Implementer Subterfuge Comes to Japan

There is something about standard essential patents that encourages subterfuge by implementers.  Typically, SEP net licensees like to complain that SEP owners violate FRAND by hiding comparable licenses behind NDAs – when in fact the confidentiality request usually comes from the other licensees and not the licensor.  The true secret manipulators of the FRAND regime are more often than not the licensees.   Unfortunately, it now seems that this subterfuge has spread from the USA, Europe, and China to Japan.

As I have written previously, Big Tech implementers have been

  • Pumping tens of millions of dollars into lobbying and fake advocacy organizations to shape legislation and avoid scrutiny.
  • Complaining about the phantom “troll plague” while manipulating the rules to hide behind PTAB trolls ignoring how the PTAB is actually used and its largest targets undermine the entire stated point behind the PTAB’s creation.
  • Using and abusing the anti-trust laws to prevent SEP owners from monetizing their assets
  • Funding misleading studies about patent hold-up to obscure the fact that their actual royalty rates were less than one-eighth the rates flaunted in the study.
  • Holding secret meetings to force through policy changes in standard setting organization that end up raising massive questions about future participation of the major innovators in that SDO and concealing the same to avoid de-accreditation.
  • Misrepresenting US government policy positions to the Chinese antitrust authorities to help facilitate the Chinese use of antitrust law as a weapon against foreign SEP owners.

Now there is a real danger that the Japanese ministry of economy, trade and industry (METI) will follow this path.  For reasons that are not entirely clear, but presumably related to the hysteria around SEPs and connected cars, METI created a commission to study SEPs.  Formally titled the Study Group on the Ideal Trading Environment for Licenses for Standard Essential Patents it has held two meetings thus far.   Ostensibly the “purpose of this study is to organize the international situation regarding licensing negotiations for standard essential patents with the participation of experts in this field, and to consider desirable countermeasures for Japan” (Japanese original).

Troublingly, however, the “proceedings [are desinged to be] closed to the public but minutes, in principle open to the public.” (Japanese original). While the minutes, in translation, appear to be high-level summaries of the major controversies in SEP licensing, little is disclosed as to what in fact the committee is considering implementing.  However, the tone of the stated objective seems to approach SEP licensing from that of an implementers’ perspective.  Why else would the stated purpose be to consider “countermeasures” to SEP licensing.   One fears that at best, the committee will result in another little used SEP boondoggle like the Japanese Patent Office essentiality service.  One can envision a scenario, however, where the automobile lobby – which is quite powerful in Japan, tries to copy the Chinese approach of circa 2013 that used “anti-monopoly laws as a countermeasure … to break down [foreign] technology fortresses and win space for development.”

Such a development would be both unfair and backward looking.  While there are many Japanese implementers, there are also many Japanese SEP holders.  Moreover, one would think that it is the job of METI to be on the looking for new technology and to help foster it – and not to defend old, wealthy and established industries.   If Japan wishes to be part of the 5G revolution and beyond it would be wiser to focus on policies that encourage innovation and development in areas like artificial intelligence and/or the future of 6G, as opposed to those that help established companies reduce their costs and stiff their suppliers.