Standard Equipment Patents (SEP)

Free Reasonable and Non-discriminatory (FRAND) licensing was well-known before European Commission interest and relevance to the ‘Internet of Things’ focused attention to Standard Equipment Patents (SEP).

Clearly innovators may want their patents (and innovations) to be based on standards to generate a revenue stream beyond what can be generated in their own right. SEPs give an incentive to innovate both by the standards innovator as well as avoid a direct block or at least concern to adaptors.

The question arises around revenue levels and hindrances to changing the standards. Problems arise in relation to the non-discriminatory element; most standards are established by major players who might cross-licence with other major players in partnership pool. Smaller entities will not put their unique selling point in the pool. There are issues in determining revenue on a so-called ‘chipset’ basis (probably limited revenue if the patent relates to a small product such as a chip in a much larger user machine) or user basis (potentially much higher royalty levels of the whole user machine in which the patented component is used) .

Should SEP licensing be capable of geographical limitation? It is not clear what will happen with SEPs in the near to medium future – The European Commission has indicated that a major element will be dependent upon what is normal/acceptable in a particular trade segments. There is no open register of licences so what is normal/acceptable is hard to determine.

The best advice is to ensure, particularly SMEs, draft claims which maximise the prospects of diverse license revenues under any SEP arrangements e.g. the product and uses of the product so licenses can be severally directed to individual claims in a patent.

Please contact us if you would like to discuss this further.

9. Plausibility of successful therapy seems to be emerging as an important requirement in assessing medical use inventions. It has been considered in several recent UK biotech court cases as a sufficiency requirement. Where it is used to assess the contents of a prior art document a lack of plausibility can negate the effects of potentially novelty destroying disclosure.

10. Plausibility is going to be important in attacking medical use claims post-grant as there is usually no data relating to therapy in humans in specifications. Plausibility can be considered in terms of whether therapy is shown to be achievable and whether it will be achievable across the breadth of the claim. That means that when attacking consideration will in particular need to be given to how the data in the specification supports the breadth of the patient group and the conditions to be treated. Importantly post-filing data cannot be used to fix plausibility issues.