Published: November 26, 2017

By: CUBICIBUC

Patent valuation for SEP’s is the subject of much heated debate amongst patent holders and implementers, and is a taxing issue for Courts and regulators worldwide. Negotiations in SEP licensing in the telecoms sector have invariably relied on some kind of patent counting as SEP holders boast about the size of their portfolios, and recent Court decisions in the UK (such as Unwired Planet vs Huawei) and in the US have used counting techniques. Key to understanding the strength of any patent portfolio is to consider its size relative to that of the wider patent landscape.

Within the IP industry it is well understood that not all patents are equal – that there are many patents that are “low quality” and that many have questionable validity. Some studies estimate that as much as 80% of declared SEPs are not in fact essential and may be invalid. It should therefore be of no surprise that not all SEPs are created equal. Some SEPs cover key, core technical elements of standards, while others cover lesser aspects that perhaps do not contribute to the state of the art outside of the standard itself.

While the principle of treating all SEPs as equivalent has been historically convenient, the resultant proportionality approaches to licensing and damages means patent portfolios consisting of low quality patents can be treated on a par with much higher quality innovations.

Today’s analytical approaches allow us to compare patent metrics across portfolios and landscapes to at least determine proxies for patent quality, and make broad judgements as to the relative strengths of one portfolio to another.

Counting patents and SEPs are often-used methodologies, but ignore strength factors. Relying on assessments of essentiality alone ignores the question of patent quality and innovation strength. We believe an additional analysis of strength factors can significantly contribute to the identification of value within patent portfolios relative to the wider SEP landscape. We recognise that SEP analysis is still a necessary, and complementary element, but we no longer accept the idea that all SEPs must be treated equally.

Read more here.