1. Gustav Brismark, Mattia Fogliacco, Carter Eltzroth, Matteo Sabattini, and Richard Vary published an article titled Overview of SEPs, FRAND Licensing and Patent Pools, in les Nouvelles - Journal of the Licensing Executives Society, Volume LVIII No. 1, March 2023. Here is a link, and here is the abtract:
An SEP is a patent, necessarily infringed when implementing a technical standard adopted by a standards development organization (SDO), for example, IEEE, ISO/IEC MPEG or DVB. In order to eliminate the risk of hold-up by an SEP owner, SDOs generally include in their IPR policies a requirement that members declare whether they are prepared to offer licences to their SEPs on terms that are fair, reasonable and non-discriminatory (FRAND). A second obligation that selected SDOs implement is to require notification of patents that are or may become essential. If SEP owners identify a patent and say that they will not offer licences on FRAND terms, the SDO may remove the technology from the standard.
SEP ownership, together with the FRAND promise, is treated by courts within a framework based on antitrust rules or contract law. These IPR policies work well for the SDOs, ensuring reward for the technology contributors and access to SEPs, and therefore to the standard, for implementers. But bilateral licensing negotiation between the SEP holder and the implementer has become drawn out, subject to delaying tactics and other gamesmanship by implementers. Costly litigation is often the result. Patent pools are an alternative, efficient and pro-competitive mechanism for licensing, bringing together in a licensing program SEPs owned by multiple owners. The pool offers a one-stop shop, a lower aggregate royalty and transparency in the offered SEPs and in the licensing terms, and evaluations of essentiality performed by independent third party experts. One SDO, DVB, actively encourages pools of DVB-essential standards by fostering their formation in a pre-commercial process. Pools reduce the overall number of litigations, thanks to aggregation. Further, over the past decade judicial decisions, such as Sisvel v Haier, have been useful in identifying the steps in good-faith negotiation, the elements of a FRAND offer, and the conditions under which the SEP holder can enforce its rights through injunctions. This judicial framework, together with pooling, can be applied to increase transactional efficiency, especially at a time of growing complexity through convergence of new industries, benefitting not only large market players but also small and medium-sized enterprises.
2. Joachim Henkel published a paper (linked to in his Kluwer Patent Blogpost that I mentioned last week) titled Licensing standard-essential patents in the IoT – A value chain perspective on the markets for technology, Research Policy 51 (2022) 104600. Here is a link, and here is the abstract:
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.
3. Henrik Horn posted a paper on ssrn titled International Jurdisdiction Over Standard-Essential Patents. Here is a link, and here is the abtract:
Countries are alleged to pursue commercial interests through their antitrust interventions regarding FRAND commitments for standard-essential patents (SEPs). This paper examines pros and cons of allocating jurisdiction according to fundamental principles in international law, assuming that countries’ regulations promote national objectives. It shows why the Territoriality Principle yields too lenient treatment of patent-issuing countries’ SEPs, and too strict of treatment of other countries’ SEPs, and why the Nationality Principle yields too lenient treatment generally. Non-discrimination obligations can, but need not, improve on outcomes. Hence, existing international law will typically not implement efficient outcomes, suggesting that an international agreement is required.
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