5G AND STANDARD ESSENTIAL PATENTS IN INDIA: CAN IT BE FRANDLY?
Updated: Nov 8, 2019
This piece has been authored by Mohit Kar, a third-year student of B.A.LL.B (Hons.) at the Maharashtra National Law University, Aurangabad.
Addressing the largest digital technology event of South Asia, Indian Mobile Congress, Union Communications Minister set lofty goals for the rollout of 5G in India. The Union Minister expressed the committed resolve of the government for the creation of Indian Intellectual Property and patents in 5G.[i] As India nurtures the hope for breakthrough innovations in this sector, the realities are that other countries are far ahead. China is striding ahead to cite a shining example. It has already acquired a large number of patents in this sector, with Chinese companies accounting for 34% of worldwide applications for patents relating to 5G.[ii] This has enabled the already thriving Chinese Tech companies to improve their Research & Development (“R&D”) and rollout a host of new products and services related to this revolutionary technology in the near future. Other countries that are marching ahead include the likes of South Korea, Finland, United States and Japan.[iii] In the meanwhile, Indian companies have yet to start trials of this spectrum (5G), with the permission for the same having just been granted.[iv]
5G and Its Potential Impact on the Indian Telecomm Sector
5G is the fifth generation in internet connectivity. Once introduced, it will bring about much faster data transfer (1 Gbps), deep coverage (can be accessed in remote areas), strong security (key for government and security agencies).[i] As has been witnessed, the advent of 2G, 3G and 4G triggered massive surge in mobile usage and internet access worldwide. But 5G promises much more. 5G will bring about and strengthen newly initiated technologies such as Internet of Things (“IoT”) and machine to machine communications. Economic survey of 2018-19 has predicted that telecom industry’s contribution to the GDP would grow up to 8.2% in the year of 2020 by which time the 5G spectrum would be fully integrated into the telecom sector.[ii] Keeping in view these benefits, the Indian government through the Department of Telecomm (DoT) has published the Draft National Digital Communication Policy[iii], and put an emphasis on the creation of an actionable plan for the rollout of 5G. DoT is laying focus[iv] on development of Intellectual Property Rights, and in light of the statement made by Ravi Shankar Prasad, it is clear the government is intent on promoting Patents in 5G.
Patents in 5G: Standard Essential Patents (“SEP”)
Patents and Standards must go hand in hand for increased innovation and growth. Standards are guidelines that ensure safe and risk-free technology dissemination among industries. Patents on the other hand help in protection of various rights of companies and increase Research and Development (R&D) and secure adequate flow of income. The patents that provide protection to technologies essential to standards can be defined as SEPs. SEPs play a key role in bringing out an industry standard of devices and mobile phones, by restricting manufacturers to use technologies granted by one or more SEPs. In the Indian context for patents to be considered as SEPs, they must be accepted by Standard Setting Organizations (“SSO”).[v] The SSOs function according to the Fair, Reasonable and Non-Discriminatory (“FRAND”) guidelines.[vi] FRAND stands for “Fair, Reasonable and Non-discriminatory”. It is an essential requirement for the SSOs to comply with while they grant SEPs to potential licensees. Any potential user of a particular standard (SEP) and the body (“SSOs”) that grants permission for such use, need to adhere to the principles of fair licensing terms (absence of anti-competitive practices), reasonable fees and treating each individual licensee as the same (non-discriminatory).[vii]
In a world of fast communication, interconnectivity among various devices has become a bare necessity. A host of newly launched products need to be interconnected with each other so as to ensure smooth interactions and uses by a consumer. We can take for example, home appliances. This has been predominantly made possible by the IoT (Internet of Things). To put it to simple terms IoT means connecting and controlling a series of everyday devices with the help of Internet. With the forthcoming of 5G we have taken one step ahead in the thorough implementation of IoT, with the resulting effect being that a large number of patents being filed relating to 5G. The need of the hour is to make an industry standard. The European Commission in a communication paper has talked about this issue.[viii] They have termed it as a global crisis. There is need for a proper framework and implementation of rules and regulations with regards to SEPs in the 5G sector keeping in mind the FRAND principles all throughout the world. India should implement the same to ensure a smooth and balanced SEP structure.
Principles for Implementing SEP with FRAND norms in 5G Innovation
The European Committee for Electrotechnical Standardization (“CENELEC”) recently came up with certain guidelines for the whole conundrum of SEPs on FRAND norms in the 5G sector. [ix]Since India will eventually have to deal with these issues, there are some key takeaways from the CENELEC recommendations:
1. Owners of patent rights which are essential for implementation of SEPs should allow access to the patented technology. The guidelines to do so are:
1.1. This principle makes the exposition that owners of patented technology, must agree to give access to SEPs by making licensing agreement.
1.2. Availability to SEPs must be provided to parties directly through licensing, or indirectly by licensing at any level of the supply chain.
1.3. The Licenses should be provided by following the FRAND norms.
2. There should be swift and efficient conclusion of licensing agreements between a SEP owner and a potential Licensee with the help of FRAND. Guidelines for this would be:
2.1. The owner of SEP should provide appropriate information to the potential licensee regarding its SEP portfolio.
2.2. If an owner believes that a party is infringing its right over SEPs, then it should inform the infringer about the alleged infringement and enter into negotiations with it regarding a FRAND license.
With the future of technology, ‘5G’ about to hit the global markets, India seems to be underprepared for its rollout. 5G brings with it scores of innovations as the society delves deeper into the IOT. The regulatory framework in India is currently lax regarding the protection of such innovations. The role of SEPs on FRAND norms needs to be at the forefront of upcoming policy matters and discussions by the government. This would enable future innovators to commit to risky R&D and bring out new devices while being compensated duly for their work.
[i] Yoram Wurmser & Jasmine Enberg, Getting Ready for 5G, eMarketer (14 Sep. 2019), https://www.emarketer.com/content/getting-ready-for-5g
[ii] ET Bureau, Telecom industry may contribute 8.2% to GDP by 2020 by leveraging 5G, Economic Times (14 Sep. 2019), https://economictimes.indiatimes.com/industry/telecom/telecom-news/telecom-industry-may-contribute-8-2-to-gdp-by-2020-by-leveraging-5g/articleshow/70071849.cms?from=mdr.
[iii] Department of Telecommunications, National Digital Communications Policy-2018, (14 Sep. 2019)
Available at: http://dot.gov.in/sites/default/files/Final%20NDCP-2018.pdf?download=1.
[iv] ET Bureau, New policy will take care of telecom industry’s concerns: Manoj Sinha, Economic Times, (14 Sep. 2019) https://economictimes.indiatimes.com/industry/telecom/telecom-news/new-policy-will-take-care-of-telecom-industrys-concerns-manoj-sinha/articleshow/66371555.cms?from=mdr (14 Sep. 2019).
[v] Dipak Rao & Nishi Shabana, Standard Essential Patents, Mondaq, (14 Sep. 2019) http://www.mondaq.com/india/x/484412/Patent/Standard+Essential+Patents.
[vii] EU Science Hub - European Commission, Fair, Reasonable and Non-Discriminatory (FRAND) Licensing Terms, (14 Sep. 2019) https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/fair-reasonable-and-non-discriminatory-frand-licensing-terms-research-analysis-controversial.
[viii] European Commission, Setting out the EU approach to Standard Essential Patents, Ec.europa.eu. (14 Sep. 2019) Available at: https://ec.europa.eu/docsroom/documents/26583/attachments/1/translations/en/renditions/native
[ix] CENELEC, Principles and guidance for licensing Standard Essential Patents in 5G and the Internet of Things (IoT), including the Industrial Internet (14 Sep. 2019), https://www.cencenelec.eu/news/workshops/Pages/WS-2018-011.aspx.
[i] IANS, Aim to create Indian patents in 5G, says Union Communications Minister Ravi Shankar Prasad, Times Now, (14 Sep. 2019) https://www.timesnownews.com/business-economy/economy/article/aim-to-create-indian-patents-in-5g-says-union-communications-minister-ravi-shankar-prasad/460117.
[ii] Akito Tanaka, China in pole position for 5G era with a third of key patents, Nikkei Asian Review, (14 Sep. 2019) https://asia.nikkei.com/Spotlight/5G-networks/China-in-pole-position-for-5G-era-with-a-third-of-key-patents.
[iv] Navtan Kumar, India gears up for rollout of 5G services, The Sunday Guardian Live (14 Sep. 2019), https://www.sundayguardianlive.com/business/india-gears-rollout-5g-services [