Transparency, Transparency, Transparency

Those were the words on everyone’s lips at both IAM’s SEP Summit Global 2025 in London (“IAM’s Summit”) and at the Symposium on Standard Essential Patents hosted by the World Intellectual Property Organization (“WIPO”) in Geneva (“WIPO Symposium”).  The Honorable Justice Mellor of the Chancery Division of the U.K. High Court put it most succinctly at IAM’s Summit: the biggest issue related to SEPs today is the lack of transparency.[1] 

On nearly every panel, nearly everyone, including SEP holders, standard implementers, judges, government and organizational representatives, academics and practitioners whose work focuses on standards and standard essential patents, agreed that increased transparency would benefit the courts (or other adjudicators) and the parties in determining what is FRAND.  Person after person spoke about the need for transparency, and the issues related to the lack of sufficient transparency, in current FRAND licensing and rate setting.

Here are some those comments:[2]

From major SEP licensors:

We respect the need for more transparency . . . There is a need to understand the broader picture.  Nokia (Adrian Howes, Head of IP, Standards, at the IAM’s Summit).

In one of our matters, a Court in the U.K. ordered disclosure of relevant licenses.  We followed a process to keep them reasonably confidential – the disclosure was to the lawyers.  The lawyers prepared an anonymized table from the license.  That was really helpful and led to the parties resolving the matter.  “These mechanisms could be used more.”  Phillips (Kevin Scott, Licensing Program Leader, at IAM’s Summit).

We are interested in “maximum transparency.”  Huawei (Julia Dias, Senior IP Policy Counsel, at the IAM’s Summit).

From timplementers (many of which also hold FRAND portfolios):

We need good access to information.  If we receive sufficient information, we sometimes find that licensor’s have engaged in discriminatory conduct.  We are supportive of the principles that we must have more information, more disclosures and a mechanism to obtain the information that implementers need in order to assess whether a demand is FRAND.  Most implementers would prefer a negotiated license to litigation, but implementers need disclosures in order to conduct these negotiations.  Oppo (Jack Peng, Head of Patent Litigation, Europe, at IAM’s Summit).

Transparency is one of the biggest challenges.  We need “clear intelligence.” Airbus (Nick Carrier, UK IP Counsel, IP Intelligence, Analytics Manager, at IAM’s Summit).

We need more transparency to shed light on what is a fair price.  This would increase speed, efficiency and fairness in the licensing process.  We need help – from the U.K., the E.U. and standard setting organizations - to make this happen.  Lenovo (John Mulgrew, IP Policy, at the WIPO Symposium).

We would like to know what it will cost us to license the entirety of the standard.  How can we decide whether to implement that standard if we do not know how much it will cost us . . . We are ready for greater transparency.  Amazon (Scott Hayden, Vice-President of the IP Group, at the WIPO Symposium)

From government representatives, SSO representatives, academics and others:

From our fact finding, we have good evidence that there are “licensing fictions” and significant information asymmetries.  We need to fix these information asymmetries and address transparency.  The U.K. government is trying to improve transparency with respect to pricing of SEPs, and with respect to essentiality determinations.  We need to foster “an ecosystem where information is shared.”  U.K. Intellectual Property Office (Hamza Elahi, Deputy Director of Business, Regulatory Policy at IAM’s Summit).

“We can all agree that there is a lack of transparency . . . and without transparency, we cannot understand the entire problem at hand.”  European Commission (Jonas Hein, Legal and Policy Officer, at the WIPO Symposium).

Transparency is critical but license agreements are generally secret.  Then we get selective disclosure through discovery or very limited disclosures, none of which is public.  This is an issue.  Alternative dispute resolution (ADR) is an efficient resolution mechanism when both parties agree to it but it also worsens the transparency problem because usually the result is confidential or the rates and the basis for the rates is not disclosed.  Prof. Jorge Contreras, College of Law, University of Utah, at the WIPO Symposium.

We have heard the demands for transparency.  But ETSI cannot do this by itself.  We need help to make it happen.  ETSI (Magali Fitzgibbon, Legal and Governance Director, at the WIPO Symposium).

ETSI and WIPO should work together to address the problems with a set of rules accessible to everyone and some kind of transparency.  We should render at least some of the rates public.  ETSI (Christian Loyau, Former Director for Legal Affairs and Governance, at the WIPO Symposium).

We need data driven transparency.  International Electrotechnical Commission (IEC) (Claudia MacMaster, Head of Legal and Compliance, at the WIPO Symposium)

What do people mean by transparency? 

A related question is what do people mean by “transparency.” This also was answered by nearly every panel at both conferences.  Indeed, the last panel of the WIPO Symposium even focused on “Transparency and Data Science behind SEPs.”

The transparency needed includes:

1.      Increased disclosure of licenses and actual license rates (not published wish rates but rates companies are actually paying) and enough information to unpack the amounts reflected in those agreements.  This was recognized by most commentators at both conferences as being the single most important thing that would help parties engaged in SEP licensing, help regulators and help courts and other decisionmakers.  As one panelist (who I believe was Alexander Haertel, Cluster Lead Patents, from Deutsche Telekom, at the WIPO Symposium) stated: 

There needs to be a better mechanism for determining the right price for a SEP license.  Information asymmetry deters licensing.  It distorts the system.  We need information so that we understand the price tag of a SEP portfolio early.  This will make negotiations more efficient for everyone.

2.      More information about what patents are actually standard essential and whether they are valid.  As Qualcomm (Shahrokh Nayeb Nazar, Senior Director of Technology, at the WIPO Symposium) pointed out: “Many patents have messy prosecutions and often [patents that were disclosed during standard development] do not actually cover the standard.”  Huawei (Julia Dias, Senior IP Policy Counsel, at the IAMs Summit) acknowledged that over declaration during standard setting was “inevitable.” But, a few panelists pointed out that there are a variety of sources for at least some of this information already, so they did not think this was as critical as gaining more information about licenses.

3.      Finally, several people mentioned that we need better transparency for determinations made by courts (and other adjudicators) about essentiality and FRAND rates.  Both Germany – which lacks an online docketing and retrieval system – and Brazil – which is trying to create one – were mentioned as being laggards in this regard.  There was also mention that failure to have a suitable retrieval system was one of the bases for the EU’s competition case against China. In response, a Chinese lawyer said that China was working to develop a case retrieval system.   And see the comment above about the problems of ADR.

The Ramifications of a Lack of Transparency

Several German and German UPC judges spoke at the two conferences.  It became apparent from what they said that we are where we are in Germany (and increasingly the UPC) in part because of the lack of transparency.   Germany essentially does not have discovery which makes it extremely difficult to determine a FRAND rate.  Presiding Judge Oliver Schön, 7^th Civil Chamber of the Regional Court of Munich, noted this at the IAM’s Summit.  He stated that “everything about FRAND is confidential.” He acknowledged that this makes it hard to determine a FRAND rate. 

Presiding Judge Matthias Zigann, Local Division Munich of the Unified Patent Court, underlined (also at IAM’s Summit) that, in his view, the SEP holder has only a minimal obligation to help the court determine whether the amount of an offer is FRAND and, in Germany, there is no legal obligation to give license agreements.

What I took away from each of these discussions was that the German and UPC courts are unable to make a decision on what a FRAND rate is because of the lack of transparency.  Instead, they examine the behavior of the SEP holder and implementer to determine willingness.  And, because these German judges see patent rights as “absolute rights” (according to Presiding Judge Zigann), showing correct behavior by the SEP holder is a really low bar.  If the SEP holder has made an offer, given some claim charts and offered to meet, the court will consider it to satisfy the SEP holder’s FRAND obligation.  The court has no mechanism, and insufficient information, to determine, and seems uninterested in examining, whether the offer itself is fair, reasonable and non-discriminatory. 

In other words, we are where we are in Germany (and increasingly the UPC) because of the lack of transparency.  In these courts, there is no way to determine whether an offer is, in fact, fair reasonable and non-discriminatory.  Rather than address this lack of information and lack of transparency directly, the German (and now the UPC) courts have instead decided to reward SEP holders with injunctions in every single case in which infringement is found on the barest showing of "willingness" to license.[3] 

Conclusion:

There is a demand from all corners to improve transparency and increase the information available about existing SEP licenses.  This is at the top of everyone’s list as to what type of increased transparency is needed.  As Jamie Lewis, Head of SEP, IP and Competition Policy at the U.K. IPO, said at the WIPO Symposium:  we need to improve the evidence in order to improve SEP licensing.

It is time for governments, regulators, SEP holders, implementers and the standard setting organizations themselves to step up and address this significant problem.

[1]          This post is based on my notes of what was said and much of it is paraphrased from comments made over the course of a panel.  I apologize in advance for any inaccuracies that have crept in or mistakes that I have made.

[2]          With a few exceptions, I have put the names of the speakers and their positions in parentheses after the names of the companies/government bodies/institutions for which they work.

[3]          It appears the German courts have found the licensor "willing" in every single case in which infringement has been found even when the offer was at a rate which appears not to be FRAND.  Neither of the German judges could give a single example of a case in which a SEP holder was found to be unwilling, or where an injunction had not issued when the implementer was found to infringe a valid FRAND committed SEP.