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Technology Stocks : The New QUALCOMM - Coming Into Buy Range
QCOM 176.31+1.9%Jan 5 3:59 PM EST

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To: carranza2 who wrote (860)8/15/2007 11:53:24 AM
From: Art Bechhoefer   of 9132
 
In regard to the obligation to inform a standard setting body of IPR ownership, the recent ruling of Judge Brewster seems in conflict with a ruling involving Exxon and Unocal, which went all the way to the Supreme Court. Here is the case, if I recall correctly:

Unocal developed and patented a process for making reformulated gasoline to meet California standards that were under discussion in the 1980's. Having successfully tested its new method, Unocal then used lobbying and other tactics to persuade California regulators to adopt a standard that could make use of its new process. Once the regulators adopted the standard, Unocal began informing refinery operators of its reformulated gasoline patent. Tosco, one of the larger refineries, purchased a license from Unocal, which would add about 1 cent/gallon to its costs. Exxon refused to get a license and began using the process anyway, arguing that Unocal illegally influenced California regulators, and once the standard was adopted, only then did Unocal demand that others like Exxon get a license.

Exxon argued the patent was invalid for the very reason that Unocal falied to inform the regulators that the standard to be adopted would make use of a Unocal patent.

Exxon lost its case in the trial court, lost on appeal, went to the Supreme Court, which refused to hear the case (late 1990's or early 2000's).

To me, the lesson of Exxon v. Unocal is that a corporation can go even to the point of exerting influence over a standards setting body, without informing the body of its IPO, and without invalidating its relevant patents. Brewster's ruling seems to turn Exxon v. Unocal (now part of Chevron) topsy turvy.

Note: I have discussed this case earlier on the Moderated thread, but I thought it worth mentioning here in view of the recent developments.

Art
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