Patent Rights in Standard-Essential Technologies (SEPs) | What to Know

When companies create new tools, devices, or platforms, they often rely on shared technical standards to ensure that different products work together, such as Wi-Fi, 5G networks, or USB ports. These standards make it possible for a phone made by one company to connect with a router made by another, for example. To achieve this level of interoperability, standard-setting organizations adopt specific technologies, some of which are protected by patents. Read on and reach out to Lemler IP to speak with a seasoned New Orleans, Louisiana patent lawyer to learn more about standard-essential patents (SEPs). Here are some of the questions you may have:

What makes a patent “standard-essential?”

Importantly, not all patents are considered essential; a patent becomes standard-essential when the technology it protects is incorporated into an industry standard and is unavoidable for compliance.

For example, if a new communication protocol requires the use of a patented method of signal transmission, any manufacturer that wants to adopt the standard must use that method. In turn, they must also obtain permission from the patent holder. This gives the patent owner a significant amount of leverage, but it also creates an obligation to license the patent fairly and on reasonable terms.

Standard-setting organizations often require participants to commit to FRAND licensing, which stands for fair, reasonable, and non-discriminatory. Without these commitments, competition could be stifled, resulting in consumers facing higher costs.

Why do licensing disputes occur with SEPs?

Although FRAND commitments are meant to level the playing field, disagreements often still arise. One frequent dispute involves what counts as “fair” or “reasonable” compensation. A patent holder may argue that its innovation represents a groundbreaking contribution and deserves a higher royalty, while a manufacturer may insist that the contribution is minimal and that the requested rate is excessive.

Another common point of contention is whether the patent holder is engaging in discriminatory practices by offering better licensing terms to some companies and not to others. Access to standard-essential technologies can determine whether a business thrives in a competitive industry, so it’s important to have a knowledgeable attorney in your corner who can effectively represent your interests at every turn.

What are the best ways for companies to protect their interests?

Companies that own SEPs need to manage their rights to avoid accusations of abuse, while companies that need to license these patents must ensure they are not overpaying. If you’re a patent owner, documenting licensing offers and maintaining transparency can reduce the risk of legal issues, and if you’re a manufacturer or service provider, obtaining legal guidance before signing a licensing agreement is critical.

If you have further questions or would like to speak with a seasoned New Orleans intellectual property lawyer, please don’t hesitate to contact Lemler IP today.