table of contents
First, the demand elasticity of SEP is low
Second, the transaction cost of SEP licensing is expensive
3. Preliminary economic analysis of the license rate space for SEPs
4. Recommendations
Patent licensing deals have been in the news from time to time in the past two years. For example, on January 24, 2024, after OPPO signed a global patent cross-licensing agreement with Nokia, vivo also signed a global patent cross-licensing agreement with Nokia shortly after. On March 5, Huawei and vivo signed a global patent cross-licensing agreement covering cellular SEP, including 5G. Many of these patent licenses involve the licensing of Standard Essential Patents (SEPs), which are commonly understood to be patents that must be used to implement a certain technical standard.
This article does not discuss too much about the legal attributes of SEP, but analyzes the various behaviors in the patent licensing market from an economic perspective on SEP as a commodity.
Here it is necessary to first distinguish between patents and patented physical products, as well as technical goods, and patents do not correspond to ordinary physical patented products, nor do they correspond to technologies. A specific physical patented product may involve different technologies, for example, the product of automobile involves different technologies such as mechanical, electronic, chemical, etc., and the realization of each specific technology has many different technical realization paths, for example, the steering of the automobile can adopt completely different technical routes such as steering gear or in-wheel motor, as long as the patent is applied in it, it can be attributed to the patented product. For technical goods, technical goods often contain not only patents, but also trade secrets, etc., and even special equipment that needs to be assisted, and the purchaser of technological achievements does not purchase technology for legal licensing, but to achieve commercial purposes in technology. Therefore, patents cannot be viewed as a commodity in the same way as physical goods or technical goods.
As a commodity, SEP depends on how its use value and exchange value as a commodity are reflected. Use value refers to the attribute that a commodity can meet a certain need of people, which reflects the natural attribute of the commodity, while value (exchange value) refers to the undifferentiated general human labor condensed in the commodity, which reflects the social attribute of the commodity.
First, the demand elasticity of SEP is low
The price elasticity of demand refers to the degree to which the demand for goods in the market reacts to price changes. It is usually expressed as the percentage change in demand to the percentage change in price, that is, in terms of the price elasticity coefficient of demand. A high price elasticity indicates that consumers react strongly to price changes, while low price elasticity indicates that price changes have little impact on consumer choices.
Factors influencing price elasticity:
(1) Whether the goods are essential or non-essential. The elasticity of necessities is small, and the elasticity of non-essentials is large.
(2) The more substitutable items there are, the closer they are in nature and the greater the elasticity, and vice versa, the smaller they are.
(3) Breadth of use of the product. The more versatile a good is, the less elasticity of its demand and vice versa.
(4) Time factor. The same commodity has a large elasticity in the long run and a small elasticity in the short term.
1. Demanders for standard essential patents
The value of commodities is affected by both supply and demand, and the subjectivity of value means that value is directly related to the subject and is always centered on the subject. First, the formation of value relations depends on the existence of the subject. Without a subject, there is no value relationship; The same subject matter may have different values for different subjects. The value of a patent depends on the subject of the patent, and the value of the patent cannot be generalized, because the value of the patent is different for different subjects. From an economic point of view, the use value of a patent can be to make money through licensing and transfer; It can be to apply for government subsidies and subsidies; Improve the market competitiveness of enterprises, protect the market share of enterprise products, and so on. For different purposes, the value of patents to the demanders is also different.
This paper focuses on the formation of the price and cost of patents, mainly exchange value, but exchange value is contained in the use value, and what has no use value has no value, so the use value should be the starting point of research. The use value of patented goods should be viewed from the perspective of the demander, and the demander should first be profiled and the thinking mode of the demander should be analyzed.
SEP generally appears in the technology industry with a high degree of standardization, although most industries may involve patents, but there are not many industries involving standard patents, and the industry related to communication is the most important industry, and there is also some demand for SEP in the pharmaceutical industry and the construction industry. As the demand for communications expands to more industries, such as the Internet of Things, many industries, such as automotive, are also starting to involve SEP issues.
From the perspective of the industrial chain, the demanders of SEP are more downstream and are usually integrators. Few downstream manufacturers license patents to upstream enterprises.
2. SEP is generally a rigid product for demanders
Patents are not different from technology, in order to improve the performance or efficiency of the commodity itself, technology is often difficult to avoid, but patents and goods and technologies do not have a one-to-one correspondence, even if a certain technology is a rigid need, the patent attached to the technology is not necessarily unavoidable. However, there is a situation that may lead to a patent becoming a rigid product, that is, the scope of protection of the patent is very large or there are multiple patents with substitution (e.g., patents for additives that achieve a certain effect, organic and inorganic, and the two are mutually substitutionary, and the inclusion of substitution in the same patent portfolio increases the difficulty of circumventing the patent portfolio). ) forms an unavoidable line of defense, and must be licensed in order to obtain the technology in essence, in which case ordinary patents or combinations thereof can be justified. Most patents cannot enter the patent trading market, and the vast majority of patents have value for applicants or existence, but there is no real demand for other subjects, so they do not belong to rigid demand products.
However, SEP is different from general patents in that it is a rigid product. For example, in the case of abuse of market dominance between Huawei Technologies Co., Ltd. and Interactive Digital Technology Co., Ltd., the court held that when the technical standard adopts the patented technology, so that the patented technology becomes a SEP, the implementation of the technical standard means that the patented technology must be implemented at the same time. Once the patented technology is incorporated into the relevant technical standards, the manufacturer of the product has to use the patented technology in order to make the product conform to the technical standards. Unless the manufacturer of the product withdraws from the production of the product, the demand for SEP is rigid.
SEP's patent portfolio strengthens its rigid demand attributes, and on the one hand, the patent portfolio enhances its overall stability. On the other hand, SEPs are usually complementary to each other, they are all part of a larger system, the value of the system is greater than the value of the part, and the economic value of the licensing of one essential patent will increase because of the licensing of other essential patents.
3. SEP has no substitute product and has a single purpose
SEP, as a patent itself, cannot be granted repeatedly, unlike trade secrets, which can exist in multiple subjects at the same time, only one patent can be granted for the same technical solution. Therefore, there is no substitute for the same patent for the implementer of the standard. In addition, the patent has been bound to the standard, and the implementer has no choice as long as the standard is implemented.
The role of SEP for technology implementers is to legally authorize the use of technology, and there is no other role.
4. The rigidity of SEP demand is temporal
Technical standards are constantly upgraded, such as communication standards from 1G to 5G, audio and video decoding standards H.261 to H.266, and IEEE 802.11 WiFi standards from WiFi0 to WiFi7, which will be upgraded every few years, resulting in a continuous change of applicable mainstream products. Implementers' needs for patents vary depending on the period at which the standard applies. For each generation of SEPs, there is a window of time for approving licensing rates, and the battle for pricing power is most intense. When the standard is changed, the value of the SEP attached to the original standard will decrease, and the demand rigidity will become lower.
Generally speaking, SEP patents are products with low elasticity of demand, and demanders have little choice for SEP price changes.
Second, the transaction cost of SEP licensing is expensive
1. Look at transaction costs through the scenario of patent transactions (or licensing).
First, imagine a typical patent transaction (or licensing) scenario:
A sells or licenses his technology patents to B, which is essentially a complex transfer of power – A may sell ownership of his patents entirely, or B may only be allowed to use his patents for a period of time to make a profit, and then he will take them back, and so on. Then, in order to write the contract clearly enough according to their wishes, both parties need to go through a complex bargaining process.
Since the boundaries of patents are not as clear as those of physical goods, and they may be worthless or valuable because they are unstable, it is necessary to consult relevant experts, on the one hand, to evaluate the stability and coverage of patents from a legal point of view, and on the other hand, to examine the rigor of the contract and the reasonableness of costs from a commercial point of view. Since the two sides may have completely different understandings of the above issues, then the process of bargaining will not be too smooth, and the negotiation may fall apart.
In addition, after the contract is signed, if one party breaches the contract, the other party may use the patent administration or the court to protect its rights and interests. In the whole process of the above, bargaining, consulting experts, administrative agencies, and courts are not directly related to the transaction itself, but in order to ensure the effectiveness of the execution of the contract, it also brings a certain cost, which is the so-called "contract" transaction cost.
This transaction cost is very high, if a patent transaction is one, it is likely that for both parties, the benefits can not compensate for the transaction costs, attorney fees, litigation fees, evaluation fees, etc. may be hundreds of thousands, but the price of most patents is not up to hundreds of thousands, so the transaction cost hinders the development of the patent licensing market.
Second, the passive transaction of patents, patent transactions in the form of infringement litigation.
In more cases, due to the openness and reproducibility of the patent itself, there is a situation of "getting on the bus first, making up the ticket later" in the patent transaction, B finds that A's patented technology is advanced, so he directly uses A's patent in the technology, and A discovers B's infringement, of course, A can choose to require B to stop using the patented technology, or B can also require B to pay a license fee, which depends on A's business choice. In this case, the transaction cost of patent transactions is also unavoidable. Of course, it may also be that the two parties may not be able to reach an agreement through communication smoothly due to the large difference in the recognition of the value of the patent, so as to reach a deal through litigation.
2. The high transaction cost of patent transactions comes from two-way information asymmetry
The information asymmetric market refers to the market where there is a difference in information between the two parties in the transaction process. CharacteristicsIn the information asymmetry market, one party has more information than the other party, which leads to the unequal status of the two parties to the transaction, which is easy to lead to adverse selection and moral hazard problems, thus hindering the development of the market.
The patent trading market is a two-way information asymmetric market, and both parties have information advantages in different types of information. For patent buyers, the licensed patentee usually does not manufacture or sell the patented product itself (because the patentee who manufactures and manufactures the core patent generally does not license the core patent), resulting in the loss of contact between the patentee and the customer, and the patentee does not know much about the manufacturing process and marketing of the patented product, and it is even more difficult to know the market prospect of the patented product. For the patent seller (the right holder), its information advantage is reflected in the fact that the patentee has a better understanding of the technology itself, because the patent does not require a high degree of technology disclosure and does not need to reach the level of industrialization, it understands the details of the trade secrets not recorded in the patent, and the current industrial division of labor is complex, and it is common to conduct cross-border patent licensing, and the patentee's ability to evaluate the value of the patent may be higher than that of the licensee. Under certain circumstances, some sellers or buyers may not have the above defects due to their own information channel advantages, which is similar to one-way information asymmetry.
While asymmetric information can make one party to the seller's advantage, it can cause the other party to lose (in our previous discussion, the customer not only has to pay the time cost of the bargain but also has to pay a higher price), and the loss of the injured party is greater than the gain of the winning party, and the difference between the two is dissipated. This dissipated value is the transaction cost increased by information asymmetry. In people's economic life, the cost of information itself is part of the transaction cost, and the high cost of information caused by the lack of freedom of information itself is increasing the transaction cost, which will directly hinder the freedom of the economy. This two-way information asymmetry increases transaction costs.
The existence of a "patent certificate market" in China is closely related to the adverse selection of information asymmetry, because the value of patents is difficult to discern, so the mainstream transactions will be priced according to the value of low-quality patents, which is very tolerable in Taobao and other e-commerce companies, and it is even lower than the cost of patent rights. The value of a low-quality patent is the value that the patent brings when it is only used as its lowest function, not its quality, but only its quantity. Its main role is the direct economic value brought by the financial subsidies for the identification of high-tech enterprises, specialization, special and new projects or similar projects, and a small and medium-sized enterprise can generally receive more than 100,000 government-related subsidies after being identified as a high-tech enterprise. In this patent trading market, the value of patents is completely reflected in the quantity, and no one cares about the quality of patents. Generally speaking, transactions in the patent certificate market do not occupy judicial resources due to their low value, but they may also occupy judicial resources under special circumstances, such as the "patent operation" of the STAR Market listing raid, which inflated the value of some fabricated patents, which may also lead to litigation.
Since both the supply and the demander are different, and they do not belong to the same commodity, the SEP market and the "patent certificate market" are two completely separate markets, and their two-way information asymmetry and consequences are completely different from those of the "patent certificate market". In addition, because technical standards are global, the pricing of the SEP market is global and does not depend entirely on the pricing of the Chinese market.
3. Organizational change due to transaction costs
Due to the high cost of patent transactions, the patent trading market has gradually developed collective bargaining methods such as patent alliances and patent pools, which reduce transaction costs by packaging and trading patents, and NPEs are also part of reducing transaction costs. Today's technical standards tend to contain a large number of patented technologies, and modern patent pools and NPEs are closely related to SEPs. For example, Sisvel's Wi-Fi 6 Patent Pool provides a one-stop solution to license all patents owned or controlled by participating patent owners that are essential to the Wi-Fi 6 (802.11ax) standard. The MPEG-2 patent pool is a family of standards that implements ISO ISO/IEC 13818-1 and 13818-2, and its patents are essential for both standards. In general, patent pools and NPEs, on the one hand, enhance the value of patents by aggregating them into patent portfolios, while reducing transaction costs and making patent transactions more profitable through packaged transactions, and on the other hand, reducing negotiation costs through specialization, thereby further reducing transaction costs.
The patent pool implements one-stop package licensing for other vendors, and adopts a unified standard license agreement and charging standard, so that the licensee does not have to conduct lengthy patent licensing negotiations with each member of the patent pool separately, saving transaction costs for both parties. In addition, the barriers to cross-licensing between barrier patents and complementary patents will be removed, thereby promoting technology diffusion.
Non-practicing entities, also known as non-patent implementing entities or non-implementing entities, means that the subject with the patent right does not implement the patented technology itself, that is, does not transform the technology into products for production and circulation. PAE (Patent Assertion Entities) stands for Patent Assertion Entities, which is a typical part of NPE. It mainly refers to the group of NPEs that acquire patents (some also carry out research and development), including patents from inventors or declining technology companies, and license them, so they effectively play the role of "middlemen" or "retailers". The emergence of specialized patent operating companies has led to a social demand for reducing the cost of patent transactions (rights protection), but there is also a controversy over anti-competitive effects that harm innovation and social welfare.
4. The ambiguity of SEP and the transaction costs brought about by the globalization of standards
Most of the problems in SEP licensing practice come from the laxity and ambiguity of FRAND principles. The standardization organization is not responsible for judging the specific application of FRAND principles and does not intervene in patent licensing matters. Although there is an obligation for the right holder to declare the SEP, the standardization organization does not carry out the necessity check of the declaration of the SEP, and there is a serious problem of excessive declaration. In order to confirm the number of patents for SEP, it is necessary to pay a large cost. In addition, some SEP patent portfolios are not very stable, such as Huawei's licensing negotiations with Conversant, which includes a patent portfolio of 15 patents, of which 8 have been declared invalid, and only 1 of the remaining 7 is a standard essential patent. In 2020, 20 of InterDigital's invalidation cases were declared invalid out of a total of 26 patent samples.
In addition, SEP usually conducts licensing negotiations in the form of patent family portfolios, based on the globalization of technical standards, in order to promote licensing, litigation for licensing purposes usually occurs in multiple countries, and this transaction cost is often huge, for example, the licensing negotiations between Nokia and OPPO lasted for 3 years, and the two parties have more than 100 patent infringement lawsuits and rate lawsuits in more than 10 countries such as the United Kingdom, France, the Netherlands, China and India, with a cumulative total of more than 100 cases, and the transaction costs incurred by both parties due to licensing are huge.
3. Preliminary economic analysis of the license rate space for SEPs
1. The lower limit of licensing revenue is mainly determined by the fixed cost, and the marginal cost of patent licensing is lower
Marginal cost refers to the additional cost required to produce or provide an additional unit of product or service, while fixed cost refers to the fixed cost that must be paid regardless of how much product or service is produced or provided.
Patents are non-competitive and reproducible, i.e., increasing the consumption of the good by one user does not reduce the supply to other users; Therefore, given that a patented technology already exists, then its marginal production cost is zero, then the main factor in its initial production cost is the fixed cost of obtaining the patent.
The fixed cost of SEP varies depending on the source, and it is necessary to distinguish between NPE and non-NPE (mainly PAE).
The fixed costs of the original R&D SEP patentee need to be limited in order to be counted, and they need to be distinguished from the R&D costs and the costs related to the standard. Because the patent application itself is a by-product of technology research and development, and patent standardization is also a by-product of enterprises in order to promote their own technology to become mainstream technology, if the research and development cost and standardized communication cost are also added to the fixed cost of patent licensing, the existing problems are, first, unable to be evenly apportioned to each piece for accounting, and second, it is difficult to distinguish from the benefits brought by the expansion of its products and markets. According to the Brookings Institution's report, The Patent Boom: Inventions and Economic Performance in the United States and Its Metropolitan Area, since 1975, an average patent has been granted at about $3.5 million in research and development. However, patent deals are not calculated on the basis of R&D investment, even if Apple and Microsoft jointly bid for 6,000 patents of Nortel Networks and successfully acquired them for $4.5 billion, the average patent is only $500,000 per patent, and in most cases the price of US patent deals is tens of thousands of dollars, so the cost of most patents is roughly equal or slightly higher than the cost of obtaining and maintaining.
For SEP patentees such as PAE, the cost structure is different from that of R&D companies that implement patents. The premise of the existence of the PAE industry is that it can obtain a profit margin that is at least not lower than the level of other industries, otherwise it will not survive. Although PAE currently has commercial and litigation activities around the world, it is mainly in the United States that it really exists as an industry. Although PAE's gross profit margin does not seem to be low, the long-term profit level is not very high, for example, the five-year net profit margin of InterDigital, a listed company, is about 15%. The cost of a PAE is generally the cost of acquiring a patent portfolio, which is fixed before the out-licensing and becomes a fixed cost. However, this cost is not the same as that of non-PAEs, where the fixed cost is not the cost of maintaining the patent but the cost of purchasing the patent from the market, which is often market-based and varies from case to case. The license income cannot be lower than the fixed cost of the SEP patentee, if it is lower than the fixed cost, then the business must be loss-making, obviously it cannot be long-lasting, so the lower limit of the license fee is determined by the fixed cost.
2. The upper limit of licensing income is mainly affected by transaction costs, which is easy to induce rent-seeking behavior
It can be said that the upper limit of the patentee corresponds to the lower limit of the licensee, that is, the limit of what the licensee can bear. Since there is not a single SEP right holder, the implementer needs to pay license fees to multiple right holders before it can continue to be implemented, otherwise it will face the risk of litigation from multiple parties and the ensuing injunction pressure. In order to avoid the stagnation of technological development caused by the failure to implement the standard, the upper limit of the licensee's rate should also be considered, and the problem of license fee stacking should also be considered. For example, the Nanjing Intermediate People's Court ruled in the Huawei and Kang Wensen case that the cumulative industry rate of 4G standards in China is 3.93~5.24% respectively, and the Chongqing court confirmed that the global cumulative rate of the 5G standard in the mobile phone industry is 4.341%-5.273% in the case of oppo and Nokia.
The benefits of SEP licensing are also related to the degree of protection and economic development in different jurisdictions, and the maximization of licensing benefits will inevitably drive the rent-seeking behavior of licensors to engage in parallel litigation. Judge Posner, in The Economic Structure of Intellectual Property Law, said that if the degree of patent protection is too high, the elasticity of supply will be lower, so that the patentee can charge a higher price and gain a larger share of the market after the invention. If it is very difficult for a competitor to make peripheral inventions, or in the case of a new product, the elasticity of demand is low because the benefits provided to the consumer by the product are unlikely to be obtained from other products, then the patentee is able to charge a higher price relative to the marginal cost and, as a result, may receive income that substantially exceeds its modest total cost. Not only will this be more limited access to patented inventions than is necessary to incentivize optimal inventions, but the prospect of such a windfall will induce rent-seeking.
SEP rights holders (especially PAEs) tend to pursue cross-jurisdictional rate litigation in order to maximize commercial interests in order to seek the most favorable SEP pricing, and some international courts also cater to global rate rulings in order to expand their global influence. The intensity of patent protection in each country is related to the needs of the society in the country where it is located, and to a certain extent, it depends on the fixed costs of the patentee, the inherent difficulty of engaging in peripheral inventions for the patent, the additional benefits that the patentee can expect from a higher degree of protection, and the average profit level of the technology implementer. Therefore, it is not only reasonable but necessary that there are differences in patent pricing systems in different countries.
The judicial decisions of many countries also reflect that the global FRAND license rate is not a global flat rate value, but reflects regional differences, and different rate values are set for different regions in the world, such as the Nanjing Intermediate People's Court oppo and Nokia case, and the California court TCL v. Ericsson. However, it should be pointed out that although the ruling of the global rate is conducive to reducing short-term transaction costs, because the extraterritorial effect of its judicial decision extends to other countries implementing the technical standards, it interferes with the judicial and economic sovereignty of other countries, so there are potential hidden dangers, which has led to judicial conflicts such as anti-suit injunctions, such as the UK rate case between Conversant and Huawei, the English court ruled that the global rate was inclined to favor Conversant, the Nanjing Intermediate People's Court made different rate rulings in favor of Huawei, and the German court in Düsseldorf found that Conversant's rate did not violate FRANDHuawei applied to the Supreme Court of China for an injunction ordering Conversant not to enforce the German court injunction. The SEP dispute between Xiaomi and InterDigital has led to anti-suit injunctions and anti-anti-suit injunctions, and related companies have been in a judicial deadlock for a while.
The logic of rent-seeking behavior of SEP rights holders (especially PAEs) is as follows:
On the one hand, it is in the interest of SEP rights holders to outlicense as much as possible. Fixed costs account for a high proportion of total costs, and as production increases, fixed costs are diluted and profits increase. In order to maximize the profits, a typical SEP right holder can objectively meet the expectations of different licensees through differentiated licensing prices, charge higher prices for licensees with insufficient elasticity of patent demand, and charge lower prices for licensees with sufficient elasticity of demand, so as to maximize licensing benefits in order to promote the conclusion of patent licensing contracts, recover costs as soon as possible, and realize profits。 However, price discrimination will cause unfair market competition among licensors and will be regulated by law, such as the principle of non-discrimination in the FRAND principle and the abuse of market dominance in the anti-monopoly law, which will regulate the opportunistic behavior of SEP rights holders.
On the other hand, it is in the interests of SEP rights holders to select the top licensee with large product sales. Transaction costs do not go into the pockets of both the licensor and the licensee and should be avoided as much as possible. Centralized trading is an effective means of reducing transaction costs, and this is also true in practice. The main source of revenue for a typical NPE is large companies, one is that the patent license rate of a large implementer is much smaller than the patent license rate of a small implementer, and whether it can get a lower discount, for example, in the comparable agreements listed by Lenovo and InterDigital, InterDigital, the license rate difference is up to 17.2 times, and Apple is the largest source of revenue, and also gets the lowest license rate.
4. Recommendations
1. Reduce two-way information asymmetry and improve the authority and voice of China's SEP consulting institutions.
The asymmetry of SEP information is mainly reflected in the confidentiality of both parties, and the licensee lacks the public comparable price and the true number of SEPs, making it difficult to shop around; The Licensor lacks the number of sales made by the Licensee difficult to calculate the amount of the licensee. In view of the two-way information asymmetry, there are third-party consulting institutions, whether it is negotiation or litigation and arbitration, they need to rely on third-party consulting opinions, but the right to speak of these institutions is mainly in the hands of European and American institutions, such as 5G SEP research institutions: IPlytics, Clarivate Analytics, Unified Patent, etc., and sales analysis data companies Counterpoint, Omdia, etc. Although there are also relevant consulting institutions such as Moqiu in China, the international influence is still relatively weak. Once China loses its right to speak on these issues, then the two-way information asymmetry will evolve into a unilateral information asymmetry that is only unfavorable to China, no matter what status Chinese enterprises are in, they are all information weaker parties, and the value of China's patents and R&D is difficult to be truly reflected, and this situation should be paid attention to and changed. Third-party consulting agencies must maintain a certain degree of impartiality and objectivity and avoid short-sightedness, otherwise they can only talk to themselves and it will be difficult to exert influence.
Enhancing the capacity of SEP consulting institutions in China is also helpful for the pricing of SEP patents in China, as well as the pricing power and rationality of patents as a whole. If third-party institutions play a role, some originally valuable patents, such as those of bankrupt technology companies, will not flow into the "patent certificate market" and be sold cheaply.
2. Establish a SEP rate adjudication mechanism to distinguish the global influence of adjudication from the adverse impact of domestic industrial interests.
At present, the interests involved in the settlement of SEP licensing disputes in major countries are very significant, and different industries in China have different attitudes or even opposing attitudes towards SEP policies, and there is an urgent need to safeguard the strategic interests of national economic sovereignty in the international community, so that parallel lawsuits, anti-suit injunctions and even diplomatic disputes frequently occur.
It is recommended to promote the establishment of a more flexible SEP dispute resolution mechanism, and the judicial policy of resolving problems through a single channel has more and more room for manoeuvre. Consideration may be given to establishing a two-way parallel guidance mechanism, whereby the pro-patent adjudication body and the pro-implementer adjudication body play their respective roles under the premise of basic fairness. The purpose of this seemingly contradictory line of thought is that the pro-patent adjudication body gives full play to the global rate adjudication to attract SEP rights holders and reduce their flow to other countries, and the pro-implementer adjudication body is not only to continue the regular patent trial, but also to protect the country's major strategic interests and avoid the destruction of industries such as automobiles by the SEP policy. The premise of this is that the pro-patent adjudication authority has a certain "offshore" effect, otherwise it will be difficult for the jurisdiction to play its role and solve more problems for foreign implementers, and it is not appropriate to conduct regular patent infringement trials.
Author: Wang Suyuan
Editor: Sharon