Revisiting the Bizarre SEP Level of Licensing Antitrust Controversy

Abstract

Standardized technologies are often embedded in both intermediate products (such as chipsets or modules) and end products (such as smartphones or connected cars) that incorporate the intermediate products as components. In principle, owners of patents covering such technologies (standard-essential patents or SEPs) could license their SEPs to the manufacturers of intermediate products, the end-product manufacturers or, to the extent possible, given patent exhaustion constraints, to both. Yet, in practice, they often choose to license at the end-product level only, while de facto not enforcing their patents on producers of intermediate goods or including ‘have made’ rights and exceptions in their licenses, so that intermediate product manufacturers are protected when selling to licensed end-product manufacturers. (See Section II.) This licensing practice is currently subject to scrutiny in various parts of the world. On 26 November 2020, the Düsseldorf Regional Court, as part of its assessment of the civil case...