Controversial standard essential patent reforms backed by European Parliament committee

Legal Affairs Committee JURI adopts proposals, with 13 of 23 votes
Brussels, Belgium 02.12.2022 European Parliament

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The Legal Affairs Committee (JURI) of the European Parliament has adopted heavily criticised proposals to regulate standard essential patents (SEPs).

With 13 votes for, no votes against and 10 abstentions, MEPs have agreed that the EU Intellectual Property Office (EUIPO) will be given new powers to create a competency centre including a register of holders of SEPs and create an SEP Licensing Assistance Hub.

The register is intended to verify which patents are really essential to a particular standard and what is fair payment for the use of such a patent, as well as provide help in related negotiations between companies.

The EUIPO will also set up an electronic database with detailed information on SEP terms for registered users, including academic institutions.

Under the new rules, the licensing hub will act as a “one stop shop to provide free-of-charge training and support to small and medium-sized enterprises (SMEs) and start-ups.”

The MEPS hope the competency centre will reduce litigation and increase transparency.

Discussing next steps, the agreed text needs to be adopted by the European Parliament as a whole before talks with EU countries on the final stage of the legislation can start.

Following the committee vote, rapporteur and German MEP Marion Walsmann, said that the new instruments would bring much-needed transparency to an “opaque system, make negotiations fairer and more efficient, and strengthen European technological sovereignty”.

For instance, she pointed out that in 5G almost “85% of the SEPs are in fact non-essential”. The new essentiality test will stop the occurrence of over-declaration and strengthen EU SEP holders’ position in global markets, she added. 

However, some have pointed out that 10 of the 23 JURI members present elected to abstain from the vote.

Head of IP policy and advocacy at Nokia, Collette Rawnsley, said on LinkedIn: “It is striking that over 40% of the JURI MEPs did not support this.”

While Rawnsley supported the European Commission’s objectives to provide greater transparency, efficiency and predictability for SEP licensing, she added: “I do not believe the draft SEP regulation or the JURI Committee’s amendments will deliver on these goals. This initiative threatens to undermine incentives for European firms to participate in open collaborative standards development.”

She urged the European Parliament to take time to scrutinise the proposal, assess its impact on Europe’s global competitiveness and consider carefully the significant concerns expressed by industry stakeholders and independent third parties alike.

The proposals have weathered a barrage of criticism. The European Patent Office (EPO) president António Campinos wrote in a letter dated 18 October to the chair and vice chair of the Legal Affairs Committee that the EPO was not consulted on the proposed regulation, despite being “well versed in the complex relationship between patents and standards”.

Discussing the proposed register for SEPs, Campinos said that there were structures already in place – for exmaple, the administration of the newly-created Unitary Patent (UP) had been entrusted to the EPO instead of creating a new EU agency or entrusted to an existing EU agency with no experience in the field of patents.

SEPs protect cutting edge technologies, such as Wi-Fi or 5G, that are essential to a technical standard, meaning that, for example, Internet of Things products cannot be developed without using them. 

They also play a key role in the development of connected vehicles, smart cities and technologies to mitigate climate change. 

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