Industry report - How to count and valuate standard-essential patents

November 15, 2017

In this report, Tim Pohlmann notes that counting and valuing cellular SEPs -- 3G, 4G and soon 5G -- are increasingly the subject of lively debate among industry practitioners, policy makers and regulatory institutions. His analysis aims to shed light on different approaches, which can be implemented to measure the strength of SEP portfolios.

First, Tim Pohlmann suggests different ways of determining the size of an SEP portfolio. More specifically, he argues that:

  • A combination of SEP (family) counts, legal status filters (e.g., expired patents, lapsed patents), and grant rate offers a transparent understanding of the SEP portfolio size.
  • Portfolio size by country of jurisdiction or by a technological distinction between handset-related SEPs and infrastructure-related SEPs can be potentially useful metrics.
  • The share of transferred SEPs and share of litigated SEPs reflect the activities of each patent holder regarding the assertion of the SEP portfolio at issue.

Second, Tim Pohlmann introduces three different metrics to quantify the value and relevance of SEPs to cellular technology standards. In particular:

  • The first metric counts the % of SEPs that are declared against multiple standards (e.g., 3G and 4G). He argues that this measure identifies whether the corresponding SEPs are relevant for the core standards technology layers used for multiple generations.
  • The second metric counts how many standards documents (e.g., 3GPP technical specifications) are cited as prior art by the SEPs under consideration. As the author claims, only citations of standards that relate to the declaration should be counted.
  • The third metric counts the number of prior art citations received from other SEPs, while discounting self-citations.
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