No, the sky is not falling—despite the flurry of recent warnings to that effect from supporters of the European Commission’s proposed regulation on standard-essential patents, also known as SEPs.  

First, a bit of background: the European Commission in April 2023 proposed to regulate SEPs licensing. IP Europe and many other organizations active in the development of technology standards opposed this proposal, arguing that it would discourage companies and research organizations from investing in the kind of fundamental research and development that forms the building blocks of international open standards such as 4G, 5G, future 6G, digital audiovisual compression, and wireless charging standards.

These standards are not consumer products: they are the foundation on which interoperable consumer and B2B products are built. They have enabled smartphones and smart factories and audio and video streaming, among other things, with relatively little friction.  

Some groups have recently argued that without the SEP regulation, innovation in Europe would decline and die.  

A question of perspective  

But innovation does not begin with companies that make smartphones, computers, digital televisions, smart cars or smart home appliances. Without the underlying technology standards they employ, these things could not “talk” to one another or transmit digital audio and video at the high level of quality that consumers enjoy today. These standards do not appear by magic. They require millions of euros in R&D and a consensus-driven process that can take years, if not decades, to result in a robust technology standard. 

The #InnovationStartsHere campaign currently running on our social media channels is a reminder that the years of R&D and innovation that go into developing international open standards is also innovation and comes first. 

The European Commission decided, in February 2025, to drop the proposed SEP regulation from its 2025 Work Programme. Ever since, supporters of the proposal have been airing arguments to keep the proposal alive.  Some of their arguments are misleading. Consider the following:  

Red tape  

• Claim: The SEP regulation “is not red tape”, “reduces burden” and “simplifies the fragmented regulatory environment.”  

• FACT: First, the proposed SEP regulation would have imposed new compliance burdens only on the companies that create the standards, not those that implement them. So, what may not be burdensome red tape for major smartphone and automotive companies, it certainly would have been burdonsome for European SEP holders such as Ericsson, Nokia, Philips, Orange, Fraunhofer and Sisvel. Second, it’s hard to see how the creation of an entire new organization to police SEPs at the European level would have “simplified” anything at all. It would have largely duplicated the activities of existing structures such as European standards bodies (e.g. ETSI), European courts and the European patent office (EPO) and the Unified Patent Court, in addition to corresponding international organizations and courts. Moreover, since SEP implementers would also have to deal with some of these processes (and added costs) without an effective solution, all stakeholders would have added layers of unnecessary bureaucracy and costs with no value added compared with what already exists today. This would be particularly burdensome for SMEs, which can least afford such red tape. Europe would be better advised to let the Unified Patent Court show what it can do on SEPs before creating another whole bureaucracy at the EU Intellectual Property Office, which has no experience in patents.  

Access granted  

• Claim: Without the SEP regulation, industry in Europe could be “denied access to essential infrastructure such as 5G.” 

• FACT: All implementers, including SMEs, can start using standardised technologies to create new products without a licence. Commercial negotiations take place after they are put to use. SEP holders offer licences under fair, reasonable, and non-discriminatory (FRAND) terms. These negotiations are based on long-established practices and case precedents that incentivise good-faith negotiations. In the IoT segment, market solutions known as patent pools are increasingly on offer. Moreover, what is often ignored is that pricing in most cases is transparent and public: about 25 euros—paid just once—per smartphone or “connected” car, that costs several hundred or tens of thousands of euros, respectively. Courts in Europe and other jurisdictions have repeatedly found that some implementers refused—sometimes for more than a decade—to negotiate in good faith or accept FRAND terms and conditions for the use of the patented technologies.  

Those who live in glass houses… 

• Claim: Supporters of the proposed SEPs regulation claim that patent owners are predominantly non-European, and therefore SEP licensing is a kind of tax on European companies that implement standardised technologies in their products.  

• FACT:  Europe boasts many companies which are leaders in the development of fundamental technologies, technology standards and SEPs, including Ericsson, Nokia, Orange and Philips amongst others. On the other hand, many of the implementers which have spent by far the most time and money arguing for the proposed SEPs regulation are themselves based overseas. They include some of the biggest smartphone and digital equipment manufacturers in the world. Europe is a net receiver of SEP licensing royalties.  

Strategic autonomy or dependency?  

• Claim: Supporters of the proposed SEPs regulation say: “Europe’s strategic dependencies, including for security and defence systems, are also at stake.” They argue that European security and defence systems “increasingly depend on smart devices for real-time data, situational awareness, and autonomous systems.” They cite technologies that enable video encoding and decoding as being importarnt to security cameras, drones, and body cameras, among other uses.  

• FACT: Those are all excellent reasons for Europe to ensure that companies it can trust continue to contribute to the development of such fundamental, mission-critical technologies. That means protecting incentives for companies to invest in the financially risky development of new fundamental technologies that contribute to new standards. One sure-fire way to ensure that those fundamental technologies are developed outside Europe’s borders is to create additional costs, excessive bureaucracy and delays in licensing for the companies that still develop such technologies in Europe. If European companies cannot maintain their participation in global standards development, critical fields may be dominated by proprietary technologies or by standards set outside of Europe.  

While colourful arguments make for interesting reading, it does not necessarily make them true. We hope that fact-checking some of the arguments made in the public debate can provide clarity on why the draft SEP regulation was not aligned with the EU’s competitiveness and strategic autonomy goals and why the withdrawal of the proposal is the right decision.