LES Standards Initiative Offers Certainty This Year

Managing Intellectual Property magazine talked with LES' Bob Held and Bill Elkington on why the LES Standards initiative is critical for business and the innovation economy.

LES President and Chair Bob Held and Immediate Past-President and Past-Chair Bill Elkington talked with Managing Intellectual Property Reporter Ellie Mertens recently on the LES initiative to develop standards that tackle tough topics from FRAND (Fair, Reasonable, And Non-Discriminatory) licensing to patent valuation and management of trade secrets and proprietary information in the supply chain. The questions and answers below were pulled from a transcript of the full interview before editing and publication. Read the full Managing Intellectual Property article titled "New LES Standards Offer Certainty This Year."

Q: Managing Intellectual Property: "In your mind, why is it important that an organization of intellectual capital and intellectual property professionals like LES develop standards to create certainty in the space, among its other networking and educational activities?"

A: Elkington: "There's a lot of chaos and asymmetry in the understanding of intellectual capital. Gaining a clear understanding is critical to the economy. It's important to realize that 80 percent of the equity value of a publicly traded company today is in its intellectual capital. So the future of such a company depends on the safeguarding of its intellectual capital. Formalizing best practices through industry-created standards is necessary because legislative solutions don't always help people navigate the intellectual capital universe."

A: Held: "Governments often mandate the use of voluntary standards before creating their own standards. The resulting unintended consequence of this approach is that the industry may not have fully thought through what best practices would make the most sense for them. The LES standards initiative has created a forum to achieve industry consensus in this area. LES' future efforts also include weighing in on Section 101 amendments via the LES Public Policy Committee, and involving the FTC in its standards program. For instance, the FTC v. Qualcomm case is a great example of where standards would help the industry. If the FTC leveraged LES standards, there would be a clearer path for both parties. Hundreds of court cases go before judges every year on the infringement of IP. Our LES Standards initiative aims to make great strides in leveraging the industry's professionals to put together business process standards that both industry and judges can leverage."

Q: Managing Intellectual Property: "What work is currently underway by the LES Standards Committees?"

A: Held: "The FRAND Standards Committee is developing best practices for the FRAND standard-essential patents (SEPs) licensing process. Right now, the definition of FRAND is heavily disputed, and many methodologies for calculating FRAND rates exist. However, SEPs will be critical to scaling the multi-billion dollar Internet-of-Things (IoT) industry, because they support technical interoperability. In exchange for being widely adopted, the LES standard will create a flexible and yet standardized framework for licensing SEPs on FRAND terms."

A: Elkington:  "The LES Standards IP Valuation Committee aims to make IP valuation more predictable, which would be beneficial to parties on every side of the issue. There are so many variables involved and accepted ways to measure IP that vastly different values can be justified using different methodologies. When principles of valuation are dramatically different, you're likely to come up with dramatically different results. A standard should get everyone on the same page, so you're not coming to the table with grossly misaligned concepts."