IAM magazine publishes study on Standard Essential Patents

IAM magazine standard essential patents

IAM magazine standard essential patents

The current January issue 75 of the IAM magazine has published an article on the landscape of standard essential patents. The study reveals the latest trends of patent files around standards using the IPlytics Platform tool.

Future technologies such as Internet of Things, smart cars, smart home and smart energy will increasingly rely on patented technology standards such as LTE, Wifi, NFC, RFID and Bluetooth. The number of patents that claim an invention on these standards is consequently constantly increasing. So called Standard Essential Patents (SEPs) can be extremely lucrative in terms of royalty income, but also in terms of being strong bargaining chips in cross-licensing negotiations. Accordingly, also the number of SEP litigation cases as well as the number of SEP transfer deals has been become more frequent. In recent years, standard essential patents are increasingly the subject of lively debate among market observers, but are they worth all the fuss?

standard essential patent trend

standard essential patent trend

Indeed, the IAM article provides evidence that declared SEPs are cited more often, are subject to larger patent families, are transferred more often and are litigated more frequently. While companies such as Qualcomm, Nokia and InterDigital still hold the largest SEP portfolios, emerging Asian companies such as Huawei, ZTE or Datang Mobile are catching up quickly. The analysis further confirms that declared SEP portfolios are by large still active and valid. Most of the declared SEPs either cite the relevant standards projects as prior art or are cited by other declared SEPs. Both measures indicate that declared SEPs have a close technical relationship with the respective standardized technology.

standard essential patent licensing

standard essential patent licensing

The study makes use of data from the IPlytics Platform tool, connecting information on:

  • 80 million world-wide patents documents
  • 2 million world-wide standards documents
  • 300,000 declared standard essential patents (licensing statement, FRAND commitment, reciprocity statement, etc.)
  • 450,000 patents referencing standard as prior art
  • 15,000 patents that are subject to a patent pools
  • 42,000 patents that are subject to US litigation

The article concludes with proving an action plan on how to deal with the interrelation of patents and standards. IPlytics CEO Tim Pohlmann states:

“The interplay between patents and standards is higher on the agenda than ever before. Senior managers and directors at patent-owning businesses which are active in fields where standards matter, or will matter in the future, should bear some key considerations in mind”:

  • The number of declared SEPs is constantly increasing. IP directors should consider royalty costs for products that comply with technology standards.
  • Not only has the number of declared SEPs been increasing, but so too have the number and diversity of rights holders. This is reflected in the increasing geographical variety of rights holders, as well as the increasing variety of business models. IP directors should conduct foresight screenings on the existence of relevant SEPs to identify possible licensing costs or legal problems at an early stage. The risk potential for the launch of new technologies or products can thus be quantified and valued during the early stages.
  • While litigation around declared SEPs is rising, the market for declared SEPs has evolved in recent years. Senior managers should bear in mind that buying SEPs may be a way to enter new markets. SEPs may be good bargaining chips in licensing negotiations, which could avoid costly court disputes.
  • The results of the analysis suggest that companies should pursue a common strategy for patenting and standardization in order to ensure that they are aware of the existence of SEPs and are exploiting patented inventions in technology fields where standards matter.
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Professor Blind and IPlytics CEO Tim Pohlmann discuss at the Standards Your Innovation Bridge Conference in Brussels

 

Professor Blind and IPlytics CEO Tim Pohlmann were invited speakers at the first EU Conference On Standards: Your Innovation Bridge hosted and organized by CEN/CENELEC in Brussels. The goal of the conference was bringing together experts from industry, research and policy organizations to explore and discuss the role of standards and patents in research and innovation. Several speakers presented their experiences in linking the patent and standard world to show how each one is benefiting from the other. Professor Blind Chairman of CEN-CENELEC STAIR, moderated Breakout Session 4 Horizon2020 and discussed how standards and innovation relate in the closing expert panel. The discussions revealed that standards and patents are two different tools with different goals and strengths. Knowing when to use which is key in understanding how to monetise research and development expenditures. In this regard IPlytics CEO Tim Pohlmann held a presentation on the topic: “Understanding the Interplay of Patents & Standards to Leverage Market Potential“.

Standards Your Innovation Bridge Conference Tim Pohlmann, Ged Owens and Laurent Tonnelier

Standards Your Innovation Bridge Conference (l. to r. Tim Pohlmann IPlytics GmbH, Ged Owens EPO and Laurent Tonnelier mobilead)

In the follow-up panel discussion Ged Owens from the European Patent Office and Laurent Tonnelier from mobilead discussed with Tim Pohlmann the future perspectives on the interplay of IPR and standards. Pohlmann’s presentation revealed that patents and standards more and more overlap. In this regard the number of standard essential patents has not only been increasing, but develops to be relevant for sectors beyond information and communication technologies (ICT). In view of the industry 4.0 (Internet of Things), companies are more and more challenged by critical technology investment decisions that concern standards and patents at the same time. In order to make the right technology investment decisions, an innovative company needs to identify which technologies will be relevant in the future, which technologies are protected by intellectual property rights and which standards or specifications are to be adopted. In this regard Laurent Tonnelier stated that “standard setting initiatives are mirrors of how technology will look like in the future. Very often companies participate in standard setting projects that are unrelated from their todays core businesses. This interest in developing a standard reflects a company’s interest in future technologies and related product markets.” Ged Owens further noted that “patenting and standardization are both tools to foster innovation”.

IPlytics is a Berlin based company that offers an online based patent analytics platform tool to analyze market developments, technology trends and a company’s competitive position for patenting and standardization. IPlytics Platform integrates patent analysis, patent valuations, patent mapping, patent landscaping and a mapping of technology standards and products, such as an identification of standard essential patents, patent licensing terms or patent pools. IPlytics Platform helps companies making the right R&D investment decisions by providing actionable and trustworthy insights on relevant IP assets.

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