Why? What? When? How? These are some of the most used words in John’s dictionary. He’s pretty curious about the workings behind what happens in his life, and many of those have to do with the inventions and the workings of intellectual property in the world around him.
John’s been having more and more IP-related conversations in life these days. One of the things which keep popping up are Standard Essential patents- so he turns to IP Geek to find out more about them.
Hey IP Geek- do you have a minute? One of my friends mentioned standard essential patents when we were hanging out this weekend- they sound pretty important. Are they any different from normal patents?
Hey John. And well, it depends on how you look at them. Standard Essential Patents (we call them SEPs for short) are patented the same way as normal patents, and have the same term limits and other statutory rights as other patents.
What makes them different is in the name itself- ie, they are standard essential. This means that if any technology adheres to a standardized format (such as, for example, mobile phone chargers or USB ports), patents essential to that standard are SEPS. Basically, you will not be able to uphold standards, or function well in the market, without owning or licensing the SEP in question.
Wow. Doesn’t that mean the owner essentially gets a market monopoly on that whole technology?
Normally, yes. That would be the case. But if a patent is an SEP, the patent owner has an obligation to license this SEP under FRAND terms. FRAND here stands for Fair, Reasonable and Non-Discriminatory. Which is to say, SEP owners are not allowed to set unreasonable or exploitative conditions for the licensing of their technology.
Of course, SEPs being part of standard mean that even with reasonable terms, such a patent can give massive returns to the investor just because of how many people would be willing and eager to use it.
I see. Thanks for the explanation, IP Geek. Hope you have a good day!
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