ROSE meets the call by the European Commission for a SEP Licensing Platform.

The European Commission 29 November 2017 communication “Setting out the EU approach to Standard Essential Patents” (SEP) stated:
The Commission calls on SDOs and SEP holders to develop effective solutions to facilitate the licensing of a large number of implementers in the IoT environment (especially SMEs), via patent pools or other licensing platforms while offering sufficient transparency and predictability. (“SEP Licensing Platform”) EC p. 8
SDOs and SEP holders may rely on ROSE to provide a SEP Licensing Platform.  ROSE complies with the call by the EC for a new SEP Licensing Platform because it provides the following features:
1.

Licensing of a large number of implementers:

The ROSE database is a subscription based database open to all subscribers to access comparables data freely searchable according to technology category.  ROSE will be populated with licensing data from both SEP holders and implementers, including private deal licensing data (submitted anonymously).

2.

Includes implementation for the IoT environment:

ROSE shall include licensing data from technology categories that comprise the Internet of Things environment.  IoT will be one amongst thousands of technology categories that will be easily searchable on the ROSE database.

3.

Especially available to SMEs:

ROSE shall be easily accessible to Small and Medium size Enterprises.  ROSE addresses the data asymmetry issue currently present in licensing of SEPs by providing an open data base of private deal licensing data so the data poor implementers and data custodians may have equal access to symmetric licensing data.  ROSE subscription rates will be reasonable, so that the smallest SME can access its database.

4.

Transparency

ROSE provides sufficient transparency of pricing data via disclosure of private deal data from data custodians, such as SEP holders.  ROSE relies on its TRANDsparency process to insure anonymized and aggregated collection of data to avoid prejudice to data custodians yet providing sufficient licensing term data, so that implementers may easily identify comparable license term data by which a FRAND term may be
established.

5.

Predictability

ROSE provides a sufficient level of predictability via its large collection of private deal data. When fully populated, ROSE will have hundreds of thousands of licenses and data points to be searched.  The database will have uniform data fields by which licensing term data may be accessed in order to provide predictable processes for accessing comparable data.  Data custodians that contribute data to the ROSE database will be required to certify that the license data that was supplied using non-discriminatory collection methods to provide an additional level of predictability of the search results.

6.

Provide a reasonable aggregate rate:

ROSE provides aggregated licensing data to help establish a reasonable royalty rate or unit rate, based upon comparables data obtained by searching the ROSE database.  Using the TRANDsparency process for organizing and collecting private deal licensing data, implementers may easily and quickly arrive at a reasonable aggregated rate for SEP licensing.

7.

Anonymization limits price erosion:

ROSE will not contribute to the erosion of pricing by SEP holders due to anonymization and aggregation methods of receiving private deal data.  ROSE provides a system that is compliant with the European Commission SEP Licensing Platform, while protecting SEP holder identity in order to avoid price erosion.  ROSE data omits all identifying information of licensee, licensor and patent number. ROSE receives licensing term data using anonymized collection methods so that implementers cannot identify the licensor who contributed specific license data.  However, sufficient license term data categories are provided so that comparables data may be easily obtained by ROSE subscribers.

8.

Segregation of ex ante License Data:

The organization and categorization of license data on the ROSE database allows for the segregation of licenses executed ex ante—subsequent to the issuance of a standard for which the SEP is required.  Thus, ROSE allows for implementers to comply with the EC to set a value that is irrespective of standardization of the technology being licensed and so that the incremental value added may be determined from comparables data obtained from ROSE.

9.

Reduce Overall Transaction Costs During Licensing Negotiations

The ROSE database provides a great reduction in
transactional costs by eliminating expensive price discovery and use of hypothetical factors to determine a rate. Once ROSE is fully populated, it can replace other (more resource consuming) methods of calculating a FRAND rate. What currently takes valuation experts many months to determine, can be gathered in seconds on the ROSE database. 
By searching for comparables data from thousands and thousands of licenses on ROSE (based upon private deal data), setting a FRAND rate is as easy as pricing residential real estate.

10.

ROSE TRANDsparency process protects SEP holder disclosures and reduces SEP holder and SDO liability

The 29 December 2017 Eurp[ean Commission Communication elevates the necessary disclosures by SEP owners and SDOs with respect to essentiality and declaration of SEPs.  The TRANDsparency system provided by ROSE provides protection of disclosures made by SEP holders with respect to essentiality analyses and declaration of SEPs (e.g maintaining some disclosures as attorney client privileged communications via engagement of the Gould & Ratner LLP law firm).  By use of ROSE as a third party intermediary to receive disclosures from SEP holders; SEP holder and SDO liability with respect to such disclosures may be reduced.

11.

Support Good Faith Negotiations:

SEP holders and implementers that use ROSE provide the indicia of good faith negotiators.  The act by a SEP holder of contributing its data to the ROSE database, use of its TRANDsparency process and providing a certification that it has used non-discriminatory collection methods demonstrates good faith by the SEP holder to facilitate fair license negotiations and shows a lack of intent to “hold-up” the implementer(s).  Likewise, the act by a standard implementer to obtain comparables data using the efficiencies of the ROSE database demonstrate good faith by the implementer to facilitate fair license negotiations.  Because the implementer has avoided other more time consuming price determination methods that lead to delay, the use of ROSE as an alternative resolution method shows a lack of desire by the implementer to “hold-out” from executing a license.

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Professor Arthur Best, University of Denver, Sturm College of Law

"ROSE data would highly likely be admissible to prove the value of a patent, a reasonable royalty rate or damages in a patent infringement suit[.]"

When we join together as members of the IP community and share licensing data via Royalty Sunshine Enterprise (ROSE), we level the playing field and reduce litigation and licensing transaction costs for everyone.
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