostly genetic in nature.[15]

Many countries have different definitions and regulations of orphan drugs,

USA under its The Orphan Drugs Act (ODA) is a federal law concerning rare diseases that affect fewer than 200,000 people or are of low prevalence, oraffects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will recovered from sales in the United States of such drug. Determinations under the preceding sentence with respect to any drug shall be made on the basis of the facts and circumstances as of the date the request for designation of the drug under this subsection is made.[16]

According to the Orphan Drug Regulation in Europe, an orphan disease is a disease or disorder that affects fewer than 5 in 10,000 citizens.[17]

In Australia, RareDiseases are defined as a condition, syndrome or disorder that affects 1 in 10,000 people or less (The Australian Therapeutic Goods Authority).[18]

The lack of regulation in India increases the burden on the patients but also negatively impacts the economic success of India’s pharmaceutical industry. Orphan drugs may help pharmaceutical companies reduce the impact of revenue loss by patent expiration of blockbuster drugs. Although there may still be challenges ahead for the industry, orphan drugs seem to offer the key to recovery and stability within the market. Governments of various countries have proactively implemented special incentives for the manufacturers of orphan drugs. For example, regulations include accelerated marketing procedures, marketing exclusivity, tax credit grants for research, reconsideration of applications for orphan designation, and technical assistance for elaboration of the application file.

Intellectual Property Rights came into existence with the primary objective of promoting the progress of science. Patents are the rights that grant exclusivity to the patent holders, where they can exclude others from exploiting their invention which they have spent their R&D upon. This creates a monopoly in the hand of the right holder; this monopoly was intended to serve as an incentive for creation.
What we can observe with the emerging trend of IP is that the protection is shifting its focus from promoting innovation in every field to reserving exclusivity. Pharmaceuticals have been trying to evergreen their patents on blockbuster drugs by merely changing the form of the drug, which when restricted by the Indian Courts by the mandate of S.3(d) of the Indian Patents Act, the validity of which section was found to be challenged in the Supreme Court. The Supreme Court held the section to be constitutionally valid, thereby striking down Bayer’s contentions[19], leading to many disappointed Pharmaceutical Companies. Data exclusivity is yet another tool aiming at the same monopolistic outcome, protecting the clinical data of any “new drug” for an absurd period of time. A “new drug” is not defined as a patented drug but simply a drug which has not been used in the country to any significant extent under the Drugs and the Cosmetics Act[20].

In re Ericsson v. CCI, it was alleged that Ericsson had added a covenant subjecting all disputes relating to matters under their FRAND license to the jurisdiction of Swedish Courts, thereby causing unnecessary costs for Indian mobile phone companies.[21] There are no specific guidelines as to what is fair, reasonable and non- discriminatory, due to which big fishes in the market construe the terms in their own brackets of convenience. Considering the economic condition of the Indian market, such licensing terms can lead to winding up of small and medium enterprises which is to be further evaluated by the Competition Commission of India.

This prevailing trend is untimely exclusivity masked in the disguise of evolution. However, exclusivity is an innate part of evolution, provided, used in the solution of overlooked issues such as orphan care drugs. Exclusivity is indeed very appealing for pharmaceutical companies to invest their R&D in the production of orphan drugs. It curbs their fear of negative commerce which appears to be an obvious result of producing any product with low commercial demand. With regulations such as a fixed exclusivity period over their drug and royalty standards, a profit margin can be achieved in addition to the recovery of production costs in the aforesaid duration.The shifting trend towards exclusivity can positively shape the Indian IP regime, if given the right direction.

About the Author: Namisha Jain, ILS law college, Intern  at Khurana and Khurana Advocates and IP Attorneys and can be reached at info@khuranaandkhurana.com

[1]  Indian Patents Act, 1970

[2] www.ipindia.nic.in/writeraddata/Portal/Images/pdf/Revised_Guidelines_

for_Examination_of_Computer-related_Inventions_CRI.pdf

[3] Report of the Joint Committee presented to the Rajya Sabha on 19th December, 2001 and laid on the table of Lok Sabha on 19th December 2001.

[4]  http://www.ipabindia.in/Pdfs/Order-283-2012-OA-22-2009-PT-DEL%20(Final).pdf

[5] Application No. 201747007327 A; www.Ipindia.nic.in/writeaddata/Portal/IPOJournal/1_471_1/Part-2.pdf

[6]  Application No. 201747015385;www. Ipindia.nic.in/writeaddata/Portal/IPOJournal/1_471_1/Part-2.pdf

[7] http://www.ipindia.nic.in/writeraddata/Portal/Images/pdf/Revised_Guidelines_for

_Examination_of_Computer-related_Inventions_CRI.pdf

[8] Bilski v. Kappos

[9]  http://ec.europa.eu/competition/publications/cpb/2014/008_en.pdf

[10]  http://www.cencenelec.eu/standards/DefEN/Pages/default.aspx

[11]  http://www.standardslaw.org/How_Many_Standards.pdf

[12]  In re Telefonaktiebolaget lm Ericsson (publ) v. Intex Technologies (India) Limited I.A. No. 6735/2014 in CS(OS) No.1045/ 2014

[13]  https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

[14] https://www.ip-watch.org/2016/11/06/indian-generic-pharma-warns-government-caving-us-pressure-data-exclusivity/

[15] Adapted from the Rare Diseases List provided by the Foundation for Research on Rare Diseases and Disorders (accessed May 7, 2015)

 [16] https://www.fda.gov/forindustry/developingproductsforrarediseasesconditions

/howtoapplyfororphanproductdesignation/ucm364750.htm

[17] http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2000:018:0001:0005:en:PDF

[18] http://www.rarediseasedayaustralia.com.au/what-is-a-rare-disease/

[19]  Novartis AG v. Union of India CIVIL APPEAL Nos. 2706-2716 OF 2013 (ARISING OUT OF SLP(C) Nos. 20539-20549 OF 2009)

[20] Rule 122E of the Drugs and Cosmetics Act, 1945- Directorate General of Health Services. The Drugs and Cosmetics Act and Rules. D&C Rule’s 1945- 122E:2005. Delhi: D&C; 2005. p. 134.

[21]  Ericsson v. CCI W.P.(C) 464/2014 & CM Nos.911/2014 & 915/2014

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Compulsory Licensing: An Indian Overview

Compulsory licenses are sovereign state authorizations that enable a third party to make, use, or sell a patented product without the consent of the patent holder. Provisions pertaining to compulsory licensing are provided for under both the Indian Patent Act, 1970, as well as the international legal agreement between all the member nations of WTO – the TRIPS.In India, Chapter XVI of the Indian Patent Act, 1970 deals with compulsory licensing whilethe conditions thatneed to be fulfilled for the grant of a compulsory license are laid down under Sections 84 and 92 of the Act.

In accordance with Section 84(1)of the Indian Patent Act, 1970, after three years from the grant of a patent, any interested person may make an application for a compulsory license on the grounds that the patented invention:

(a) Does not satisfy the reasonable requirements of the public;

(b) Is not available to the public at a reasonably affordable price; and

(c) Is not worked in the territory of India.

In addition to the aforementioned grounds, according to Section 92 of the Act, compulsory licenses can also be issued suomotu by the Controller of Patents pursuant to a notification issued by the Central Government if there is either a “national emergency” or “extreme urgency” or in cases of “public non-commercial use”. The said section enables the Government of India to notify to the public of such extreme circumstances, whereupon, any person interested can apply for a compulsory license and the Controller in such case may grant to the applicant a license over the patent on such terms and conditions as he thinks fit.

The patentee, however, has the right to be heard in the compulsory licensing application process.

India’s first ever compulsory license was granted by the Patent Office on March 9, 2012, to Hyderabad-based Natco Pharma for the production of generic version of Bayer’s Nexavar, an anti-cancer agent used in the treatment of liver and kidney cancer. It was established in the Bayer vs Natco case that only 2% of the cancer patient population had an easy access to the drug and that the drug was being sold by Bayer at an exorbitant price of 2.8 lakh INR for a month’s treatment[1]. Further, on the ground that Nexavar was being imported within the territory of India, the Indian Patent Office issued a compulsory license to Natco Pharma, which assured that the tablets would be sold for Rs. 8,880/- per month. It was settled that 6% of the net sales of the drug would be paid to Bayer by NatcoPharma as royalty.

In the second case of Compulsory licensing in India, the Controller rejected BDR Pharmaceuticals’ application for compulsory license (made on March 4, 2013) for BMS cancer drug, SPRYCEL[2]. The Controller rejected the compulsory license application made by BDR for stating that BDR has failed to make prima facie case for the making of an order under section 87 of the Act. Controller in the said case observed that BDR Pharmaceuticals had not made any credible attempt to procure a voluntary license from the Patent holder and the applicant has also not acquired the ability to work the invention to the public advantage.

In the most recent case of compulsory licensing in India, Lee Pharma, a Hyderabad based Indian pharma company, filed an application for compulsory license (dated 29.06.2015)for the patent covering AstraZeneca’s diabetes management drug Saxagliptin. In order to make a prima facie case, Lee Pharma strived to show that their negotiations for a voluntary license with the patent owner were not rewarding as they did not receive any response from the Patent owner within a reasonable period. The grounds alleged by Lee Pharma were that:

  • the patentee has failed to meet the reasonable requirements of the public,
  • the patented invention is not available to the public at a reasonably affordable price, and
  • the patented invention is not worked in India.

However, all the three grounds of Lee Pharma were rejected by the Controller General and the Compulsory license application was refused[3]. The application was rejected on the basis that Lee Pharma failed to demonstrate what the reasonable requirement of the public was with respect to Saxagliptin and further failed to demonstrate the comparative requirement of the drug Saxagliptin vis-a-vis other drugs which are also DPP-4 inhibitors. Further, Controller General held that all the DPP-4 inhibitors were in the same price bracket and the allegation that Saxagliptin alone was being sold at an unaffordable price was unjustified. The Controller General also stated that Lee Pharma failed to show the exact number of patients being prescribed the patented drug and how many of them were unable to obtain it due to its non-availabilityand consequently it was difficult to hold whether manufacturing in India was necessary or not.

Considering the last two compulsory license cases in India, it is clear that the provisions of compulsory license cannot be misemployed to diminish the rights of the patent holdersand that the basic jurisprudence governing the subject of compulsory license lies in balancing the conflicting interest of the patentee’s exclusive rights and making the invention available at an affordable price to third parties in case of need.

[1]http://thefirm.moneycontrol.com/story_page.php?autono=1132015

[2]https://iiprd.wordpress.com/2013/11/13/indian-patent-office-rejects-compulsory-licensing-application-bdr-pharmaceuticals-pvt-ltd-vs-bristol-myers-squibb/

[3]http://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/india-rejects-compulsory-license-application-of-lee-pharma-against-astrazenecas-saxagliptin/articleshow/50652935.cms

About the author: Tanu Goyal, Patent Associate at IIPRD and can be reached at: tanu@khuranaandkhurana.com

Division Bench of Delhi HC stays restoration of Monsanto license agreements with Nuziveedu Seeds

In the light of the recent order by Division Bench of Delhi High Court, this is an update to author’s prior blog dated April 5 2017 pertaining to the legal dispute between Nuziveedu Seeds and Mosanto.

US-based agro major Monsanto Technology LLC and Hyderabad-based seed manufacturer Nuziveedu seeds had been locked in a long-term licensing agreement whereby Nuziveedu Seeds was entitled to use Monsanto’s patented seed technology – Bollgard II, for which Monsanto received a patent in 2009 (Patent Number- 232681, granted on 20th March 2009) in India, for its ability to modify cotton seeds to include a microbe- Bacillus thuringiensis (Bt), which fortifies cotton plants against bollworms. In lieu of making use of this technology, Nuziveedu Seeds was required to pay trait fees to Monsanto.

However in November 2015, MMBL (Mahyco Monsanto Biotech Ltd), a joint venture through which Monsanto sells cotton seeds in India and has sub-licensed Bt cotton seed technology since 2002 to various domestic seed companies, terminated the license agreements of Nuziveedu Seeds Ltd. and its subsidiaries – Prabhat Agri Biotech Ltd and Pravardhan Seeds Private Ltd on account of what it said continued refusal to pay contractually agreed trait fees amounting to more than $20 million.

Monsanto later sued Nuziveedu Seeds (and its subsidiaries) for continuing to sell cotton seeds using its patented Bt technology, even after the termination of the license agreements in 2015. Dismissing the claim, the single judge (Justice R.K. Gauba) on March 28 had held (order) that the license agreements allowing Nuziveedu Seeds to use Monsanto’s patented seed technology still continued to be in force and binding on both parties.

This decision allowed Nuziveedu to continue to use Monsanto’s genetically modified cotton seed technology and had directed the license agreements between the two companies to be modified as per the GM Technology Licensing Agreement found in the Licensing and Formats for GM Technology Agreement Guidelines, 2016.

The court had also held that all future royalty payments for the use of Monsanto’s patents were to be made as per the cotton seed price control order issued by the central government. The 2015 price control order reduces the cost of cotton seeds by 74 per cent, from Rs 163 to Rs 43 per packet (exclusive of taxes)[1].

Monsanto appealed against this single-judge order passed on March 28 which had held that the termination of its license agreements with Nuziveedu was illegal and arbitrary in nature.

Senior advocate Kapil Sibal, counsel for Monsanto, argued that the single judge could not pass a direction to restore inter-party contracts that had been terminated by one of the companies[2].

The Division bench of Hon’ble Delhi High Court granting interim relief to Monsanto, stayed its single judge’s order reinstating a sub-licence between US-based agro major Monsanto Technology and three Indian seed companies, which the foreign entity had terminated.

ABOUT THE AUTHOR:

Tanu Goyal, Patent Associate at IIPRD and can be reached at: tanu@khuranaandkhurana.com.

[1]http://www.business-standard.com/article/companies/high-court-stays-restoration-of-monsanto-agreements-with-nuziveedu-seeds-117041000803_1.html

[2]http://www.livemint.com/Companies/DvBDJEMcG9GXATm9JADOLL/Delhi-HC-stays-restoration-of-Monsantos-sublicence-pact-wi.html

Samsung Patent Licensing Agreement with Personalized Media Communications

Texas-based Personalized Media communications, which is having a seminal intellectual property portfolio, has successfully signed a patent licensing agreement with Samsung Corporation and its affiliates.

PMC patent portfolio includes around 100 issued patents and pending applications that cover the use of control and information signals to control automated systems for generating and delivering electronic content to a display that is relevant to a user. Over the years, PMC is consistently pursuing a license-first approach to commercializing its intellectual property.

In November 2015 PMC filed suit against Samsung in the Eastern District of Texas, claiming the electronics maker had infringed patents related to signal processing. Specifically targeting Samsung digital televisions and its Android smartphones. In its complaint, PMC said it had months of discussions in the year 2014-15 about potential license but failed to reach a deal.

Samsung denied infringement and sought a judgment that the patents were invalid. Samsung said the patents arose from technology that dated back to the 1980’s and now PMC was “stretching its patents to cover modern-day smartphones and TVs, devices and technologies that were science fiction at the time of PMC’s purportedly inventive work.” But Samsung failed to prove the claims it had made.

Later, Samsung filed a series of petitions seeking Patent Trial and Appeal Board review of the patents. PTAB petition and district court case ended after the two sides reached an agreement.

With this licensing agreement, Samsung joins other like Sony, Panasonic, Cisco, DirecTV etc., who also have taken PMC patent license.

About the Author: Gaurav Giri, Sr. Executive Licensing at IIPRD and can be reached at: gaurav@iiprd.com

Meizu – Qualcomm License Agreement Deal

Qualcomm and the Chinese consumer electronics company Meizu recently announced that they had signed a licensing deal with each other. With this deal, they ended a yearlong infringement suit which was filed by Qualcomm against the Chinese company.

In the October of 2016, we came to know that Qualcomm (the largest chipmaker in the world) has filed patent infringement suits against the Chinese smartphone maker Meizu in the US International Trade Commission, the Mannheim regional Court in Germany and in France. The two went under a tiff when Qualcomm claimed that Meizu is refusing to negotiate the patent licensing deals for the chipmaker’s 3G and LTE technologies.

Qualcomm’s technology licensing (QTL) business owns a massive portfolio of wireless technologies and generates a lion’s share of its operating profits also. This portfolio allows it to generate a 3-5% profit over the wholesale price of every smartphone which is sold worldwide. This deal was widely accepted when the smartphone sales were booming but as the prices fell down, smartphone makers complained that the royalties were impacting the already small margins. In response to Qualcomm’s licensing fees, many companies in china started underreporting their shipments to pay the less licensing fee to Qualcomm. The Chinese government in return also slapped Qualcomm with a $975 million antitrust fine and forced it to lower its licensing rates.  Due to this, Qualcomm had to renegotiate new licensing agreements with the companies on its own. Most of the major Chinese companies negotiated new terms with the chipset maker but Meizu was not ready to do this as they said they are not using Qualcomm’s chips in its lower segment phones and mainly puts MediaTek chips in them and Samsung’s Exynos chips in higher end devices.

After all this tussle, the two recently signed a patent licensing deal with each other. Under this deal, Qualcomm is granting Meizu, a worldwide royalty-bearing patent license for developing, manufacturing and selling certain 3G and 4G smartphones following the terms that the royalties produced by Meizu in China should adhere to the terms and conditions of the rectification plan which Qualcomm has submitted to the country’s National Development and reform Commission.

About the Author: Gaurav Giri, Sr. Executive Licensing at IIPRD and can be reached at: gaurav@iiprd.com

BlackBerry and India’s Optiemus Infracom sign’s licensing agreement to capture Asian smartphone market

BlackBerry once a phone innovator, was considered a game changer in 1999 when its mobile phone allowed on-the-go business people to access email wirelessly. BlackBerry devices were popular for a long time almost a decade. But with the introduction of the iPhone in 2007 and Google’s android in 2008 BlackBerry lost its market as a consequence of errors in its strategy and vision.

Blackberry is striving to get back into the smartphone market for which it is strategically using third parties to manufacture and market the Blackberry smartphones. India being the fastest-growing smartphone market in the world, everybody is looking at India as a huge landing ground. Trying to capture Asian smartphone market BlackBerry has signed a long term licensing deal with Delhi based Optiemus Infracom to manufacture and market smartphones in the South Asian countries like India, Bangladesh, Sri Lanka and Nepal.

Optiemus will focus on BlackBerry handsets priced between Rs 12,000 to Rs 20,000, which is the fastest growing segment in India. Under this aggrement Optiemus Infracom will perform all the services for Blackberry starting from manufacturing to selling the Blackberry smartphones in South Asia. Optiemus will provide all the customer support needed for the users. The Delhi-based firm is expecting to sell two million handsets in one year.

BlackBerry will also license its security software and service suite to Optiemus whereby it will launch BlackBerry smartphones running on Google Android operating system and position them as “secured” handsets. The handsets will also receive security updates directly from BlackBerry.

The agreement between BlackBerry and Optiemus also supports the Indian Government’s “Make in India” initiative, which aims to create local manufacturing and job opportunities. As per the agreement, Optiemus will follow BlackBerry’s recent global licensing agreement with TCL Communication and PT BlackBerry.

With this, BlackBerry now have licensees all over the world, in all markets to manufacture BlackBerry branded devices, proving the firm is delivering on its licensing strategy and accelerating its transition to be a ‘future-proof’ security software and services company.

About the Author: Gaurav Giri, Sr. Executive Licensing at IIPRD and can be reached at: gaurav@iiprd.com