Encourage FRAND SEP licensing negotiations through patent pools, intermediaries: The World Bank recommends to low, middle-income nations

Context:

• The World Bank is a global development organization that provides financial and technical support, such as loans, grants, and advice to low and middle-income countries to reduce poverty, boost shared prosperity, and promote sustainable development by funding projects in health, education, infrastructure, and governance. Every year, it issues a flagship World Development Report, focusing on an array of areas, including education, finance, data, and the law (World Bank WDR reports).
• China’s economy has undoubtedly transformed itself in the last few decades, with the country now owning the greatest share of standard-essential patents (SEPs) in key technologies in the world. In May, a GreyB report entitled “Who owns WiFi 7 SEPs?” determined that Mainland China patentees lead the ownership for the number of overall WiFi 7 patent families, with Huawei taking the top spot (May 14, 2025 ip fray article). And the market has started to notice, with organizations such as Via Licensing Alliance (LA) expanding their focus on growing partnerships there. In an interview earlier this year, Via LA’s Chief Licensing Officer Jane Bu emphasized the “paramount” central position China holds in global patent licensing today (July 29, 2025 ip fray article).

What’s new: The World Bank has today issued its annual World Development Report, entitled “Standards for Developmet”, which, as can be gathered from the title, underlines the importance of standards to economic infrastructure (a copy of the full 373-page report is below the box but this is a shorter overview: December 11, 2025 World Bank SEP report overview). According to the report, international standards are delivering hefty benefits to the wealthy nations and large multinational companies that set them. Meanwhile, it warns, developing countries are left “on the sidelines”.

Direct impact: The World Bank’s report marks the first assessment of the role of standards in economic development. As noted by Indermit Gill, Chief Economist of the World Bank Group and Senior Vice President for Development Economics, in a statement today, it is a call to developing countries to make standards a “core component” of their development strategies. The report notably highlights China as an example of ascending from aligning with international standards to “systematically shaping them”. The nation has taken a two-legged approach, which has allowed for this to happen, which involves both mandatory state standards to ensure baseline compliance and voluntary standards to spur innovation and competitiveness in high-tech sectors, the report says.

Wider ramifications:

• The report outlines several recommendations that low and middle income nations can take, including a “hybrid approach” of both open standards and patented technology: “Use open standards wherever possible, particularly in regard to interfaces, but consider adopting proprietary technology if it serves the public interest and does not undermine the overall openness of a system.” It notes that state intervention should be limited as too much would create “compliance burdens, overwhelm government capacity and technical expertise, and make regulations too rigid to allow for innovation”.
• The World Bank also encourages the use of fair, reasonable, and nondiscriminatory terms (FRAND) for SEP licensing agreements. Noting that using technologies such as WiFi, Bluetooth, or 5G requires licenses from a small number of major patentees, it emphasizes that governments should be aware not to encourage market concentration but rather push SEP holders to grant access through more affordable, FRAND licensing deals.
• It recommends patent pools or “intermediaries” to help address competition concerns, as well as strike licensing deals on FRAND terms to lower the barrier to adoption.