5 October 2021

News

Everybody appreciates standardization. Because of technical standardization, trains can cross borders; mobile phones are operational around the globe; chargers, plugs, and wires work for more than one device; screw drivers match screw heads; money can be wired through undersea cable; drugs can be developed faster, cheaper, and safer; airplanes and ships do not collide in increasingly crowded skies and seas; a Japanese DVD player can read and play US-American DVDs – just to mention a few.

Interoperability is the flagship use case for technical standardization and is often referred to as a key benefit when standardization is mentioned. From an end-user perspective, interoperability seems to be primarily improving comfort and pricing, which are both great achievements. Let’s stick with the train example. If German trains were not compatible with Belgian and French tracks, a train from Berlin to Paris would stop at the German/Belgian border, off-board its passengers and have them switch to a Belgian train. The same would happen at the Belgian/French border. Maintaining multiple border stations and the corresponding railway infrastructure would be expensive and most definitely impact the price of the Berlin/Paris railway ticket. Besides the cost dimension, it is way more comfortable for the passenger to board the train in Berlin and drive through three European countries to Paris.

A question that is addressed less prominently when discussing technical standardization is how does the end-user benefit from technical standardization, beyond the mere interoperability improvement, regarding personal comfort? The answer is features. Good examples can be found in the first iPhone or the Motorola Razr. Companies like Nokia, Siemens, and Ericsson (just to name a few, even back then there were dozens of companies contributing to telecommunication standards) had focused their R&D efforts on developing a basic infrastructure for providing phone calls and internet access through the air interface at a global scale. Under the roof of the 3GPP cooperation, “cordless phone calls and internet access” were solved (and improved consistently since) – providing the nurturing ground for the first smartphone class. Apple could basically “source the technology” by licensing the patents from the innovating 3GPP members and focus its own R&D efforts on an excellent and disruptive user experience. Apple was very successful in doing so by aggregating an array of technologies like touchscreens, the Gorilla Glass, the “slide to unlock” functionality, etc. Motorola could – even though active in 3GPP itself – focus on producing a foldable phone which remains celebrated by fan groups to this day.

Standardization has been booming in the last few decades. Many standardization organizations have been brought into existence and issued a wide range of standards and technical norms. But technical standardization has also attracted other players who quickly understood that standards are of strategic importance. If your technology makes it into the leading standard, it becomes mandatory for everyone to use. Suddenly, the nerdy approach of finding the best solution to a technical problem got an additional dimension: standard politics. Centralized standardization is vulnerable to external influencers like any centralized system, depending on certain staffing and voting rules. Once a tipping point is reached, it is no longer guaranteed that the best technical solution is adopted, it might very well be the technical solution from the “right” or the most strategic submitting entity or country. How could a scenario where politically endorsed solutions take precedence over technically suitable solutions be avoided?

The first step to the answer is easy: by inducing competition. Competition will safeguard that the best solution prevails; best being defined as the best mix of cost and technical benefits. If competition is mentioned to people that are active in standardization, they quickly think of competing standards, like the epic battle between Blu-ray and HD-DVD over the succession of DVD technology. But what about a decentralized standardization system? What about the classic factual standards like the CD? The CD used to be proprietary technology of Philips, but its market adoption was so overwhelming that the underlying patents conveyed a market dominant position to its owner – a situation where the monopoly needs to be defused by a pledge to license the technology to all interested parties at fair, reasonable and non-discriminatory terms. The currently prevailing centralized institutional standards (so-called de jure standards) make it highly unappealing for one company to try to outsmart the aggregated R&D effort of many, and to establish its own proprietary technology line as the best in-class. The market power of the combined efforts is just too smothering to stand a chance.

One countermovement can be seen in the open-access movements. Free access to essential technology makes it appealing to at least try the technology for cost reasons. But the downside of this approach is that the relationship between the technical foundations and the features is flipped around. Investing in openly accessible technology is an R&D effort that can hardly be recovered if it is given away for free. Therefore, companies will try to work only to some degree on the technical foundations and focus on the features as the selling point of the technologically enabled product. If, however, the features are more important than the technical essentials, “the tail is wagging the dog” and not vice versa. What is required to break the current conundrum is an IP-embracive approach to recover R&D efforts at fair return-on-investment and at the same time makes it appealing to develop features on top of it – effectively lowering the market-access hurdles also for smaller players in the ecosystem.

The solution is a decentralized incubator for emerging technologies – a technology sanctuary in which new solutions thrive, and get their fair chance to be developed, tested, and to succeed. The cornerstones of this approach are simple:

–   The technology contributors cross-license each other and share innovative ideas (post-filing or under NDA as trade secrets). The various solutions compete on the pool-internal market, and the strongest will emerge.

–   The shared technology is licensed to technology subscribers to recover the aggregated R&D effort. The subscribers get access to the technology (and not just freedom-to-operate) and can choose what to adopt from the available tech stack while their focus is on feature implementation. If their features in turn find market adoption, the subscribers can mature into becoming technology contributors themselves.

In combination with seasoned internal voting mechanisms, the incubator for emerging technologies provides a people and technology-driven nurturing ground as an alternative or an addition to centralized standardization.

 


 

Author: Jonas Block, Head of Artificial Intelligence

Jonas Block leads development of IPwe’s technology and novel approaches to dissolve the existing access restrictions and open the global IP commercialization markets for everyone by leveraging a unique combination of AI, blockchain and user-experience. He has a PhD in automated patent licensing and previously worked as a patent litigator in Germany where he focused on cross-border patent assertion and pan-European defensive strategies. He is currently tasked with Artificial Intelligence development and supporting NFT infrastructure design at IPwe.

 

About IPwe

IPwe is quickly emerging as creating the industry standard for patent NFTs. IPwe recently announced its partnership with IBM to represent patents as non-fungible tokens (NFTs). IPwe also has a partnership with CasperLabs  to further improve the patent registration process and create a chain of custody (CoC) Solution by using the Casper public blockchain to store, secure, and trace patent data, thereby creating a new approach to patent ownership verification. Patent NFTs are stored and shared on the IPwe Platform, running on the IBM Cloud and Blockchain services such as the Casper Network. IPwe anticipates tokenized IP to become commercially available in Q4 of 2021. IPwe operates in more than 50 countries with offices in Asia, Europe, North and South America. To learn more about how IPwe can provide the answers to your IP-related business decisions, Request a Demo of the IPwe Platform on www.ipwe.com

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Mia Mixan
Corporate Marketing
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