Licensing Of Standard Essential Patents Research Articles

The Welfare Effects of Government Intervention into the Licensing of Standard-Essential Patents: An Analysis of the Chinese Smartphone and SoC Markets

The Welfare Effects of Government Intervention into the Licensing of Standard-Essential Patents: An Analysis of the Chinese Smartphone and SoC Markets

SEP licensing in the automotive sector: shifting gears too quickly?

... The licensing of standard essential patents (SEPs) has, for a large part of the last three decades, occupied an integral position in the development of information and communications technology (ICT) standards. But while much of the focus has been on SEP licensing in the telecommunications sector, the emergence of the Internet of Things (IoT) and increasing use of connected technology by cars make the automotive sector the next major battleground for technology owners and implementers. The ‘smartphone wars’ might have left several major telecom companies financially drained but have certainly made these companies highly experienced at both asserting SEPs and defending against their assertion.1 Automobile manufacturers have, on the other hand, benefitted from the collaboration between suppliers and original equipment manufacturers (OEMs), without being restricted by concerns surrounding the licensing of proprietary technology.2 The introduction of autonomous and connected vehicles brings with it interoperability needs that will likely change the status quo. With features such as access to the internet, streaming of music and real-time traffic updates offering enhanced functionality, cars will require connectivity to not just the internet but also the OEM servers, nearby cars and other users of roads.3 In other words, cars will become part of the IoT, further necessitating the implementation of technologies previously unheard of, as far as the automotive industry is concerned.4 More specifically, a lack of acquaintance with the licensing of patents of the nature of SEPs might prove to be a stumbling block for car manufacturers. Add to it the complexities involving a long supply chain, multiple stakeholders and enormous financial stakes, which will challenge companies to address a wide range of crucial licensing questions5—the same questions that have attracted a significant amount of debate, as well as a series of patent infringement cases involving SEP holders and automobile manufacturers, in the USA and the European Union (EU).

Analysis on The Licensing of Standard Essential Patents and Its Anti-trust Regulation for Intelligent Connected Vehicle

Intelligent Connected Vehicle (ICV) is one of the most important strategic industries in China, which with both technology and standard intensive characteristics. Standard Essential Patents (SEPs) have become the focus of competition globally in the automotive industry. Even though resources are invested heavily in research and development by automotive related companies, almost all the major automotive companies are facing the licensing and litigation problems caused by SEPs. In comparison with the patent law and other private laws, it is more applicable to regulate the abuse of SEPs from the perspective of anti-trust in China. Topics like how to deal with the “patent hold-up”, how to deal with the potential anti-trust violations, how to apply FRAND principles and anti-trust regulations to SEPs licensing, and how to build a rate calculation framework in the automotive industry, should be analyzed seriously.

Challenges to the disclosure and licensing of standard essential patents in the context of evolving trends in ICT technologies

Describing the importance of Standard Essential Patents in fostering innovation and development in Information and Communication Technologies, the article traces the implications and interpretations of the Fair, Reasonable and Non-discriminatory (FRAND) Agreement and emerging issues in the context of Standard Essential Patents in the United States, Europe and China through a brief analysis of recent judicial pronouncements—Microsoft v. Motorola, Apple v. Motorola and others—and systems.

Licensing standard-essential patents in the IoT – A value chain perspective on the markets for technology

Innovative industries need efficient markets for technology (MFTs). One determinant of MFT efficiency neglected until now is licensing level—that is, the level in the value chain where patents are licensed. Patents may be licensed upstream, to firms that put the patented knowledge into practice. I refer to this as integrated licensing. Alternatively, patents may be licensed further downstream in the value chain, in particular to makers of final devices. I call this bifurcated licensing since it separates intellectual property rights from the technical knowledge they cover. I study the licensing level of essential patents on communication standards such as LTE and Wi-Fi in relation to the Internet of Things (IoT). The choice of licensing level in this context is currently a hotly debated topic. To show how bifurcated licensing affects MFT efficiency, I present empirical evidence from a qualitative study comprising interviews with 30 individuals from 22 diverse firms, focusing on startups. IoT device makers clearly find the uncertainty regarding infringement, patent validity, and the licensing process hinders efficient licensing, which is compounded by the large number of IoT device makers and, for SMEs and startups, by resource constraints. As a theory contribution, I show that a patent's licensing level need not correspond with the implementation level of the patented knowledge—in other words, licensing may be bifurcated rather than integrated. I develop a model of how licensing level affects MFT efficiency. Implications for practice are that device-level licensing of standard-essential patents (SEPs), if broadly implemented, would have a negative effect on innovation and entrepreneurship in the IoT. Policymakers should ensure that SEP licensing is simplified.

The Use and Abuse of Anti-Suit Injunctions in SEP Litigation: Is There a Way Forward?

Abstract Cross-border litigation over standard essential patents (SEPs) entered a new phase when the English courts decided in Unwired Planet v Huawei that they have the power to set the terms of a global license within the context of national patent infringement proceedings. Unwired Planet appears to have unleashed a global race to the bottom and a race to the courthouse, with litigants racing to seize their preferred forum to set global rates while trying to prevent their opponents from bringing proceedings elsewhere through ‘anti-suit injunctions’, a type of relief traditionally granted by common law jurisdictions but now increasingly by civil law jurisdictions such as China. Yet this is rarely the end of the matter, with litigants applying for anti-anti-suit injunctions or even anti-anti-anti-suit injunctions. The purpose of this paper is to explore the new realities in SEP litigation post-Unwired Planet, with a focus on the use of anti-suit injunctions and the corresponding turf war between national courts. After discussing the legal test for granting such relief in various legal systems, the paper discusses the worrying proliferation of anti-suit injunctions across major jurisdictions, noting how this trend wastes judicial resources and may undermine international comity. It considers that in the absence of some form of international coordination, a satisfactory solution is unlikely to emerge in the short term. As a first step, it proposes that governments consider establishing ‘best practices’ for SEP licensing dispute resolution, including for jurisdictional issues such as the scope of licenses fashioned by national courts.

The economic case against licensing negotiation groups in the Internet of Things

Abstract Competition policy generally prohibits coordination among buyers or sellers, especially coordination on price, price-related inputs, and output. In licensing markets for standard-essential patents (SEPs), it has been periodically proposed that this rule should be relaxed to permit licensing negotiation groups (LNGs), which is expected to reduce transaction costs and the purportedly ‘excessive’ royalties paid to licensors. Based on the economic structure and historical performance of wireless technology markets, this policy intervention is likely to degrade, rather than enhance, competitive conditions in the wireless, automotive, and other markets encompassed by the ‘Internet of Things’. In the short term, LNGs would most likely result in a redistributive (not an efficiency) effect that shifts value from innovators to implementers in the technology supply chain without necessarily passing on cost-savings to consumers. In the medium to longer term, LNGs are liable to impose efficiency losses by endangering the viability of licensing-based monetization models that have funded research and development, promoted dissemination of technology inputs, facilitated entry in device production, and enabled business models across multiple industries. While LNGs may reduce the transaction costs of SEP licensing, the historical record shows that pooling structures can achieve the same objective at a substantially lower risk of competitive harm.

SEPs licensing across the supply chain: an antitrust perspective

The rise of the Internet of Things (IoT) and the development of 5G are set to add a new layer of complexity to the current practice of standard essential patents (SEPs) licensing. While, until recently, the debate has centred on the nature of fair, reasonable and non-discriminatory (FRAND) commitments and the mechanisms to avoid hold-up and reverse hold-up problems between licensors and licensees, a new hotly-debated issue has now emerged. At its core is the question of whether SEP holders should be required to grant a FRAND licence to any implementer seeking a licence, including component makers (the so-called ‘licence-to-all’ approach), or if they should be allowed freely to target the supply-chain level at which the licence is to be granted (the so-called ‘access-for-all’ approach). After providing an up-to-date overview of the current legal and economic debate, this article focuses on the most recent antitrust case law dealing with the matter on both sides of the Atlantic and argues that no sound economic and legal bases which favour licence-to-all solutions can be identified. * The authors would like to thank the anonymous referees, Luigi Federico Signorini and the participants in the 2021 Annual Conference of European Policy for Intellectual Property (EPIP), in the 38th Annual Conference of the European Law and Economics Association (EALE), in the TILTing Perspectives 2021 (Tilburg University), and in the 16th Annual Conference of the Academic Society for Competition Law (ASCOLA). The study was conducted as part of the research activities promoted by the DEEP-IN (Digital Ecosystem, Economic Policy and Innovation) Research Network. The author is grateful for the financial support received. Any opinions expressed in this paper are personal and are not to be attributed to the Bank of Italy. The first is Half-Causation Branching, which allows the logical mapping of the inventing space, within which the imaginary invention is located. Implementing this tool reveals two alternative nearby inventions, which if left out of the sought patent protection would render any eventually granted patent practically worthless. Following that, Half-Causation Encapsulation comes to the rescue by allowing the encapsulation of the original imaginary invention, plus the two alternative nearby ones, all in a manner that provides the all-important unity of invention On the one hand, patent agents are not supposed to contribute to their client’s inventive concept to the extent that they become co-inventors. On the other hand, scientists and engineers are not supposed to dedicate so much time and effort to learning about complex patent laws as to become patent agents. Arguably, each should aim to excel in their discipline. However, a structured dialogue should be considerably helpful to each and to the patent process as a whole. It is proposed that Half-Causation, with its logical structure, can provide a basis for such a dialogue. Besides targeting a readership in patent practices and theory, this paper should be of interest to multiple readerships, for example in engineering design, medical discovery and philosophy of technology.

Licensing of standard essential patents in a developing economy: an Indian perspective

The ripple effect created by standardization has transcended beyond the developed world and engulfed developing economies. While a major chunk of the discussion involving standards-setting and the licensing of standard essential patents (SEPs) has centred around the United States (US) and the European Union (EU), with the rapid emergence of Chinese patent holders and a steady increase in SEP-related jurisprudence in India, the innovation landscape has witnessed a significant change in the past five years. Amidst such market realities, it is neither possible nor logical to extend the regulatory framework devised in the US and EU to the rest of the world. In the Indian context, jurisprudence on FRAND disputes is still at a nascent stage, despite there being a long-standing history of standards development in the country. With the global roll-out of 5G beckoning to transform human lives in a never-before-seen manner, having a comprehensive set of guidelines for the licensing of SEPs is the need of the hour. The most crucial role in that regard is likely to be played by the IPR policies of standard setting organizations (SSOs), which have quite often proved to be the decisive factor in facilitating the interaction between innovators and implementers, vis-à-vis licensing of SEPs. Against this background, the present article focuses on the state of standardization in India and the possible role SSOs might play in stimulating an innovation culture in the country. * Dr Manveen Singh can be reached on msingh@jgu.edu.in

FRAND Access to Data: Perspectives from the FRAND Licensing of Standard Essential Patents for the Data Act Proposal and the Digital Markets Act

FRAND Access to Data: Perspectives from the FRAND Licensing of Standard Essential Patents for the Data Act Proposal and the Digital Markets Act

Negotiating Issues between Patentees and Implementers on Licensing of Standard Essential Patents - A Comparative Analysis of Two CWAs -

Negotiating Issues between Patentees and Implementers on Licensing of Standard Essential Patents - A Comparative Analysis of Two CWAs -

The Licensing of Standard-Essential Patents in the IoT – A Value Chain Perspective on the Market for Technology

The Licensing of Standard-Essential Patents in the IoT – A Value Chain Perspective on the Market for Technology

Conference Report on ‘Patents and Standards – Online FRAND-Forum’

Abstract There have recently been a large number of court decisions concerning questions of FRAND (fair, reasonable and non-discriminatory) licensing of standard essential patents (SEPs). Despite this high level of judicial activity, however, many of the questions surrounding this topic continue to remain unanswered. On 4 November 2020 the annual Mannheim (Germany) FRAND Forum organised by the FORUM Institute was held online to discuss these highly challenging issues. The forum spanned five presentations from both judicial and legal perspectives, as well as two group discussions in which around 30 people took part.

FRAND Defences Against the Grant of Injunctive Relief: Applying Huawei v ZTE in Singapore and China

AbstractFrom the size of A4 paper to 5G in the telecommunications sector, standards are ubiquitous. Standard essential patents (SEPs), which protect technology essential to standards, enable their proprietors to gain significant market power. Antitrust authorities therefore scrutinize the exercise of SEPs for breaches of competition law. In this regard, the ability of SEP proprietors to obtain injunctions against implementers as a remedy for infringement of SEPs where licensing negotiations have broken down or are ‘ongoing’ has proven controversial. Some fear that this enables SEP proprietors to threaten injunctions unless implementers agree to unfair, unreasonable, or discriminatory terms. In Huawei Technologies Co Ltd v ZTE Corp [2015] ECLI:EU:C:2015:477, the Court of Justice of the European Union identified circumstances where a SEP proprietor's application for injunctive relief as a remedy for infringement of its SEP constitutes an abuse of a dominant position, with the classification of the SEP proprietor's application as being abusive forming a ‘FRAND Defence’ which implementers may invoke against the grant of the injunction requested. This article analyzes whether this approach can be replicated by the Singapore Courts and whether the Chinese Courts, which have already dealt with SEP licensing disputes, adopt a similar approach.

Anti-suit injunctions for standard-essential patents: the emerging gap in international patent enforcement

The unprecedented success of standardization in the field of wireless telecommunications, with the development of 2 G, 3 G, 4 G and—currently—5G standards, has engendered a market for standards, and standard-compliant products and equipment of global proportions.1 Cooperation between technology developers and contributors to standard development organizations (SDOs) on the one side, and users of standards on the other, for the development of innovative international standards has, however, also entailed disputes regarding the licensing of standard-essential patents (SEPs). Of particular importance in SEP-litigation is the issue of which licensing terms can be viewed as fair, reasonable and non-discriminatory (FRAND). Because patents are territorial rights and major technology contributors hold SEPs in various jurisdictions, it is not uncommon—in case a FRAND outcome is not reached through bilateral negotiations—for FRAND disputes to result in lawsuits being filed in several jurisdictions. In patent infringement actions, national courts routinely review the FRAND-conformity of the conduct of both parties in negotiations before awarding the remedy of injunctive relief.2 Adding to that, the contractual nature of the FRAND commitment provided by SEP-holders to SDOs may give parties to a FRAND dispute cause of action for a declaratory judgment that a given licensing offer is, or is not, FRAND.3 Hence, a situation of overlapping jurisdiction may arise in international FRAND disputes.

SEPs Licensing Across the Supply Chain: An Antitrust Perspective

The rise of the Internet of Things (IoT) and the development of 5G are set to add a new layer of complexity to the current practice of standard essential patents (SEPs) licensing. While, until recently, the debate has centred on the nature of fair, reasonable and non-discriminatory (FRAND) commitments and the mechanisms to avoid hold-up and reverse hold-up problems between licensors and licensees, a new hotly-debated issue has now emerged. At its core is the question of whether SEP holders should be required to grant a FRAND licence to any implementer seeking a licence, including component makers (so-called ‘licence-to-all’ approach), or if they should be allowed freely to target the supply chain level at which the licence is to be granted (so-called ‘access-for-all’ approach). After providing an up-to-date overview of the current legal and economic debate, the paper focuses on the most recent antitrust case law dealing with the matter on both sides of the Atlantic and argues that no sound economic and legal bases which favour licence-to-all solutions can be identified.

The Pro-Patent Holder Approach in Unwired V. Huawei in Interpreting the ‘Fair, Reasonable and Non- Discriminatory’ Rule for the Licensing of Standard Essential Patents

The English Supreme Court case of Unwired Planet International Ltd v. Huawei Technologies (UK) Co Ltd demonstrated a pro-patent holder approach when interpreting the ‘fair, reasonable and non-discriminatory’ (‘FRAND’) rule/ undertaking. This article argues that this is a welcomed decision, because this approach pays due regard to commercial reality and the commercial needs of the patent holder. Understanding this approach is very important, because it helps in applying the rule. This approach also vitally provides more certainty by supplementing the existing, yet limited and vague, guidance on the interpretation of this rule. Furthermore, this comment rebuts the concern that the Court may have demoted the usefulness of the ‘non-discriminatory’ limb by allowing differential pricing. It is argued that this approach is both legally correct and makes practical sense. The impact of differential pricing to prospective licensees should not be over-exaggerated. English Supreme Court case, Unwired Planet International Ltd v. Huawei Technologies (UK) Co Ltd, patents

How to license SEPs to promote innovation and entrepreneurship in the IoT

The Internet of Things (IoT) relies heavily on wireless communication technologies, which are covered by thousands of standard-essential patents (SEPs). Numerous applications of IoT technologies are being developed, frequently coming from entrepreneurial firms. The high degree of fragmentation on the side of device makers raises the question of how—i.e., on which level of the value chain—SEPs should be licensed. Device makers prefer upstream licensing, allowing them to purchase fully licensed modules, while SEP holders tend to favour licensing at the device level. I present empirical evidence on the matter from a qualitative study comprising interviews with 18 individuals from 12 firms of different sizes and industries, including device makers and SEP licensors. The focus lies on the perspective of entrepreneurial firms. I also review and discuss arguments presented in the literature. I find that device-level licensing poses serious problems to device makers, in particular to SMEs. The main problems are: A lack of resources and pertinent legal and technical competence, precluding fair negotiations with licensors; high transaction costs due to a high degree of industry fragmentation; and uncertainty regarding cost and patent clearance. As a consequence, device-level licensing would likely have a chilling effect on innovation and entrepreneurship in the IoT. Policy makers should ensure that IoT SEP licensing is simplified. They should commission studies on the feasibility of licensing and price differentiation higher up in the value chain, and on the aggregate cost of developing the main standards. Adding to those formulated by the SEPs Expert Group, I propose two additional principles for IoT SEP licensing: Licensing at a value chain level where transaction costs are minimal; and licensing in a way that promotes downstream innovation and entrepreneurship.

Complementary components and returns from coordination within ecosystems via standard setting

AbstractResearch SummaryWhen and how does a firm generate positive returns for itself as it coordinates technological development in ecosystems via standard setting? We depart from the convention of examining a firm's disclosed standard essential patents (SEPs), to instead focus on its nondisclosed complementary components. Using data from the information and communication technology industry from 1988 to 2010, we demonstrate that a firm that discloses SEPs generates higher returns when it has more nondisclosed complementary components, especially when they are firm‐specific. We further demonstrate the mechanism by showing at a component level that disclosure raises the value of nondisclosed complementary components. Findings suggest that adopting a systemic perspective over the firm's entire portfolio to include its complementary components provides a more comprehensive understanding of returns from coordination within ecosystems.Managerial SummaryCompatibility standards provide the blue print behind the core technological platform in many ecosystems. During the standard setting process, firms disclose their ownership of intellectual property essential for the standard to function (SEPs). We study when such disclosures benefit the firm by examining the change in firms' equity market valuations. We find that firms generate positive returns when they own nondisclosed components that are complementary to their disclosed SEPs. We also find that the nondisclosed complementary components increase in value after the disclosure of SEPs. Our findings point to how managers can leverage standard setting to create and capture value in their technology portfolio beyond the licensing of SEPs.

Looking Back to the Future—Selective SEP Licensing Through a Competition Law Lens?

Looking Back to the Future—Selective SEP Licensing Through a Competition Law Lens? Evelina Kurgonaitė, Evelina Kurgonaitė Secretary General at the Fair Standards Alliance (FSA) Evelina Kurgonaitė is a Secretary General at the Fair Standards Alliance (FSA). Pat Treacy is The Head of the Competition Team at Bristows LLP in London and Brussels. Edwin Bond is an associate at Bristows LLP. Representing over 45 small and large companies operating in different sectors around the world, FSA advocates fair and more transparent licensing of standard essential patents (SEPs). Most FSA members implement connectivity technology standards, and many members own SEP portfolios. The FSA is not a client of Bristows LLP. Bristows LLP has advised and represented both SEP owners and licensees for a number of years. The views expressed in this article are personal, reflecting an interest in the past and future evolution of FRAND. They do not necessarily represent the opinions of the FSA, Bristows LLP, or any client or clients of Bristows LLP. Search for other works by this author on: Oxford Academic Google Scholar Pat Treacy, Pat Treacy The Head of the Competition Team at Bristows LLP in London and Brussels Evelina Kurgonaitė is a Secretary General at the Fair Standards Alliance (FSA). Pat Treacy is The Head of the Competition Team at Bristows LLP in London and Brussels. Edwin Bond is an associate at Bristows LLP. Representing over 45 small and large companies operating in different sectors around the world, FSA advocates fair and more transparent licensing of standard essential patents (SEPs). Most FSA members implement connectivity technology standards, and many members own SEP portfolios. The FSA is not a client of Bristows LLP. Bristows LLP has advised and represented both SEP owners and licensees for a number of years. The views expressed in this article are personal, reflecting an interest in the past and future evolution of FRAND. They do not necessarily represent the opinions of the FSA, Bristows LLP, or any client or clients of Bristows LLP. Search for other works by this author on: Oxford Academic Google Scholar Edwin Bond Edwin Bond Bristows LLP Search for other works by this author on: Oxford Academic Google Scholar Journal of European Competition Law & Practice, Volume 11, Issue 3-4, March-April 2020, Pages 133–146, https://doi.org/10.1093/jeclap/lpaa003 Published: 04 March 2020 Article history Received: 04 November 2019 Revision received: 23 January 2020 Revision requested: 29 January 2020 Accepted: 30 January 2020 Published: 04 March 2020