There has been much discussion recently around standard essential patent (SEP) licensing as it applies to the internet of things (IoT) space. Most thought leaders agree that given the vast number of IoT verticals emerging over the coming decades, there will not be a one size fits all model for licensing. Indeed, predictions are that we will see a mix of traditional models of bilateral licensing and patent pooling but also likely new and creative ways of thinking about licensing, centering on more transparency. For example, engaging industry groups and leaders earlier in the licensing process for candid discussions with patent holders around value and contribution could improve efficiency. Other ideas involve having one or more centralized bodies that determine the FRAND rate by industry vertical using consistent and transparent criteria. Changes such as these would be a mind shift for the industry and might meet with resistance but, if done right, could lower transaction costs and reduce litigation.
Implementers I’ve spoken with indicate a willingness and desire to engage in early conversations with patent holders around fair and reasonable licensing rates in the IoT space. Transparency is key. Taking the good of what has been achieved in the mobile device space and learning from mistakes will help to advance the ball in what is sure to be the next wave of SEP licensing.
Shelly Irvine is a Managing Director in the Intellectual Property Disputes Practice and leads the San Francisco office of Ocean Tomo, a part of J.S. Held. Ms. Irvine is an experienced expert focused exclusively on clients who have intellectual property needs, both within litigation as well as advising clients regarding intellectual property business planning, benchmarking, and valuation.
For further information, contact Shelly Irvine at [email protected] or +1 415 946 2556.