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Debate continues on IEEE rule changes.

Byline: Ed Silverstein

The Institute of Electrical and Electronics Engineers (IEEE) has changed its bylaws related to licensing and a controversy has erupted.

Companies such as chipmaker Qualcomm that oppose the rule changes have refused to participate.

As a result, the IEEE could reconsider the rule and possibly modify it, Michael Ng, an attorney who works at Kerr & Wagstaffe, speculated in an interview.

"You may see a legal challenge by one or more of the companies affected by the rule," Ng told InsideCounsel. "How it all plays out is yet to be seen."

The IEEE agreements are "contractual in nature," Ng explained. It is not like a rule by the federal government. But the U.S. Department of Justice supported the rule changes.

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FURTHER READING: DOJ approves IEEE's changing rules on standard essential patents Technology: Can reasonable and nondiscriminatory licensing terms follow a purchased patent? What is reasonable and non-discriminatory (RAND) patent licensing? (Part 1)

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In a recent letter, the Justice Department said the update "has the potential to benefit competition and consumers by facilitating licensing negotiations, mitigating hold up and royalty stacking, and promoting competition among technologies for inclusion in standards. The Department cannot conclude that the Update is likely to harm competition. Further, to the extent that there are any potential competitive harms, the Department concludes that the Update's potential procompetitive benefits likely outweigh those harms."

Overall, some companies hold a lot of intellectual property and do not like the rule, Ng said. Qualcomm, which has a lot of patents, opposed changes made by the IEEE. Qualcomm makes money by the licensing of technology.

"Qualcomm will not make licensing commitments under the new policy," the company said in a recent statement reported by the news media.

"This is a seismic shift," Sean Murphy, Qualcomm's vice president and counsel for international government affairs, was additionally quoted by The Wall Street Journal.

Other companies, such as Apple, Intel and Microsoft tend to favor the rule changes, because they will make more money on the sale of mobile devices.

"Tech companies are divided based on their own particular needs," Ng said.

Meanwhile, the IEEE has defended the process used to come up with the rule changes. The IEEE's Board of Governors Standards Association in December approved the changes to the IEEE patent policy. "This update is designed to provide greater clarity and predictability for patent-holders and implementers," the organization explained in a statement. "The update resulted from a rigorous process over the past two years that included extensive input from a broad range of stakeholders who may choose to develop standards within the IEEE-SA framework. The members of the Board of Governors and its committees all serve as fiduciaries of IEEE who must make decisions in the best interests of IEEE."

Earlier in February, the IEEE Board of Directors voted to approve the policy changes. The changes to the IEEE Standards Association Standards Board bylaws will become effective during Q1 of 2015.

"Rules require that standards be developed under procedures that incorporate due process, openness, transparency, broad consensus building, and balance without dominance to ensure that all parties are heard," the organization added in its statement. "IEEE strives to develop standards that can achieve universal availability and gain widespread adoption in the market."
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Publication:Inside Counsel Breaking News
Date:Feb 20, 2015
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