IPO Consults SMEs on SEP Licensing

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On the day that my article Patents - Interdigital Technology Corporation and others v Lenovo Group Ltd. and others appeared in which I discussed Mr Justice Mellor's 225-page judgment in Interdigital Technology Corporation and others v Lenovo Group Ltd. and others [2023] EWHC 539 (Pat), the Intellectual Property Office ("IPO") announced a questionnaire on standard essential patents ("SEPs") for SME small-cap and mid-cap businesses.

This follows an earlier consultation on SEP licensing that the IPO launched on 7 Dec 2021.  I discussed it in IPO Consultation on SEPs and Innovation on 19 Dec 2021.  The IPO received 56 responses to that consultation.  The names of the respondents appear in Annex A to a Summary of Responses to the Call for Views.  Their responses are analysed in that document. 

Bearing in mind the costs of FRAND litigation and that it seems to involve only massive multinational companies in the electronics and telecommunications industries, I was surprised that the IPO thought it worthwhile to consult SMEs at all.  I am also curious as to what the IPO means by "small-cap" and "mid-cap" because there does not appear to be a definition in the questionnaire or anywhere else.   

The IPO states in its guidance Standard Essential Patents (SEPs) explained that it had heard that new entrants and SMEs often lack the experience and knowledge to enter negotiations on a level playing field. It also heard that those companies do not take part in the standard-setting process which may mean they do not know whether a patent is essential to a standard and therefore whether a licence is required. Some respondents to the previous consultation stated that some of these issues might cause barriers to innovation and scale-up of new entrants.

I am not sure how realistic those concerns are.   To my mind, the real barrier to SME involvement is the massive investment required for R&D in telecommunications, the need for multiple technical trials and lengthy FRAND trials and the obligation to take a worldwide licence or face an injunction in the UK. Only companies like Huawei and Lenovo can afford such costs.  There is no British equivalent to those companies or even to continental ones like Ericsson, Nokia or Phillips.

Having said that the IPO has asked for responses. As questionnaires go this is a fairly short one.  It consists of 4 or 5 screens with about 4 or so questions per screen.  Most are very short and non-technical.  As I am a small business and reasonably well informed on the relevant issues I answered the questionnaire.   It took no more than a few minutes to complete.  The consultation will remain open until 24 April 2023.

Anybody wishing to discuss this article may call me on 020 7404 5252 during office hours or send me a message through my contact page,

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