Essential patent

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An essential patent or standard-essential patent (SEP) is a patent that claims an invention that must be used to comply with a technical standard.[1] Standards organizations, therefore, often require members disclose and grant licenses to their patents and pending patent applications that cover a standard that the organization is developing.[2]

If a standards organization fails to get licenses to all patents that are essential to complying with a standard, owners of the unlicensed patents may demand or sue for royalties from companies that adopt the standard. This happened to the GIF and JPEG standards, for example.[citation needed]

Determining which patents are essential to a particular standard can be complex.[3] Standardisation organizations require licences of essential patents to be on fair, reasonable, and non-discriminatory (FRAND) terms.

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