Government outlines next steps for SEPs

The Government has published its response to the consultation on Standard Essential Patents (SEPs), setting out a comprehensive package of measures designed to enhance transparency and efficiency in SEP licensing. SEPs are critical patents that protect innovations essential to various technical standards, facilitating connectivity and functionality across numerous technologies. These patents underpin significant sectors, such as telecommunications, medical technology, and advanced manufacturing, and their relevance is poised to grow alongside the rising prevalence of declared SEPs and the introduction of new standards for emerging technologies such as 6G and artificial intelligence.

To create a more navigable ecosystem for businesses, the Government has outlined several targeted actions. Firstly, it intends to improve the resolution of SEP disputes, exploring the possibility of an early FRAND (fair, reasonable, and non-discriminatory) determination process within existing court proceedings in England and Wales. The Government also plans to draft FRAND licensing guidelines to facilitate more structured engagement among parties involved and will seek evidence on designing a useful IPO-led FRAND opinion service that offers early assessments of proposed licensing terms.

In addition to dispute resolution enhancements, the Government aims to improve access to critical SEP information by establishing a voluntary pathway for rightsholders to share patent details with the IPO. This initiative involves collaborating with industry stakeholders to ensure businesses can easily identify relevant SEPs.

Moreover, the Government is focusing on improving pre-litigation conduct by promoting constructive engagement before disputes escalate to court. This includes enhancing the existing alternative dispute resolution services available to parties, ensuring they understand appropriate behaviours and expectations during negotiations.

To further assist businesses, especially those with limited SEP licensing experience, practical licensing guidance will be developed in cooperation with industry experts. Additionally, the initiative seeks to bolster essentiality assessments by promoting transparency, improving data quality around existing services, and considering non-binding best practice principles for such assessments.

The Government has also pledged to increase wider support and international engagement by enhancing awareness of alternative dispute resolution options, expanding the IPO’s SEP Resource Hub, and maintaining collaboration on a global scale to aid businesses as they navigate SEP licensing.

A successful and efficient SEP licensing environment not only allows businesses to access necessary standardised technologies but also ensures that innovators receive fair compensation for their research and development efforts. This is particularly vital for major UK sectors reliant on SEP-dependent technologies, contributing over £40 billion annually to the UK’s GDP. As new technical standards continue to appear in areas like AI, quantum computing, and semiconductors, the importance of a clear SEP ecosystem cannot be overstated.

By making SEP licensing more straightforward and transparent, the UK Government's measures aim to encourage more businesses to leverage standardised technologies confidently. This also aligns with broader government efforts to harness the economic advantages of digital standards while reinforcing the UK's role in shaping international standards that influence future technologies and markets. Additionally, maintaining a predictable SEP ecosystem ensures UK consumers can access a diverse array of connected products and services.

The Government has carefully considered input regarding the potential effects of injunctions on SEP licensing negotiations. However, the consultation did not yield compelling evidence that the current legal framework systematically hinders market entry or discourages innovation. Consequently, the Government does not believe it is appropriate to restrict the availability of injunctions in SEP disputes at this time.

The collective evidence has led the Government to pursue what it deems a targeted and proportionate approach. Thus, it will not implement a standalone Rate Determination Track or an essentiality checking service at this point. Instead, the focus will remain on enhancing transparency, fostering earlier dispute resolution, and aiding all businesses in effectively navigating SEP licensing.

In the immediate future, the Intellectual Property Office plans to conduct further technical assessments regarding the potential FRAND Opinion Service, reaching out to businesses, professional advisors, academics, and other interested parties for their insights and evidence. Adam Williams, CEO of the Intellectual Property Office, highlighted the importance of SEPs in underpinning critical technologies, stating that “these targeted measures are about supporting the SEP ecosystem to function more effectively — removing unnecessary friction, encouraging better licensing negotiations and helping businesses access standardised technologies while ensuring innovation is rewarded.”

The Government remains committed to engaging with stakeholders throughout the development and implementation of these essential measures.