Standard Essential Patents UK consultation: outcome

Summary of responses

As expected, a range of patent-holder friendly and implementer friendly views were submitted. We summarise the key points below, using the same numbered paragraphs for each of the topics as in the consultation:

1. Balance of the benefits to innovation and consumers

There are no surprises in the replies here, with respondents suggesting new roles for SDO (Standard Development Organisations), patents pools, regulators, and the UK government.

2. Competition and market functioning

Many respondents were agreed that there exists an imbalance of power to influence prices in SEP negotiations, but views were split as to whether hold-up or hold-out is the bigger concern.

3. Transparency

There was some discussion about over-declaration of patents, and disagreement as to whether essentiality checks should be introduced.

4. Patent infringement and remedies

There was some disagreement as to whether or not the current system is working well, with recognition that the UK courts are a favoured destination for some patent holders, as well on disagreement as to whether the Supreme Court’s Unwired Planet decision has contributed to greater fairness or unfairness. (See our previous article on the decision). There was also disagreement on the availability of injunctions on infringed SEPs, as well as anti-suit injunctions.

5. Licensing of SEPs

Here there was disagreement about whether it is legitimate for SEP holders to prefer to license at a specific level of the value chain. There was also disagreement on the effectiveness of patent pools, but no respondents said that patent pools should be mandated. There was discussion on the typical approach on basing a royalty on a device's net selling price, with some advocating that an SSPPU (smallest saleable patent practicing unit) approach should be used instead.

6. SEP Litigation

There was debate as to whether the UK court should be setting global FRAND rates, some arguing for the efficiencies of avoiding litigation in multiple jurisdictions versus others arguing that the UK's approach was an extra-territorial over-reach. There was also discussion on the benefits of ADR and some respondents proposed a new forum at an international level for resolving FRAND disputes.

What next?

As for the next steps for SEPs in the UK, we shouldn't expect anything to happen quickly and as the government’s executive summary reports there was little consensus on the need for the government to intervene.

The UKIPO has said that it now requires a further period to assess the issues/merits of the proposals submitted, and it will engage with businesses and seek further evidence. Then, it plans to report its findings to UK ministers in 2023 and it expects any significant policy interventions to be subject to consultation in due course.