SEP licenses should be available to all companies in a supply chain that want a license for SEPs in their products – Supporting references

8 June 2020. Following the Fair Standard Alliance’s previous position paper on discriminatory licensing practices of standard essential patent (SEP) holders who selectively refuse to grant licences to some prospective licensees, FSA prepared a reference document that highlights policy statements and case law supporting the ‘license availability’ principle.

On 24 June 2016 the Fair Standards Alliance published a position paper concerning the failure of some SEP holders to comply with the non-discriminatory requirement of FRAND by refusing to license companies who would like a license to SEPs used in their products. The paper addressed the negative impact of such discriminatory licensing practice on the product ecosystem and on consumers. It explained why this practice is not acceptable and why FRAND SEP licenses must be available to all entities, regardless of their role within the product supply chain.

Some highlights from this position paper include the following:

• The non-discriminatory requirement of the FRAND policy means that SEP licenses must be
available to all entities, regardless of their role within the product supply chain; accordingly,
SEP licensors shall not refuse to provide licenses to willing licensees including at the level of
intermediate subsystem manufacturers;
• Subsystem manufacturers are better equipped than end-product manufacturers to assess
patent assertions by SEP licensors, and to monitor the evolution of the standardized
technologies that are incorporated within their products;
• Most, if not all, of the inventive aspects of a SEP holder’s patent claims only apply to the subsystem that implements the standard;
• Some SEP holders discriminate by offering different licensing rates for the same technology at
different levels of the supply chain;
• The ecosystem is placed at risk by the unfair and discriminatory practices of some SEP holders
who attempt to unreasonably take value from the end product, effectively placing a tax on the
value chain;
• Such practices have the potential of reducing the attractiveness of the standardised
technology to the end-product manufacturer. In turn, this hinders the propagation of the
standard and may deprive the end consumer of the benefit of the technology.

As a follow up to that position paper, the FSA thought it would be helpful for SEP licensors and prospective licensees of SEPs to have an easy to reference document that highlights some of the supporting policy statements and supporting case law. We would be interested to hear of other policy decisions and case law that interested parties are aware of, and we shall explore publishing an update in the future.

 

Download full paper here.

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