The role of patent pools is an important one. They help ensure that valuable innovation does not remain constrained by patent protection, but can be used to advance shared understanding, as well as mutual commercial benefits for the rights holders or ‘licensors’.

However, not all patent pools are built for financial gain. The Medicines Patent Pool, for example, was created by a number of non-profit organisations and measures its success in dollars saved, not dollars earned.

What is a patent pool?

A patent pool is an agreement between two or more patent holders to licence the technology protected by their patents to one another and/or third parties.  In other words a patent pool is a way for companies and third parties to work together to develop new products and innovations that make use of patented intellectual property that may belong to another owner.

The WIPO definition

The most accurate definition of a patent pool is provided by the World Intellectual Property Organization (WIPO) in a March 2014 paper ‘Patent Pools and Antitrust – A Comparative Analysis’.

In the paper, prepared by WIPO’s secretariat, the following definition of patent pools is given:

“Patent pools can be defined as an agreement between two or more patent owners to license one or more of their patents to one another or to third parties.”

The patent pool also determines the share of any royalties paid, which may be from one member of the pool to another, or from a third party who pays both/all licensees for access to the licence pool.

When are patent pools used?

The WIPO document notes that patent pools are often seen in relation to complex technologies, where existing patented innovations may be required to develop new and efficient solutions.

In these instances, the technologies involved are typically mature. There may be a significant number of existing patents held, and advancing innovations further forward may require the use of patented ideas.

However, there is a second case when patent pools may also be used. WIPO explains: “Pools also frequently represent the basis for industry standards that supply firms with the necessary technologies to develop compatible products and services.”

In this case, when access to second-party and third-party patents is a matter of interoperability, the relevant technology or market may still be in a state of development.

Examples of popular pools

Some of the most popular patent pools are a necessary way to enable the licensing of technologies used in consumer electronics and communications, for example:

DVD6C Licensing Group

Created by a group of eight companies including Hitachi, JVC Kenwood, Mitsubishi Electric, Panasonic, Samsung, Sharp, Toshiba and Warner Bros, the DVD6C Licensing Group was a one-stop shop for companies wishing to license patents relating to DVD production.

It was discontinued on January 1st 2020 as high-definition formats such as Blu-ray have overtaken DVD, whose standard resolution was just 480p.

One-Blue

DVD6C was eventually succeeded by One-Blue, a one-stop licensing programme for Blu-ray products which launched in 2011. This time, six major electronics and entertainment brands were involved: CyberLink, Hitachi, Panasonic, Philips, Samsung and Sony.

From an initial remit relating to Blu-ray Discs (BD), the scheme was expanded in 2017 to also include Ultra HD Blu-ray (UHD) products.

Via-LA

The Via Licensing Alliance, or Via-LA, was founded in April 2023 after Via Licensing Corp acquired its forerunner, MPEG-LA. This in turn was created back in 1996 to license patent pools that used video compression standards like MPEG-2 and MPEG-4.

All of these examples give a clear idea of why a patented technology developed by one company, such as DVD, Blu-ray or MPEG, might be licensed to another company involved in the production of software or hardware relating to that patent.

But what is the role of patent pools in other sectors, such as healthcare? What is a patent pool used for in medicine?

The Medicines Patent Pool

The Medicines Patent Pool is deliberately designed to save money, as a way to make important treatments more available to developing countries.

Critical intellectual property is licensed voluntarily to the MPP by its rights-holders, which in turn allows it to be used to develop new treatments for diseases like HIV, tuberculosis and hepatitis C (and, since 2020, COVID-19).

WIPO reports that in the first decade of the 21st century, the cost of first-generation HIV medicines fell from over $10,000 per patient per year to less than $70, a drop of over 99%.

This was thanks largely to markets like India, where medicines were not patented. But as developing countries introduce patents on medicines in order to comply with international trade rules, this starts to prevent generic drug manufacturers from producing low-cost versions.

Patent pools like the MPP help to counteract this chilling effect, by providing low-cost access to essential intellectual property via a licensing model that’s easy to navigate, removing some of the roadblocks to continued affordable medicine for emerging economies.

The Medicines Patent Pool in numbers

Between January 2012 and the end of 2023, according to its own published figures, the Medicines Patent Pool:

  • Supplied over 43.5 billion doses of treatment
  • Provided access to MPP-licensed products in 148 countries
  • Reduced patient years of treatment by over 118 million
  • Saved $1.9 billion on medicine licences
  • Averted 38,000 deaths

By the end of 2030, the MPP forecasts that it will save $3.9 billion in licensing costs and prevent 170,000 fatalities.

Benefits of patent pools

The numbers above speak for themselves, but the role of patent pools goes beyond saving lives and money; they are also an important driver of economic performance.

Some of the benefits of patent pools listed by the UK government include:

  • Efficient one-stop access to a pool of complementary licences
  • Reduced negotiation and admin costs for licensors and licensees
  • Easier financial planning due to fixed upfront royalties
  • Frequent access to discounts on royalties
  • Less risk of ‘patent thickets’ where access to multiple licences becomes very complicated

There may be some technical obstacles to navigate, for example where a non-disclosure agreement conflicts with a patent pool’s requirement for innovations to be made public, but these are likely to arise only on a case-by-case basis.

Overall, the benefits of patent pools – whether profit-making or charitable – make them a compelling licensing structure in any industry where access to critical intellectual property is needed to enable further advances to be made.