Timely licensing for SEPs – how to avoid opportunities for hold-up and royalty stacking

Brussels, June 24, 2021 – In business environments in which SEPs are used to generate revenue streams, securing early certainty over licensing costs will make the business plans of standards adopters less risky and encourage them to launch more innovative products and services. In such an environment, SEP holders can benefit from earlier and better adoption rates of the standards on which their licensing revenue is dependent.

To minimize the potential for hold-up and royalty stacking, SEP holders seeking to actively license their patents to collect royalties should be open and transparent about the rates they seek to charge for their SEPs, what patents are being licensed, and their basis for believing that the patents are actual, valid SEPs. They should provide a base level of information without requiring the prospective licensee to sign a non-disclosure agreement (NDA).

This approach is especially needed when it comes to patent pools licensing FRAND-encumbered SEPs. They are subject to the same requirements and obligations to license under FRAND terms and conditions as exist for SEP licensors licensing directly.