IPO issues call for views on Standard Essential Patents and innovation

December 9, 2021

The UK government seeks views as to whether the Standard Essential Patents (SEPs) ecosystem (that is, the enabling participants, commercial relationships, infrastructure, and legal and regulatory environment) surrounding SEPs is functioning efficiently and effectively and striking the right balance for all entities involved. The purpose is to help assess whether government intervention is required.

Its aim is to produce the optimal IP framework for the UK that will promote innovation and creativity both now and, in the future, while supporting the government’s ambitions set out in the Innovation Strategy and Diversification Strategy.

A patent that protects technology which is essential to implementing a standard is known as a standard essential patent (SEP). Without using the methods or devices protected by these SEPs, it is difficult for a manufacturer (or “implementer” of the standard) to create standard-compliant products, such as smartphones or tablets. Typically, developers will have IPR policies in place that ensure SEP holders, once their SEPs are declared as essential to the standard, provide a license to implementers of the SEP on fair, reasonable and non-discriminatory (FRAND) terms. This ensures the technical standards can be readily used by implementers of the standard.

In November 2020 the Government’s Telecoms Diversification Strategy made a number of recommendations to encourage new vendors into the market, including sunsetting legacy networks, encouraging new technologies and funding R&D. It also commissioned the Diversification Taskforce which reported in April 2021. The Taskforce noted that SEPs have potential to serve as considerable barriers to diversification and recommended government takes action. Overcoming the challenges that the SEPs framework currently encounters may require global collaboration to reflect the fact that business is global.

The government is asking for views in the following areas:

  • competition and market functioning (the government’s overall objective is to ensure there is an efficient functioning of markets using SEPs and the appropriate promotion of both competition and innovation);
  • transparency in the system (particularly concerning declaration of patents essential to the standard and pricing of SEPs);
  • patent infringement and remedies;
  • licensing of SEPs (the government is keen to understand whether there are ways to ensure the right balance can be struck to promote competition and innovation and provide access to technologies protected by patents); and
  • SEP litigation. The amount of litigation relating to SEPs has increased dramatically since the mid-2000s, according to US data. There has been a significant number of high profile and widely debated cases indicating a growing financial impact of declared SEPs

The call for views ends on 1 March 2022.