10 November 2017
Reporter: Jenna Lomax

Use-based pricing would lead to arbitrarily higher royalties, says ACT

The use-based pricing concept for standard essential patents (SEPs) would essentially give a standard holder the ability to arbitrarily dictate higher royalties, according to the App Association (ACT).

Senior policy counsel at ACT, Brian Scarpelli, stated that these higher royalties would come from contributions from other innovators and the innovations of downstream companies.

Scarpelli’s comments come after research and development organisation, IP Europe, announced its push for an SEP code of conduct for 5G and the internet of things.

IP Europe said this “will help technology contributors and users in the internet of things ecosystem find fair, reasonable and non-discrimatory (FRAND) outcomes to licensing negotiations, and avoid the further spread of litigation.”

ACT has vehemently opposed such a code of conduct.

Morgan Reed, executive director at ACT, explained how bringing in use-based pricing will be a deterrent for people to innovate because of fear of unforeseen costs.

He explained: “The consequences will be less choice, higher prices and less innovation, and ultimately that will affect the consumer and the development of the internet of things in Europe.”

Scapelli affirmed that the European Commission should “reward innovation”, not quash it.

He added: “Standard-setting systems were not created to be a business model for SEP holders; they were created to promote competition and interoperability.”

Subscribe or free to the next issue of IPPro Patents, published on 15 November, to read this article in full.

More news
The latest news from IPPro Patents
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Baker Botts promotes three in IP
21 November 2017 | Texas | Reporter: Barney Dixon
Baker Botts has promoted three intellectual property attorneys to partner, as part of a round of 11 partner promotions
Alibaba in ITC spotlight
20 November 2017 | Washington DC | Reporter: Barney Dixon
Alibaba will be investigated by the US International Trade Commission over the importation and sale of insulated beverage containers, their labels, and packaging materials
MediaTek partners with Anaqua
20 November 2017 | Boston | Reporter: Barney Dixon
Taiwanese semiconductor company MediaTek has selected Anaqua to manage its intellectual property activities, including its inventions and patents
Brazil and China sign PPH agreement
17 November 2017 | Beijing | Reporter: Barney Dixon
The State Intellectual Property Office of China has signed a patent prosecution highway agreement with the Brazilian National Institution of Intellectual Property
Cozen O’Connor hires ex-DLA Piper litigator
17 November 2017 | Washington DC | Reporter: Barney Dixon
Cozen O’Connor has hired ex-DLA Piper litigator Hugh Marbury as member in its intellectual property department
Mewburn Ellis opens Munich office
16 November 2017 | Munich | Reporter: Barney Dixon
Intellectual property boutique Mewburn Ellis has opened a new office in Munich, its first expansion outside of the UK
EPO faces backlash over scrapping of permanent employment contracts
15 November 2017 | Munich | Reporter: Barney Dixon
In an internal memo, the Staff Union of the European Patent Office described the move as “Kafkaesque”