Standard-Essential Patents: a Strategic Issue for Technology Companies

By Mariana Reis Abenza, Partner at Dannemann Siemsen

Standard-Essential Patents (“SEPs”) play a central role in today’s digital economy. They protect technologies that are indispensable for the implementation of technical standards used in sectors such as 5G, Wi-Fi, audio and video compression, connected devices, streaming, the Internet of Things, and smart vehicles. In practical terms, these standards allow products made by different manufacturers to be interoperable, benefiting consumers, companies, and entire innovation chains.

The economic relevance of SEPs derives precisely from this dual nature: they are exclusive industrial property rights, but they cover technologies that are necessary for certain products or services to comply with a widely adopted technical standard. For this reason, the topic requires balance. On the one hand, it is essential to ensure adequate remuneration for patent holders, who make significant investments in research and development. On the other hand, implementers must have access to standardized technologies on fair, predictable, and commercially viable terms.

In Brazil, there is still no specific legislation governing SEPs. They are, in principle, treated like any other patent and are subject to the Brazilian Industrial Property Law, which requires novelty, inventive step, and industrial application for protection to be granted. The Brazilian Patent and Trademark Office – INPI does not conduct a specific essentiality assessment; in other words, it does not verify whether a given patent is effectively indispensable for the implementation of a technical standard. Essentiality is usually declared by the patent holder itself before international standard-setting organizations, often accompanied by a commitment to license the technology on fair, reasonable, and non-discriminatory terms, known as FRAND terms.

The absence of a specific Brazilian framework has both advantages and challenges. On the one hand, it avoids creating additional bureaucracy or shifting essentially commercial discussions to INPI. On the other hand, the lack of specific parameters may create uncertainty regarding essentiality, royalty calculation methodologies, and the boundaries between the legitimate exercise of patent rights and potential competition law concerns.

In this context, the FRAND commitment should be understood as a balancing mechanism, rather than a rigid formula. Fair and reasonable conditions do not necessarily mean identical conditions for all licensees. Territorial scope, duration, the portfolio involved, sales volumes, the existence of cross-licenses, the stage of negotiations, and the characteristics of the implementer may justify legitimate commercial differences. The key point is that such differences should have economic rationale, transparency, and should not result in anticompetitive discrimination.

Discussions involving SEPs often concern two opposing risks. The first is so-called hold-up, where the patent holder takes advantage of the essential nature of the technology to impose excessive terms. The second is hold-out, where the implementer uses the technology without a license or indefinitely delays negotiations, shifting the cost of strategic non-compliance to the patent holder. A balanced system should discourage both types of conduct.

The topic has been gaining greater visibility in Brazil. In 2025, CADE published an institutional study on standard-essential patents and has been paying closer attention to the interface between intellectual property, technological standards, and competition law. This movement should not be viewed as a weakening of patent protection, but rather as a sign of the increasing maturity of the regulatory and competition debate in the country.

International experience confirms that there is still no unified standard solution, illustrating the complexity of the topic and reinforcing the need for pragmatic solutions, calibrated on a case-by-case basis.

For companies operating in technology-intensive sectors, SEPs should be treated as a strategic issue, not merely a litigation matter. Patent holders should structure consistent licensing programs, document good-faith negotiations, and economically justify their licensing terms. Implementers, in turn, should assess their technological exposure, engage constructively in negotiations, and avoid conduct that could be characterized as unjustified resistance to taking a license.

Brazil is moving toward a model in which enforcement, negotiation, and competition analysis coexist. The challenge will be to build predictability without restricting contractual freedom, to protect innovation without limiting access, and to ensure that essential technologies continue to be fairly remunerated. For a country seeking greater integration into the digital economy, this balance will become increasingly relevant.