Economic Analysis of Market Licensing v. OEM Restricted Licensing for Standard and Essential Patents

February 15, 2024

The latest research on Standard Essential Patents (SEPs) shows that there are potential problems in SEP licensing that may result in excessive royalties beyond the technical contribution of a patent. When patent owners refuse to license patents except to original equipment manufacturers (OEMs) in industries where OEMs invest heavily in their brands, it creates a risk of excessive royalties based on OEM investments in brand value. Excessive royalties may discourage patent implementation and reduce products available for consumers.

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