When I arrived in New Zealand, I needed a phone that had a New Zealand phone number. I could have just bought a new SIM card and put it into my US phone. That is what my daughter did. Like most teenagers these days, she keeps in touch with her friends via Insta, Snap, etc. rather than by dialing or texting a telephone number. So, she was ok with having only a single phone in which she can use a New Zealand phone number when she is in NZ (via her NZ phone number SIM card) and a United States phone number (via her US phone number SIM card) when she is in the U.S.
On the other hand, my friends, clients and I are old-fashioned. While we use Teams, Webex, Zoom and the like to video conference, we still occasionally like to talk on the phone. And I don’t want my clients or my U.S. based friends to have to pay international rates. Being of the older generation, unlike my daughter, we do not have a uniform messaging/calling app to make that happen. We prefer to dial a phone number to make calls. Also, every service seems to want to dual authenticate via text messages these days which requires me to be able to use my U.S. phone number at random times. For similar reasons, I needed a New Zealand phone number for local calls here. I decided to buy a second phone so I could keep my US phone solely for my US phone number and use the new phone for my NZ phone number while having both phone numbers operational at the same time.
My US phone is a Samsung. I have had several Samsung phones over the past decade and I keep buying Samsung phones because I like them. I like the screen. I like the camera. I like that, with a single swipe, I can pull down a menu that allows me to turn on or off the WiFi, turn flight mode on, turn my flashlight on, etc. I am used to the way Samsung phones work and consequently find them very easy to use. I bought my current Samsung phone because of all the non-standardized features that I’ve come to love over my many years of having Samsung phones.
But, I did not buy a Samsung phone in New Zealand. I bought an iPhone. Sorry Apple, I do not love my iPhone. After years of using Androids, I don’t know how to do many things on the iPhone and am constantly having to ask my daughter (a long time iPhone user) for help. Because the phone’s commands are unfamiliar, I have a hard time figuring out how to do things on my own and find that the way certain things work on the iPhone is frustrating. It would be really nice for example if I could turn location on and off with the same ease as on my Samsung.
So, if I don’t love the iPhone why did I spend a great deal of money purchasing an iPhone to use in New Zealand? I bought the iPhone essentially because my mother, husband, two of my 3 kids, my in-laws and many of my US based friends and clients have iPhones. It is incredibly convenient to be able to use Facetime with them. Facetime allows me to use my NZ phone to make calls with people in the US without paying international dialing rates and allows me to videoconference at the drop of a hat with them. So, I ended up buying an iPhone mostly for the ability to be able to call, text and videoconference with all of these people easily, seamlessly and without international charges.
In other words, cellular standards (or any other standards) played very little role in my decision of which phone to choose. Standards are, per se, standardized. All cell phones on the market today implement one or more of the 3g/4g/5g cell standards. Many of them also implement Bluetooth, WiFi and multitudes of IETF internet standards and MPEG, JDEG and other audio and video codecs and many other standards. In other words, most cell phones (at least those sold in the US and NZ) implement the same (or nearly the same) set of standards in the same or nearly the same way. If the standards were the main reason consumers purchased a particular brand or model of cell phone, then decisions would be made primarily on price because the standards are the same. But, like my example, that is not what often happens.
Consumers often purchase particular brands or models of cell phone because of all the other things that go into that phone. Sure, unlike my teenage daughter, I expect my cell phone to implement a cellular standard to make calls, but I would never pay the amount I paid for my Samsung phone or my Apple phone if all it did was make calls using a cellular standard. Like most consumers, I paid the money I did because each phone has additional non-standardized features that make it more useful than a phone that only makes calls. I chose my Samsung phone and my Apple phone because they each had different, non-standardized features which were more appealing than the feature set in all of the other phones, each of which implemented the very same set of standards, that I could have chosen instead.
It seems self-evident that the value of the cellular standard doesn’t somehow change because a cellular chip is put into a phone that has more or better features or functionality or even if that chip is put into a Mercedes-Benz. The value of the overall product is dependent on all the other things that product brings to the table which might be better features or better service or better manufacturing or better salespeople or better marketing or a better brand name but clearly isn’t because of a better standard since, by definition, the standard is the same for all products that implement that standard.
It thus makes zero sense to base a SEP royalty on the price of an end product. Whether we look at this from a legal perspective or simply our own practical experience, it seems bottom line that royalties for a patent (whether SEP or otherwise) should not be based on the economic value contributed by other inventions, features, functions, brand name, support services and the like. Any methodology for calculating a royalty should distinguish between the value contributed by the patent and the value contributed by all the other things that go into making a successful product. When that patent is a FRAND committed SEP, such methodology should also take into account the FRAND commitment itself, the value of the standard in the aggregate and all of the other patents that contribute to the success of that standard. Ultimately, any SEP royalty should be fair, reasonable and non-discriminatory for all implementers and should not overly burden the standard with royalties that alone, or in the aggregate, are excessive for any implementer.
That’s a long way of saying that we need to start applying some common sense to how we value standards.