Standard Essential Patents: What the Medical Technology Industry Needs to Know

Howard Wright, partner and patent attorney at European intellectual property firm Withers & Rogers, explains what medtech companies need to know about standard essential patents.

The rapid growth of the medical technology sector, which aims to enable people to monitor and manage their health conditions from home, means more innovators in the sector may come into contact with standard essential patents (SEPs) for the first time. do. Is this a risk or an opportunity? What exactly do they need to know?

SEP is familiar with innovative companies in the consumer electronics sector, especially those related to mobile phone technology. SEPs are patents that apply to inventions that form part of a standard. Standards such as 4G or 5G aim to provide a standardized approach to technology and are important to ensure technological interoperability between devices and methods from different manufacturers and innovators. By law, SEP holders must be willing to provide implementers with a license to use the SEP technology. This will facilitate the sharing of patented technologies needed to ensure products meet essential industry standards.

Without access to communication standards, it is virtually impossible for smartphone owners to communicate with other smartphone owners, no matter where they are in the world or what phone network or operating system they use. The purpose of the law is to ensure that SEP holders cannot prevent competitors from operating under the standards without first providing the competitors with the opportunity to obtain a license.

SEP holders can realize the value of their innovations by licensing them to third parties, but SEP holders must be willing to do so on fair, reasonable and non-discriminatory (FRAND) terms. If a SEP holder refuses or refuses to provide intellectual property rights (IPR) licenses on FRAND terms to potential licensees, it may run afoul of antitrust regulations in the UK, EU and many other global jurisdictions.

In the field of medical technology, a surge of innovations aimed at monitoring, analyzing and transmitting patient data is developing technologies that require the use of smartphones and telephone networks. Therefore, more innovators in the sector may find themselves needing to interface with SEP owners in the telecom sector for the first time. As these areas of technological innovation expand, it is also likely that new standards will be needed in the future, especially as new medical technology devices generate large amounts of data about patients that must be collected, transmitted, and analyzed. Doing this in a standardized way and providing greater understanding of the consequences of medical interventions would be beneficial to both patients and healthcare practitioners, which could be reflected in the development of future medical preventive measures.

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The UK government has published a notice requesting comments to determine whether standard essential patents are functioning efficiently and effectively and whether standard essential patent holders are complying with FRAND conditions. The survey results show that while most respondents believe that SEPs help create a balanced ecosystem, some felt that there was still an imbalance where one side benefited more than the other. For example, there were concerns that standard essential patent (SEP) holders could leverage their market power and file court cases to dictate excessive royalty rates. These findings suggest that it is unlikely that the UK government will take such action unilaterally, but it is likely that standards will be strengthened in the future.

The guidelines and rules surrounding the use of standard essential patents (SEPs) are largely discretionary, which has led to high-profile legal disputes. Most have focused on what it means for holders to be fair, reasonable and non-discriminatory, and what enforcement rights they should have access to. For example, after considering the issues raised by Unwired Planet v Huawei, the Supreme Court confirmed that UK courts have the power to issue injunctions to prevent infringement of SEPs and determine the terms of global FRAND licensing agreements. The increased use of SEPs by health technology innovators may mean that more disputes are likely to arise in the future.

The basic principles of SEP use are not entirely new in the medical field. During the COVID-19 pandemic, innovators working on vaccines have faced pressure to give up their IP rights to make their patented technology available to as many people as possible, as quickly as possible. The World Health Organization (WHO) has established the COVID-19 Technology Access Pool to reserve patented technologies that need to be quickly shared under license across the global biotechnology and pharmaceutical industries. Although patent pools are not the same as standard essential patents (SEPs), they are rooted in the same principles, encouraging the sharing of technology on fair and reasonable terms. Patent pools allow third parties to seek licenses for multiple patents from multiple patent holders in a single transaction, ultimately improving and simplifying access to patented technology. Patent pools can become especially useful as medical technology innovators increasingly seek to integrate new technologies, such as communications capabilities, into their products and services.

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For innovators working in telemetry, biometric analysis, and diagnostics, knowing SEPs and how to use them is especially important. Here are some key pieces of advice to keep in mind:

  • Explore the patent environment – While conducting ‘freedom to operate’ searches is always important, knowing the patent landscape is even more important in areas where there may be standard essential patents (SEPs). Understanding where SEPs exist can help innovators identify routes to market. There is no point in investing in innovation activities if the product or service cannot be commercialized because it infringes on IP owned by another company or individual. Therefore, it is important to conduct due diligence early on on any technology that may be relevant to your product or service and be prepared to work with third parties if necessary.
  • Find your will in others – Medtech innovators who have not previously experienced SEPs may not realize that SEP holders must be willing to license their technology to third parties on FRAND terms. Innovators should aim to learn more about standard essential patents (SEPs) and how licensing is conducted so that they are prepared to enter negotiations.
  • Expanding our approach to patent protection – In markets where SEPs or patent pools may be required, it is especially important to seek patent protection for innovations that may typically be considered peripheral to the core functionality of the product. For example, if your device needs to communicate with other devices, systems or networks. This approach will place the company in a stronger position if the technology is later added to the patent pool or deemed an 'essential standard' in the future.
  • Get ready to change your mindset – Innovative technology companies typically intend to outpace their competitors by designing around proprietary technologies and bringing their products to market first. Transforming markets with SEPs or patent pools requires a more collaborative approach. Cooperation with competitors can be necessary and mutually beneficial.
  • Appreciate the potential benefits. – When a company files a patent, it may think that it will not be considered an essential standard. However, as standards are developed, companies may decide to file patents with the standards-setting body. SEP owners effectively own dominant technologies across key global markets, giving them significant commercial advantages, including providing revenue streams. Being aware of the various standard-setting bodies relevant to your technology from the beginning will allow you to tailor your patent strategy with the goal of obtaining SEPs in the future.
  • Know when to seek advice – If you believe you have an invention that is likely to form part of a future standard, you should seek expert advice to determine whether your patent is most likely to be considered essential to the standard. For example, the timing of submission can be important as potential SEPs are often submitted just before the technology is released to a standards meeting/committee.

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