The positive vote on the European Commission’s proposal for a regulation on standard essential patents (SEP Regulation) in the European Parliament’s Legal Affairs (JURI) Committee is an important milestone. The Fair Standards Alliance (FSA) is optimistic that following the JURI vote, we are one step closer to important changes in the currently highly unbalanced and instransparent SEP licensing system in Europe.
On 24 January, the JURI Committee adopted its position supporting the SEP Regulation. The JURI Committee is the lead committee on this legislative dossier at the European Parliament, with its vice-chair Marion Walsmann as rapporteur.
The FSA welcomes the JURI report as a step in the right direction and appreciates that it balances the interests of various stakeholders in the ecosystem, including standards contributors, standards users and consumers. The FSA looks forward to continuing working constructively with policymakers to refine the text so that the SEP Regulation achieves the goals set by its drafters.
The Commission’s legislative proposal attempts to redress imbalance, recognising that SEP holders can gain undue leverage over licensees. The proposed measures include a register of patents that patent holders claim to be essential to standards, a requirement to get some of them assessed as to whether they are indeed essential and specify the terms on which any patents would be licensed. A nine-month mediation would be an intermediate step before litigation can be initiated. Critics seek to portray these as controversial. Yet, many fearmongering claims have little basis in fact.
For example, contrary to some assertions, the SEP Regulation does not seek to redistribute revenues, nor does it unduly restrict property rights The SEP Regulation focuses on providing greater transparency and predictability in the currently woefully inefficient licensing system. A more balanced system of licensing standardised technologies such as WiFi or 5G will enable the European industry to deliver more innovation for consumers.
Evelina Kurgonaite, Secretary General of the FSA, has said:
“The status quo is not working in favour of the European competitiveness, as data shows that over one billion euros flowed from standardised technology licensees in France and Germany into the hands of foreign holders of SEPs in 2022. Innovative European industry is a net licensee of standardised connectivity technologies. It is therefore hardly surprising that so many companies, large and small, from a broad range of sectors have spoken in favour of the Regulation. The fact that so many support this Regulation in itself suggests that there are many underlying issues in the market that warrant a regulatory initiative.”