Introduction

Standard essential patents (SEPs) can make or break an organization’s research and development program, and no industry can manifest this like Telecom. The innovation behind 5G, 4G, and 3G wireless technologies carries the weight of the 21st century world, and it plays a large part in setting the pace of society. This makes it uniquely suited to showcase the strategic positioning SEPs can create. One telecom company alone has already declared more than 12,000 SEPs related to these wireless technologies. How does that compare to its competitors, and what can the varying strategies in this fast-moving industry teach us about patent portfolio management?

Patent lapse rates can answer these and other key questions about a company’s SEP and overall intellectual property (IP) strategies and about an industry’s competitive landscape. The lapse rate of a company’s overall patent portfolio, for example, can indicate how proactively the portfolio is managed, but lapse rates can signal very different developments when it comes to SEPs. How well is a company’s SEP portfolio positioned for license negotiations? How committed are patent owners to their declared essential patents? Is a patent holder over-declaring its SEPs? Analyzing a company’s lapse rate specific to SEPs can shed light on the answers to big questions like these.

Standard essential patents

SEPs ensure compatibility and interoperability among an industry’s products and services. Typically associated with certain industries and technologies, SEPs sometimes span multiple technology sectors. Companies actively declare their patents as standard essential to generate revenue through royalties from other industry players who wish to use the standardized technology. Companies can enhance their overall value and market competitiveness by declaring SEPs, which can make it more attractive to investors by signaling its commitment to technological leadership and collaboration within industry ecosystems.

In telecommunications, SEPs are often associated with 3G, 4G, and 5G wireless standards. Many providers of mobile communications technologies license SEPs to seamlessly comply with established industry standards and ensure interoperability and compliance. Considering the ubiquity of smartphones and mobile data usage, these technologies represent the essence of essential technology, and the SEP strategies of top telecom companies deserve closer examination.