Brussels, November 25, 2020 – The Fair Standards Alliance (FSA) welcomes the European Commission’s goal to bring more transparency to standard essential patent (SEP) licensing.
According to the European Commission’s ‘IP Action plan’ published on 25 November, the Commission intends to “improve transparency and predictability in SEP licensing.”
Since its launch 5 years ago the FSA has advocated more transparency on licensing of SEPs, particularly those reading on connectivity standards. FSA has long argued that increased transparency would encourage IoT players to uptake those standardised technologies more swiftly as well as innovate in the space more confidently.
The FSA also agrees with the Commission that a “resilient, green and competitive economy needs tools to facilitate access to critical IP protected technologies”. Indeed, access to SEP licences must be ensured for any business that uses standards in its technologies and wishes to license relevant SEPs. If we want to create a flourishing innovative economy, it is critical that any company can get a licence to SEPs, without restrictions.
The Commission’s intention to create an independent system of third-party essentiality checks for patents that are claimed to be essential to technology standards could also be a positive step, but its success will depend on how it will be structured in practice. For example, it would be imperative to ensure that that the checks are done by a truly independent party, who was an expert in the field, had knowledge of the standard, and did not have any interest in the outcome of the test. The system should also leave it to courts to ultimately determine whether certain patents are indeed essential to a given standard.
We note the Commission’s plan to “facilitate industry-led initiatives to reduce frictions and litigations among players in specific sectors.” As a voice of numerous innovative member companies from across the value chain on SEP licensing topics, the FSA is looking forward to maintaining constructive discussions with the Commission in pursuit of solutions.
But it must not be forgotten that SEP licensing challenges are not confined to any particular sector, and that potential solutions in one sector will have significant spill-over effects on other sectors. With the advent of the IoT, virtually every industry will be affected. As the Commission itself acknowledges in the IP Action plan, “although currently the biggest disputes seem to occur in the automotive sector, they may extend further as SEP licensing is relevant also in the health, energy, smart manufacturing, digital and electronics ecosystems.”
The Commission plans to “consider reforms to further clarify and improve the framework governing the declaration, licensing and enforcement of SEPs.” We encourage the Commission to discuss with businesses as to whether and what type of reforms might be warranted. Indeed, given the fast-paced nature of connected industries, industry-led solutions may well be more appropriate.
Should the Commission nevertheless pursue reforms, the FSA encourages the Commission to ensure that any such rules would indeed be “efficient and fair”. To ensure at least the basic level of the much desired legal certainty and predictability for business, any such rules should be in line with the Commission’s and EU Court of Justice’s case law, as well as Commission’s own rules, e.g. on the use injunctions in SEP disputes or application of the ‘proportionality’ principle in legal proceedings seeking injunctions.
We encourage the Commission to engage with the industry to make sure that any further proposals would reflect and fit business realities – otherwise, they will not be ‘effective’ and will further stall rather than encourage innovation.
“We look forward to working with the Commission and all stakeholders to find solutions to enable innovation to thrive across all sectors in Europe and beyond,” – said Robert Pocknell, the Chairman of the FSA.