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The UK government is seeking views as to whether the Standard Essential Patents (SEPs) framework is functioning efficiently and strikes the right balance of protection and innovation.

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The UK Intellectual Property Office (IPO) is calling for evidence-based views on the the Standard Essential Patents (SEPs) framework in a review that will run for 12 weeks. It is open from 7 December 2021 and will close on 1 March 2022.

This follows a similar review by the US patent office earlier in the year.

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 to create standard-compliant products. The number of declared SEPs doubled on average every five years between the early 1990s to 2014. As of 2020, around 95,000 patents had been declared essential for the 5G standard, RISC-V and the growing Internet of Things (IoT) sector.

Once a patent is declared as essential to the standard, the owners can 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.

This has been an issue in areas such as standards for video compression and could b an issue with the promotion of Open RAN for wireless networks

The UK IPO is looking at issues such as the actions or interventions that would make the greatest improvements for consumers in the UK, as well as whether there are practices with SEPs that create difficulties for industry or act as barriers to innovators.

“[IP] helps innovators reap the rewards of their investments, promoting investment in research and innovation. IP is vital to the UK economy: Between 2017 and 2018, investment in intangible assets grew by 3.3% to an estimated £169.2 billion,” said the office. “This was greater than total tangible investment in 2018, which fell 3.9% to £151.0 billion. Use of IP has been linked with an increase in firm performance, with ownership of IP rights (IPRs) being strongly associated with improved economic performance at firm levels.

The UKIPO says it ranks fourth in the World Intellectual Property Organization’s Global Innovation Index 2021 and second in the US Chamber of Commerce Global Innovation Policy Centre (GIPC) International IP Index 2021.

“Our IP system is consistently highly regarded around the world,” it said. “However, the UK IP system’s ability to keep pace with technological change is central to its continued high performance. The digital sector plays an important role in the UK economy, contributing £150.6bn in 2019, accounting for 7.6% of UK gross value added, representing an increase of 6.1% from 2018.”

The review is driven by the rise of wireless technology, particularly 5G in telecommunications and the automotive industry, for example, in navigation systems. This in turn has seen increased attention given to issues surrounding the licensing of patents and use of standards.

The importance of standards is growing with the increasing globalisation of commerce, the emergence of new technologies and the need for interoperability.

“In new markets, we have seen the requirement for digital, the Internet of Things (IoT) and Artificial Intelligence, products from different manufacturers needing to be able to seamlessly ‘talk to’ each other to provide value to consumers. Standards and patents can span across multiple disciplines and sectors. In some cases, standards require the use of specific technologies protected by patents,” it said.

The review is also looking at the amount of litigation relating to SEPs. This has increased dramatically since the mid-2000s according to US data.

“The aim is to better understand whether SEPs litigation has become increasingly problematic for patent owners and implementers, as a consequence of FRAND negotiations being prolonged to avoid paying fees or the general cost and inefficiency of the litigation. The government recognises the important role national courts play in resolving licensing disputes. However, it also recognises that reliance on courts to resolve such disputes can be inefficient and costly for users of technologies in which SEPs are embedded,” it said

The questions are at www.gov.uk/government/consultations/standard-essential-patents-and-innovation-call-for-views/standard-essential-patents-and-innovation-call-for-views

Submissions can be made at SEPcallforviews@ipo.gov.uk

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