FAQ | SME Licenses

FAQS

Frequently Asked Questions

What are Standards Essential Patents?

Standards Essential Patents (SEPs) are patents which must necessarily be infringed when a company makes, markets, uses or sells a standards compliant product. Examples of standards would be 3G, 4G, 5G, Wi-Fi or Zigbee. Companies participating in a standards setting process usually commit to license their patents on a fair, reasonable and non-discriminatory (FRAND) basis.

As an SME, why do I need licenses to patents?

Companies that make, market, use or sell products compliant with standards need to ensure that the products or components they buy or sell have a patent license to the SEPs. They either need to ensure their suppliers have a license, or they need to take a license from the holders of the SEPs. There are hundred of companies that have SEPs, and thousands of SEPs. Contacting each of them and negotiating licenses would be time-consuming and expensive. As a special concession, some SEP holders have agreed to our solution whereby SME’s can use their SEPs for free in exchange for a few asks. SLL has simplified the process by being an independent licensing entity that has been granted a license to the SEPS, but we can only sub-license SEPs to SMEs.

What is the license for?

SLL will grant to the SME (and listed Affiliates) a personal, non-exclusive, non-transferable, non-assignable royalty free license to market, sell and use products implementing the Licensed Patents.

What if the SME grows and ceases to be an SME?

If the SME (and its Affiliates) does not meet the SME criteria, then the license will be deemed revoked from the date that it does not meet the SME criteria.

How long is the license for?

The license term will be for 1 year. SLL will offer a new annual license on the expiry of each year, subject to payment of the annual administration fee, and subject to the SME meeting the eligibility criteria

Is it transparent?

Yes. The SME will permit the fact it is a licensee to be shown on SLL’s website.

How much is the annual administration fee?

The administration fee is [£250] per annum.

How can it just be limited to true SMEs? Will companies try to get round it to game the system?

SMEs will certify they meet the criteria. The license is only be valid provided that the SME met the criteria. If it does not, then the license would not cover the SME. It would therefore be pointless for an SME to take a license from SLL, and to pretend that it was licensed, if in fact it did not meet the relevant criteria.

How do you deal with the question of patent exhaustion?

There is a clause in the sub license that there is no warranty that licenses have not already been granted earlier in the value chain, and that it is open to the SME to seek to negotiate directly with its suppliers, but that there would be no reimbursement of the fee. There is no double dipping, because there is no fee payable by SLL to the SEP holder, so the SEP holder is not getting a royalty twice. It is true that if you had two or three SMEs in a supply chain, and all of them took a license, then each of them would be paying an administration fee of £250 each, but that will be the maximum liability and there would be no reimbursement.

What if the SME sues an SEP holder?

There is a provision in the sub-license that the license would be terminated immediately upon the issue of any proceedings against an SEP holder

What about the SMEs own commitments?

There is a provision in the sub-license acknowledging that the SME would license it’s SEPs to SEP Holders on fair, reasonable and non-discriminatory terms and conditions.