Session II

Are standards the crux of ICT businesses in today's digital world?

The session on standards was moderated by Mr Antoine Dore, Senior Legal Officer, ITU Legal Affairs Unit. Mr Dore presented the panellists: Ms Renata Hesse, Deputy Assistant Attorney General for Criminal and Civil Operations, United States Department of Justice, Antitrust Division; Ms Marieke Scholz, Senior Case Handler, EC Directorate General Competition; and Dr Suthiphon Thaveechaiyagarn, Commissioner, National Broadcasting and Telecommunications Commission (NBTC), Thailand.

The discussion paper on the role of standards in a digital economy was presented by Dr Rudi Bekkers, Assistant Professor, Eindhoven University of Technology, Netherlands.

The panel shared the view that standardization and the patent system can serve as effective mechanisms to promote innovation and boost the economy. In a digital world, standards are being recognized as pivotal for economic and social growth. From a user perspective, there are both advantages and disadvantages associated with standards. On the positive side, standards encourage technical change, innovation and competition, as well as facilitate international trade. At the same time, standards can transfer power and hamper competition. The positive effects, however, seem to outweigh the negative ones.

The presenter outlined the current trends and kicked off the debate on the key challenges for all the different kinds of stakeholders. Recently, there has been a growing demand for standards in the ICT sector. Because ICT markets are extremely dynamic, patents are increasingly being traded and this creates an underlying complexity. The number of patents is on the rise, notably in the area of technical compatibility. For example, the standard H.284 which serves to transfer video files via PC incorporates more than 1300 patents. Globally, one patent out of six is a telecom one. This is not surprising given that there are some 500 standards in a laptop.

Litigation on standards matters is growing in importance and costs the industry a lot of money. Tensions relating to essential patents have recently become apparent. The actual or prospective implementer of any given standard is bound to use the technology covered by essential patents, and seek a licence. This gives the patent owner an exclusive power, which may lead to competitive and other concerns. Speakers emphasized, however, that these concerns need to be balanced against the benefits of patents and standards, including the long-term incentives for parties to invest in research and development activities. Lawsuits between Nokia and Apple, between Apple and Samsung, and between Motorola (later Google) and Microsoft are the most well-known examples of complex litigation cases yet to be resolved.

In the framework of patents and standards, national ICT regulators have a key role to play. With the growing evidence of the importance of standards for the economy and society, and the potential detrimental effects of problems with patents, policy-makers and regulators are increasingly expected to be proactive in protecting consumer interests along with those of industry players. Some other entities, such as courts and competition authorities, also need to get involved in finding solutions to implementation issues and disputes. All stakeholders need to work together, as no stakeholder, be it a standards-setting body, patent office or other, can address them alone. Collaboration and information sharing are thus essential, at national as well as at international level, to continue to spur innovation and growth in the ICT sector.