Standards Essential Patents: Big Money

Unified Patents had a seminar entitled “Who is Gaming Who? Why 5G Self-Declarations Have Exploded and What to Do About it.”

The seminar is a lot of inside baseball, but gives you a good glimpse about how patents are used in developing standards, and how the licensing game is played at the highest levels.

Standards-essential patents are the Holy Grail of patents.

When a patent is included in a standard pool, there are enormous licensing royalties that are paid to the patent holders. Standards-essential patents originated during the Singer Sewing Machine patent wars during the Industrial Revolution, and continue to be one of the important ways IP is shared/transferred within an industry.

Anyone who says patents *inhibit* competition are dead wrong – they play a huge role in establishing our standard technologies, and they provide enormous incentives for companies to innovate.

Over 35,000 patent families have been self-declared as “standards-essential” for 5G. This is 35,000 innovations that are in the top 2% of all inventions, and represent billions of dollars in research and development. All of that technology is pooled together, put into a licensing vehicle, and made available to the industry.

Because there is so much money at stake, there is enormous amounts of capital poured into creating these inventions (as well as protecting them). This incentive brings out everyone in the ecosystem to contribute.