By Mattia Fogliacco

Markets for Technology - especially those covering standardised technologies - are frequently described as “broken”. It is said they are plagued by uncertainty and litigation that put a brake on innovation and create obstacles to the development of new business verticals in areas such as IoT. This constant dysfunctionality refrain is presented to policy makers as an argument for regulation that would reduce the value of standard essential patents (SEPs), so making them far harder to license at price points reflecting the value of the R&D investments that underpin them.

Such claims, though, do not stand up to serious scrutiny. If markets for standardised technology were genuinely “broken”, what would we expect to see? In such a scenario, courts would be overwhelmed by SEP-related lawsuits, standards would be stalling, adoption would be slowing, prices for consumers would be rising well above the rate of inflation and new generations of technology would be arriving slowly or not at all. Yet none of these things are happening.

Market truths

Take a look at legal disputes. In its 2025 report, Standards and the European Patent System, the European Patent Office was clear: “Most SEP licensing agreements between SEP holders and implementers are reached without litigation.” In a similar vein, a 2023 European Commission study – Empirical Assessment of Potential Challenges in SME Licensing – found that:

… observable outcomes do not indicate the existence of pervasive “opt-out” from standards-related innovation as a consequence of SEP licensing conditions; i.e. it does not appear that the observed challenges in SEP licensing are sufficiently severe as to systematically discourage potential contributors from participating in standards development, or discourage potential implementers from creating products that use technology standards subject to potential SEPs.

This is not what a broken market looks like.

It’s a similar story when you examine connectivity-related technology. In 2024, GSMA Intelligence observed that: “5G has been the fastest mobile generation rollout to date, surpassing one billion connections by the end of 2022, rising to 1.6 billion connections at the end of 2023 and 5.5 billion by 2030.” It’s a similar story in Wi-Fi. The Wi-Fi Alliance launched WiFi 7 on 8 January 2024 with the expectation that by 2028 2.1 billion devices would be in use; and it’s not just projections. “Enterprise purchases of Wi-Fi 7 have shot up since early 2025. All major vendors have full portfolios of the new technology, and the price is unusually low,” says Siân Morgan, Research Director at Dell’Oro Group.

Not failing, scaling

Far from failing, the market is scaling. Products underpinned by connectivity standards are more widely available than they have ever been before, at prices that make them affordable for consumers of all types and sizes. This is something to be celebrated, not to put in peril.

That is not to say that some friction doesn’t exist in SEP licensing. No, it is real. However, it is also normal in complex commerce. Unfortunately, just as real, and far more insidious, is the fiction of friction - the claim that the system is unfair and unworkable. It is made with only one intention: to justify “solutions” that are really about shifting bargaining power.

Here’s the reality: most SEP licensing deals are done with little or no friction. Parties come together, discuss the issues, swap information and reach agreement. That is how it usually works.

Of course, litigation does exist – and the bigger the sum at stake the more likely a dispute will be. There is no need to apologise for this. It is a natural part of any functioning market: in business, parties do not always agree and sometimes cannot find a way through to a solution. In such circumstances, the courts or other dispute resolution fora may get involved. This happens in real estate, shipping, energy, M&A, banking and any number of other areas; it is bound to happen, on occasions, with SEPs, too.

But here’s the fundamental point: as most deals get done without legal disputes, “the market is broken” is not a diagnosis. Instead, it is a strategy.

Now, none of this means the system is perfect. Standards-based products are complex; portfolios are large; supply chains are global. Technology convergence is bringing new players to the negotiating table. These are often unfamiliar with licensing industry practices; SMEs are increasingly entering the discussion, especially with the rise of IoT.

Holdout as a business strategy

But complexity is not dysfunction. It simply means you need market infrastructure, forms of intermediation, long-term vision and a willingness to do the right thing to navigate the challenges, all alongside credible rules and meaningful incentives.

These components are currently in place or realistically achievable, so why do we keep hearing the same dysfunction script?

Sometimes it is honest frustration, the reflection of real limitations. But often it is not. It is tactical instead. That’s because there is one move that changes negotiation dynamics more than any other: delay.

If you can postpone paying for long enough - while continuing to ship - delay becomes a profit centre. This is where the “friction” narrative is useful. It gives you the opportunity to propose the “fix”, which is all about weakening remedies to counter the infringement of SEPs in the knowledge that when such remedies lose credibility, delay stops being a risk and becomes a rational plan. Welcome to holdout.

Holdout is not a slogan, it is a playbook that goes something like this: ignore letters from the SEP holder; slow‑roll responses; ask for “one more” dataset; refuse to share basic sales information; keep the calendar moving; and keep products flowing. In such a scenario there is only one winner – and it is not the party that has invested its time and money to develop foundational connectivity standards.

When people hear “injunction”, they treat it like the end of a commercial story. But that is a mistake. In markets for technology, remedies are often the beginning because they force negotiation to move from principle to price. The American law professor Adam Mossoff calls this the “injunction function”. What he means is that credible injunctions secure property rights and facilitate exchange. They keep negotiations honest by putting a genuine cost on time

By contrast, if squatting on someone else’s property carries no credible consequence, you don’t get a balanced market, you get incentives to wait, to hold out.

Room for improvement

All that said, genuine friction does exist. The question is what to do about it. The answer is not blunt regulation or sweeping rules that hard‑code delay. Instead, we should be looking to create new forms of intermediation. In other words, we do what functioning markets always do: we build infrastructure.

There are three levers that work:

1. Embrace transparency. The practical friction in many deals is information asymmetry. Transparency doesn’t eliminate disagreement, but it does narrow the fight.

2. Build aggregation and licensing solutions. Patent pools exist because bilateral licensing at scale is expensive. Pools standardise terms and reduce transaction costs. They can also publish benchmarks - rates, terms and patent lists - that help the market price risk. What’s more, we can build on patent pools by creating new licensing solutions for the market. Take one example: just three months after the launch of an SME licensing royalty fund for the Sisvel Cellular IoT pool, the first deal was agreed. This rapid turnaround underscores the effectiveness of market-led solutions. So far, 90 SMEs have been identified and contacted as potential recipients of funding; we are already talking to 10 of them. Compare and contrast with how long it takes to legislate.

3. Look beyond litigation. Global products create global disputes, but litigation is not the only way to solve them. For example, WIPO has built ADR mechanisms specifically for SEP/FRAND disputes. ADR is not “soft”, it is efficient: it reduces cost, preserves confidentiality and gets parties to an outcome.

If your goal is to reduce friction, you expand the tools that de‑escalate. The problem is that when policymakers confuse friction with failure, they over‑correct. When regulators focus on short-term gains and forget long-term societal welfare, they protect special interests.

Furthermore, over‑correction produces second‑order effects. Without closed, proprietary systems the risk is that standards-based innovators will scale back on their investments in R&D. At the same time, they will look for venues in which they feel they can still effectively enforce their rights. Thus, disputes multiply and positions harden as innovation falls. The friction you wanted to reduce becomes worse.

Reject the fiction

The right question is not: “How do we eliminate friction?” It is: “How do we reduce friction without breaking incentives?” The answer is greater transparency, more aggregation and bold new forms of intermediation, alongside the expansion of ADR.

Balance, credible remedies and evidence-based policy making will enable the knowledge economy to thrive. That is why it is so important to recognise the fiction of friction and to reject the narratives it spurns. The claim that the SEP licensing market is fundamentally broken is no more than a lobbying play - sometimes strategic, sometimes opportunistic. If we design policy around such a claim, we risk manufacturing the very problem we seek to solve.

At Sisvel, we refuse to believe this is the best the licensing industry can offer. We will continue to focus on developing and delivering market-based solutions that reduce frictions by meeting the needs of both licensors and licensees. This is the way forward. We invite you to join us.

Mattia Fogliacco is President and CEO of Sisvel International. This article is based on a speech he gave at IPBC Europe in Paris in March 2026