Standard Essential Patents: Myths & Realities

It is not common knowledge but companies tend to err on the patent declaration. This is because there is no essentiality check performed on the declared patent to assess its essentiality rate. This phenomenon wherein a patent is declared ‘essential’ when it may not be the case, is termed as ‘over-declaration’. Over-declaration may occur due to the following reasons: 

• Businesses may feel bound to declare their patents even before being approved as not doing so may lead to other problems in the future and might even hinder the enforce ability of their patent.  
• Due to the fast-evolving tech landscape, some patents may lose the status of being essential as new innovations come to the forefront. 
• The narrowing down of the scope of a patent may limit the parts that make it essential. 

• Rejection of the patent means that it can no longer be essential. 
• Unethical practices by some businesses to gain an advantage in the market by declaring their patent as essential. 
• While it is difficult to determine the ‘essentiality’ of a patent, there are few tools like data models, AI, etc which can help in performing the task.  

Since they are born within the organization., protecting these ideas at the initiation stage is possible and increases the IP security.  

Standard Setting Organisations are responsible for setting and managing the industry standards. They require member companies to disclose SEPs and are also responsible to assist in licensing the SEPs based on FRAND terms. While it is required by companies to declare their SEPs to the Standard Setting Organisations, it is not obligatory. Since there is no rule mandating this, companies sometimes reveal only a portion of their SEP or defer from disclosing any information.  

A standard patent includes optional as well as mandatory features. While patents leaning on mandatory features come under essentials, the optional features are important only if applied in products.  

This is a common concern faced by licensees. Truth is that only the patents that infringed on the features of your product need to be licensed. If you do not intend to use all the patented features in a SEP then those are not required to be licensed either.