The UK Intellectual Property Office (UKIPO) launched its Standard Essential Patent Resource Hub in 2024 as part of a broader strategy to address the growing complexities surrounding standard essential patent licensing and the fair, reasonable and non-discriminatory (FRAND) terms under which these patents must be licensed.

A standard essential patent (SEP) is a patent for an invention that is incorporated into the standard for a certain technology, meaning that a product which conforms to that standard infringes the patent unless the implementer has a license. SEPs play a critical role across a number of industries including telecommunications, automotive systems and the Internet of Things. In these sectors, standardised technologies such as WiFi, 4G/LTE, 5G, NFC or Bluetooth are vital for the connectivity between different products like mobile phones and computers. The hub was introduced to improve understanding, increase transparency and streamline SEP licensing.

The question stands as to whether the hub has achieved its goals in enhancing the SEP licensing system, improving understanding of the SEP ecosystem and fostering greater transparency in SEP dealings.  

Background to SEP licensing in the UK

The licensing of SEPs is inherently complex, primarily due to the balancing act required between the patent holders and implementers. In order to be considered a SEP, a patent owner must undergo an essentiality check with a standard setting organisation (for example, the European Telecommunications Standards Institute) for their patent. ‘Essentiality’ is the idea that a SEP is a patent that protects technology that is essential to the implementation of a technological standard. Patent holders of SEPs are required to license their patents on FRAND terms, ensuring that critical technological standards remain accessible and are not monopolised by a few companies. 

However, disagreements over what constitutes ‘fair, reasonable and non-discriminatory’ terms have led to a significant amount of litigation, most notably in the telecommunications sector, where companies such as Huawei, Ericsson, Apple and Samsung have found themselves in court disputes over SEP licensing fees and obligations. Major issues facing entities in the SEP ecosystem included knowledge gaps between SEP holders and SEP implementers, and the lack of transparency in the licensing process, making it difficult for companies to know what SEP licenses were available and on what terms. As a result, both patent holders and implementers often end up in protracted litigation, which can hamper innovation and slow down the deployment of standardised technologies.

The role of the UKIPO SEP Resource Hub

The purpose of the hub is to provide a centralised ‘one-stop shop’ for information and guidance on SEPs and FRAND licensing. The hub’s key objectives, as stated by the UKIPO, are:

• to help implementers, especially small and medium-sized enterprises (SMEs), navigate and better understand the SEPs ecosystem and FRAND licensing;   
• to improve transparency in the ecosystem, both in relation to pricing and essentiality; and
• to achieve greater efficiency in respect of dispute resolution, including arbitration and mediation.

The hub’s stated aim is to be a neutral space where both SEP holders and implementers can access useful information and resources that help in understanding the obligations and opportunities within the SEP ecosystem. The hub is divided into four parts:

• guidance on ‘Technical Standards and Standard Development Organisations’, which provides a basic introduction on SEPs, the disclosure and declaration process at Standard Development Organisations (SDOs), and an overview of SDOs which may be of interest to UK businesses;
• guidance on ‘Standard Essential Patent Licensing’, providing an overview on SEP licensing and the FRAND negotiation process;
• guidance on ‘Dispute resolution and remedies in SEP Licensing’, providing an overview of typical SEP and FRAND licensing disputes, different forms of Alternate Dispute Resolution (ADR), such as arbitration and mediation, information on court litigation including UK case law, and further information relating to UK and global SEP litigation; and
• additional resources including a ‘UK SEPs case law tracker’, ‘glossary of terms’ and ‘international SEPs-specific resources’ which may be useful to UK businesses trying to navigate the SEPs ecosystem are also provided.

Improving understanding of the SEP ecosystem and FRAND licensing

A key area where the UKIPO SEP Resource Hub aims to make a difference is in helping businesses, particularly SMEs, better understand the SEP ecosystem and their rights and obligations under FRAND licensing. For many smaller companies, the SEP system can be overwhelming due to the technical and legal complexities involved in determining whether a product implements a standard that requires a license, and if so, how to negotiate a fair deal. 

The hub provides educational resources and practical guidance to help companies navigate this landscape. For instance, it offers explainer documents that break down the SEP framework and FRAND obligations in simpler terms, making this information more accessible to businesses that may not have extensive experience in patent licensing. By improving access to this information, the hub helps to level the playing field for smaller companies that may not have the legal resources of large multinational corporations. 

Furthermore, the hub’s inclusion of case studies and summaries of key legal decisions provides valuable insights into how FRAND licensing disputes are resolved in practice. As more businesses and legal professionals engage with the hub, it has the potential to foster a better understanding of the SEP ecosystem, leading to more efficient and fair licensing negotiations.

Improvements in transparency of SEP licensing

In centralising information on SEPs and FRAND licensing in a single, publicly accessible platform, the hub has taken steps to address the transparency issues plaguing the SEP landscape. In particular, the hub provides resources on common areas of technical standards, to prepare and help those in the SEP ecosystem to understand what to expect and how to navigate potential FRAND licensing negotiations.

The hub also offers information about SEP licensing models that are commonly used and advice on how to check whether a patent is essential to a standard. Further, the hub suggests finding out prior to negotiations if there is any information on public record about previous licensing agreements or SEPs regarding the same technology, or if there are existing tariffs or average market rates that can serve as a benchmark for negotiations.

While the hub provides valuable information, there are ways in which transparency may be further improved and facilitated. By way of example, while the hub provides useful pointers to those in the industry that they should seek publicly available information on licensing agreements, it may be of further assistance to provide that information directly on the hub by way of a database or direct links. 

Further, given the number of key FRAND judgments that have been handed down over the last year, it appears that the case law database could be updated with increased regularity to further increase understanding of this area. Nevertheless, the steps taken by the hub so far are a big leap in the transparency of SEP licensing.

Has the resource hub improved the SEP licensing system?

The hub was first released in July 2024, thus whether the hub has improved the SEP licensing system remains to be seen. The hub was initially implemented with the assistance of entities and individuals such as Cyclopic, Qualcomm, Nokia, Elisabeth Opie, Benn Consulting Ltd, Becca Edney of Nyobolt, Brisson Consulting, Amazon, Robert Pocknell of Fair Standards Alliance and Jorge L. Contreras. The group included a broad range of industry trade representatives, SEP implementers, SEP holders, start-up and scale-up businesses, research institutions and academia. The hub is not static but is a work in progress and aims to develop over time.

Initial reactions to the hub generally seem positive, with the Chartered Institute of Patent Attorneys (CIPA) fully supporting the new SEP resource. The hub itself is easy to navigate and provides information at a basic level. Thus, the hub has aided in demystifying the world of SEP and FRAND licensing and seems to be a useful tool for UK businesses.

Conclusion

The UKIPO SEP Resource Hub has made promising strides in improving the SEP licensing system, particularly by enhancing access to educational resources and providing clarity on the UK’s legal framework for FRAND licensing. The hub is well geared to provide businesses and legal professionals a better understanding of the SEP ecosystem, potentially reducing the need for litigation by encouraging more informed negotiations. As the hub evolves, it can further streamline the SEP licensing process and promote fairer outcomes for all stakeholders involved. In order to do this however, it is critical for the hub to receive continued support from the relevant stakeholders.

Yelena Morozova is a partner, Sarah Rodriguez is of counsel and Nessa Khandaker is an associate at IP firm Finnegan.