MSMEs seek access to patented tech through licensing of SEP on FRAND terms

New Delhi, Apr 25 (KNN) Access to patented technology is critical for India to create mass scale employment opportunities through self-employment and enterprise creation for its 1.2 million people coming in job market every year.

The national MSME body, Federation of Indian Micro and Small & Medium Enterprises (FISME), has written to Department of Industrial Promotion and Production (DIPP)  that to realize Make in India, setting-up standards to maintain uniformity, sustainability and access to patented technology is vital for technological advancements.

“It is only possible with the licensing of Standard Essential Patents (SEP) on Fair, Reasonable, and Non-Discriminatory (FRAND) terms’, says Anil Bhardwaj, Secretary General of FISME.

“Many Indian MSMEs are suppliers of products and services to the corporations who manufacture the end products (in compliance with a Standard). The guidelines should be strict enough ensure that there is no abuse of dominance by the SEP holders as this would overburden the corporations manufacturing the standard-compliant products and as a result may stifle MSMEs”,  FISME official added. 

FISME was responding to a DIPP query on SEP and their applicability on FRAND terms. 

According to FISME, Indian IP laws and anti-trust laws are well-equipped to handle the SEPs and their availability on FRAND terms and these are issues that don’t need amendments in the law per se but need guidelines to implements the law. 

FISME runs three IPR Facilitation Centers (IPFCs), supported by Ministry of MSME,  in New Delhi, Bangalore and Hyderabad. FISME-IPFCs study the IPR related issues and their impact on Indian MSMEs.

On the issue of criteria for fixing royalty rates in SEPs, FISME recommended that the royalty rates in SEPs be decided on the basis of the Smallest Saleable Patent Practicing Component (SSPPC).

According to FISME, this is the best way to ensure that the end customer is not over burdened with heavy cost of the end product and the standard-compliant product can be brought by wider section of customers.

It further suggested that prescribing the guidelines for defining the FRAND terms by the Government of India would be extremely helpful in ensuring the smooth negotiations of the SEP license between the manufacturer, Standard Setting Organizations (SSO) and SEP license holder.

It also recommended that such prescribed FRAND terms should be industry sector specific and sought establishment of an effective dispute resolution mechanism.