By- Tisya Mishra UG Law Student, Unitedworld School of Law, Karnavati University, Gandhinagar, Gujarat
ABSTRACT
This research investigates the impact of Standard Essential Patents (SEPs) and patent pools on innovation, licensing cost reduction, and access to health technologies in India. SEPs pose unique problems like patent hold-up and hold-out in other industries like telecommunications, electronics, and new digital infrastructure owing to interoperability. Patent pools, which bundle licenses for a number of SEPs together, make licensing easier and lower transaction costs which encourages access. This study reviews the governance of SEPs across the globe focusing on the United States, European Union, and China and analyzes their relevance to the Indian context. It also highlights the pooling of SEPs located socioeconomically in critical areas like medicine, education, and agriculture. This study proposes changes to the law that would clearly define the terms for granting a license to an SEP or a pool of SEPs to encourage competition, innovation, and public good. After all, the incorporation of patent pools of SEPs could revolutionize India’s innovation ecosystem by accelerating the nation's economic growth, technological advancement, and facilitating the widespread availability of sophisticated technologies.
KEYWORDS: Standard Essential Patents (SEPs), Patent Pools, FRAND Licensing.
INTRODUCTION
Innovation is still the foundation of the economy and social development. This process relies heavily on invention patents which enable an individual to have exclusive rights over his or her intangible creation. This monopoly encourages investment in research and development (R&D) while at the same time requiring a public disclosure of technical knowledge, accomplishing both a private benefit and a public reward. The social contract which forms the basis of patent law is the energizing of innovations at the same time allowing societal access to these innovations.
Hence, the patent system not only compensates inventors, but also seeks to aid public and economic development. This combined intention has always been a foundational concept of patent law. The US Supreme Court in 1829 in the case of Pennock v Dialogue observed that the intention behind granting patents was to stimulate scientific advancement, not solely for the benefit of individual enrichment.
For a long time now, Patents have been perceived as financial recovery mechanisms for innovations developed by an Inventor, in return for the technical secrets that will be unlocked after the expiration of the patent. In this modern age, however, this model is increasingly strained in areas such as information and communication technology. Again, because of co-invention, innovations are increasingly interdependent and isolating patentable parts is nearly impossible. Moreover, in a lot of cases a patented technology is crucial towards the realization of a wider technical standard. Without the ability to exclude others from use, isn’t it a situation where access to an entire ecosystem is blocked. These type of patents are known as Standard Essential Patents (SEPs).
Both sets of technologies are vital for the interaction between devices and systems, for interoperability. The other part relates to the devices and is equally important. Many operators and multiple patent owners claim to own technologies that underlie communicating standards like, GSM, LTE or even 5G. Consequently, SSOs (Standard-setting organizations) compel holders of SEPs to permit the usage of their inventions on Fair, Reasonable, Non-Discriminatory (FRAND) conditions. The logic behind “FRAND” licensing terms is to avoid anti-competitive behavior such as excessive royalties on patents or denial of access to the market. However, the ongoing debate claiming ‘what satisfies fair’ or ‘what satisfies reasonable’ remains a problem. This conflict typically highlights the struggle between private domain and public domain where ownership is fought over and access opens up simply.
In order to control the overlapping issues of patent claims, which is typically called the ‘patent thicket’ concern, patent pools have resurfaced as a concern solution. These pools combine patents within a singular licensing system, lower transaction costs and royalty stacking, as well as promote innovation through competition. Historically, agreements like the Sewing Machine Combination of 1856 demonstrates how pooling can fosters industrial growth while breaking deadlocks.
Underlying all of this is the core principle of exclusivity in patents, which remains grounded in a public-interest rationale. Inventors receive a temporary monopoly as a reward for contributing useful knowledge to society. Indian legal jurisprudence echoes this sentiment. In Novartis AG v Union of India, the Supreme Court clarified that patents serve broader public purposes and are not ends in themselves. This perspective is particularly relevant for SEPs, which—due to their essential nature—must be licensed on FRAND terms to ensure market accessibility.
1.1 Changing Patent Policies and Technological Growth
The systems for granting patents have transformed from simple incentives to multifaceted tools of global economic strategy. The moves made to perfect these systems indicate an increasing influence of innovations on the processes of globalization.
As one of the world's leading markets for patented technologies, India has a unique problem: balancing the needs of foreign patentees whose innovations are global standards and fostering domestic innovation with affordable access for its citizens.
The study focuses on the practices and policies governing the licensing of Standards-Essential Patents (SEPs), the legal disputes stemming from FRAND terms, and the role of patent pools as mechanisms for conflict resolution and resource efficiency. The main focus is to construct effective policy frameworks that reconcile international obligations with India’s economic and legal realities.
1.2 Research Questions
a. How has the legal framework governing Standard Essential Patents (SEPs) and patent pools evolved over time?
b. How do regulatory approaches in the US, EU, and China address SEP and patent pool challenges, and what reforms could harmonize global practices?
c. What are the key regulatory challenges in India’s SEP and patent pool regime, and how might reforms improve innovation and competition?
d. How can India strategically leverage SEPs and patent pools to drive economic growth and public welfare?
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