DOJ Business Advisory Letter 02-06 of
November 12, 2002 concerning
the 3G Patent Platform Partnership
There are two generations of wireless communications systems in use today in the United States and other nations. The first uses analog transmission technology, while the second generation ("2G") uses various digital transmission technologies and makes possible the provision of some additional services along with voice telephony. The third generation ("3G") of wireless communication systems, also involving the use of digital transmission technologies, will enable not only wireless voice telephony, but also the transmission of data at rates much higher than those of the second generation systems, making additional applications possible.
As with most standardized technology, utilization of any of the interface standards may implicate the patent rights of numerous entities. As of June 2000, a total of 45 firms had claimed ownership of at least one patent essential to compliance with one or more of the 3G radio interface standards to at least one standards-related body. Consequently, it appears likely that any operator of a 3G wireless system and any manufacturer of 3G equipment, whether handsets or network infrastructure, regardless of the particular radio interface technology it adopts, will need to acquire licenses from multiple patent holders, and for some standards may need licenses for a large number of patents. Each such patent owner could exclude an operator or manufacturer from the use of a 3G technology by denying it a license.
The 3G Patent Platform serves several distinct functions, including identifying, evaluating and certifying patents essential to compliance with one or more of the five distinct 3G standards in the IMT-2000 "family," and providing a mechanism by which licensors and licensees can enter into a Standard License Agreement for each 3G patent applicable to a technology, or can enter into an Interim License similar to the Standard License, while negotiating differing final license terms. As the Platform Specification makes clear, there will not actually be a single 3G Patent Platform entity, but rather a number of entities created with distinct personnel and responsibilities to carry out the various functions identified in the Platform Specification, and to ensure that where such functions may implicate competitive considerations among the five technologies, competitive choices are made independently for each technology rather than on a common basis
Based on the information that you have provided to us in the Platform Specification and other documents submitted to the Department, as well as the clarifying representations of counsel for the Partnership, it appears likely that the Platform arrangements described are not likely to impede competition and could offer some integrative efficiencies for users of the various 3G interface standards. Potentially significant competitive concerns about setting uniform licensing terms for competing technologies have been addressed by the separation of the licensing functions into five separate and independent PlatformCos. Only limited functions that do not inherently pose substantial competitive risks and potentially offer some efficiencies if performed on an integrated basis, most importantly the process for identifying and certifying essential patents, continue to be performed through a common ManCo entity and common personnel. The proposed arrangement is likely to facilitate the availability of complementary patent rights related to each of the five 3G standards, and could lower search and transaction costs for manufacturers and service providers who need access to these patent rights in order to provide 3G products and services.
For these reasons, the Department is not presently inclined to initiate antitrust enforcement action against the conduct you have described. This letter, however, expresses the Department's current enforcement intention. In accordance with our normal practices, the Department reserves the right to bring an enforcement action in the future if the actual operation of the proposed conduct proves to be anticompetitive in purpose or effect.
See also Press Release JUSTICE
DEPARTMENT CLEARS WAY FOR FORMATION OF WIRELESS TELECOMMUNICATIONS
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