IEEE revises patent policy for fuller disclosure on licensing

The IEEE Standards Association (IEEE-SA) has approved a change in its patent policy effective April 30, 2007, which provides for the optional advance disclosure of "not to exceed" licensing terms associated with patents that might be included in its standards.

The change is intended to make the IEEE standards-setting process more transparent. The association has submitted a request to the U.S. Department of Justice for a business review letter confirming the Department's guidance on the antitrust aspects of the new policy.

The revision to IEEE-SA's patent policy includes that it permits and encourages the optional and unilateral ex ante disclosure of royalty rates and other license terms—that is, disclosure before a patented technology is included in a standard. The disclosed terms may include, for example, the maximum royalty rate that the patent holder will seek to charge.

Another is that the revised policy improves the mechanisms to ensure that a patent holder's assurance (which is irrevocable) fully and effectively binds subsequent owners of the patent by requiring the patent-holder to provide notice of the existence of the assurance. Moreover, the third key element in the revision is that the policy strengthens provisions for binding the submitter's affiliates to the terms of the policy, making clear that affiliates are bound unless the submitter identifies affiliates it does not wish to bind.

"This change in our patent policy is part of the ongoing evolution of our standards process," said Judith Gorman, IEEE-SA managing director. "Until now, we have allowed the inclusion of essential patents in IEEE standards if patent holders assure us they will license their patents without compensation or with reasonable and non-discriminatory terms. However, the lack of specific information in such assurances may create uncertainty that can impede the adoption of a standard.

Gorman added, "The new policy is an important step in correcting this situation through additional transparency of licensing terms for the technology alternatives being considered for inclusion in a standard. The policy should also benefit anyone who seeks to comply with IEEE standards after they are approved."