SEPs are on the rise, the variety of annual newly declared patents has nearly tripled over the previous 5 years; there have been 6,457 new declared patent households in 2015 in comparison with 17,623 in 2020 (see Determine 1).
The 5G normal alone counts over 150,000 declared patents since 2015. Equally, litigation round SEPs has elevated. One of many driving elements of current patent litigation is the shift in connectivity requirements (eg, 4G/5G, Wi-Fi) that previously have been largely utilized in computer systems, smartphones and tablets, at the moment are more and more applied in linked automobiles, good houses, good factories, good vitality and healthcare functions. Another excuse why litigation might rise additional is the assumption that giant SEP homeowners corresponding to Huawei and LG Electronics might quickly promote components of their SEP portfolios, which can doubtless find yourself within the fingers of patent assertion entities (PAEs). In an announcement in April, LG introduced it could shut its cell phone enterprise, after struggling years of declining market share. On condition that it’s among the many high 10 worldwide SEP homeowners, many market consultants worry that LG might change its licensing technique round SEPs, for instance, by extra aggressively commercialising its personal SEPs, or promoting its portfolio to PAEs or different market members. Huawei may additionally quickly change its SEP licensing method; because of the US ban on the corporate, SEP commercialisation in the US will turn into more and more vital. That mentioned, a state of affairs the place Huawei is not promoting smartphones in the US would make it a pure out-licensing firm, which some would class as an NPE.
A technique or one other, it’s anticipated that almost all of patent holders will actively monetise their SEPs overlaying requirements corresponding to 5G, Wi-Fi 6 or VVC on this fast-moving, high-investment atmosphere. Any firm adopting these requirements should lower operational threat and expense publicity by taking a proactive technique in direction of SEPs relatively than a reactive one. Nonetheless, most of the companies that can undertake requirements topic to SEPs have little experience in negotiating SEP licences. Right here, understanding the general SEP panorama is vital for clean normal adoption, sustaining profitability and defending the capability to promote new services and products with sufficient entry to third-party patent rights.
Limitation of self-declared SEP databases
Normal-setting organisations (SSOs) such because the European Telecommunications Requirements Institute (ETSI), which specifies 4G/5G requirements, encourage builders to declare any patent that might probably be important for requirements. Whereas a couple of declaring corporations conduct declare charts earlier than declaring patents, most declare potential patents with no in-depth evaluation. As well as, corporations usually submit declarations when patents are but pending and the usual continues to be evolving. Thus, patent claims in addition to requirements specs are topic to vary after the preliminary declaration. Because of this apply, among the declared patents find yourself being non-essential. Nonetheless, publicly self-declaring all probably important patents for a given normal is a vital a part of the FRAND obligation and shouldn’t be known as “over declaration”. Nonetheless such patent declarations should not be confused with verified SEPs. For instance, solely between 20% and 47% of all ETSI declared 2G,3G and 4G patents are important in response to Unwired Planet v Huawei and TCL v Ericsson. Some consultants declare the essentiality charge to be even decrease. These numbers affirm that the willpower of SEP essentiality is required for the ETSI declaration database. Different declaration databases such because the Institute of Electrical and Electronics Engineers (IEEE), which specifies Wi-Fi, and the Worldwide Telecommunications Union (ITU), which specifies HEVC/VVC, permit patent homeowners to submit so-called blanket declarations, the place declaring corporations should not declare particular patent numbers however solely submit a blanket assertion with none additional particulars about probably important patents. Nonetheless, these databases present no details about the magnitude of SEP possession throughout corporations. In different phrases, there is no such thing as a transparency a few declaring firm proudly owning only a single SEP or a number of thousand SEPs.
To summarise, there are two huge issues. Not all declared patents are important and never all important patents are declared. Consequently, patent declaration knowledge wants refinement, filtering, and a possible SEP willpower metric.
Prior to now, SEP essentiality willpower was solely carried out by subject material consultants (SMEs) who mapped and charted patent claims to requirements sections. Nonetheless, there is no such thing as a sensible means for SMEs to find out patent essentiality for giant numbers of declared patents. IPlytics counts over 300,000 world-wide declared patents. One of many main challenges when negotiating SEPs licences is that there is no such thing as a public database with details about verified SEPs. SSOs don’t decide whether or not any of the declared patents are important, nor are the declarants required to supply any proof or updates. In consequence, over the course of licensing negotiations, patent acquisitions or litigation, the query of which patents are important and which aren’t, is without doubt one of the most debated.
Can AI predict essentiality for SEPs?
AI has began to assist the method of understanding how patent claims relate to specs for requirements corresponding to 3G, 4G, 5G, Wi-Fi 6 and VVC to find out essentiality charges of bigger SEP portfolios with out spending weeks or months and staggering sums of cash on handbook evaluations by technical SMEs and counsel. The business is effectively conscious that consultants spending important quantities of time on declare mapping are presently extra correct than AI prediction fashions. Right here patent declare building is a really complicated endeavor, and it wants the knowledgeable’s summary understanding of the know-how. AI SEP willpower just isn’t but meant to switch consultants, however to assist them when handbook declare charting is economically unfeasible.
One instance of an AI-based SEP prediction mannequin getting used in the present day is to permit a patent portfolio supervisor to know how a portfolio together with hundreds of self-declared SEPs compares to the same sized portfolio of a competitor.
AI-based SEP willpower is an economically possible and goal means for each licensors and licensees to get a sign of the speed of essentiality for a given SEP portfolio. Additional, patent transaction managers usually should make selections round buying a patent portfolio earlier than a extra in-depth handbook evaluation is possible. AI fashions are helpful as a primary step for understanding a patent portfolio’s relation to a given normal.
Lastly, in patent litigation, AI fashions have began to assist the estimation of the denominator in a top-down method. A current ballot taken in an IPlytics public webinar requested 244 business consultants in the event that they thought AI-based patent essentiality algorithms may assist SEP willpower as an extra knowledge level; 85% responded that they thought it may (see Determine 2).