AEEE
The AEEE is a group that worked to develop a standard, called IAV-6, a new intelligent antennae software standard that will enable mobile broadband communications to more reliable, ubiquitous and adaptive to ever-changing physical environments allowing signal ranges and speed to be maximised across networks. To be eligible to join AEEE and participate in the development of the standard, members who include a range of communications hardware manufacturers must commit at least $1 million or the equivalent in man-hours of active involvement over a two-year period. They also have to sign an agreement whereby they commit to disclose any intellectual property rights that might possibly be relevant to or included in the standard and commit to make available at fair, reasonable terms and on a non-discriminatory basis, licences to any party seeking to use any patented technology they own which may be included as essential to practice the standard.
One of the members, Dev Inc., a German technology and electronics manufacturing company, signed the agreement before joining AEEE. At the time, Dev Inc did a search but did not discover that it did have a patent in its vast portfolio for a technology it would have been required to disclose. Very similar technologies were ultimately included in the AEEE standard and the group’s minutes of meetings reflect Dev Inc’s active endorsement of this. Just prior to the standard being adopted, Dev Inc. discovered its patent’s existence and while there were still alternative non-patented technologies under consideration. It did not, however, disclose the possibility that it might have patents essential to the standard to AEEE until after months following the completion of the standardisation process and the adoption of this patented technology. Dev Inc advised AEEE that it had only just come to appreciate that the standard likely reads on this patent.
The new AEEE intelligent antenna software standard has enjoyed great success. Communications hardware manufacturers around the world have retooled their manufacturing to include this innovative technology. They believe the mobile phones and other receivers using this software will have great appeal to many consumers who rely on public Wi-Fi signals or whose home broadband equipment is located in a remote part of the house and who would need to buy a separate signal repeater. Recently, Dev Inc. started asserting its patents. It indicated that it will require that every manufacturer wishing to produce a standard-compliant handset or other device must obtain a licence for its patents or that it will enforce its IPRs via litigation. Dev Inc is seeking royalties that comprise at least 20% of a mobile telephone’s component costs. The AEEE has not taken any action against Dev Inc.
Damsun, a manufacturer of mobile handsets and routers with production and distribution outlets throughout the EU is Dev Inc’s primary competitor in the very new market for advanced routers that cost less than £50. Damsun retooled its manufacture to include the AEEE IAV-6 standard technology. Dev Inc has a 50% market share in the production of these routers throughout. It has brought actions in the EU seeking preliminary injunctions to Damsuns’s use of this patented technology and has refused to negotiate on any terms.
Analyse the above practices under Article 102, TFEU.
