Patent Pools: An ‘Industry Solution’ to SEP disputesin 5G and Internet of Things : A quest for a successful Digital Single Market

Abstract: Patent pools are a source of collaborative efficiencies when they comprise of patents essential to astandard thereby facilitating access to useful technologies. Despite that, in the context oftelecommunication standards, attempts to create patent pools have seemingly not been successful,for example in 2G, 3G and 4G standards, owing to a lack of participation by SEP holders, whohave mostly engaged in bilateral negotiations. This had led to significant litigation. Bilateralnegotiations are hard to foresee in the 5G and IoT context, where the number of downstreaminnovators and implementations are large. Essentiality understandings have mostly been evaluatedfrom a SSO policy perspective and a lack of consistency therein has led to further confusion.In that context, patent pools may be an industry solution to facilitate access to technology andavoid costly and time-consuming litigations and therefore, pose an attractive alternative. Patentpools have however evolved, have infamously resorted to assertions and aggressive licensingapproaches. The European Commission has recognized reliance on patent pool mechanisms, as ameans, to achieve a Digital Single Market. However, to be able to do so, pools must be properlydesigned and managed. Against that background, the purpose of the thesis is to discuss thestrengths and weaknesses of patent pools, the regulatory framework under which they operate, theessentiality policy weaknesses of ETSI in the development of telecommunication standards, thetransformation of pools into assertion entities and concludes with certain suggestions in which theyshould operate to provide an attractive alternative to bilateral licensing in the emerging 5G andIoT era.Keywords: Pools, SEP, 5G, IoT, European Commission, Digital Single Market