Standard Essential Patents Extend Beyond 5G to Drive Innovation Across Multiple Technologies

Introduction: 

If you talk about Standard Essential Patents (SEPs), you'll inevitably come to the topic of 5G, which is one of the most important aspects of the discussions. But this approach doesn't do justice to the scope of an institution that regulates almost all of the connected technologies that are in use in commerce today - from the hospital ward Wi-Fi router, to the safety sensor in a modern car. An SEP is a patent that is so basic to a technical standard that any manufacturer constructing a technical standard compliant product will inevitably have to use it.

This responsibility has a critical safeguard. “SEP holders are required to license under Fair, Reasonable and Non-Discriminatory (FRAND) terms”, as set by standard-setting organisations (SSO) like ETSI, IEEE and ITU. This is a compromise between the remuneration of the inventor and the overall availability of the market to the standards. The knowledge of SEPs outside 5G is not esoteric legal information, it's a basic prerequisite for any designer, manufacturer, or licenser of connected technologies.

Wireless Internet connectivity: All Connected Rooms benefit from SEPs

One of the thickest SEP ecosystems in the tech world today is the IEEE 802.11 family (Wi-Fi). Over the years, since the initial release of 802.11n, until the latest standard, Wi-Fi 7 (802.11be), hundreds of key patents have been identified for different features of those standards: OFDM modulation, MIMO antenna technologies, channel access protocols, etc. - and companies such as Huawei, Nokia, Inter Digital, Qualcomm, Intel and Ericsson have asserted these patents. All the routers, smart devices and wireless access points that are carrying the Wi-Fi certification are relying on this licensed base. It is because standardisation and FRAND licensing work hand in hand that the seamless interoperability that allows any compliant device to plug into any compliant network across the globe is possible.

While Bluetooth is a small protocol, it has a huge patent footprint

The key patents that apply to Bluetooth Low Energy (BLE), LE Audio and Bluetooth Mesh are all related to frequency hopping, adaptive modulation and ultra-low-power communication. Medical device manufacturers use these standards for insulin monitors, hearing aids and cardiac sensors. Bluetooth Mesh is a technology used in factories for automation and asset tracking for industrial operators. This is possible commercially at scale with FRAND licensing. If not, Bluetooth would become independent, proprietary versions, and the interoperability which makes it the market value of the standard would fall apart.

Understand how video codecs can be used and how licensing policy impacts on market uptake

H.265 (HEVC) was twice as efficient as H.264, but was divided into many different patent pools with overlapping claims. Netflix, Google and Amazon turned their funding focus to AV1, a royalty-free codec that was developed by the Alliance for Open Media. The market moved towards an alternative, not to accept unsustainable transaction costs, by stacking royalties from a single standard on top of dozens of separate patent pools. The next generation VVC standard is on a similar path: better compression, licensing split, and delayed uptake.

The role of SEPs in Road Safety - Automotive

Vehicle-to-everything (V2X) communication is based on C-V2X (based on the 3GPP LTE/NR specifications) and DSRC (based on the IEEE 802.11p standard), both of which are SEP-laden. These standards are based on 3GPP Release 18 technical specifications for 5G NR. The solution will be delayed here, and so will be the solution here for collision avoidance systems: it's a matter of royalty. The automakers and telecom firms are closely working out the application of SEP royalties in complicated multi-tier supply chains - but who should be the base on which the royalties are applied, the component or the end vehicle.

Descending the IoT: Scale, Thin Margins, and the FRAND Challenge. The FRAND Challenge, Scale, Thin Margins, and the IoT

The industry has embraced a range of different IoT deployment technologies: Zigbee, LoRaWAN, NB-IoT, LTE-M and the new Matter protocol, all of which have clearly stated essential patents. A $3 connected sensor is not going to be as much of a per-unit licensing expense as a $1,000 smartphone. This has introduced SEP licensing into territories as yet unexplored, and they may be royalties based on the value of the component, the device, or the end-product. The effect will be felt on the degree of access hardware companies with narrow profit margins will be able to have to the market for connected infrastructure in smart cities, agriculture and logistics.

The industry has embraced a range of different IoT deployment technologies: Zigbee, LoRaWAN, NB-IoT, LTE-M and the new Matter protocol, all of which have clearly stated essential patents. A $3 connected sensor is not going to be as much of a per-unit licensing expense as a $1,000 smartphone. This has introduced SEP licensing into territories as yet unexplored, and they may be royalties based on the value of the component, the device, or the end-product. The effect will be felt on the degree of access hardware companies with narrow profit margins will be able to have to the market for connected infrastructure in smart cities, agriculture and logistics.

The Unifying Logic: Interoperability as a Licensed Institution

SEPs play the same institutional role in all 5 fields: the establishment of binding economic incentives for companies to share real innovations for shared standards. The FRAND rule guarantees that contributors will earn a guaranteed revenue from licensing, but lose the right to prevent or leverage in excess of market rent. When this is working properly, whole sectors can benefit from interoperability which only standardisation can bring. Disruption spreads through supply chains and to end users when it breaks down due to royalty stacking, pool fragmentation or contested essentiality.

Conclusion

The royalty issue is huge and the drama is strong, that's why 5G SEP is dominating headlines. The more significant story is the structural one: Standard Essential Patents are the backbone of the law for achieving interoperability at scale in modern technology — and consequential in every connected technology category in use today. For any company designing on a technical standard, it is not a choice whether to know what the SEP landscape is, it is simply legal and commercial due diligence. The future technological development in industries will be influenced by how regulators, courts, and standard-setting organizations balance the FRAND concept for decades, as new technologies for the automotive sector, “the Internet of Things, and the next generation of wireless standards are still being developed”.

Author :- Mudavath Bindhu, in case of any query, contact us at Global Patent Filing or write back us via email at support@globalpatentfiling.com.

References

1. European Telecommunications Standards Institute (ETSI). (2023). ETSI Guide on Intellectual Property Rights (EG 202 730). ETSI Secretariat, Sophia Antipolis. https://www.etsi.org/intellectual-property-rights 
2. Lemley, M. A., & Shapiro, C. (2013). A Simple Approach to Setting Reasonable Royalties for Standard-Essential Patents. Berkeley Technology Law Journal, 28(2), 1135–1166.
3. IEEE Standards Association. (2022). IEEE-SA Standards Board Bylaws and Operations Manual, Section 6: Patents. Institute of Electrical and Electronics Engineers. https://standards.ieee.org/about/policies/ 
4. Wi-Fi Alliance. (2023). Wi-Fi 7 (IEEE 802.11be) Technology Overview and Certification Program. Wi-Fi Alliance Technical Committee. https://www.wi-fi.org/discover-wi-fi/wi-fi-certified-7 
5. Bluetooth Special Interest Group (Bluetooth SIG). (2023). Bluetooth Core Specification Version 5.4 and Intellectual Property Rights Policy. Bluetooth SIG, Inc. https://www.bluetooth.com/specifications/ 
6. Layne-Farrar, A., Padilla, A. J., & Schmalensee, R. (2007). Pricing Patents for Licensing in Standard-Setting Organizations: Making Sense of FRAND Commitments. Antitrust Law Journal, 74(3), 671–706.
7. Alliance for Open Media (AOMedia). (2023). AV1 Bitstream & Decoding Process Specification and Royalty-Free Licensing Policy. AOMedia Technical Specification Committee. https://aomedia.org/av1-features/ 
8. Geradin, D., Layne-Farrar, A., & Petit, N. (2012). The Complements Problem within Standard Setting: Assessing the Evidence on Royalty Stacking. Boston University Journal of Science & Technology Law, 18(1), 144–176.
9. 5G Automotive Association (5GAA). (2022). C-V2X Technology and SEP Licensing Considerations for Automotive Deployments. 5GAA White Paper, Munich. https://5gaa.org/ 
10. Contreras, J. L. (Ed.). (2019). The Cambridge Handbook of Technical Standardization Law: Competition, Antitrust, and Patents. Cambridge University Press. ISBN: 978-1-108-42331-0.
11. European Commission. (2023). Proposal for a Regulation on Standard Essential Patents, COM(2023) 232 final. Official Journal of the European Union, Brussels.
12. IoT Analytics GmbH. (2023). IoT Standards Landscape: Protocol Fragmentation and Licensing Implications. IoT Analytics Research Report, Hamburg. https://iot-analytics.com/ 
13. Bekkers, R., & Updegrove, A. (2022). A Study of IPR Policies and Practices of a Representative Group of Standards Setting Organizations Worldwide. National Academies of Sciences, Engineering, and Medicine, Washington, DC.
14. 3rd Generation Partnership Project (3GPP). (2024). Technical Specifications for 5G New Radio — Release 18 (3GPP TS 38 Series). 3GPP Secretariat, Sophia Antipolis. https://www.3gpp.org/specifications 
15. Ericsson AB. (2023). Intellectual Property Rights and Standard Essential Patents in 5G and Beyond. Ericsson Technology Review, Stockholm. https://www.ericsson.com/en/reports-and-papers/ericsson-technology-review