Introduction
Patent pools, i.e., the practice of one or more patent owners to come together to license their patents as a bundle, have played a relevant role in the Standard Essential Patents (SEPs) licensing scenario for many years now. Part I of this article exposes how the pools’ pro-competitive effects typically outweigh the antitrust concerns, such as the risk of price-fixing or unlawful tying agreements. Indeed, patent pools are very flexible in the formation phase and usually facilitate the SEP licensing process by offering higher transparency, more efficiency and a reduction of transaction costs. This allows participants to address certain challenges, such as in the Internet of Things (IoT), where increasingly new stakeholders incorporate standardized technologies in their products or services but lack experience in SEP licensing. One example, Avanci for the automotive and smart meters manufacturers, is analyzed in detail.
Still, pools are not a “one-size-fits-all” solution. In some situations, SEP owners and implementers may benefit from choosing other alternatives, such as bilateral negotiations. Some factors that influence the decision as licensor or as a licensee on which licensing model to adopt are the standardized technology involved, whether the pool has managed to attract the most relevant SEP portfolios, and whether it offers a compelling licensing program considering the different interests of the diverse stakeholders.
Part II (below) continues to explore how patent pools have addressed the above-mentioned challenges, with a focus on the pool aggregate royalty rates, the licensing process, the distribution of (the collected) royalties among members, as well as the role of the pool and its members in litigation.
