Discussion on Standard Necessary Patent

A standard essential patent (Standards-Essential Patents, SEP) refers to a patent contained in an international standard, a national standard, and an industry standard, which must be used in implementing said standard.

Standards can improve efficiency, reduce adaptation costs for consumers, and facilitate international trade. Corresponding standards have been developed in many industries, such as DVD standards and Blu-ray standards for players. Video codec standards, including the USB 2.0 we are familiar with, are precisely because of the existence of this standard. When purchasing external devices such as keyboards and mice, we can use them on computers without considering the applicable voltage, interface shape, etc., as long as they are compatible with USB. In addition to bringing a lot of practicality to users, standards also play a great role in promoting the development of the industry. First, it can reduce the threshold for new entrants in the industry and reduce repeated R & D investment. Secondly, because of the reasonable protection of the necessary patents of the standard, it encourages enterprises to invest in standard research and further promote the rapid development of technology in this field.

However, when the standard involves patents, once the standard is recognized by the market, it will essentially create a monopoly, and the standard necessary patents will also bring considerable benefits to the patentee and enhance the patentee's position in patent licensing negotiations. Of course, the patentee of the standard necessary patent can not be overpriced. When the standardization organization formulates the corresponding standard, it not only requires the standard participants to disclose their patents to the standardization organization in a timely manner, but also requires them to promise to use their patents in a fair, reasonable (reasonable) and non-discriminatory (non-discriminatory) license standard implementers, that is, the "FRAND" principle.

After a patent is identified as a standard essential patent, its patent value will be significantly improved, so how can an enterprise apply for a standard essential patent? First, the enterprise will take the initiative to submit its patent that may become a standard to the standard setting body (SSO), and at the same time indicate that the patent licensing method can be free license, FRAND license or refuse to license. It is worth noting that if the patentee refuses to license, the relevant technical scheme will probably not be included in the standard. Therefore, careful consideration should be given to the choice of licensing method. The standard-setting body only collects and organizes the disclosed patent information, but is not responsible for confirming whether the disclosed patent is a standard essential patent. To confirm whether a patent is a standard necessary patent is to compare the claims of the patent authorization text with the published standard after the standard is published, and make its own judgment. Thus, sometimes a patent litigation decision is a good means of testing whether a patent constitutes a standard essential patent and its corresponding value.

In addition to lawsuits related to judging whether a patent constitutes a standard necessary patent, lawsuits related to standard necessary patent license fees have been common in recent years. For example, Nokia, Ericsson, Texas Instruments and other companies sued Qualcomm, believing that Qualcomm had monopolized the collection of patent license fees for WCDMA standards. Huawei accused IDC of violating FRAND principle; Huawei sued Samsung for infringement of its standard necessary patents, etc. It can be seen that the "FRAND" principle does not completely solve the actual licensing problem of standard necessary patents. The problems mainly focus on two aspects: first, the FRAND principle is too abstract, there is no clear and specific behavior in the policy link, and courts or arbitration institutions have to be introduced to determine whether it conforms to the FRAND principle; Secondly, the FRAND principle does not give clear guidance on patent license fees, resulting in patent license negotiations, the two sides hold different opinions, and it is difficult to reach an agreement, which also causes many disputes in the actual patent licensing process.

Since most of the standard essential patents are in the hands of some large companies, many Chinese companies are often at a disadvantage in the process of gaming with these international giants. If we want to reverse the current passive situation, we should make efforts from the following aspects: first of all, we should strengthen our own strength. At present, the patent accumulation of Chinese enterprises is relatively small, and it is in the high-tech field, and its high-value patents are rare, which directly leads to the small number of standard necessary patents owned by Chinese enterprises, which often play the role of being licensed, it is rare to avoid direct large fees, such as cross-licensing of patents with those giants. Secondly, the participation and contribution of Chinese enterprises to the formulation of international standards is not high. From the perspective of the above-mentioned standard formulation process, as long as they actively participate, they have the opportunity to upgrade the company's technical solutions to standards. Therefore, Chinese enterprises, especially Technological innovative small, medium and micro enterprises should actively participate in the formulation of international standards.