Thursday, 22 September 2016

Self-interested bias of committee members amending IEEE’s patent policy devalues SEPs

According to research published by J. Gregory Sidak of Criterion Economics, the process by which the Institute of Electrical and Electronics Engineers (IEEE) amended its patent policy was significantly biased in favour of implementers and against standard-essential patent (SEP) owners.
He finds that large SEP holders that are net patent licensors and were opposed or neutral to the proposed changes had their comments on policy drafts rejected at a substantially higher rate than companies that are predominantly implementers and net payers of licensing fees. The bias favoured patent policy revisions designed to devalue SEPs. IEEE is the standards development organisation (SDO) responsible for developing the 802.11 WiFi standard, among many others.


Sidak provides a succinct description of the patent policy amendments and finds that these limit the ability of SEP owners to generate patent licensing royalties.

“In 2015, the IEEE ratified amendments to its patent policy to mandate that a reasonable and nondiscriminatory (RAND) royalty for a standard-essential patent (SEP)—more precisely, an Essential Patent Claim for an IEEE standard—exclude any value attributable to the standard, and to deny an SEP holder the right to seek an injunction against an unlicensed implementer until appellate review is exhausted. The amendments further say that the determination of a RAND royalty “should,” without limitation, (1) be derived from the value of the smallest salable compliant implementation of an IEEE standard that practices an SEP; (2) comport with a reasonable aggregate royalty burden of the relevant standard; and (3) disregard comparable license agreements obtained under the implicit or explicit threat of an injunction. Because the revisions place strict limitations on an SEP holder’s ability to enforce its patent rights against infringers, they truncate the upper range of the distribution of bilaterally negotiated RAND royalties and thus unambiguously reduce the compensation that the SEP holder may obtain for its technological contributions to the IEEE standards. The IEEE’s patent-policy revisions became effective in March 2015.

The IEEE’s 2015 bylaw amendments are highly significant because each unambiguously reduces the compensation that an SEP holder can obtain for its technological contributions to the IEEE’s standards. Throughout the development of those bylaw amendments, sixteen companies submitted 680 comments on four drafts of the proposed amendments and two drafts of a supporting informational document that an ad hoc drafting committee of the IEEE released for public comment. The ad hoc committee responded to the suggested revisions in each comment, either accepting them and implementing them into the next draft, accepting them in principle, or rejecting them. I find a strong negative correlation between the comment submitter’s status as a firm initially opposed to the revisions (a group primarily consisting of net SEP licensors) and the ad hoc committee’s incorporation of the submitter’s proposed revision in the subsequently revised draft. The treatment of the comments by the ad hoc committee exhibits a statistically significant bias against the firms that opposed the bylaw amendments—primarily large SEP holders—and in favor of revisions designed to devalue SEPs.”

He finds disregard for important principles and safeguards that IEEE upholds in standard setting. He notes that various members complained that the process by which the IEEE amended its patent policy did not comply with the principles of openness, consensus, balance, due process, and right to appeal that are consistent with the IEEE’s standard-setting process, and that the ad hoc drafting committee responsible for the patent policy revisions did not conciliate this dissent. 

“The IEEE patent policy, contained within the IEEE Standards Board bylaws, specifies the conditions under which an SEP holder voluntarily commits to license its SEPs on RAND terms. The bylaws serve as the Standards Board’s constitution and establish the consensus-driven process of developing and promulgating technical standards, including the popular 802.11 Wi-Fi standard. Embedded in the bylaws, as well as in other IEEE governance documents, are comprehensive safeguards that discourage opportunistic, anticompetitive conduct within the IEEE.”

Also according to Sidak:

“[t]he 2015 bylaw amendments deviated from the safe­guards that the IEEE had guaranteed its members in both the foundational documents of the IEEE and its history of consensus-driven policymaking.”

Although amending an SDO’s patent policy is a different process to selecting a technology to incorporate in a standard, it defies logic or probity that an SDO espousing these principles in standard setting should abandon them in amending patent policy – something that is so fundamental to an SDO’s standing and workings.

Sidak identifies self-interest as the reason the ad hoc committee did this. “To those large implementers, it is now expedient to renege on the bargain of interpret­ing the RAND commitment in a manner that is neutral to both net licensors and net licensees.”  The bias he found in the committee’s decision making aligns with the company affiliations and employment of committee voting members and the objectives of those companies:

“the bias suggests that decision making at the IEEE was controlled by parties that seek to devalue SEPs. The process for amending the IEEE’s bylaws did not protect the interests of SEP holders that were disproportionately responsible for the technologies that the IEEE had incorporated into its standards.”

I wrote, here, prior to its adoption, that the amended IEEE patent policy was bad policy. I opined it would undermine the free and fair market for licensing of SEPs and that imposed licensing terms would make IEEE an unattractive venue for patent owners. Most recently, I have also written, here, about how interested parties are also unjustifiably and harmfully trying to foist similar changes on patent licensing practices more widely.


Sidak’s paper can be accessed via the Criterion Economics web site here.

Friday, 9 September 2016

Free and Fair Trade in IP would be Crushed by Compulsory Chip-based SEP Licensing

The Fair Standards Alliance  makes various demands in its “position paper.” Among these it states that a standard-essential patent license “should be available at any point in the value chain where the standard is implemented and that a fair, reasonable and non-discriminatory royalty should in most cases “be based on the smallest device that implements those patents, and additionally it should take into account the overall royalty that could be reasonably charged for all patents that are essential to that standard.”  Some of the FSA’s demands echo changes adopted last year by the IEEE in its revised patent policy


Such dramatic disruption to the basis of SEP licensing would most troublingly affect trade between commercial parties with highly unpredictable outcomes on the amounts actually paid. Whereas technology developers and others can still choose whether or not to participate in IEEE standards setting and can declare with a “negative Letter of Assurance” if they are unwilling to license on the basis of IEEE’s new patent policy, it is not clear how the FSA seeks prosecution of its demands. Compulsory licensing would undermine legal rights enshrined in patent law, eschew the consensus-based and voluntarily agreed patent policies of other standards development organizations while also overriding well-established and prevailing licensing practices.

FSA members including major technology companies Google, HP and Intel hold many patents and collectively spend billions of dollars on R&D, but would like lower charges for licensing SEPs because these tend to be owned by other companies. In a press release this summer, the FSA claims to be “the ‘voice of reason’ whereby we seek the right for all businesses to use standard essential patents under fair and transparent licensing terms.” The FSA’s Chairman Robert Pocknell added that “[w]e cannot and will not accept that Europe’s future economic growth is held hostage by a number of companies bent on endless litigation as a means to reap profit at everyone else’s expense.”

These are strong words but the FSA presents no evidence of harm to economic growth or of excessive payments and profits to patent owners. To the contrary, profits have significantly declined for the major SEP owners in the last year while royalty income has remained flat as a percentage of devices sales revenues.

Total Revenues and Operating Income Declined Substantially for Major SEP Licensors* in 2015


2014
2015
millions
Revenue
Operating Income
Revenue
Operating Income
Alcatel-Lucent
$18,039
$208
$15,962
$798
Ericsson
$34,083
$2,513
$29,923
$2,642
InterDigital
$416
$169
$441
$209
Nokia
$16,101
$1,933
$13,976
$1,888
Qualcomm
$26,487
$7,375
$25,281
$5,593
Total
$95,126
$12,197
$85,584
$11,130
Annual growth in total


-10.0%
-8.8%
*These companies’ licensing revenues account for the majority of SEP licensing fees paid.

Licensing Revenue Rose In-Line with Increasing Mobile Phone Sales Revenues in 2015

2014
2015
$ figures in millions
Licensing
Yield
Licensing
Yield
Alcatel-Lucent
$75
0.02%
$63
0.01%
Ericsson
$1,480
0.36%
$1,745
0.40%
InterDigital
$416
0.10%
$441
0.10%
Nokia
$791
0.19%
$1,145
0.26%
Qualcomm
$7,862
1.91%
$8,202
1.87%
Total
$10,625
2.58%
$11,596
2.64%
Annual growth in total

9.1%
0.06%
Yield = licensing revenues divided by total mobile phone industry revenues.

Total licensing fees paid are dwarfed by device revenues and profits. Industry analysts’ estimates for total mobile phone revenues include IDC’s of $438 billion for 2015. Total industry operating profits for smartphones have continued to grow by 17.6 percent from $53.4 billion in 2014 to $62.8 billion in 2015, according to Strategy Analytics.

With clarification of the European Commission’s position on SEP licensing in its settlements with Motorola and Samsung and with the CJEU Judgment on seeking SEP injunctions in Huawei versus ZTE,  the Commission’s competition agency is now focusing on other smartphone industry matters with its assessment that Apple failed to pay €13bn ($14.6 billion) in taxes on its European profits. Apple’s iPhone operating profits were $55.3 billion and the company’s total operating income was $71.2 billion globally in 2015.

Extended litigation, in various cases, is resulting from “efficient infringement” and the “patent holdout” tactics of free-riding implementers, not from profiteering patent owners.

The rest of my article, in full here, is based on some of my previously published analysis and focused on explaining why existing free-market licensing practices are fair, reasonable, non-discriminatory and well established. The royalty base and royalty rates are agreed bilaterally, not by regulatory fiat or based on silicon foundry costs. Existing licensing agreements reflect the fact that patent claims and corresponding value created relate to entire devices and beyond in communications systems. Forcing change to licensing terms would cause unpredictable disruption to arrangements that have worked very well and enabled new entrants such as Apple, numerous Asian OEMs and others to enter the SEP-intensive markets for smartphones and other devices and then grow to command significant market shares while owning little or nothing in SEPs themselves. 

Monday, 5 September 2016

After Dieselgate comes a multi-million Euro claim for inventor compensation

One of the more esoteric aspects of IP finance is the need to pay extra compensation for inventors in many countries. Whereas some countries consider that an inventor is adequately compensated by his salary when she or he makes an invention, others, like the UK, adopt a position that extra compensation is payable if the invention is somehow (see sections 40 and 41 of the 1977 UK Patent Act).

Germany’s body of law is probably the most comprehensive anywhere. Every inventor is entitled to some level of compensation depending on the use made of the invention. There’s a seperate Act of the Bundestag devoted to claiming rights to the invention, the requirement to keep the inventors involved in the prosecution of the application as well as on compensating the inventors. The Ministry of Labour has also issued a series of Guidlines on how to calculate the level of compensation.

Many inventors dream of fortunes to be made. And earlier in his career, this blogger used to regularly deal with inventors who came to his office expecting a massive salary boost. Several hours of calucation later, they were often politely informed that the amount due was a couple of hundred D-Marks.
Occasionaly some inventors struck it big and Reuters has a great story about a former Volkswagen manager Wolfgang Schreiber (former Bentley/Bugatti head) who is now looking for EUR 20 Million in compensation for use of his invention of the dual clutch gear box. Rumours abound from time to time about large claims being made. Few ever come to court as employees are required to use the arbitration service of the German Patent and Trade Mark Office initially. It’s not clear whether he will get the claimed level of compensation. It’s going to probably depend on the value of the invention actually incorporated into millions of Volkswagen cars. Given that most inventions build on existing ideas and that cars incorporate ideas from hundreds of patents, Volkswagen will probably have a different idea of the value than the inventor.

Monday, 29 August 2016

Twitter: will live sports come to the rescue?


The saga of whether Twitter can make a commercial go of it may be reaching a critical juncture. At least, that is the view of Dan Weil of
Institutional Investor, in his recent piece (August 23, 2016), “Pro Sports Contracts Not a Winning Strategy for Twitter”. The issue is this—the number of active Twitter users is stuck at slightly more than 300 million (313 million for the last quarter), only a 3% gain from last year and a fraction of Facebook’s user numbers. Profits remain elusive (a loss of $107 million, on revenues of $602 million, for the most recent quarter) and the stock has tumbled from a high of $69 to $19 (as of the date of the article).

The generic problem of Twitter is described by Weil as—
“It’s too complicated. Casual users often complain that it’s difficult to find what they want, and filter out what they don’t want….”
Faced with these challenges, Twitter’s response in an effort to remain commercially relevant appears to be an attempt to capitalize on sports contents. Thus, Twitter is reported to have signed deals with four major U.S. sports leagues—football (NFL), baseball (MLB), basketball (NBA) and hockey (NHL), to stream some of the live sports contents. In addition, Twitter has deals with Wimbledon and college sports Pac-12 Networks and there are reports of negotiations regarding golf (PGA) and soccer (MLS). The attraction of sports is clear—unlike other contents, it is most valuable when viewed in real time. Taping and the like is a pale second best, if at all (although this blogger continues to watch the rebroadcast of the 2015 playoff game between Ohio State and Alabama, just to be reassured about Ohio State’s victory).

Against that backdrop, what is Twitter getting in these deals? Most notably, it is not getting exclusivity in broadcasting rights in any of them. Indeed, it is not getting any right of live broadcast at all regarding the NBA. For the other sports, it is receiving the right to broadcast a fixed (and small) number of games. Still, this is better than competing platforms, such as Facebook and YouTube, neither of which has, as of yet, received the right to commercialize live sports events. Still, how far will all of this lead to a viewership that will attract meaningful ad revenues for Twitter?

Add to this the very practical question raised by Weil—
“…. [M]any fans won’t watch a game on its mobile platform if they can’t use Wi-Fi, because of the heavy data usage involved [says equity analyst Peter Stabler]. Many who would be using Wi-Fi would be doing so from their homes, where they can just as easily watch the game on TV. “
So what is one to make of this move by Twitter. Well-known media analyst Richard Greenfield sees it perhaps as a way of making the company more attractive for sale to a legacy media company, for which sports is presumably crucial. Media analyst Victor Anthony is of a different view, seeing these deals as a whole-hearted attempt by Twitter to right the company’s financial ship. Under his scenario—
“If they are successful in doing that, there’s no need for it to be sold. If not, they seek out an acquirer.”
That is well and good, this blogger supposes, but he still wonders what will be its value of Twitter if this gambit fails? Exactly where is the value in the service in such a circumstance? No matter what happens, these developments certainly are far-removed from the often naive 140-character messages that this blogger remembers sending when Twitter first became a popular platform. Whether they are any more likely to lead to commercial success, in light of the generic problems in using the Twitter platform, remains the crucial question.

Friday, 26 August 2016

US Treasury Department Issues White Paper Critiquing EU State Aid Investigations of Transfer Pricing Rulings

On August 24, 2016, the U.S. Department of Treasury issued a White Paper titled, “The European Union’s Recent State Aid Investigations of Transfer Pricing Rulings,” explaining United States transfer pricing concerns with the EU Commission.  The state aid investigations of note, include Apple, Starbucks, Fiat/Chrysler and Amazon.  There are indications that there may be more investigations launched.  Notably, the EU Commission’s positions, apparently, mostly involve transfer pricing concerning intellectual property. 

In February of 2016, Treasury Secretary Lew authored an open letter to the President of the Commission, Jean-Claude Juncker, stating:

that the Commission’s “sweeping interpretation” of State aid doctrine “threatens to undermine” the progress made by the international community “to curtail the erosion of our respective corporate tax bases” and described four principal concerns.  First, the Commission has “sought to impose penalties retroactively based on a new and expansive interpretation of state aid rules.”  Second, the investigations appear “to be targeting U.S. companies disproportionately.”  Third, the new enforcement theory “appears to target, in at least several of its investigations, income that Member States have no right to tax under well established international tax standards.”  Fourth, the Commission’s investigations “could undermine U.S. tax treaties with EU Member States."

The White Paper further explains the concerns and in the Executive Summary states:

The Commission’s Approach Is New and Departs from Prior EU Case Law and Commission Decisions.  The Commission has advanced several previously unarticulated theories as to why its Member States’ generally available tax rulings may constitute impermissible State aid in particular cases.  Such a change in course, which has required the Commission to second-guess Member State income tax determinations, was an unforeseeable departure from the status quo.

The Commission Should Not Seek Retroactive Recoveries Under Its New Approach.  The Commission is seeking to recover amounts related to tax years prior to the announcement of this new approach—in effect seeking retroactive recoveries.  Because the Commission’s approach departs from prior practice, it should not be applied retroactively.  Indeed, it would be inconsistent with EU legal principles to do so.  Moreover, imposing retroactive recoveries would undermine the G20’s efforts to improve tax certainty and set an undesirable precedent for tax authorities in other countries. 

The Commission’s New Approach Is Inconsistent with International Norms and Undermines the International Tax System.  The OECD Transfer Pricing Guidelines (“OECD TP Guidelines”) are widely used by tax authorities to ensure consistent application of the “arm’s length principle,” which generally governs transfer pricing determinations.  Rather than adhere to the OECD TP Guidelines, the Commission asserts it is employing a different arm’s length principle that is derived from EU treaty law.  The Commission’s actions undermine the international consensus on transfer pricing standards, call into question the ability of Member States to honor their bilateral tax treaties, and undermine the progress made under the OECD/G20 Base Erosion and Profit Shifting (“BEPS”) project.
[Hat tip to Pepperdine University School of Law Professor Paul Caron's TaxProfBlog]


Thursday, 18 August 2016

Revisiting the fall of Kodak: are we any smarter about the "what" and "why"?


Four or so years ago, perhaps the most poignant story of a technology leader gone bad was the fall of Kodak. The saga played out on several levels: Kodak versus Fuji, traditional film versus digital technologies, the free-standing camera device versus the embedded camera in a smartphone, and the rise and fall of the value of Kodak's patent portfolio. Much was written about these issues at the time, including by this blogger, but as the several years have passed, the Kodak tale has gradually receded from hi-tech discourse.

Scott Anthony, a frequent contributor to Harvard Business Review on-line, has sought to revisit the Kodak tale in a piece published last month, “Kodak’s Downfall Wasn’t About Technology”. The focus: how did Kodak fail the move from film to digital to cellular? He suggests but rejects the following arguments:

1.The company was so much into the traditional film business that it missed seeing the digital revolution—Anthony says this is wrong, because it was Kodak itself that developed the first prototype of a digital camera, back in 1975.

2. Kodak did not invest in the digital camera business—Anthony claims that not only was the company involved early on in the invention of the digital, but it invested billions to develop digital cameras, albeit with little success.

3. Kodak mismanaged its investment in digital cameras—Yes, Anthony says, the company stumbled a bit at the beginning, but it ultimately developed elegant technologies that enabled one to move from the camera to the computer.

4, Kodak’s big miss was not seeing the move to the smartphone and the role of picture-sharing in social media—Not exactly, says Anthony. In fact, Kodak acquired a photo sharing site—Ofoto—in 2001, but it sought to leverage Ofoto to encourage customers to print more digital images, rather than to focus on file-sharing.

Having raised and shot down all these explanations, how does Anthony explain why Kodak stumbled so badly? He writes:
“The right lessons from Kodak are subtle. Companies often see the disruptive forces affecting their industry. They frequently divert sufficient resources to participate in emerging markets. Their failure is usually an inability to truly embrace the new business models the disruptive change opens up. Kodak created a digital camera, invested in the technology, and even understood that photos would be shared online. Where they failed was in realizing that online photo sharing was the new business, not just a way to expand the printing business.”
This blogger finds Anthony's use of the term “subtle” a bit odd. If Kodak's management failed to perceive that its accumulated technology was pointing towards a new business, not an extension of the current one, such a miscalculation was anything but subtle. Be that as it may-- how did IP fit into this web of corporate myopia? Not for the first time in the corporate world, there was a disconnect between a company's patent prowess, at the technological level, and the utilization of this IP to advance the company’s long-term product goals, at the management level. Add to this the wildly overstated estimates of the company’s patent portfolio in 2011 and early 2012 (amounts up to $2.5 billion or more were earnestly suggested, only to witness the actual sale of the portfolio at slightly over $500 million dollars).

As such, internal management alone was not to blame; the penumbra of supposed expertise brought to bear on understanding the IP value of the company was also heavily flawed. All of this suggests, yet again, that management training still has not figured out how to prepare its students to understand how IP functions within an organization and what is its value and valuation. The fall of Kodak is merely a symptom of the problem, but not the problem itself.

Tuesday, 16 August 2016

"Patent holdup" allegations encourage SEP free-riders

Despite many years of speculation and recently adjusted claims, there is no empirical support for the theory of “patent holdup.” Various eminent experts refute allegations of systemic “patent holdup.” It is likely that “patent holdup” has not occurred in the context of standards and licensing of standards essential patents (SEPs) because of the fair, reasonable and non-discriminatory (FRAND) licensing contracts and available recourse to the courts have ensured that licensees cannot be forced to pay “excessive” licensing fees. 

Free Riders Abound
“Patent holdout,” which is also sometimes referred to as “reverse holdup,“ rather than “patent holdup” may instead be a prevalent problem; although calls for remedies have largely been in response to “patent holdup” allegations. Beguiled courts, antitrust authorities, government policy makers and even a standards development organisation (SDO) are tipping the scales in favour of “patent holdout” by infringing implementers of SEPs. This is destabilising the equilibrium between the interests of the licensors and licensees forged by consensus over decades in the IPR policies of SDOs such as ETSI with Fair, Reasonable and Non-Discriminatory licensing.  As leading academics note, “FRAND Implies Balance” and “FRAND [is not] a one-way street.”  Whereas alleged “patent holdup” supposedly results in excessive royalties, “patent holdout” is undermining licensors attempts even to achieve FRAND terms or to complete any licensing at all in many cases. Licensors are therefore losing their ability to make a fair return on their investments in SEP technologies. This discourages ongoing investments in standard-essential technologies, participation in SDOs and contribution to the standards.

Free-riders who are not paying for the IP they use are gaining an unfair advantage over other implementers who are paying FRAND royalties as well as stealing property rights from technology developers. There is significant evidence of some infringers flourishing while avoiding paying patent licensing fees on their manufactures and product sales for many years. They can, for example, typically challenge FRAND offers in lengthy litigation before paying any royalties. In some jurisdictions, even the royalties ultimately awarded can be derisorily low.[1] In particular, various Asian OEMs accounting for a substantial proportion of global smartphone sales remain significantly unlicensed for at least some of the many SEPs they implement in the devices they manufacture or sell.

On the other hand, Alcatel-Lucent, Ericsson, Nokia and Qualcomm have exited the mobile phone market over the last 15 years while ramping-up R&D in 3G and 4G technologies. These and other technology-development oriented companies can only sustain these risky R&D investments if they can make direct returns on their patent portfolios through licensing. Former network equipment market leader Ericsson has recently ousted its CEO due to poor growth and weak profits despite cost reductions, including in R&D.

“Patent holdup” is manifestly not a systemic problem. There is no empirical evidence of harm to markets or consumers, and such abundant proof of market success—particularly for innovative smartphones and the extensive 3G and 4G networks to which they are connected—including seven billion cellular connections and modest licensing costs totalling only around five percent of device prices

Unmentionable claims
I came upon a paper entitled “Patent Holdup: Myth or Reality?” by Carl Shapiro, dated 6th October 2015, which was circulated as a hard-copy and presented at an IEEE-SIIT conference at the Intel-sponsored key-note address. In this, the author concedes that there are “few documented instances of actual holdups” and that they are “exceedingly difficult for researchers to detect and reliably quantify.” He has backed off from his previous claims of prevalence of “patent holdup” where he stated “patentees regularly settle with companies in the information technology industries for far more money than their inventions are actually worth. These companies are paying holdup money to avoid the threat of infringement.”  Shapiro has retreated due to lack of empirical support for these original claims which is because portfolio licensing among many licensees on FRAND terms together with the courts ensure that holdup royalties are rarely demanded and are never paid. However, Shapiro takes another position where there is also no supporting evidence. He now claims that the social costs caused by the alleged “patent holdup” problem are in the actions taken to prevent holdup and in the opportunities forgone under the threat of “patent holdup.”

His 2015 paper is labelled a preliminary draft that should not be quoted, yet the verbatim thesis of this most outspoken author is evidently being adopted elsewhere; including in a speech by the US Department of Justice’s Chief Economist, Nancy Rose, at a George Washington University conference on “Patents in Telecoms” in November 2015. In this, she analogises that “patent holdup” is like dark matter in the universe – something that cannot itself be detected but is present. She said that the existence of dark matter can be inferred from effects on visible matter.

With the passing of ten months since Shapiro presented his paper at the IEEE event and with the DoJ’s name endorsing this latest development in “patent holdup” theory, I believe it is high time to shine some light on the flaws in arguments made by Shapiro and Rose by making their writings available and by rebutting them here. I do not see why they should enjoy the privilege of being heard and given the opportunity to persuade, while also indefinitely being able to shield their postulations from scrutiny or criticism.

My full analysis on Shapiro's paper and Rose's presentation can be found in a pdf here.



[1] For example, a Chinese court awarded InterDigital in patent litigation against Huawei a mobile SEP royalty rate of only 0.019 percent of device sales. This is extremely low given that InterDigital’s overall royalty yield (i.e. its total royalty income divided by total device market sales revenues) including licensed and unlicensed sales globally is five times higher at around 0.10 percent.