Standard Essential Patents (SEPs) have a significant role to play in defining the future of intellectual property. SEP is a category of patent that covers a technology that is necessary for the implementation of a technical standard adopted by standard-setting bodies such as ITU, 3GPP, etc. These patents are necessary for the implementation of industry standards in telecommunication technologies such as GSM, 3G, 4G, 5G and above, Wi-Fi, video encoding and decoding, codecs, Bluetooth, etc. A SEP patent protects an invention that is mandatory for implementing a technical standard, such that any system or product that complies with the standard will use the patented technology.

A patent is recognized as an SEP when either the patent holder declares to the relevant SSO that their patent is essential for implementing a particular technical standard. This is typically done through an IPR Information and Licensing Declaration platform provided by the Standard Setting Organizations.

Standards Development Organization databases have thousands of SEPs for a single standard. These declarations are basically based on a self-evaluation which are performed by the patent holders and are not subject to further inspection to confirm the essentiality of the declared patent. A close examination of SEP databases reveals that a large number of patents that have been declared SEPs are not essential. As the importance of SEPs continues to grow, there is a need for a strategic approach to determine their essentiality as well.

A comprehensive understanding was developed for all the patents in the portfolio, including claims, type of claim (device, network, or method), citations, background, field of invention, problem statement, followed by identifying patents that have the potential for being an SEP. Then, an exhaustive search was conducted in various paid and unpaid databases to conclude each patent for sorting them into SEP and non-SEP categories with proper remarks and evidence.

In further analysis, our team performed mapping for potential SEP patents and prepared charts comprising evidence from industry standards supporting the claims of potential SEP patents. A detailed analysis, along with remarks and/or comments, was presented, highlighting the gaps in the patents (if present). This detailed analysis helped the client to make appropriate decisions regarding licensing.

What makes a patent essential to a standard?

Standard Setting Organizations (SSOs) decide if a patent is required for a standard. SSOs are responsible for developing and establishing standards and have a process in place for members.

The patented method must closely adhere to the technical requirements and standards of the standard.

A patent's technology may be deemed significant if it is necessary to provide compatibility and interoperability among systems or products that follow the standard. In other words, if the patented technology was not used, it would be difficult or impossible for different systems or products to work together as required by the standard.

How to make a contribution to a standard?

When a standard is created, standards-developers and other stakeholders may recommend several different solutions, which may be the technical method or process, to obtain a specified functionality for the standards. Many of the proposed solutions may also be subject to patents or pending patent applications. To lessen the likelihood of anti-competitive conduct, many SOs have implemented an intellectual property (IP) policy.

When patent owners contribute their own protected technical methods or processes to a standard, then it is implied they will license their respective patents for the relevant technical methods or processes to implementers in accordance with the SO's IP policy. This generally involves an implied commitment to license and/or an implied commitment to license openly on a royalty-free basis or more commonly, in accordance with Fair, Reasonable and Non-Discriminatory (FRAND) terms. These commitments may be made on a general basis, without naming individual patents, or may be limited only on individual patents or families of patents named by the SEP owner.

When a new technology standard is adopted, then the SEP owners will likely have an obligation to license their SEPs to implementers in accordance with FRAND terms.

How SEPs are different from Regular Patents?

SEPs are patents that protect technology implicit in a standard. Not every patent is necessary to meet a standard. For example, since businesses are free to create alternative designs that do not infringe upon the patent, design patents are not SEP. To ascertain whether a patent is "essential," SSOs require that patent holders reveal essential patents to them.

SEPs are robust patents that include necessary technology that other businesses need to utilize. As a result, the owners of SEP patents can profit handsomely from their creations. Due to their vital significance, SEPs are the most disputed patents.

SEP Challenges

The interoperability and technological connectedness offered by SEPs cause issues in the highly competitive market. A handful of these are discussed below:

• Royalty Stacking
• Infringement laws
• Calculating Royalty
• Over-declaration

Patent Pool

The idea of patent pools is becoming more popular due to the intricate and challenging licensing situation for SEPs. Two additional SEP holders who consent to jointly cross-license technology to other companies make up a patent pool. They serve as a practical means of resolving licensing disputes quickly for both the patent holder and the licensee. A great way to reduce litigation, boost cost effectiveness, and cut licensee transaction costs is through patent pools. 

What is the commitment of FRAND?

Declaring a patent important to a standard gives SEP patent holders access to a larger market or possible licensees, as well as the opportunity to earn royalties. The SEP holder is then required to license their technology on fair, reasonable, and non-discriminatory (FRAND) conditions since this gives them such authority.

This implies that the SEP must be available for licensing without excessive limitations or prohibitive prices for anyone wishing to adhere to the standard. SEP holders who accept FRAND terms pledge to provide SEPs equitable licenses. In order to make the terms and expenses of using the technology obvious to the licensees, they must also give them explicit information about the essentiality of the SEPs and the licensing terms.

Determination of FRAND terms?

Potential licensees and the SEP holder must frequently negotiate in order to determine FRAND terms, which can be difficult. The several factors include market demand, the competitive environment, the technology's worth, and the extent of the patent claims.

No body enforces FRAND commitments, even if SSOs decide which patents are necessary for a standard. Regulatory agencies and courts may be called upon to resolve disagreements about FRAND requirements.

A FRAND (fair, reasonable, and non-discriminatory) patent licensing agreement may be agreed to by potential SEP holders throughout the standard-setting process. Note that patents needed for a standard might not necessarily be disclosed, for example, if the patent holder was not engaged in the standard's creation. This suggests that they may be exempt from FRAND licensing requirements for their patents.

What occurs if parties are unable to reach a consensus on FRAND terms?

Parties may turn to litigation or other dispute resolution procedures if they are unable to agree on FRAND conditions through discussion. Depending on a number of variables, such as industry standards and the particulars of the case, courts may step in to decide what conditions are fair and reasonable.

Determining If a Patent is SEP or Not?

1. Identifying relevant standards

Identifying which industry standards your product must implement. Such standards are set by Standard setting organizations (SSOs) such as IEEE, ITU, ETSI, or the like.

2. Checking standard document

Checking a copy of the applicable standard or standards which includes technical descriptions, specifications, as well as other documents that have been published by the SSO.

3. Searching for declarations

Declarations of the standardization bodies or patent holders need to be considered. ETSI provides an IPR Online Database for information and communications technology where you can search for patents that have been identified as necessary or possibly necessary for ETSI and 3GPP specifications.

4. Reviewing patent declarations

Determine whether the patent in question has been considered essential to the standard by scanning the patents declared. The patent information and how it applies to the standard are often indicated in the declarations.

5. Verifying claims coverage

Check if the technology required for realizing the functionality described in the standard is included in the claims. The wording of the claims should be checked against the technology required by the standard.

Checking Existing Patents and Prior Art

If an idea or technology seems to be innovative, the assessment of existing patents and prior arts becomes crucial to check whether a similar invention has been patented. The review of patent filing dates is necessary, as the idea or technology may be disclosed in the older patents, while recent filings may also be relevant. In case of legal disputes, e.g., litigation or arbitration, such assessment is important as the more recent patents are likely to be relevant, essential, or enforceable.

Strategies for Protecting Standard Essential Patents

The protection of SEPs should be considered by each R&D team in their strategies. Some of the key aspects of protecting IP rights of an organization includes implementing licensing agreements, negotiation of royalty fees, and preparation of defensive publications.

Achieving Licensing Agreements

Licensing agreements create an agreement between two parties on how they will use their patented innovation, allowing both parties to retain ownership of their respective patents. Companies can enter into licensing agreements either by mutual agreement or through court orders if an agreement cannot be reached. All terms of the licensing agreement should be written clearly and concisely so that both parties can clearly see the value they are obtaining through the agreement.

Determining Fair Royalty Prices

Determining fair royalty rates is one of the most important steps in ensuring that both parties benefit from a licensed agreement and that one party is not being taken advantage of by the other. In addition, future changes in industry standards should also be taken into consideration when determining fair royalty rates to ensure equity and fairness over time.

Defensive Publications

Defensive publications provide evidence that a company owned a particular piece of patented technology prior to being sued for infringing upon that piece of technology. Therefore, a defensive publication prevents companies from wasting their resources on frivolous lawsuits and allows companies to better protect their valuable intellectual property assets.

To support collaboration between all corporate departments, effective and efficient access to reliable data sources such as patents, scientific articles, or blogs as well as good governs management of all standard essential patents under the Applicable Law of the Country, and by using the open innovation model where possible. However, achieving a level of collaboration between all corporate departments may only be possible if there is a single, centralised digital workspace such as Cypris that enables faster collaboration and time-to-insights, along with improved efficiency in all aspects of research.

Advanced claim mapping strategies

There is a basic blueprint which informs about the functionality and interconnectivity of the different parts of the machine. Further, there is an instructional manual kind of process which takes through each and every aspect of the assembly and functioning of the machine.

A combination of these two procedures forms a strong basis for making claim charts.

One of the main factors which contribute to the increase of the market value of SEP patents as well as their litigational quality is the use of EoU claim charts.

Claim charts get detailed technical data, for instance, exact signaling protocols and procedures from step 2 specifications. Thus, it is much more difficult for other companies to claim that their products work differently.

A claim chart is an indication of the exact location when it connects a product's feature to a step 2 protocol, for instance, the NSSAI usage in 5G standards.

Tools & Resources to identify standard essential patents in your portfolio Searches

Finding standard essential patents is typically the responsibility of an internal intellectual property (IP) team or a patent research firm. The process follows the same fundamental guidelines in each instance.

Step 1: Look for patents that address technical topics connected to standards.

Step 2: Determine which of its claims is the most expansive.

Step 3: Look up information about the procedure outlined in the patent claim in a generic search.

Step 4: Search the 3GPP standards for the procedure outlined in the patent. Searching 3GPP can be challenging and time-consuming.

Step 5: To ascertain whether a patent is SEP, compare all of its elements with the procedure outlined in the patent.

SEPs Can Be Valuable

Two of the most significant motivations for a company to try the costly feat of acquiring SEPs are:

• Reducing patent portfolio cross-licensing costs;
• Income from licensing

SEPs Over-declaration

SEPs are robust patents that considerably strengthen the intellectual property portfolio of a company. Everybody would desire SEPs to be included in their IP assets accordingly. For being able to take advantage, this places companies in a position where they would desire even non-broadcast patents to be considered essential. The patent environment is that of over-declaration or over-inflation since there is no impartial "test" of essentiality. The humongous penalty of non-disclosure, the outrageous cost of necessity testing, and relaxed SSO regulations all encourage mass declarations. Hyperbole declaration of SEPs is a flaw that makes ineffective patent licensing and litigation. SEPs are powerful. It leads to license agreements artificially inflate prices and thereby cramp innovation and creativity, to the disadvantage of the entire principle of patent grant.

Key Cases

Oppo V Nokia

User interface, security, 5G technology, and other patents were all at the center of Nokia and Oppo's high-stakes, multi-nation patent war. Later, Oppo retaliated by bringing revocation claims against the Nokia patents. Oppo filed a lawsuit over its own patents at the same time. One of the biggest patent fights in recent years came to an end when the firms finally worked out their differences through a cross-licensing deal.

Ericsson V Intex

Ericsson was accused of misusing its dominating position in SEP license discussions by Intex, an Indian smartphone manufacturer. Ericsson filed a legal challenge to the CCI's inquiry. Following that, Ericsson filed a patent infringement lawsuit against Intex, obtaining a court order requiring interim royalties based on an earlier contract with Micromax. Ericsson provided expert affidavits and in-house laboratory tests to back up its statements.

Tools for Claim Mapping in 5G

Tools for Patent Research and Analysis

• These tools are used to extract claims as text, legal status, equivalents in family, and technical classifications (IPC/CPC codes).
• Protocol and Packet Analysis Tools
• Claim Charting and Documenting Tools

Strategies for Mapping 5G Technical Specifications to Patent Claims

Identifying Keyword/ Concept

The primary goal is to identify relevant keywords that appear in the claim as well as technical terms used by 3GPP or ETSI standards.

Mapping Layers of Protocol Stack

The primary goal is to map important functions of/or claims structure with relevant layers of the 5G protocol stack.

Use Case or Scenario Based Mapping

The primary goal is to frame the mapping of patent claims in the context of a real-world or standard-defined scenario presented in the real-time.

Importance of Patent Claim Mapping in SEP Analysis for 5G Technologies

Thousands of companies are involved in the development of 5G technology. The landscape of this technology is saturated with standard-essential patents (SEPs), which are unavoidable for implementing 5G standards. Identifying and mapping these SEPs is important for:

• Negotiating for licensing and justifying the royalty rate
• Defending for litigation and freedom-to-operate (FTO)
• Valuating the portfolio and declaring SEPs to SDOs (e.g., ETSI)

Mapping the claim accurately allows stakeholders to demonstrate the standard adherence, asserting the Intellectual Property rights, or challenging the patent validity effectively.

Way Forward (Key takeaways)

Standard Essential Patents (SEPs) are critical for implementing key technology standards like 5G, Wi-Fi, and Bluetooth, driving both innovation and market value. Their management through identification, claim mapping, FRAND licensing, and patent pools - is essential for maximizing IP value, ensuring compliance, and supporting interoperability.

Challenges like over-declaration, royalty stacking, and litigation highlight the need for strategic, evidence-driven SEP practices. Effective SEP management enables companies to protect their innovations, optimize licensing revenue and maintain a competitive edge, while fostering industry-wide innovation and collaboration.

Related Resources:

Strategy to determine essentiality of SEP patents

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