Push to Make SEP Licensing More Accessible to SMEs
New initiatives and regulatory scrutiny, particularly within the EU, are aiming to democratize access to standard-essential technologies for small and medium-sized enterprises (SMEs). This trend reflects a broader push for greater transparency and reasonableness in SEP licensing. The changes could lower barriers to entry and standards participation for smaller technology companies.
- The European Commission's proposed SEP regulation, introduced in April 2023, was withdrawn in early 2025 due to a lack of foreseeable agreement among stakeholders. The proposal aimed to create a central SEP registry, a database, and essentiality checks administered by the EU Intellectual Property Office (EUIPO). - Specific measures for SMEs in the withdrawn EU proposal included exemptions from random essentiality checks, access to a "SEP Licensing Assistance Hub" for training and advice, and encouragement for SEP holders to offer them more favorable FRAND terms. - The regulation faced significant criticism from major SEP holders and the European Patent Office (EPO), who argued the proposed measures were disproportionate and could harm innovators' ability to enforce their patent rights. This opposition was a key factor in the proposal's eventual withdrawal. - SMEs often face a lack of transparency regarding what constitutes a Fair, Reasonable, and Non-Discriminatory (FRAND) rate, with some SEP holders accused of using the threat of injunctions to pressure smaller firms into accepting higher rates. - A common challenge for SMEs is unexpected liability when using pre-certified connectivity modules, as SEP licenses are often not included by the component maker. Opportunistic SEP holders may deliberately target the end-product manufacturers to extract higher royalties. - Patent pools are frequently cited as a mechanism to lower barriers for SMEs by offering a single, simplified license agreement covering multiple SEPs, which reduces transaction costs and litigation risks. - For SMEs that do hold SEPs, the costs of patent development, licensing, and enforcement can be substantial, and they may lack the resources to effectively monetize their own innovations. - The landmark *Huawei v. ZTE* ruling by the Court of Justice of the European Union (CJEU) continues to set the precedent for the rights and obligations of both SEP holders and implementers when negotiating a FRAND license.
