Standard Essential Patents Explained
We spoke to Senior Patent Attorney, Vikki Townsend, about Standard Essential Patents (SEPs). We asked her how SMEs can take advantage of SEPs. As well as how to survive in a market where big companies have the monopoly. Vikki helped us understand the complexities of SEPs. If you would like to speak with our team, please get in touch.
What are Standard Essential Patents (SEPs)?
A Standard Essential Patent is a patent that protects technology that is essential to implementing a standard. If your product or service needs to comply with a Standard, then you will need access to this patented technology. SEPs should be declared in the appropriate Standard. The owners are expected to grant access to their Patents on FRAND (Fair, Reasonable And Non-Discriminatory) terms. This will enable others to provide products and services which are compliant with the Standards.
How are technical standards developed?
Standard development organisations produce Standards by consensus with input from technical experts and industry operating in the technical fields covered by the Standard. A Standard is essentially a description of how a system works and may cover the design of subsystem components and rules on how the subsystems must interact. That could include rules on how the subsystems connect physically or how they communicate with each other. For example, how your car’s satellite navigation system communicates with GPS, or your Apple® iPhone ® talks to your friend’s Samsung® smartphone.
Which industries are most affected?
Standards exist in relation to all sorts of systems where interoperability between components or subsystems is necessary. For example, in the rail industry, rolling stock needs must communicate with rail lines to run. Standards need to be adopted to ensure the rolling stock and rail lines are compatible. In today’s smartphone-connected world, the Standards applicable to a diverse range of industries are those which relate to telecommunications. When information is transmitted, communicated and received it needs to be standardised. This means any products or services that rely on telecommunication may need to conform to Standards and possibly use SEPs.
Who owns the Standard Essential Patents?
SEPs are a valuable source of income for many big companies.
Players with large SEP portfolios include:
You don’t need to be a big company to own an SEP. If you work in developing telecommunications technology adapted for use in any industry, you might have a patentable invention. This could be adopted in a Standard and you could be an owner of an SEP.
How do Standard Essential Patents impact SMEs?
If your product or service makes use of Standards, then there is a high likelihood you are using SEPs.
If you have components to enable connectivity, then your supplier may own a portfolio of SEPs. Compensation for the authorised use of these SEPs may be built into the cost of these components. However, that’s not always the case. It’s worth checking with your supplier. If you have developed a new product, which a Standardised technology is incorporated, SEP owners may have the right to pursue you for licence fees. Have this in mind when costing your products for sale. Budget for licence fees to SEP owners down the line.
Have you invented a technology that could be adopted in a Standard?
It’s important to ensure patent claims are drafted in the right way so that you can declare your patent an SEP. You can then investigate generating income by granting FRAND licenses to other users of the Standard.
Our attorneys are always here to help you with this. In fact, our attorney team are invested in you making the most out of your invention. So why not work with us to get the most out of your commercial strategy?
If you have further questions on SEPs or would like to book a no-obligation consultation, please contact us.