Harvard Professor Guilty of Misrepresenting Relationship with China

On December 21, 2021, a jury found Harvard Professor Charles Lieber guilty of misrepresenting his relationship with China.  The U.S. Department of Justice Press Release, in part, states:

“We expect professors like Dr. Lieber who are privileged to be part of taxpayer-funded research to be honest in their actions,” said Philip M. Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General. “Today’s conviction demonstrates OIG’s commitment to ensuring that taxpayer dollars are not wasted, and that those handling these funds are truthful in their dealings with federal agencies.” . . .

Lieber served as the Principal Investigator of the Lieber Research Group at Harvard University, which received more than $15 million in federal research grants between 2008 and 2019. Unbeknownst to his employer, Harvard University, Lieber became a “Strategic Scientist” at [the Wuhan University of Technology in Wuhan, China] WUT and, later, a contractual participant in China’s Thousand Talents Plan from at least 2012 through 2015. China’s Thousand Talents Plan is one of the most prominent Chinese talent recruitment plans designed to attract, recruit and cultivate high-level scientific talent in furtherance of China’s scientific development, economic prosperity and national security.

Under the terms of Lieber’s three-year Thousand Talents contract, WUT paid Lieber a salary of up to $50,000 per month, living expenses of up to $150,000 and awarded him more than $1.5 million to establish a research lab at WUT. In 2018 and 2019, Lieber lied to federal authorities about his involvement in the Thousand Talents Plan and his affiliation with WUT.

In tax years 2013 and 2014, Lieber earned income from WUT in the form of salary and other payments made to him pursuant to the Strategic Scientist and Thousand Talents Contracts, which he did not disclose to the IRS on his federal income tax returns. Lieber, together with WUT officials, opened a bank account at a Chinese bank during a trip to Wuhan in 2012.  Thereafter, between at least 2013 and 2015, WUT periodically deposited portions of Lieber’s salary into that account. U.S. taxpayers are required to report the existence of any foreign bank account that holds more than $10,000 at any time during a given year by the filing an FBAR with the IRS. Lieber failed to file FBARs for the years 2014 and 2015.

The charge of making false statements provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. The charge of making and subscribing false income tax returns provides for a sentence of up to three years in prison, one year of supervised release and a $100,000 fine. The charge of failing to file an FBAR provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

USPTO Trademark Expungement and Reexamination Guide Released

The United States Patent and Trademark Office has released a helpful 13 page guide on how to apply the new expungement and reexamination proceedings for nonuse created by the relatively new Trademark Modernization Act of 2020.  The guide is available, here. 

Royalty pricing dichotomy in 5G SEP patent pool for Open RAN Radio Units

MPEG LA and Unified Patents have just launched their Alium patent pool program that seeks to license 4G LTE and 5G standard-essential patents (SEPs) for a minimum charge of $10 per Open RAN Radio Unit (RU). Previously, attention to licensing and royalty charges for cellular SEPs has been overwhelmingly on devices, including mobile phones and recently in IoT. Alium’s stated objectives are to “help accelerate 5G” by providing suppliers of these functional units in network equipment with SEP licensing and to establish Fair, Reasonable and Non-Discriminatory (FRAND) royalty rates for them. It has not yet been disclosed which or how many owners of patents declared essential to the above standards have agreed to join the pool, if any, or are likely to do so.

Diversifying RAN equipment supply

Cellular technologies are highly standardized in the most open and collaborative way, so that any piece of network equipment will work with any device conforming to the same technical specifications from standard-setting organization 3GPP.

However, lack of standardized interfaces supporting interoperability among different functional parts the Radio Access Network (RAN)—as defined by the Open RAN Alliance as RU, Distributed Unit (DU) and Centralized Unit (CU)—has made it difficult or impossible to mix and match cellular network equipment software and hardware from different vendors. Consequently, operators have had to procure all those functional units from the same vendor for any given geographic part of their networks. The O-RAN Alliance that develops the standardized interfaces, has adopted reference designs for outdoor macrocells and indoor small cells (e.g., low PHY layer functionality per 7-2x split).

Open RAN promises to increase choice, competition among vendors and drive down costs in network equipment supply by enabling operators to integrate functional unit products from different suppliers. This approach is already being pursued by new operators including Rakuten in Japan and Dish in the US. Incumbent operators are also major advocates for Open RAN—including the O-RAN Alliance’s founding members AT&T, China Mobile, Deutsche Telekom, NTT DoCoMo and Orange who enjoy questionable governance privileges over others in the alliance. Some of these are making select Open RAN deployments, typically where integration and performance requirements are modest.

Licensing new entrants and establishing FRAND rates

For Open RAN to develop and succeed—as many desire and expect—in addition to technical issues, various commercial issues also need to be resolved. These include patent licensing for the vast trove of standard-essential technologies employed in 4G LTE and 5G network equipment. Given that cellular devices are the most significantly SEP-licensed of any product category, it seems likely that the emerging ecosystem in Open RAN might also become significant in SEP licensing.

Widespread cellular SEP licensing of mobile phones for cash royalty payments took off with the introduction of CDMA-based technologies including CDMAOne in the 1990s, and with CDMA2000 and WCDMA from around the millennium. Leading SEP owners; Ericsson, Nokia and Qualcomm, license these patents, but have ceased producing handsets. Since the introduction of 4G LTE, many different SEP owners’ disclosures have revealed “rate card” licensing charges for their cellular SEPs in handsets and other devices. The leading cellular SEP licensors generate around $9 billion annually.

Previously, in 2G with GSM, an oligopoly of vertically-integrated companies including Alcatel, Ericsson, Motorola, Nokia and Siemens owned most of the SEPs and also produced the standard-compliant devices. The SEPs were either cross-licensed or never asserted among those companies, and so royalty rates were unclear and net payments, if any, were invisible publicly.

The licensing of cellular RAN equipment—where there are also only a small number of vertically-integrated OEMs including Ericsson, Nokia, Huawei—is still rather like the above, as it used to be in 2G for handsets.

Open RAN’s open interfaces are enabling new entrants and new routes to market in cellular network equipment software and hardware supply. However, network function units—including RUs in particular—also implement numerous 3GPP technologies, many of which are SEP based and some of which are different to those in User Equipment (UE). Unlike the vertically-integrated oligopoly of OEMs who already have ingrained access to the SEP technologies required, many of these newcomers will need to license numerous SEPs and will have nothing much to cross-license.

Critical mass for pooling

While neither the operators nor the new-entrant Open RAN technology suppliers are likely to be enthusiastic about making royalty payments to many SEP owners, Alium claims it “provides a one -stop shop to license essential patents and help establish a FRAND rate.”

Patent pooling entirely within the cellular sector has not fared well so far. Bilateral licensing has prevailed between cellular SEP owners and handset OEMs, with few licensors and SEPs licensed through the 3G WCDMA or 4G LTE patent pools. Avanci’s pooling of cellular SEPs for licensing outside the cellular sector to automotive OEMs seems more successful with many licensors and licensees, and pooling holds promise in IoT generally.

Successful pools tend to balance the interest of licensors and licensees. For example, while MPEG LA’s AVC/H.264 video codec patent pool has around 40 licensors, many of these are also major implementers who were motivated to join the pool because they are more interested in minimizing what they are charged to license others’ SEPs than the smaller amounts they can generate in licensing their own SEPs.

In cellular, several major declared-SEP owners have well-established licensing programs and can do better for themselves by licensing bilaterally—particularly if their SEPs are regarded more valuable than the average of those in the pool. Antitrust authorities also demand that bilateral licensing is not precluded by the existence of patent pools, so that competition is preserved.

Participation and rate setting

Although Alium has already revealed its licensing charges, it unusual for a patent pool to do that before disclosing participating licensors. This makes it impossible to estimate what proportion of all applicable SEPs might be included in the pool. Alium would welcome participation from the major cellular SEP licensors, who include infrastructure OEMs; Ericsson, Huawei and Nokia. It seems that rather than expecting those to join, it will be from among numerous others—many of who have far fewer declared SEPs—that participating licensors will emerge.

Alium follows the fashion of setting rates on a dollars-per-unit (DPU) basis. This is most palatable to OEMs producing costly products such as cars, where most of the costs (e.g., for the chassis and tires,) are unrelated to cellular technology. While Alium intends only to license at the RU level, DPU royalties generate the same amount of revenue, regardless of the price of the RU—even if the charge is instead levied on a chip or another component within the RU. Alium’s charges range from $25 down to $10 per RU, depending on unit volumes sold.

The drawback for licensees with DPU royalties is that charges do not reduce when product prices decline. Mobile phone royalties were almost invariably set only as percentages until the mid-2000s because OEMs wanted it that way with the expectation that average selling prices would fall, as they did for a decade or so until then. It was with the introduction and then predominance of smartphones since then that OEMs have demanded royalty caps that turn charges into DPUs for higher-priced handsets.

According to the ABI Research source cited in Alium’s launch announcement, the implied average prices for outdoor macro and indoor micro Open RAN RUs in 2030 will be $4,427 and $194 respectively. That seems to reflect a plausible expectation that indoor small cell RUs will become ubiquitous in the enterprise—like WiFi access points—with 205.5 million shipments forecasted for that year. Corresponding royalties on a percentage basis for incremental sales will be in the wide and unexplained range of a maximum of 0.56% on macros to a minimum of 5.2% on micros. Royalty charges of $10 on RUs selling for around only a couple of hundred dollars are likely to be resisted by OEMs and operators—particularly if the pool’s share of total declared or independently assessed SEPs turns out not to be that great.

While product prices often reduce dramatically as technology gets cheaper and markets grow, FRAND licensing requirements can make it difficult to adjust the basis and level of charging, which are typically set for the life of standards and patent pool programs.

This article was originally published in RCR Wireless.

University of Trento COVID-19 Case Database

The University of Trento has started an ambitious project in creating a database of COVID public health related cases.  The database is available, here.  This appears to be a very useful resource. The following includes additional information concerning the database: 

The first open access case law database of the COVID era goes online

COVID-19 Litigation Project comes to light thanks to University of Trento with financial support from the WHO Built on the intense cooperation of an international network of judges and legal scholars, coordinated by the University of Trento with the financial support of the World Health Organization (WHO), the “Covid-19 Litigation Database” is now online.

The first and only single website in which information about legal challenges brought before courts in respect of public health interventions to address COVID-19 in different countries is systematically collected and analyzed.

The Project, partaken by universities and research centers in North and South America, Africa, Asia and Australia, aims at collecting, selecting, organizing and publishing, within an open access online platform, the case law concerning disputes arising from the governments’ adoption of public health measures to address COVID-19 at regional, national or sub-national level.

The Database will be launched on 15 December 2021 during the works of the Tenth Global Conference on Health Promotion for Well-being, Equity and Sustainable Development, (13–15 December 2021), organized by the WHO. You can register here to access the live session (to be held on December, 15 at around 11.30 CET).

In an era that has confronted governments with unprecedented challenges for the protection of lives and the globe’s safety, and the need to take tragic choices balancing different fundamental rights and freedoms, the “COVID-19 Litigation Project” sheds light on the role of courts within global crises like the present one. Courts are indeed increasingly asked to determine the lawfulness of public health measures to tackle COVID-19 and to balance the protection of health with other fundamental rights. In this context, courts and lawyers play important gatekeeping roles to ensure the rationality, reasonableness, and proportionality of governmental interventions.

The creation of the Covid-19 Litigation Database by the University of Trento, with the financial support of the WHO, aims to fill this gap and to enable policy makers, lawyers (including but not limited to government lawyers), judges, researchers and others to learn from experiences in different jurisdictions. It can also trigger different forms of inter-jurisdictional dialogue to coordinate authorities’ responses to the current and future sanitary crises.

Although courts can help protect vulnerable populations and ensure social solidarity by balancing rights, adjudication in these cases requires to consider complex scientific and legal issues in short time frames with limited scientific evidence.

Case selection focuses on the litigation concerning challenges to the exercise of governmental authority, where a government’s power to implement public health measures has been challenged.

The cases published in the database come from jurisdictions (WHO Member States, including national and subnational legal systems) in all world regions, and, where applicable, from supranational courts, such as the European Court of Human Rights. The database includes basic bibliographical information concerning cases, as well as English language case summaries. The cases are identified through an International Network of Judges and Scholars for a Covid[1]19 Litigation Initiative (INJuS-CoLit Network), public databases and extensive media searches, and a crowd sourcing tool allowing broader community involvement, whereby the project website will show a dedicated channel for case signalling by Database users, with collected materials being sent to the Project coordinator for review and possible inclusion in the database.

The Database will be continuously updated to reflect developments in the law of each jurisdiction. An interactive search engine is made available so that users can also provide suggestions for the integration of the database, its fruition, and usefulness.

Judge Lucy Koh Confirmed by U.S. Senate to the Ninth Circuit

Judge Lucy Koh has been confirmed by the U.S. Senate to a judgeship on the U.S. Court of Appeals for the Ninth Circuit.  Judge Koh was formerly a district court judge on the U.S. District Court for the Northern District of California--which includes San Francisco and Silicon Valley.  Judge Koh has handled numerous cases involving intellectual property and technology matters.  Notably, she is the first female Korean American federal appellate court judge in the history of the United States.  The IP Watchdog has a nice summary of U.S. Senator interest in her decision, FTC v. Qualcomm, here.  I believe Judge Koh is in the group of Democrat candidates for a U.S. Supreme Court position in the future once there is an opening.  

The Intellectual Property Office of the United Kingdom Call For Opinions on Standard Essential Patents

 

The Intellectual Property Office has published a Call for views on Standard Essential Patents (SEPs). https://www.gov.uk/government/consultations/standard-essential-patents-and-innovation-call-for-views

 The purpose of the call for views is to allow the UK Government to better understand whether the current SEPs framework encourages innovation and effectively promotes competition in markets, or whether there are any barriers to innovation and competition. It will establish whether government intervention is required and understand what intervention could look like.

 The call for views will seek to gather evidence on the following:

 

· The link between SEPs, innovation and competition and how these elements interrelate with each other.

 · The functioning of the market and whether balance is right between SEP holders and implementers.

 · The level of transparency in the SEPs framework.

 · How pricing in licensing of SEPs is determined during negotiations.

 · The functioning of licensing agreements, the patent system, the IP framework and the courts system.

The call for views will run for a duration of 12 weeks closing on 1 March 2022 at 23:45. After this call for views closes the government will assess the responses it receives and this will inform the government’s decision on any next steps on potential intervention that is required.

US Department of Justice Seeks Public Comments on Draft SEPs and FRAND Policy Statement

The US Department of Justice, Antitrust Division is seeking public comments regarding a new draft policy statement regarding SEPs and FRAND.  Details are below:

The Department of Justice announced today that it is requesting public comment on a new draft policy statement concerning standards-essential patents (SEPs) that seeks to promote good-faith licensing negotiations and addresses the scope of remedies available to patent owners that have agreed to license their essential technologies on reasonable and non-discriminatory or fair, reasonable, and non-discriminatory (F/RAND) terms. The Justice Department worked with U.S. Patent and Trademark Office (USPTO) and the National Institute of Standards and Technology (NIST) in responding to President Biden’s recent Executive Order on Promoting Competition in the American Economy, which encouraged the agencies to review the 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments to ensure that it adequately promoted competition. Together the agencies, after consulting with the Federal Trade Commission, are now issuing a revised draft statement for public comment.

“The department looks forward to working with our agency partners,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “We are committed to taking a principled, transparent, and balanced approach at the intersection of intellectual property and antitrust law.”

The draft statement is open to public comment for 30 days and provides a framework to facilitate good-faith licensing negotiation between SEP owners and potential licensees. It also discusses what remedies may be available when SEPs subject to voluntary F/RAND commitments are infringed. The draft statement indicates that good-faith negotiation that leads to widespread and efficient licensing between SEP holders and those who seek to implement standardized technologies can help to promote technology innovation, further consumer choice, and enable industry competitiveness. The draft statement will not be finalized until the agencies consider all stakeholder input.

In particular, the agencies are interested in comments addressing the following questions:

1. Should the 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments be revised?
2. Does the draft revised statement appropriately balance the interests of patent holders and implementers in the voluntary consensus standards process, consistent with the prevailing legal framework for assessing infringement remedies?
3. Does the draft revised statement address the competition concerns about the potential for extension of market power beyond appropriate patent scope identified in the July 9, 2021 Executive Order on Promoting Competition in the American Economy?
4. In your experience, has the possibility of injunctive relief been a significant factor in negotiations over SEPs subject to a voluntary F/RAND commitment? If so, how often have you experienced this?
5. Are other challenges typically present in negotiating a SEP license? If so, what information should be provided or exchanged as a practical matter to make negotiation more efficient and transparent?
6. Are small business owners and small inventors impacted by perceived licensing inefficiencies involving SEPs? If so, how can licensing be made more efficient and transparent for small businesses and small inventors that either own, or seek to license, SEPs?
7. Will the licensing considerations set forth in the draft revised Statement promote a useful framework for good-faith F/RAND licensing negotiations? In what ways could the framework be improved? How can any framework for good-faith negotiations, and this framework in particular, better support the intellectual property rights policies of standards-setting organizations?
8. What other impacts, if any, would the draft revised statement have on standards-setting organizations and contributors to the standards development process?
9. The draft revised statement discusses fact patterns intended to indicate when a potential licensee is willing or unwilling to take a F/RAND license. Are there other examples of willingness or unwillingness that should be included in the statement?
10. Have prior executive branch policy statements on SEPs been used by courts, other authorities, or in licensing negotiations? If so, what effect has the use of those statements had on the licensing process, outcomes, or resolutions?
11. Are there resources or information that the U.S. government could provide/develop to help inform businesses about licensing SEPs subject to a voluntary F/RAND commitment?

Interested parties, including attorneys, economists, academics, consumer groups, industry stakeholders or other members of the public may submit public comments to Regulations.gov until Jan. 5, 2022. Information about the draft revised statement can also be found on the Antitrust Division’s website.