Monday 5 December 2022

Gaming the System: A Scatter-Gun Approach to 5G Declarations

While it is already widely believed that “over-declaration” of standard essentiality is due to large and excessive numbers of patents being filed in patent offices and declared to Standard Setting Organizations (SSOs), my new quantitative research suggests that over-declaration is also being pursued with claims that individual patents read on multiple Technical Specifications.

Some declare patents essential to multiple Technical Specifications
Participants in technology standard standard-setting, such as in 3rd Generation Partnership Project (3GPP) Working Groups, are obliged to declare their patents that they believe might be or might become essential to technology standards such as 5G. For example, the Intellectual Property Rights (IPR) policy of 3GPP partner ETSI requires declarations to ensure that standards are not blocked by IPR being unavailable. Declaration practices differ among participating companies, but with all of them reasonably declaring some patents that would never actually be found standard essential if tried in litigation by courts of law.

More and more patents

However, with the increasing use of patent counts as a measure of companies’ respective patent strengths, for example in determining royalties, it is widely believed that some technology developers puff up their positions with numerous declarations in excess of what is reasonably required to protect their IPR, shield them from assertions of anticompetitive behaviour such as patent ambush and provide the commitments required by IPR policies. Over-declaration is thus commonly understood to be the filing and declaring of large and increasing numbers of low quality patents that would never be found essential in litigation. Accordingly, there has been an exponential increase in patent declarations. Rapidly approaching 80,000 patent families have been declared to ETSI including various communications standards.

With over-declaration, raw patent counts and checked-essential patent counts exaggerate patent strength. There is no essentiality checking in standard setting, such as by 3GPP or ETSI. While essentiality checking is undertaken by some specialist firms, my previous research shows that this does a poor job in correcting the inflated relative positions of companies that over-declare. Systemic bias prevails because essentiality checking is far from perfectly accurate. False positive determinations (i.e. where a patent is found essential when it is not truly essential) tend to exceed false negative determinations. And, the lower the true essentiality rate (i.e. the percentage of declared patents that are truly essential), the more bias there will be.

Throw everything at the wall and see what sticks

In addition to inflating patent counts by flooding IPR databases with increasing numbers of declared patents, my new research paper—based on patent declaration and standards data collected and processed by Dolcera—indicates that some companies are also declaring individual patents to multiple different Technical Specifications. While most major declarers declare their patents to an average of no more than 2.5 Technical Specifications, some companies declare essentiality to more than twice as many, and with individual patents declared to as many as 12 or even 18 different Technical Specifications. However, essentiality is based on whether a patent reads on any Technical Specification, not on how many of the latter are referenced.

As human and automated checks have to assess each declared patent’s essentiality against every Technical Specification referenced, the more of those that are referenced the higher the probability of false positive determinations while the probability of false negative determinations cannot increase even to partially offset the above. Assessing any additional Technical Specification can, therefore, only increase the possibility that a patent is found essential. This means that the systemic bias inflating essentiality rates found in checking will be higher than if declarations for each patent were more diligently focused on only one or two Technical Specifications. Costs also increase with the expanded workload in checking more Technical Specifications.

My full new research paper analysing patent essentiality declarations to multiple Technical Specifications can be downloaded here and from SSRN.

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