IPCom publicly accepts to take over Bosch’s FRAND terms commitments

On 10 December 2009, the European Commission issued a press release regarding the public declaration by IPCom, a German IP licensing company, in relation to the disputes on a portfolio of patents key to mobile standards developed by Bosch before being sold to IPCom in 2007.

Bosch portfolio included patents essential to the GSM and UMTS standards. As a member of the European Telecommunications Standards Institute (“ETSI”), Bosch took part in the GSM and UMTS (WCDMA) standard setting processes. During the development of such standards, Bosch had declared that it held essential patents in the relevant standards and committed to ETSI to grant irrevocable licenses on fair, reasonable and non-discriminatory (FRAND) terms and conditions for such patents.

Following the discussion with the Commission, IPCom is ready to take over Bosch’s previous commitment to grant irrevocable licences on FRAND terms.

The Commission welcomes IPCom’s declaration and considers that it is important that when patents essential to a standard are transferred from one owner to another, so should any relevant FRAND commitments.  The transfer of FRAND commitments after the sale of standard-essential patents is important from a competition law perspective says the Commission.  The unrestricted access to the underlying proprietary technology on FRAND terms for all third parties safeguards the pro-competitive economic effects of standard setting.  Such effects could be eliminated if, as a result of a transfer of patents essential to a standard, the FRAND commitment would no longer apply.

Arguably, IPCom statement may lead to settlements with mobile phone manufacturers HTC and Nokia before the European Commission and German courts. [Gabriele Accardo]