There is no consensus amongst the courts and commentators as to how SEPs should be valued. This has led to an increasingly complex legal thicket as patented standards become more prevalent across once disparate products and technologies. The difficulties with valuation of SEPs, determining FRAND rates, and complying with FRAND obligations, creates
Patent pools and groupings of standard essential patents (SEPs) facilitate one-stop shopping of patent licensees. When operated fairly, these arrangements can provide meaningful efficiencies to licensors and licensees alike. On the other hand, there is also ample room for abuse given the brute strength of such large portfolios.
While the Patent Trial & Appeal Board (PTAB) can be an appealing solution to combat improvidently granted patents, it is not a realistic option for an implementer facing a large pool that might include patents of questionable merit. Thus, when this “big stick” leverage is abused, unreasonable license valuations/demands can go unchecked. When such undesirable economic practices are multiplied across pools, “royalty stacking” becomes especially problematic for implementers, and ultimately, consumers.
Continue Reading Dealing with SEP Demands & Royalty Stacking