The term patent pool is commonly used to refer to a joint patent licensing program that consists of a number of companies who have decided to offer a joint license for their patents that are essential to the practice of a defined specification. Frequently this specification is published as a standard, but can also be another openly available specification or a de facto standard.
Joint licensing programs are a way for companies who own patents that are essential to a specification to provide other companies with access to those patents to enable a broader market for products that implement the specification. The joint licensing programs help to integrate complementary technologies and reduce transaction costs for both licensors and licensees. They also remove uncertainty about the availability of patent licenses and their costs. Finally, they bring a measure of stability to patent licensing for a particular technology by reducing litigation risks and by establishing a market rate, thus making it easier for licensees to obtain licenses, and also allowing licensors who are interested in obtaining a reasonable return on their research investment to do so in a market-enabling and cost-effective manner.
Joint licensing programs greatly reduce the transaction costs for licensees and licensors, help to integrate complementary technologies, help to accelerate the deployment of new technologies to the marketplace, and help to set a market rate for Essential Patents that encourages licensors to join the program and encourages licensees to obtain licenses. For licensors that are interested in licensing into a particular technology or specification, a joint licensing program is the most effective way to do so.
Joint licensing programs mean that access to Essential Patents is made easier and with lower transaction costs. Since the license is available to everyone, it makes it possible for more companies to implement the specification leading to greater interoperability and commonality within the market through greater competition, also resulting in lower prices to consumers. It also means that for similarly situated licensees, the costs for Essential Patents are equal.
A joint licensing program provides a convenient way for you to fulfill your obligations for Reasonable and Non-Discriminatory (RAND) licensing terms you may have through participation in a standards setting organization. It also provides a cost-effective and reasonable means of earning a return on your research investment by encouraging more companies to implement the specification and the industry to build and sell more products, and therefore, for more revenues to be generated from which to obtain a reasonable return.
Creation of a joint licensing program can take from six months to two years or sometimes even longer.
Often when joint licensing programs are in development for a long period of time it is because the specification is not yet complete (publication of an international standard can take 9 to 15 months after the specification is essentially complete, and three years or more from the beginning of its development) or the specification has not yet been implemented in products in the marketplace. In these cases, development of the program takes longer because the companies involved want to make sure that they are enabling the market to develop and that the licensing program will meet the needs of that market. On the short end of the time scale, the programs still take months to develop because the parties involved want to make sure that the program is market-enabling even when products have already appeared in the marketplace. The joint program is established by several to many companies that are located across the globe, and it takes time to reach consensus and agreement about important terms of a licensing program.
An Essential Patent is a patent that contains one or more claims that are unavoidably and necessarily infringed by the implementation of a specification for which it is essential.
In order not to incur liability for patent infringement, a company wishing to implement a specification needs a license to the specification’s Essential Patents. However, other patents by definition are not necessarily infringed and can be designed around. Competition authorities have indicated that the pro-competitive benefits of patent pools—of allowing a broader group of companies to have access to Essential Patents efficiently through a joint licensing program—may be diluted by including patents that are not Essential Patents.
A call for Essential Patents is a public notice given by a forming (or already formed) joint licensing program that invites all parties who believes they own Essential Patents to submit them for independent evaluation and to join the joint licensing discussions or program.
Not necessarily. While they do include all of the Essential Patents that are owned by the participating licensors, some patent owners do not desire to license their patents, preferring to keep them for purely defensive purposes. Others have large, established licensing programs for their entire portfolios and prefer not to license by individual technologies. Still others just prefer to license individually (although licensors participating in patent pools remain free to license their patents on their own).