Licensing Terms for IoT Standard-Setting: Do We Need “End-User” or “License for All” Concepts?

Licensing Terms for IoT Standard-Setting: Do We Need “End-User” or “License for All” Concepts?

Matt Heckman (Zuyd University of Applied Science, The Netherlands & Maastricht University, The Netherlands)
Copyright: © 2019 |Pages: 14
DOI: 10.4018/978-1-5225-9008-8.ch011

Abstract

The development of 5G and IoT standards requires an active participation of small and medium-sized companies (SMEs). These SMEs do not always have the resources and expertise to participate in the work of standard development organizations (SDOs). The valuation of the patents in standards can be based on “license for all” or “end-user” concepts. A specific choice for use-based licensing terms by an SDO might drive SMEs more towards standard-setting in consortia. The chapter will discuss the competition law aspects of both licensing concepts for SMEs and the recent communication in this field by the EU Commission.
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Patents Included In Standards And Competition Law Concerns

The registered patent gives the patent owner the right to exclude others from using his technology. The patent owner can give other firms access to his inventions via the method of licensing. Licensing can create more revenues for the patent owner and leads to increased diffusion and dissemination of the innovative goods. The economic impact and contribution to competitiveness is mostly determined by the licensing terms. Patent owners can license individual patents or, more often, use package deals which offer a lower royalty fee than the total sum resulting from all the individual pa- tents. Two or more firms holding substantial IP portfolios (or even a firm just holding one essential patent to the technology), use cross-licensing to exchange their valuable IP-assets. In the case of cross-licensing, all companies are entitled to use each other’s patents, often without charging any reciprocal royalties.

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