Thu, Jan 02, 2025
Here's a puzzle: India aspires to become a global leader in technology and manufacturing. But to do so, the country needs to address a major hurdle — Standard Essential Patents (SEPs).
SEPs are at the core of the technologies that enable all devices to work with each other seamlessly, including GSM, LTE and even the Wi-Fi used by all people.
Despite their significance, India's approach to SEPs remains inconsistent. In the absence of a well-defined and forward-thinking policy, it relies more on court rulings. This lack of clarity creates business challenges and may undermine India’s ambitions, especially in critical areas like 5G, artificial intelligence (AI) and the Internet of Things (IoT).
SEPs are not merely technical constructs, but the very foundational pillars of modern innovation. They enable different systems and devices to interoperate, cutting costs and accelerating progress.
India Addresses SEP Challenges
Licensing SEPs has, however, become contentious. The SEP landscape is usually controlled by multinational corporations, with small businesses forced to pay expensive royalties to use them. In the absence of robust safeguards, these costs can become stifling for innovation and competitiveness.
Recognising these challenges, the Progress and Policy Roundtable on SEPs, jointly organised by the Advanced Study Institute of Asia (ASIA) and the Office of the Controller General of Patents, Designs, and Trade Marks (CGPDTM), on November 29 in New Delhi, provided a much-needed platform for dialogue. Experts from law, policy, and industry convened to discuss the role of SEPs in emerging technologies like 5G, AI and IoT.
Professor Unnat P Pandit, the Controller General of Patents, Designs and Trade Marks, underscored India’s growing role as a technology leader. He highlighted the importance of harmonised standards to foster innovation and equitable access, emphasising how India’s vision of Viksit Bharat (Developed India) ties into its strategic focus on sustainable technology and collaboration with the Global South.
He also called for stronger benchmarking in areas like 6G and AI, and urged the integration of scientific advisors to enhance IP governance.
Globally, SEPs represent tens of billions of dollars in economic value, and are key to unlocking the next generation of technologies. The race to dominate 5G highlights their significance. By 2020, nearly 100,000 patents had been declared essential for 5G, covering over 20,000 unique patent families.
Companies like Huawei, Samsung, Nokia and Qualcomm dominate the list of patent holders. China’s rise in this domain is particularly notable, with Huawei and ZTE challenging traditional leaders.
India can take a cue from this, but systemic barriers continue to plague the country. Judicial delays, high transaction costs and opaque licensing practices all disproportionately impact small and medium enterprises (SMEs) and startups.
If reforms are not introduced, these obstacles can prevent India from realising its full potential. In contrast to the clearly defined frameworks of the EU or China, India's reliance on court rulings has created uncertainty. A good example of this is the Micromax vs Ericsson case, where royalty rates had been a subject of controversy for years, without any substantial solutions.
A Global Perspective
Markets like the EU and China offer valuable lessons. The EU has implemented essentiality checks and centralised registries to enhance transparency, while China has capped royalties to support local industries. These approaches demonstrate the importance of proactive policymaking in effectively managing SEPs.
The Huawei vs ZTE case, decided by the European Court of Justice in 2015, offers a global benchmark for SEP governance. The ruling clarified that SEP holders must negotiate licenses in good faith, and implementers must engage sincerely, ensuring a balance between protecting patent rights and ensuring fair market access. For India, this decision provides a roadmap to navigate its own SEP challenges.
India’s growing aspirations in technology demand an overhaul of its SEP governance. Practical solutions include establishing a centralised SEP registry, adopting tiered licensing models to support smaller players, and creating specialised IP tribunals to expedite disputes.
Aligning with global best practices while addressing domestic needs can position India as a leader in the SEP ecosystem.
Push For Transparent SEP Policies
The gestation period of most technologies — from research and development to real-world implementation — spans about a decade. This highlights the urgency of adopting a forward-looking policy framework.
A delayed or unclear approach to SEPs during this period can hinder innovation, lock India out of critical technology advancements, and impact its global competitiveness. Programmes like Make in India and production-linked incentives (PLIs) are steps in the right direction, but their success hinges on a transparent and efficient SEP system.
More importantly, addressing SEPs is not just about innovation; it’s about securing India’s strategic autonomy in critical technologies.
India’s vision of Viksit Bharat aligns with its ambitions in the SEP domain. By focusing on sustainability, equitable access, and global collaboration, India can redefine its role — not just as a participant in global standards but as a policy designer.
As highlighted at the recent roundtable, integrating scientific advisors and modernising IP governance will be key to navigating the complexities of SEPs and driving innovation.
In this context, ASIA’a working paper, titled Standard Essential Patents: Balancing Innovation and Accessibility, seeks to explain the role of SEPs in promoting the technological ecosystem of India, while considering the hurdles faces by smaller players, startup and SMEs.
It advocates a balance approach that considers global best practices while tailoring solutions to India’s unique needs. The paper is an attempt to arm policymakers, business institution and academic organisations with insights and findings towards creating a cohesive, transparent and forward-looking framework for SEP governance — a prerequisite for India to become a leadership technology destination.
(The author is programme coordinator, Law & Critical Emerging Technologies, Advanced Study Institute of Asia. Views are personal)