How to Declare a Patent as a Standard Essential Patent (SEP)?
Table of Content
What are Standards and SEPs?
A standard is a set of technologies, protocols, or norms used in common by various manufacturers or service providers while designing specified products or methods. Standards are essential for the global adoption of technologies and processes. For example, various telecommunication technologies such as Bluetooth and Wi-Fi function similarly on mobile phones manufactured by different companies because the associated technologies have been declared as standards by the concerned organization or industry. The groups, organizations, or bodies that define and set standards are known as Standard Setting Organizations (SSOs). The Alliance for Telecommunications Industry Solutions (ATSI) in the United States, European Telecommunications Standards Institute (ETSI) in Europe and Association of Radio Industries and Businesses (ARIB) in Japan are some examples of SSOs working in the telecommunication sector.
While defining a standard, some technologies or processes may exist that some inventor has already patented, and without using these patents, it is impossible to implement the standard. Those patents essential to implement a standard and have been accepted by the concerned SSO are known as Standard Essential Patents (SEPs). The role of SEPs is most significant in the field of telecommunications because with every new generation such as 3G, 4G, and 5G, there are a number of standards defined by the SSOs like ETSI. It is almost impossible to manufacture telecommunication infrastructure related to the concerned standard without using the innovations defined by SEPs. Now, the companies which manufacture products that are in line with a standard need to have a license of the relevant SEPs from the owners of the SEPs. The owners of the SEPs spend time, money, and other resources while inventing and defining their patented technologies, and they should get reasonable royalties for their efforts. Hence, the SEPs are generally licensed on FRAND (Fair Reasonable and Non-Discriminatory) terms. FRAND terms are an agreement between the SEPs holders and SSOs to provide a SEP license to the standard implementers on fair and reasonable terms for both parties. FRAND is a voluntary agreement, and there is no enforcing body to enforce the FRAND terms. If there is any disagreement between the two parties on FRAND, the dispute can be put before the concerned court, where the jury or judge will resolve the dispute.
Designating Patent as SEP
A patent is declared essential to implement a standard, usually by the SSOs. While developing and defining a standard, the members of the SSO check for the potential patents which may be required for the implementation of the standard and/or the patent owners declare to the concerned SSO that their patented technology is essential to implement the standard. After getting the list of such patents, the concerned SSO members check whether the disclosed patented technology is used in the standard and further, if asked by the SSO’s higher authorities, an effort is made by the SSO members to find alternative technology solutions to find whether it is possible to implement the standard without using the corresponding patent. If there is no alternative, then the patent is declared as essential for the particular standard, and the higher authorities of the SSO are informed about it.
Granting License on FRAND Terms
Generally, after recognizing a patent to be essential for the standard implementation, the patent owner is requested by the concerned SSO such as ETSI to provide an irrevocable undertaking in a specific period of time regarding its agreement to grant the license on FRAND terms, but the patent owner is not bound to grant the license on FRAND terms. If the patent owner does not show interest in granting a license on FRAND terms, subsequent requests are made by the higher authorities of the SSO such as the Director-General in the case of ETSI to get the license. Still, if the patent owner refuses to provide the license on FRAND terms, the SSO makes a decision whether the development of the concerned part of the standard should be continued or not. However, in most cases, the patent owners are the companies that are members of the concerned SSO and play a role in developing the standard. These companies usually agree to provide the license for their patented technology on FRAND terms. In many cases, the member companies intentionally embed their patented technologies into different parts of the standard to benefit from the FRAND terms' royalties, which is an unethical exercise.
The SSOs generally provide platforms on which the patent owners can declare if they find that a particular standard is using their patented technology. The patent holders have to provide all the information regarding their patents used in the standard and the part of the standard that uses the concerned technology. For example, ETSI provides an “IPR Information and Licensing Declaration” platform. The declarants can open a submitter account on this platform and declare that their patented technology is essential for implementing a particular standard. The declarants can select the particular part of the standard that is using their technology.
Finding Declared SEPs
The declared SEPs are usually disclosed publicly by the concerned SSO. The information regarding SEPs related to a particular standard/technology and/or the SEPs related to a particular assignee can be found on the website of the concerned SSO.
For example, ETSI provides an “ETSI IPR Online Database” as shown in Fig. 3. The SEPs related to a particular project, standard, and/or a declaring company can be found by filling in the appropriate details in the online database of ETSI.
Standards play an important role, especially in telecommunication, to maintain uniformity in the workflow of various technologies. With the advent of new generations, different new standards need to be defined. Often, these standards comprise patented technologies, without which it is impossible to implement the standard. These patents are declared as SEPs by the SSOs. The owners of these patented technologies had put a lot of effort while inventing these technologies; hence, they should be reasonably compensated. The process of setting standards, declaring SEPs, getting SEP licenses on FRAND terms, and providing public information regarding SEPs related to standards is generally controlled and implemented by SSOs.