‘Patent ambushers’ are the enemy of Europe’s drive for common standards

By Tim King

Date: 28/07/05

The battle in the European Parliament over the software patents directive (see above) was one of the biggest dramas of 2005 for the EU legislature. Now the issue of 'patent ambush' is adding to the potential for excitement in the intellectual property arena.

Patent ambush is so called because it is about one company ambushing its rivals in an industrial sector by announcing that it holds crucial patents after that industrial sector has worked on developing common industry standards.

The most infamous case, still being investigated by the European Commission, is that of Rambus, a memory chipmaker in the US. At the eleventh hour, Rambus pulled out of talks on the development of standards for DRAM computer memory.

The intention in developing standards is to improve interoperability, so that different hardware and software can all interact successfully. But standards may block competition between technologies and they can also depend on proprietary technology.

The Commission disclosed at the end of June that it was investigating whether the rules of the European Telecommunications Standards Institute were sufficiently tight to prevent patent abuse.

The software and telecoms sectors have been grappling with the problem of standards and intellectual property rights for some years now. Some argue that the solution is to require patent-holders to disclose relevant patents and declare the intention to license them or not. If licensed, patent-holders would be required to levy royalties on "fair, reasonable and non-discriminatory" terms.

But restrictive requirements might deter companies from participating in standardisation.

The Rambus case raised questions about what to do with an insider who would not disclose and declare. And questions still remain about how and why a patent-holder outside the standard-setting process should be obliged to co-operate.

Article takes a look at the problems with patent-holders in standard-setting processes in any industrial sector.