Mechanisms, Governance, and Policy Impact of SEP Determination Approaches
Standard Essential Patents (SEPs) are on the rise; the number of newly declared patents per year has almost tripled over the past five years. There were 17,623 new declared patent families in 2020, compared to 6,457 in 2015 (see Figure 1). The 5G standard alone counts over 150,000 declared patents since 2015. Similarly, litigation around SEPs has increased. One of the driving factors of recent patent litigation is the shift in connectivity standards (eg, 4G/5G, Wi-Fi) that in the past were mostly used in computers, smartphones and tablets, but are now increasingly implemented in connected vehicles, smart homes, smart factories, smart energy and healthcare applications. Another reason why litigation may rise further is the belief that large SEP owners such as Huawei, ZTE or LG Electronics may soon sell parts of their SEP portfolios, which may likely end up in the hands of patent assertion entities (PAEs). One way or another, it is anticipated that the majority of patent holders will actively monetize their SEPs covering standards such as 5G, Wi-Fi 6 or VVC in this fast-moving, high-investment environment. Any company adopting these standards must decrease operational risk and expense exposure by taking a proactive strategy towards SEPs rather than a reactive one.