Brussels, November 6, 2019 – Patent pools whose licensing practices are fair, reasonable and non-discriminatory (FRAND) would benefit both standard-essential patent (SEP) owners and innovative standard-implementing businesses, facilitating the uptake of the Internet of Things (IoT) in Europe.
Technology standards – especially those that underly connectivity, enabling multiple devices to interoperate and communicate with each other – have never been more important. The success of the IoT hinges on licensing of connectivity SEPs. The rapid pace of digitalization dictates that SEP licensing, too, should be as effortless and fair to all parties as possible. Patent pools that aggregate rights of several SEP holders could be beneficial in this respect, but only subject to rigorous safeguards, including those foreseen by competition law.
The Fair Standards Alliance (FSA), a voice of more than 45 innovative companies, has prepared a set of recommendations on SEP licensing through patent pools. Outlining benefits and cautioning dangers, the position paper notes that, above all, patents pools must be FRAND and at the very least:
- not discriminate against any entity that practices the standard and seeks a license;
- grant licenses on FRAND terms to those companies that want a license;
- ensure that royalty rates:
- take into account the value of SEPs in the patent pool’s portfolio as part of the entire SEP landscape relevant to the standard;
- reflect the value of the patented inventions included in the pool – and not the added value of standardization or innovations and features not covered by the SEPs.
- be transparent about license(s) offered by the pool ie publish information about the relevant SEPs and proposed licensing terms and conditions in a timely manner;
“At the FSA we appreciate that patent pools can have notable advantages such as potentially reduced transaction costs and more clarity on cumulative licensing rates,” – said FSA Chairman Robert Pocknell. “Indeed, SEP licensing via patent pools may benefit both SEP holders and SEP licensees, particularly in case of complex standards that otherwise would require multiple separate negotiations. However, such benefits are unlikely to be enjoyed if numerous patent pools exist for the same standard.”
About FSA:
- The FSA is an Alliance of European and international companies – both large and small – across a range of sectors but united by one goal: to champion Europe as a leader in the development and rollout of the Internet of Things (IoT).
- Our 45-strong membership include SMEs, global and European companies such as Volkswagen, BMW, Deutsche Telekom, Harman, Intel, Cisco, Fairphone, AirTies and Nordic Semiconductor. The full list is available on the FSA website.
- Members of the FSA contribute to the EU economy by employing more than one million people in the EU alone.
- The FSA unites a number of the world’s largest innovators. It includes companies that spend billions of Euros annually on R&D, developing technologies, participating in standards development and licensing SEPs to others.
- Annually, the aggregate turnover of the Alliance members is close to 2 trillion Euros, and on aggregate our members spend more than 100 Billion Euros on R&D and innovation and have more than 300,000 patents that are either granted or pending.
- The FSA seeks to help build a balanced framework for the licensing of standard essential patents on FRAND terms. These FRAND commitments accomplish two goals: firstly, implementers of a standard can feel secure that they can get licenses on fair and reasonable terms, and secondly, the SEP holders can receive appropriate remuneration for their patented inventions.
For further information: https://fair-standards.org/
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