What is a Standard Essential Patent (SEP)?
by Garth Brian Hedenskog, Head of Sales, Europe at SHIP Global IP
SHIP Global IP attended London IP Week in the heart of London during the 15th and 16th of October. The event was blessed with many exciting and experienced speakers from a wide variety of different areas. One of the hot topics was SEP. We thought we would dive in and provide our take on the subject.
Today’s interconnected and interactive world is made possible by standards, based on patented technologies which enable machines to interact among themselves. A typical consumer product such as a mobile phone must meet an enormous number of standards and therefor requires the patented technology to do so. But just as a builder generally does not manufacture its own bricks, but rather buys them, so does a manufacturer buy technological building blocks for its product. These technological building blocks are often protected by Standard Essential Patents (SEPs). In other words, a patent that protects technology essential to a standard is called a SEP.
A standard essential patent covers a technology necessary to use an industry standard. Anyone must be allowed to license the use of that technology at fair reasonable and non-discriminatory (we will cover this in our next article). Experts argue that policy can strike a balance of thoughtful application of antitrust law and proper enforcement of patents.
Standard Essential Patents (SEPs) are patents that are unavoidable for the implementation of a standardized technology. They represent core innovation that entire industries will build upon. These patents protect innovation that has taken extraordinary effort to achieve. SEPs cover technologies which is essential to using a technical standard.
Technical standards ensure interconnectivity and interoperability of billions of mobile phones and other electronic devices that we use every day. The organizations that set these standards often require owners of patents covering portions of a standard (SEP) to commit to license their patents on fair, reasonable and non-discriminatory (FRAND) terms.
The prospect of licensing patents that are essential to standards on an industry-wide scale is a major incentive for companies to invest in standardization activities.
SEPs – How does it work?
- Industry Representatives come together and meet under Standard Developing Organizations to develop technical specifications of a standard. They commit to make their patented technology available under Fair, Reasonable and Non-Discriminatory (FRAND) terms.
- Manufacturers of standard-compliant products which use one or more SEPs, negotiate with the SEP holders the conditions to use the technology.
- The outcome of this negotiation is formalized by a license agreement which has to reflect FRAND terms.
If you want to learn more about SEPs, please get in touch with one of SHIP Global IP team members. At SHIP we offer you advice on the best strategy to follow and we accompany you through the life-cycle of your IP portfolio.