SEPs protect technology that is essential to implementing a technical standard. Examples include the technology that connects a car’s navigation tools to traffic systems, or that connects smartphones to headphones.
According to the IPO, there is a lack of transparency around SEP pricing, licensing, the use of patents in technical standards and ‘a growing and complex litigious environment’. Its consultation on SEPs, which runs from this week until 7 October, proposes the creation of a ‘rate determination track’, which would provide an independently adjudicated licence rate.
The government could also mandate the disclosure of patent information, to provide users and businesses with greater transparency.
The IPO notes that ‘the SEPs ecosystem is complex. It intersects with the patent framework, competition law, standardisation and contract law. It is also a global ecosystem, in that SEPs licenses can be granted to a licensee globally. This has resulted in several complex cross-jurisdictional disputes, including parallel litigation’.
Litigation can be expensive and take several years; for example, the IPO estimates the case of Interdigital Technology Corporation & Ors v Lenovo Group Ltd & Ors [2023] EWHC 1578 (Pat) cost £31.5m.
The IPO expressed concern that court costs are likely to be ‘prohibitive to SMEs’. It also wants to hear from lawyers on how well pre-action protocols on disclosure and alternative dispute resolution are working to resolve licensing disputes. It suggests introducing specialist pre-action protocols for SEPs, to help with early resolution, and expanding existing mediation services for SEP disputes.
Welcoming the consultation, Sarah Vaughan, president of the Intellectual Property Federation, said: ‘As long-standing advocates for a balanced and effective IP framework, we support measures that enhance transparency, facilitate timely and fair licensing negotiations, and promote efficient dispute resolution.’
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