Presentation given at a workshop on 'The Future of Technological Cooperation for Climate Change' hosted by Chatham House and the Center for American Progress in Washington DC on August 27-28, 2009. The presentation succinctly reviews the potential influence of cross-licensing agreements within the low-carbon energy sector.

1. The Role of Technology Standards and Industry
Cross licensing
Cross-licensing Agreements
Ilian Iliev (CEO), CambridgeIP
27th August, 2009
Chatham House and Center for American Progress
Progress,
Washington D.C., 27 th-28th August, 2009
Workshop: The Future of Technological Cooperation for Climate Change
© 2009 Cambridge Intellectual Property Ltd. All rights reserved.

2. Technology Standards and Industry Cross-licensing
Agreements
 Experience in other industries shows that standards-setting bodies and
cross-licensing agreements can accelerating technology innovation and
diffusion, through e.g.:
diff i h h
– Decreased risk of litigation
– Savings from duplication of R&D effort/building on others’ mistakes
g p /b g
– Decreased barriers to entry for newcomers
– Specialisation and value chain diversification
– U
Unexpected and novel uses of t h l
t d d l f technology
Note: we’re not considering here the many risks– lock-in, patent trolls,etc.
 What can we learn from other industries’ experience that can be
adopted and adapted in the low-carbon energy technology area?
 What are the starting points for engagement with private sector?
© 2009 Cambridge Intellectual Property Ltd. All rights reserved.
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3. Why do companies enter cross-licensing agreements or
technology standard patent pools?
Considerations Rationale Examples
Remain a
Remain a In a rapidly changing industry: remain at Motorola: semi‐conductor cross‐licensing
the head of technology change Nokia: licensing of technology to Siemens
technology leader
Avoid litigation Low‐cost/reasonable royalties for use of Motorola: non‐discriminatory/blanket 5‐year
technology: cheaper to license than to risk renewable agreements to both competitors and
(defensive and
(defensive and litigation others
offensive)
Accelerate Expose your technology to greater Nokia: licensing of technology to Siemens
number/type of users
/ yp
innovation
i ti
Revenue generation Unilateral licensing out of key IP can Motorola: semi‐conductor licensing was
generate significant revenues generating $50mln p.a. in 1990s
IBM: licensing out of IP that’s not being used:
g g
100s $mln p.a.
Protect value chain Meet challenge to leadership outside of Nokia licensing of S60 platform to counter
industry – retain leadership of the Windows Mobile entry threat
against big outsider industry
g g industry Symbian Foundation: royalty‐free licensing
S bi F d ti lt f li i
entrants model to protect against Google Android & Apple
‘Increasing the pie’ Change model to redefine the market Revenue sources for Smartphones are changing
boundaries & increase services accessible from calls to data and content – even payment
on back of platform services (e.g. Visa mobile payments solutions)
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4. Example Technology Standards Body:
ETSI (European Telecoms Standards Institute)
• C t d 1988, primarily around th GSM standard setup i 1987
Created 88 i il d the t d d t in 8
– Initial patent pool by: Motorola, Nokia, Ericsson, other equipment
manufacturers
• Activities have expanded over a wide range of other standards, including
standards
2G/GPRS/2.5G, 3G,Wi-Fi, and other telecoms standards
• 300+ manufacturers, 80+ network operators, R&D services providers &
regulators
• Impact on industry
• Accelerated diffusion of technology standards: ubiquitous technology!
• Facilitating the emergence and maturing of new standards
g g g
• Moderator of IP conflicts (e.g. Sun Microsystems – ETSI – EU)
• A stakeholder/knowledge diffusion forum – with non-OECD participation
ETSI Membership by Type
Users of Technology
Government Bodies 5% University/Research
10% Bodies
6%
Consultancies and
Service Providers Other
13% 8%
Network Operators
12%
Manufacturers
46%
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5. Other Examples of Technology Standards/Patent Pools
• Continua Alliance
– Push for inter-operability between medical diagnostics devices
– Telecoms & electronics players cross over into E Health
cross-over E-Health
• STS Association:
– Pre-paid metering (the 1st smart meter?)
– Originating from South Africa: third world needs result in globall adopted
technology
– Underlying pre-paid meters globally and IEC standard
pre paid
• Nokia: Symbian/S60 Platform
– Users of S60 are licensed under a non-discriminatory, capabilities based
accreditation program: ‘A
dit ti ‘Accredited S6 d l
dit d S60 developer’
’
– S60 Smartphones dominate the market
• Semi-conductor industry cross-licensing agreements:
y g g
– In 1980s 95% of semi-conductor equipment was made in-house by chip
manufacturers;
– By 1990s only 7%: i e 90+% of the industry became ‘fabless’
i.e. fabless
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6. Can we identify industries or technologies ripe for
technology standards or cross-licensing agreements? 1
Key Indicators Other Industry Examples
Increasing patent Semi‐conductor industry: increasing number of patent
complexity & Litigation
complexity & Litigation cross references, slow down in patenting rates
cross‐references, slow‐down in patenting rates
trends
Increasing speed of product Telecoms: 1.5‐2 years product life cycle – much shorter
life cycle
lif l than the patent life‐cycle
than the patent life cycle
Increased heterogeneity of Telecoms: complex matrix of user capabilities/needs/tastes
client/user types
Fragmentation of market Telecoms: spread of GSM/3G standard globally allows
f /
by geography and local access of large number of market niches; complex
conditions combination of service providers/ manufacturers/ content
providers/ application developers serving unique niches
id / li ti d l i i i h
Increased complexity of Semi‐conductors: rapid speed of development and user
technology platforms demand led to increasing complexity; Equipment
rd
manufacturing increasingly done by 3
manufacturing increasingly done by 3 parties
Telecoms: Move to smartphones has drastically increased
complexity of O.S. platforms – leading to Symbian
Foundation/industry consortia
Foundation/industry consortia
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7. Can we identify industries or technologies ripe for
technology standards or cross-licensing agreements? 1
Key Indicators Other Industry Examples
Increasing user autonomy
g y Telecoms: Increasing choices and number of segments give
(vis‐à‐vis distributor) Operators key role – but also lead manufacturers to interact
directly with users
Major external threat: big Telecoms: Microsoft Mobile led Nokia to push Symbian
player from another standard
industry entering your Entry of Apple Smartphone and Google Android: Symbian
Foundation and royalty‐free licensing
space
space
Major markets identified, Telecoms: Key driver behind ETSI and GSM standard: to
but cannot be reached allow national EU market leaders to expand internationally
under current business
under current business into other developed and developing markets
p p g
Healthcare: Continua Alliance
model
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8. Low-Carbon Technology Energy Space –
Some Considerations
• Young/fragile business models: can be influenced at an
early stage by early buyers through procurement
requirements
• Mixing of business models due to cross-over of
technologies: e.g. Telecoms into Cleantech (SmartMeters);
biotech into biofuels
• Increasing litigation risk: e.g. Wind, PV
• Large p
g public sector role pprovides rationale/legitimacy for
/ g y
influence
• Discussions around a global patent pool: very compatible
with requirements for technology standards body
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9. Implications for Low-Carbon Energy 2
The ‘Easy’ St
Th ‘E ’ Steps to cross-licensing and standards agreements:
t li i d t d d t
• Need to ID candidate areas for industry cross-licensing agreements, for
y g g
instance:
– PV: e.g. underlying technologies for PV production, business models similar to semi-conductors
sector
– Cl
Cleaner C l e.g. hi h d IGCC t h l
Coal: high-end technology,
– Carbon Capture: e.g. Carbon separation processes – around broad, fundamental technologies
(e.g. enzymes-based carbon capture)
• Need to ID candidate areas for standards agreements
– Wind: e.g. inter-changeability of components – gear/transmission, software systems,
integration with grid
– Smartgrid: e.g. communications protocols/software for smartmeters, hardware
– Marine energy: e.g. stress-mitigation technologies
• Need to ID critical mass of willing participants
– Public sector: Universities, Research institutes, large scale buyers, SMEs, some Multinationals;
adapt the Bayh-Doyle Act/ public sector funding ?
– Private sector: procurement strategies (housing builders, utilities), SMEs, Multinationals with
compatible IP strategies, other industry technology standards bodies
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10. …and finally…
Please contact Ilian with any questions you may have
Thank You !
Ilian Iliev
(CEO and Founder)
E-mail: ilian.iliev@cambridgeip.com
GSM: 077 863 73965
Tel: 01223 370 098
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