The Future is Global: SEP Licensing in China, the UK and EU in 2024

The past year was marked by change around the world, from significant geopolitical events and elections with far-reaching implications to the dramatic acceleration of AI adoption, which is quickly changing many aspects of how we live and work. Standard Essential Patent (SEP) licensing was no exception, as the space saw a number of new trends and shifts that may have an impact for a long time to come.

Almost from its inception, patent and IP licensing has been global in nature. As we reflect on major trends within the SEP space in the past year, a notable theme was the increasingly interconnected and global dynamics of IP licensing and standard essential technologies. We see this reflected in the growing influence of various countries around the world, such as China, in shaping SEP licensing frameworks and litigation. Also, the expansion of patent pools globally over the last year signals a push toward an increasingly collaborative approach to SEP licensing.

Players Around the World Shape the Global SEP Landscape

In 2024, jurisdictions such as China, the EU, and the UK played pivotal roles in shaping SEP licensing frameworks, emphasizing transparency, efficiency, and fair competition. These efforts generally reflect the growing role of countries around the world taking a more active leadership role in dictating SEP frameworks and standards.

About a year ago, a Chinese court set a global licensing fee for Nokia’s SEPs in the Oppo v. Nokia case. This marked the first time a court in China made a global FRAND rate determination, highlighting China’s ambition to assume greater leadership around international SEP licensing practices. More recently, this year, China’s State Administration for Market Regulation (SAMR) released anti-monopoly guidelines for SEP licensing. The guidelines underscored China’s commitment to fostering innovation while balancing the needs of implementers.

The EU also took a more active role this year, introducing draft regulation that would increase SEP licensing transparency and demonstrate its commitment to fostering innovation and fair competition by streamlining SEP licensing processes. This included a mandatory database requiring detailed disclosure of SEPs to reduce information asymmetry between SEP holders and implementers, and separately, a compulsory arbitration mechanism aimed at resolving disputes before litigation to facilitate fair and efficient licensing agreements.

Additionally, certain cases over the past year reaffirmed the authority of English courts to set global FRAND rates. For example, in the recent cases Panasonic v. Xiaomi and Interdigital v. Lenovo, the UK courts served as a key venue for resolving international SEP disputes, highlighting the country’s leadership in the space. The UK’s proactive role in defining FRAND terms has made it a pivotal jurisdiction for industries reliant on SEPs, particularly in connected vehicles and telecommunications, where cross-border licensing is critical.

Growth of Patent Pools as a Preferred Licensing Mechanism

Patent pools have been fundamental to the success of the SEP licensing space for decades. However, over the last year their presence and role in the SEP space grew still further, reflecting a broader push from the market to simplify access to essential technologies while reducing legal and transactional complexities. Particularly as instances of SEP litigation around the world increase, patent pools play a valuable role in helping patent owners and implementers reach balanced licensing agreements.

This patent pool expansion has been particularly notable in industries where multi-standard interoperability is critical, such as voice and video technology. For example, a new pool emerged this year covering EVS and IVAS voice technologies, which enable high-quality voice communication service through 4G and 5G networks; an existing pool covering HEVC (High Efficiency Video Coding) technology incorporated the VVC standard*; and still another new patent pool was introduced for automakers that offered a streamlined licensing solution by providing access to SEPs for multiple generations of cellular technology. All in all, these expansions underscore the increasing importance of the collaborative licensing model to help address the rising complexities in the space.

The Importance of China in SEP Licensing

The past year also saw the continued growth of China’s relevance in SEP licensing, driven by the country’s expanding base of technology implementers and a supportive legal framework. China’s rapid industrial growth has led to a surge in companies developing products that rely on standardized technologies, necessitating SEP licensing engagement to ensure compliance and market access.

As mentioned above, the Chinese government is increasingly shaping a legal and regulatory environment conducive to SEP licensing. In November 2024, Chinese regulatory body SAMR released antitrust guidelines for SEPs, emphasizing FRAND licensing commitments and encouraging good-faith negotiations between patent holders and implementers. Chinese courts are also asserting their jurisdiction over global SEP licensing disputes. These developments underscore China’s commitment to playing a more central role in resolving international SEP licensing issues, providing a forum for both domestic and foreign entities to settle disputes.

Though the west has not always been eager to embrace China as a partner or recognize its growing influence in the global economy, this is no longer a market that players in the SEP licensing space can afford to ignore. Companies will do well to recognize the strategic importance of engaging with Chinese firms and the country’s growing influence in the global SEP landscape in the years ahead.

Looking to the Future

Two macro themes emerging over the past year serve as pointers to what we can expect in the months and years ahead. As mentioned previously, several countries and jurisdictions around the world are taking a greater leadership role in solidifying SEP frameworks and making meaningful policy decisions. We also saw a push toward increasingly collaborative models for licensing, underscored in part by the expansion of patent pools, which play a central role in collaborative licensing.

These themes point to a world in which we can anticipate greater global coordination and standardization in SEP licensing frameworks, driven by continued regulatory reforms, judicial intervention, and industry collaboration. Stakeholders are increasingly demanding predictable, transparent, and globally consistent licensing processes.

For companies in the space, these trends signal a shift toward greater clarity around SEP licensing practices – but they will also demand adaptability to evolving frameworks. Patent holders will potentially enjoy more streamlined approaches to licensing agreements but may face additional scrutiny around their licensing practices and rates. Implementers, meanwhile, may benefit from more predictable licensing frameworks, which could lower their costs and other barriers to accessing SEP technologies. However, they may face greater accountability around SEP rights in certain jurisdictions.

As always, in a space that is rapidly evolving, the most agile and adaptive players will win the day. Success moving forward may hinge on adopting an increasingly global mindset to SEP licensing. This means adapting to new licensing frameworks in various jurisdictions, embracing the growing influence of markets such as China, and maintaining active participation in collaborative licensing models that bring players together across borders.

Looking ahead, companies that focus on building bridges – seeking real opportunities for shared success with their partners and counterparties – should thrive in this increasingly global environment.

*Disclosure: Via Licensing Alliance is the administrator for these pools.

Image Source: Deposit Photos
Author: SergeyNivens
Image ID: 31076055