Application dependent SEP licensing (with Chinese version)

30 August 2016. In this paper, we explain why varying licensing terms for SEPs based on the application for which a SEP is used may not be consistent with a patent owner’s commitment to license its SEPs on Fair, Reasonable, and Non-Discriminatory (FRAND) terms.

With the advent of new applications for wireless communications, the question of how to compensate owners of patents essential to standards (SEPs) for wireless communication is increasingly important to industry. This paper focuses on one aspect of that question: whether it is consistent with rules requiring that SEPs be licensed on Fair, Reasonable, and Non-Discriminatory (FRAND) terms for royalty rates (and other licensing terms) to vary based on the specific application for which the standard is used. In this paper, we explain why varying licensing terms for SEPs based on the application for which a SEP is used may not be consistent with a patent owner’s commitment to license its SEPs on FRAND terms. We are concerned that, by licensing SEPs at different royalty rates based on the application the licensee develops, a patent owner may seek compensation for value that it did not create, for technologies that it did not patent, and for innovations for which it cannot rightfully claim credit.

The threat of application-dependent licensing of SEPs is of increasing concern in a digitised world where Information Communications Technology (ICT) has become an integral part of our economies and societies. It is critical that input costs, such as the royalty expense of licensing SEPs, be reasonably predictable, so that creators and manufacturers of products that define the Internet of Things (IoT) can make the large investments necessary to bring innovative products to market. Lack of clarity and certainty regarding SEP licensing practices will hinder—rather than enable—the take-up of these digital technologies. More specifically, innovative companies considering investments risk being asked to pay different royalties for the use of the same patented invention. Such different royalties would allow SEP owners to unfairly capture the value of innovations contributed to the product by the implementer—not the SEP owner. These concerns are particularly important as new applications emerge that do not fit into prior frameworks for SEP licensing, as will be the case with IoT.

Download full paper here.

 

基于应用的标准必要专利许可

随着无线通信新应用的出现,如何补偿用于无线通信的标准必要专利(SEP)的专利权人这一
问题在行业中愈发重要。本文关注该问题的一个方面:专利许可费率(以及其他许可条件)根据
使用标准的具体应用而不同,这是否与要求 SEP 以公平、合理且非歧视(FRAND)的条件进行许
可的规则一致。我们在本文中说明为什么根据使用 SEP 的应用而改变 SEP 许可条件这种做法可能
与专利权人作出的以 FRAND 条件许可其 SEP 的承诺相矛盾。我们担心,根据被许可人开发的应用
而以不同许可费率许可 SEP,专利权人可能借此对其并未创造的价值、并未获得专利授权的技术
以及那些并不真正归功于他们的创新,也寻求补偿。

Download Chinese version here.

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