Promoting SEPs Transparency

Conversation Highlights

How would you describe what SEPs are?

A standard essential patent is a patent that claims an invention, that reads on a technical standard.

If you implement a standard, let’s say, 4G, or 5G in a telephone, that is using certain technology that has been patented, and you’re basically implementing those patents as well.

Why it gets a little bit complicated? 

When you own a patent, you have exclusivity rights.

When you are joining the standards developing organisation, you’re basically saying,  ‘I commit to licence my patents, I’m losing my exclusivity’. 

The royalty you can ask for the licence is capped, it has to be FRAND (Fair, Reasonable and Non-Discriminatory).

The big question now is what is a reasonable grant rate?

On the scale of SEPs

What is particular with SEPs is that there’s so much licensing going on. 

The latest numbers show that we have over $20 billion of yearly licensing around SEPs. So it’s a lucrative and big market. And that’s why there’s so much at stake. 

The need for transparency in the space.

Companies must declare patents that are potentially central at the standardisation bodies. That’s good, it’s good to have databases to get started. But there’s no third party who makes any assessment if these patents are really essential.

If you look at certain studies, it says that 10/ 20, maybe 30% of these are only essential, so the majority are not essential. 

What we do at LexisNexis IPlytics is we have intelligent ways to cross-correlate patent data with standards data.

Conversation highlights continued

How patent pools aid transparency

The principle of the pool is easy, patent owners come together, they draft one contract and the implementer does not have to go to all the single patent owners, but signs that one contract with the pool.

The more patent owners, the more economic benefits.

What does the future hold? 

We will live in a world that is more fully connected, our homes are connected, machines are connected, vehicles are connected, even medical devices will connect. 

It’s not only the phones that we have these days. And with that increasing connectivity across different industry verticals, we will see also more diversity and standards development. 

Tim’s Key Takeaway

I think we live in a world that has become increasingly complex. And I think complex market structures, complex technologies, and also complex data, need data solutions that decrease that complexity. 

And I think AI is one way and one important input here that makes data more intelligent and helps companies decide and make conclusions.

Nigel Key Takeaway

Understanding who owns SEPs is of critical economic importance. 

If those who invest billions in developing cellular and other standards are not fairly rewarded, the whole ecosystem breaks down. 

Despite the differences in IP and competition laws in the US, Europe and Asia, there is only one building block which is fundamental on which all decisions are made,  high quality data.