In today's fast-paced technology landscape, companies constantly seek ways to innovate and stay ahead of the competition. One approach that has gained popularity is patent pooling. While this approach can provide significant benefits, it raises important questions about competition and intellectual property rights. This article explores the place of patent pools in the Standard Essential Patents (SEPs) environment and what tools FrandAvenue has developed to respond to the challenges faced by FRAND market players.
What is a patent pool?
A patent pool is “an agreement between two or more patent owners to license one or more of their patents to each other or third parties1”. As explained by WIPO, “patent rights are aggregated amongst multiple patent holders. Then, the pooled patents are made available to member and non-member licensees and typically the pool allocates a portion of the licensing fees it collects to each member in proportion to each patent's value.2”
Patent pools are commonly used in industries with complex and interdependent technologies, such as telecommunications, semiconductors, and computer software. By pooling their patents, companies can simplify the licensing process for third parties and foster innovation by allowing companies to build on each other's patented technologies without fear of litigation. Patent pools are specially adapted to Standard Essential Patents. Typically, a standardization patent pool enables participating patentees to use the pooled patents, provides a standard license in respect of the pooled patents for licensees who are not members of the pool, and allocates to each member of the pool a portion of the licensing fees per the agreement.
There are a few examples of SEP patent pools such as Via Licensing, which includes patents from over 20 companies, and Sisvel, which includes patents from over 50 companies.
What are the criticisms faced by patent pools?
Several criticisms have been raised regarding patent pools ranging from concerns about antitrust violations to issues related to licensing fees and the potential negative impact on innovation.
On the one hand, critics argue that when multiple patent holders come together to pool their patents, they may create entry barriers for other companies wanting to enter the market. Leading in turn to reduced competition, higher prices, and a stifling of innovation. Conversely, it has been argued that patent pools can hinder innovation by creating a disincentive for firms to invest in research and development. This is because patent pools can lead to a situation where companies can benefit more from licensing patents than investing in new technologies.
On the other hand, some argue that the licensing fees charged by patent pools can be too high thus limiting access to technologies.
How do companies benefit from patent pools -according to the pools?
Patent pools can offer several benefits to companies, and especially regarding SEPs.
First, patent pools can reduce transaction costs and simplify the licensing process for SEPs. Indeed, it can be challenging for potential licensees to negotiate with each patent holder individually. By pooling their patents, patent holders thus offer a one-stop shop for licensing essential technology, making it easier for licensees.
Second, patent pools can provide a framework for resolving disputes between licensors and licensees. Because SEPs are essential for implementing a particular standard, disputes between patent holders and licensees can be especially challenging to resolve. Patent pools can establish guidelines for licensing and dispute resolution, providing a mechanism for resolving conflicts in a timely and efficient manner.
Third, patent pools can facilitate innovation by promoting the exchange of technology. By pooling their patents, companies can share knowledge and resources, which can lead to new innovations and improvements in technology. Additionally, by establishing licensing terms and conditions, patent pools can create a stable and predictable environment for innovation, encouraging companies to invest in research and development.
How can patent pools benefit from FrandAvenue?
FrandAvenue can support patent pools with its five toolboxes and services and facilitate the licensing and management of patents and portfolios within the pool.
Here is a detailed explanation:
Dataset search: FrandAvenue gives free access to a database of more than 628,760 SEPs from 7 Standards Setting Organizations (ETSI, ANSI, IEC, IEEE, ISO, ITU, QI) with 17 advanced filters and Insights graphs to analyze and compare SEP data. With a user-friendly interface, licensing experts and SMEs alike can easily find the information they need.
Marketplace: FrandAvenue members have access to ready-to-buy claim charts meeting the highest industry standards and drafted by independent patent professionals. Members have access to a unique essentiality rating tool that allows them to review the claim charts bought on FrandAvenue and compare them with their findings, in all confidentiality. FrandAvenue marketplace is a key tool to quickly assess the essentiality of the SEPs that members consider licensing-in or licensing-out.
Management tools: Members can create and manage their profiles, manage their SEP portfolios as well as their licensing (in and out) programs. They can choose to use these management tools for their licensing teams or share this information with other members, to increase their transparency and meet their FRAND obligations.
Analysis & strategy room: FrandAvenue has developed a fully qualified interactive database of 5G market players that members can use to map out the 5G commercial environment and devise their licensing strategy.
Compliance & Negotiation Room: On FrandAvenue members can determine and share their negotiation timeline, dispute resolution process and Agreement to Negotiate. This takes just a few clicks and increases predictability and efficiency. Moreover, the FRAND negotiations can be securely initiated on FrandAvenue, speeding up interactions between licensors and licensees, in turn lowering negotiation costs.
With 5 toolboxes and more than a dozen of tools, all dedicated to SEPs and FRAND negotiation FrandAvenue thus has all is required to help patent pools in their FRAND licensing efforts.