Making Licensing Tangible – Follow-Up: What Implementers Experience in SEP Licensing

After my recent article (What Implementers Should Do When Approached for SEP Licensing – SEP Licensing for Implementers) on SEP licensing from an implementer’s perspective, I received thoughtful feedback. Some felt the piece leaned toward encouraging license conclusion rather than fully reflecting the structural challenges implementers face in practice.

This follow-up reflects on some of the main points of those comments. The aim is not to take sides, but to better understand where tension typically arises.

Willingness vs. Informed Negotiation

A recurring observation in the feedback was that being a “willing licensee” does not mean accepting the first offer on the table. From an implementer’s standpoint, willingness includes testing the assumptions behind the offer:

• Is the declared portfolio truly essential?

• Is the declared portfolio covering parts of the standard being used?

• Is the royalty base aligned with market practice?

• Would a pool license provide more predictability than bilateral deals?

• How does this compare to competitors’ exposure?

While SEP holders may view delays as avoidance, implementers often see them as necessary risk management. Assessing claim charts, essentiality, and portfolio strength requires time and expertise, often also investing into external expert services. Even when taking a license to the SEPs used is the likely end result of the discussions, structure and scope of the license matter.

The Practical Complexity of FRAND

FRAND (fair, reasonable and non-discriminatory) is a principle balancing the licensing relationship between innovator and implementer. In practice, its application is complex and sometimes only fully clarified through litigation.

During negotiations, implementers without prior SEP experience may struggle to assess whether an offer is FRAND in substance. Courts in jurisdictions such as Germany have developed structured approaches to injunctions and implementer conduct, and some market participants perceive these tendencies as favoring rights holders. Whether that perception is fully accurate is a separate discussion, but it influences negotiation dynamics.

For many implementers, the practical question is not “Is this theoretically FRAND?” but “Can we confidently assess this without going to court?”

From implementers perspective, that assessment gap often drives prolonged negotiation or defensive positioning.

The Supply Chain: Where Risk Really Sits

One of the most important feedback points concerned the supply chain. Responsibility for licensing cost is often not clearly aligned between component suppliers, OEMs, and brand owners. Indemnity clauses, pass-through mechanisms, and allocation models become central.

In practice, many indemnities are legacy clauses drafted before SEP exposure became material. They may not clearly allocate responsibility for standardized technology, or they may contain limitations and exclusions that complicate negotiations and even enforcement. As a result, implementers must carefully review supply agreements and understand their impact to SEP licenses and licensing negotiations.

In some situations, the most difficult negotiation is not between SEP holder and implementer, but within the value chain itself.

Avoidance or Optimization?

From the rights holder perspective, implementers may appear to be resisting taking a license to avoid payment (hold-out) while using the standardized technology in their products or services. From the implementer perspective, the goal is usually to optimize their deal-making: ensure they only pay for the standards they use, evaluate patent pool versus bilateral licensing options, check if they enjoy license through supply chain or other arrangements, and use available contractual protections appropriately.

Even when a licensing for technologies used is inevitable, licensing structure affects competitiveness and requires careful approach. However, also careful negotiation can and should be target-oriented and effective. Implementers and licensors seem to often have different views on what is a reasonable time to conclude a license.

A Shared Ecosystem

SEP licensing is intended to balance innovation incentives with market access, creating a level playing field for all. In practice, that balance is constantly negotiated.

What one side sees as reluctance, the other may see as disciplined risk management. Sustainable licensing requires recognizing these commercial realities on both sides and addressing them with clarity and realistic expectations.