ROLE OF STANDARD ESSENTIAL PATENTS IN SEMICONDUCTOR TECHNOLOGY

Gayatri Sangamkar

DES's Shri Navalmal Firodia Law College, Pune

Abstract

While researching this topic, I learned so many new concepts related to semiconductors, essential patents, and standards. This is my humble submission to whatever I could learn and grasp put into words.

We live in the age of chips; the age of oil is over. Every century has an important asset, and in the 21st century, the asset is the semiconductor chip. This blog explores what standard essential patents are and their importance in the semiconductor industry. Semiconductors conduct electricity sometimes, and act as insulators the other time. This unique feature makes it so special. In today’s time, no chips means no modern economy because chips are everywhere and in everything. These are patented and are a part of standard essential patents. This blog explores what semiconductors and standard essential patents are, and their importance in the semiconductor industry.

Introduction

Our phones, laptops, iPads, connect to the same wifi, our Bluetooth works across brands, there is no need for the headphone or speaker to be of the same brand to connect. Today, we all have 4 G phones, and the new ones function with 5 G. There is no need to buy a special phone that has access to 5G. This is because of “semiconductors.” A semiconductor is a material that can act both as an insulator and an electrical conductor. This dual sort of personality is what makes it special. Semiconductors are the basis for establishing a modern economy. Semiconductors are present in every machine. The deal with semiconductors is simple: semiconductors can be controlled because they have tiny switches called transistors. These transistors are attached to a single chip, hence they are controllable. This control gives the controller an advantage and the one being controlled a disadvantage. That’s the main reason why countries are in a rush to produce more semiconductors. Semiconductors are patented, and special semiconductors come under standard essential patents. As technology progresses, semiconductors are being integrated into military weapons and AI as well, becoming a strategic asset for countries. The country that has more rights over semiconductors will dominate other countries. International news in recent years has highlighted the race for semiconductors and the ongoing rivalry between the US and China. It’s important to understand the fight between nations for “semiconductors. Semiconductors make up everything. Now, like any invention, semiconductors are also patented. Certain semiconductor patents become so important for technologies like wifi and telecommunications that companies cannot operate without them; these are called standard essential patents. They are necessary for operating global technology standards.

SEP Meaning & Importance

SEPs sit at the intersection of technology, economy, military, and global businesses, as I mentioned before, the one who has control over semiconductor controls the economy. As we further develop new inventions, semiconductors, and the role of SEPs become increasingly important. Now the story of SEPs is divided into two parts- standards and essential patents. Standards are common technical rules that allow varying technologies to function together. Wifi, Bluetooth, and 5G all work together because the companies follow the same standard. Without standards, devices made by different manufacturers would not be compatible. Modern communication is smooth and feasible; to avoid chaos, different companies contribute innovations together to create standards. Some of these inventions become so important that anyone manufacturing a related product has to use standards. This is where we transition into the second part- these essential standards are patented, now called standard essential patents (SEPs), and complying with the tech standard is impossible without using them.

So to understand it better, if a company invents a signal transmission method, now this becomes part of 5G standards, now all the 5G phone manufacturers must use this transmission mechanism. SEPs dominate industries like telecommunications, semiconductors, smartphones, AI, military, cloud computing, and surveillance, to name a few.

Why are SEPs so Powerful

SEPs hold great economic and strategic value, apart from being the controller and all of that, SEP owners earn licensing royalties in huge amounts, as these patents are unavoidable while creating a relatable technology. Companies with SEPs hold immense market influence, raising legal concerns over antitrust laws. It’s almost like owning salt; to understand the real taste of food, you have to add salt, it’s unavoidable. Similarly, in modern tech, certain patents are like salt- impossible to avoid because they form an essential part of global tech standards.

While researching semiconductors and their dominators, obviously, Taiwan is at the top. Taiwan Semiconductor Manufacturing Company owns up to 68,000 granted patents, with 56,000 active patents. This is the reason why countries have strong incentives to protect TSMC and Taiwan as a state; it shows the deep-rooted connection between IP and Geopolitics. NVIDIA and AMD are the main competitors to TSMC from the US. However, to an extent, they still depend on TSMC. SEP heavy industries include telecom, chip manufacturing- the most trendy topic of discussion in today’s time. Most importantly, digital communication technologies on which modern society relies, those who own digital communication standards own communication in the 21st century.

Role of SEPs in the Semiconductor Industry

Semiconductors form the foundation of modern technologies. For these technologies to function properly, companies follow SEPs. certain semiconductors and related inventions are so crucial to these standards that manufacturers cannot produce compatible devices without using them. Owning such powerful patents gives companies immense negotiation power, as licenses are required to use these. As the semiconductor industry touches new heights, it’s important to understand the legal competition concerns over semiconductors and SEPs. The concentration of SEPs raises concerns regarding monopoly and unfair licensing.

Legal Competition Concerns

The blog has established so far that SEPs are important and unavoidable, the controller has an unfair advantage, etc. SEPs’ owners may misuse their position and demand high royalties, leading to a monopoly and dominating the market, which leads to unfair market practices, causing patent hold-up. Such practice distorts competition and creates obstacles for small manufacturers who cannot afford the SEPs, leading to a loss of innovation, which is extremely important for the economy. SEP holders license their patents on FRAND terms. Licensing must be:

Fair
Reasonable
Non – discriminatory

However, determining fair and reasonable is till a part of the debate and a challenge in antitrust laws, SEPs are a frequent topic of discussion in market laws, international trade and technology laws.

Conclusion

SEPs are invisible but essential foundations of semiconductors, which are the building blocks of modern technology. The country that owns the most semiconductors and SEPs has a secure future and can be independent, or as we say, “atmanirbhar.” They encourage innovation but also raise competition concerns, regarding monopoly and unfair practices. Balancing innovation and fair access becomes a legal challenge.

In a world increasingly dependent on semiconductors and digital infrastructures, SEPs are no longer tech legal rights; they have emerged as tools influencing economics, technology, and geopolitical power.

References

Inquartik, ‘Case Study: TSMC Patents Analysis’ https://www.inquartik.com/blog/case-tsmc-patents-analysis/ accessed 22 May 2026.

McKinsey & Company, ‘What Is a Semiconductor?’ https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-a-semiconductor accessed 22 May 2026.

World Intellectual Property Organization, ‘Standard Essential Patents (SEPs)’ https://www.wipo.int/en/web/patents/topics/sep accessed 22 May 2026.

European IP Helpdesk, ‘Standard Essential Patent Landscape in India – Part 1’ (4 January 2024) https://intellectual-property-helpdesk.ec.europa.eu/news-events/news/standard-essential-patent-landscape-india-part-1-2024-01-04_en accessed 22 May 2026.

IIPRD, ‘Standard Essential Patents and FRAND Licensing in India: Navigating the Intersection of Patent Law and Competition Policy’ https://www.iiprd.com/standard-essential-patents-and-frand-licensing-in-india-navigating-the-intersection-of-patent-law-and-competition-policy/ accessed 22 May 2026.