In a series of blog posts, I will be discussing about Standard Essential Patents (SEPs) from the very basics to the latest cases concerning SEPs and all allied areas.
As the name suggests, Standard Essential Patents (SEPs) are the patents which are an integral part of a particular Standard. But, what do I mean by that? In simple terms, a Standard may be understood to be a set of instructions. Consider these instructions to determine the minimum conditions that all devices of a particular set (e.g., a particular set could be personal computers, another could be mobile phones; Note that no two sets of devices can have the same standards) must comply with in order to enter the marketplace. In this way, by having common requirements, Standards ensure interoperability and compatibility across different devices.
This document here describes a Standard as:
A set of technical specifications that seeks to provide a common design for a product or process.
and also as:
A standard is a document that sets out requirements for a specific item, material, component, system or service, or describes in detail a particular method or procedure.
The next question to be asked is, why do we need these instructions? Because, for example, if there was no standard set for the size of the USB port in a laptop, then perhaps there would be specialized pen drives for every laptop, and a pen drive that is operable on a laptop of “X” make would not be operable on a laptop of “Y” make. But, since there is a Standard set across the industry for the USB port, it makes it easier to interoperate a single pen drive on multiple laptops of different make; it also lowers the costs of pen drive for the consumer.
This document here states the need for a Standard as follows:
[S]tandards are crucial for products to communicate with each other and provide ease of use and other benefits to consumers.
A standard may be de facto standard or a de jure standard. De facto standards are those which have come to be realized as common through massive industry-wide use. An example of a de facto standard is Microsoft Windows. On the contrary, De jure standards are those which are agreed to as common by a recognized industrial body or Standard Setting Organizations (SSOs). An example of such industrial body is European Telecommunications Standards Institute (ETSI).
How are SEPs made? Whenever an SSO makes a particular standard, it suo moto includes all the requisite patents within it. However, a patent holder may also self-proclaim that its patent is essential for the implementation of a particular standard. In such cases, the patent holder then sets out his intention to be included in the particular standard by reaching out to the specific SSO which governs that particular standard. The SSO will then check whether the patent is worthy of being included in the standard or not (Every SSO has a different procedure to check this). If the SSO finds that the patent is an essential patent for that particular standard, it will include its name in the standard. Subsequently, the patent holder has to undersign the SSO’s IPR policy and a quid pro quo for the patent holder is to license the SEP on Fair Reasonable and Non-Discriminatory (FRAND) terms.