This report addresses a critical gap in policy discussions on the standard-essential patent (SEP) licensing ecosystem by examining the perspectives of startups and small and medium-sized enterprises (SMEs) in India. Global policy debates on SEPs typically focus on balancing the interests of SEP holders and implementers, while overlooking the unique challenges faced by emerging firms in intellectual property creation, monetisation, participation in standard-setting processes, and navigating the complexities of SEP licensing. Our analysis finds that many economic concerns surrounding SEPs are overstated when assessed against real-world evidence. Industries built on standardized technologies have thrived under the current SEP framework, where fair, reasonable, and non-discriminatory (FRAND) commitments have supported innovation and interoperability without imposing undue burdens on consumers or follow-on innovators. The key challenge for India lies not in systemic flaws within the global SEP regime, but in strengthening its domestic capacity to effectively engage with and benefit from this ecosystem. The empirical evidence we examined in this report does not support claims of systemic market failure in SEP licensing. While some inefficiencies and transactional frictions remain, these can be addressed through market-based mechanisms rather than regulation, thereby preserving incentives for innovation. Based on these insights, we recommend targeted policy measures to bolster India’s innovation landscape. These include institutional support to increase the participation of Indian firms in standard-setting activities, development of a robust intellectual property regime that enhances competitiveness, and the provision of efficient pathways for resolving SEP disputes, such as fast-tracked mediation and arbitration to avoid protracted litigation. By providing a nuanced, evidence-based assessment, this report seeks to inform policies that may empower Indian startups and SMEs to play a strategic role in the global SEP ecosystem and strengthen India’s overall innovation capacity.
