Afraid you might miss some third-party analysis of the European Commission’s proposed Regulation on Standard-Essential Patents (SEPs)? We’ve got you covered. So much is being said and written that we felt the need to collect key criticisms in one place for easy reference. We thought you might find it useful, too. We will be keeping this live blog up-to-date with links to all the insightful commentary that we spot. The items in red relate to relevant commentary by institutional stakeholders. For our own thoughts, visit our Own Goal campaign page or check out the rest of our blog.

September

25 September, 2024 — At a Politico event on Europe’s digital future, Juan Montero Rodil, chief public policy, competition and regulatory officer, at Telefónica S.A, underlined the critical importance of network security–an issue barely mentioned in the European Commission’s proposed SEPs regulation–for any modern economy. “Would you sit on a plane which isn’t secure? This is the basic rule for whatever we do in society. In this there can’t be a compromise.”

10 September 2024 — A scathing report by former Italian Prime Minister Mario Draghi for the European Commission accused the EU of strangling digital innovation in Europe with burdensome rules and regulations at a time it desperately needs to encourage private investment in R&D. ““Europe must become a place where innovation flourishes, especially for digital tech. A weak tech sector […] will not only rob us of the growth opportunities of the coming AI revolution, it will also hinder innovation in our traditional sectors,” he told journalists in a briefing about the report. A few key excerpts from the report:

• “Europe must profoundly refocus its collective efforts on closing the innovation gap with the US and China, especially in advanced technologies.”
• “Innovative companies that want to scale up in Europe are hindered at every stage by inconsistent and restrictive regulations.”
• “Security is a precondition for sustainable growth…. We are also hugely reliant on imports of digital technology.”
• “EU companies, especially SMEs, underutilise the possibility of formally protecting their Intellectual Property Rights (IPR), which is often necessary to compete globally. Only 9% of SMEs in the EU own formal IPR such as patents, trademarks and designs, compared to more than 55% of large companies. This is partially due to the complex and costly procedures involved in filing IPR applications across fragmented national systems, as well as by a lack of expertise and awareness regarding the importance of protecting IPR.”
• “Vis-á-vis US and Asian counterparts, EU tech players currently lack the scale to support R&D and deploy investments in telecoms, cloud services, AI and semiconductors….
• “The telecommunication equipment and software sector are also key for the EU’s cyber-resilience, security of strategic infrastructures, and protection of citizens’ and business data. Strong EU champions in these fields are being penalised by the loss of access to the Chinese market, China’s fierce competition in developing markets, and lower levels of investment in Europe. “
• Read the full 328-page report here.

7 September 2024 — Clete Williams, a former U.S. trade negotiator, accused the European Union in an opinion editorial published by IAM Media of “aiding and abetting” China’s rise to domination of global wireless communications standards. Referring to the European Commission’s proposed Regulation on Standard-Essential Patents, he said the Commission and the European Parliament “appear to be actively aiding and abetting Beijing’s aspiration to lead in global wireless standards. That’s bad for the economy and bad for national security, both in the United States and in Europe.” He said the EU should “drop its short-sighted and self-defeating efforts to regulate patent licensing negotiations” and partner with the United States to “ensure the next generation of communications infrastructure is one we can rely on to serve our collective security interests.” The article is free to read.

August

15 August 2024 — Announcing an event on patents and innovation in European universities in October, The European Patent Office said Europe faces a key challenge: “while Europe excels in research, effectively bringing these results to the market remains difficult.” It also underlines the crucial role for patents in helping universities monetize their research: “The role of universities in technology transfer—through licensing, research contracts, spin-out companies and collaborative projects—continues to grow. This is especially true in cutting-edge fields like AI or quantum computing. Now, more than ever, understanding how to transform academic research into valuable IP assets, especially patents, is crucial for Europe.”

July

2 July 2024 — China’s official government news service, China.org.cn, has published an article mentioning the role it envisions for standard-essential patents in the expansion of high-quality economic development in the country: “With the annual economic contribution from China’s mobile sector forecasted to exceed $1 trillion by the end of the decade, it is expected that rapid 5G expansion, coupled with China’s recent strides in the evolution of 5G to 5G Advanced (5G-A) or 5.5G, will ultimately create new value across industries and society. In fact, the rapid 5G development and expansion over the last few years depicts continuous innovation at the heart of Chinese modernization drive. Home to about 42% of the world’s standard essential patents issued for 5G technology , Beijing’s commitment to nurturing new quality productive forces in order to inject new energy into the country’s high-quality development is on track.”

June

3 June 2024 — This isn’t a direct response to the EU proposal, but illustrative of a different way of approaching a market that is inherently global. The U.S. Patent and Trademark Office and U.K. Intellectual Property Office have signed a Memorandum of Understanding that provides a framework for collaboration between the two offices on policies relating to standard-essential patents (SEPs). “Standards touch all aspects of modern life, including video compression, wireless communication technologies, computer connection standards, automotive technology, and more,” said USPTO Director Kathi Vidal. “This important collaboration with UKIPO will help us work together toward a fair and balanced international standard essential patent ecosystem that benefits all businesses in our two countries, including small and medium-sized enterprises and new market entrants.” Among other things, the two countries agreed to look for ways to help small- and medium-sized companies navigate SEPs questions and “examine ways of improving transparency” in fair, reasonable and non-discriminatory SEPs licensing.

February

22 February 2024 — The U.S. Chamber of Commerce’s International IP Index for 2024 bemoaned a tendency in some high-income economies to continue to consider policy and regulatory proposals that could undermine IP leadership to foreign competitors. With respect to Europe, the U.S. Chamber said: “The General Pharmaceutical Legislation, Patent Package, and European Health Data Space proposals will limit the availability of regulatory data protection, needlessly expand the ability to grant compulsory licenses, undermine the system for Standard Essential Patent (SEP) licensing and negotiations, and jeopardize trade secrets protection.” It also said the centralization of the licensing process in the EU and the potential for direct government intervention and management of the SEP negotiating process through the EUIPO are deeply concerning.” You can download the full report here.

21 February 2024 — David Kappos, Co-Chair of the Council for Innovation Promotion, described the draft EU SEP Regulation as “proposal that could weaken the continent’s technology sector and empower its adversaries.” In an opinion published by The Brussels Times, he argued that the Commission proposal would replace market forces with bureaucracy: “At its core, it would task bureaucrats – rather than companies within industries that use and understand the standard-essential technologies in question – with determining licensing rates” for standard-essential patents. “Approving the proposal – which is designed to solve a problem that the European Commission’s own study admitted does not exist – would harm European companies without any offsetting benefits for consumers. Parliamentarians would be wise to reject it – before the damage is irreversible,”he wrote. Kappos served as the undersecretary of commerce for intellectual property and director of the United States Patent and Trademark Office from 2009 to 2013.

February 2024 — In debates in the European Parliament leading up to its vote on the proposed SEPs Regulation, Finnish centre-right MEP Henna Virkkunen warned that “reducing patent protection will increase risks as it will discourage European companies from participating in the development of global standards by undermining patent protection.” She said the proposed SEPs regulation “can have a negative impact on Europe’s competitiveness, especially in the development of 5G and 6G technologies, where standard-essential patents play a crucial role.” An out spoken critic of the Commission’s proposed SEPs regulation, she said “If Europe wants to keep its innovative edge we need to have stable and meaningful intellectual property rights such as patent rights.” She said the Parliament’s proposed compromise text on SEPs “creates too much regulatory burden, especially to the standard-essential patent holders.”

January

29 January 2024 — Two co-inventors of the MP3 standard that formed the basis for all of today’s audio and video streaming services spoke with IAM Media about the proposed SEPs Regulation and said the planned reform would harm European innovators. “The most obvious observation is that the regulation was drafted by people who have never participated in the standardisation process,” said Bernhard Grill, Director of Fraunhofer IIS. “From what I have seen, there is a total disconnect between the practical world of standardisation and what the regulation tries to do.” He provides several good examples. You can read the full article here.

26 January 2024 — Kirti Gupta and Chris Borges, two experts at the Washington, D.C.-based Center for Strategic and International Studies (CSIS), but said in an article following the JURI Committee vote that “by devaluing European intellectual property rights, the proposal may ultimately undermine European innovation and influence over critical global technology standards.” They didn’t explicitly call it an own goal, but said as much: “As the European Union is a research and development (R&D) powerhouse for the technologies protected by SEPs, such as cellular devices, internet of things devices, and connected automobiles, this may primarily benefit device manufacturers and licensees that are largely based in Asia.”

25 January 2024 — Juliet Hibbert, a lawyer at Bird & Bird, told World IP Review the JURI Committee vote “shatters the very foundation of a patent” by curtailing the rights of patent owners to go to court before a (new) review by the European Union Intellectual Property Office has been completed. “These are curtailments in the EU of the fundamental right of a patent owner, which gives the owner of the patent the right to stop others from carrying out the invention claimed” if they have not licensed that patent. “This is the very foundation of a patent, wherever in the world it exists.” Tom Foster, a patent litigation partner at law firm Taylor Wessing, told WIPR that “the proposed regulations are particularly burdensome on SEP holders and would cause significant disruption to the licensing industry in the EU without sufficient explanation of why that’s necessary.”

24 January 2024 — In an opinion published on Euractiv, The Council for Innovation Promotion, said the planned SEP Regulation “that would gut Europe’s most innovative tech companies and their millions of workers” and empower Europe’s adversaries, especially China. “The idea that government bodies, rather than industry participants, should control the licensing of essential patents has emboldened China,” they wrote. “Mere weeks after the Commission put forth its proposal last year, Beijing unveiled its own proposal for unilateral rate-setting for essential patents. Then, in December, a Chinese court unilaterally set global royalty rates for a technology owned by Nokia — an unprecedented move, especially since the court is allowing Chinese companies to pay lower royalties than foreign firms.” You can read the full article here.

22 January 2024 — Giuseppe Colangelo, Jean Monnet Professor of EU Innovation Policy at the University of Basilicata and Antonio Manganelli, professor of competition policy and regulation at the University of Rome LUMSA, said the draft SEPs regulation is “unnecessary, imbalanced and dangerous” and would devalue European patents. In an article published in Politico, the academics said the regulation “will likely have adverse effects on European innovation, tech sovereignty and the competitiveness of the European Union in the global arena.”

19 January 2024 — In a policy memo, Adam Mossoff, senior fellow and Chair of the Hudson Institute’s Forum for Intellectual Property, wrote that Western innovators launched the mobile revolution by creating its foundational telecommunications technologies and that the majority of the commercial implementers of patented technologies—the companies that make and sell consumer products that use them—are in Asia, especially China. He said policy-makers in the U.S. and Europe should base policies on evidence, noting that “Data confirm the critical role of reliable and effective patent rights, the rule of law, and courts using due process to resolve disputes.” These have been essential for Western innovators creating the modern world, he said, and will drive the technologies of tomorrow in the internet of things and artificial intelligence.

9 January 2024 — As reported in mlex, the proposed European SEPs Regulation has come under fire from several patent experts including a top judge at the Unified Patent Court and a senior official at the European Patent Office. At an event in the European Parliament, which was preparing amendments to the Commission proposal, Rian Kalden, a judge in the Court of Appeal of the UPC, said the proposed regulation would add delays and costs: “I find it very difficult to see how this proposal could work for any SEP,” she said. Michael Fröhlich, a director at the European Patent Office, said the Commission proposal introduced changes that were “drastic” and would lead to “excessive regulatory burdens and delay access to justice.” Both said the proposed EU rules would play into the hands of China and other regions to the detriment of European businesses. (Article behind a paywall)

November

29 November 2023 — Chris Hannon, a Senior Patent Attorney in the Office of Policy & International Affairs at the U.S. Patent and Trademark Office, told a Euractiv event that Europe, like the U.S., would be well advised to let courts handle commercial SEP licensing disputes rather than try to regulate them in a way that could be counter-productive. Citing the U.S.’s experience with case law and marketplace developments, he said: “The executive branch agencies believe and have full confidence in our tribunals that they’re able to adjudicate these disputes when they come before them. We would urge all regulators to do the same in implementing any proposal, especially those that have a global impact.”  You can listen to his full statement here.

28 November 2023 — The Financial Times publishes a video explainer on how and why the EU proposal for connectivity patents could backfire. “Qualcomm, Nokia, and other patent holders say it will primarily cut costs for Apple and big carmakers at their expense,” the video explains. “They argue that EU-set prices will quickly become the global norm, depriving them of the revenue they need to fund research. They also worry that the EU intervention will spark similar moves in China. Constant litigation and complex rules do slow down progress, but Brussels’s proposed solution could be counterproductive.”

16 November 2023 — 15 prominent European scientists including Karlheinz Brandenburg, the inventor of MP3, have sent a letter to Members of the European Parliament and to the Council of the European Union urging them to rethink their approach to the proposed regulation on standard-essential patents. An article published in Heise Online, a German tech news portal, quotes the letter as saying “We are convinced that this proposal would undermine Europe’s technological competitiveness and would weaken its innovative potential and thereby undermine the competitiveness of the European Union.” They urge the EU to proceed with “extreme prudence” to avoid a “strategic mistake.” You can read the full article here.

October

31 October 2023 — From the DG Grow, I’d like to introduce you to DG Trade department: In arguments before the World Trade Organisation, the European Commission, on behalf of the European Union in a case against China, argued that a recent Chinese decision “effectively deprived” the owners of standard-essential patents “of the rights conferred upon them by the TRIPS agreement. Such a restriction on the exercise of the rights of SEP owners can only be justified in exceptional cases, assessed on a case-by-case basis, if the SEP owner’s use of procedures for patent enforcement is in itself vexatious, oppressive or otherwise abusive.”

30 October 2023 — An article in The Parliament magazine quotes Fredrik Erixon, an economist and the director of the European Centre for International Political Economy (ECIPE) in Brussels, as saying the Commission’s SEPs proposal risked unintended consequences. He laid out two key concerns: the risk of legislation eroding the value of SEPs and the threat of legislation going against European interests. “By decreasing the value of standards, we risk fewer patents being declared to standards, less specialisation and less innovation,” he warned. “With implementers increasingly based outside of Europe in countries like the U.S. and China, these legislative changes look set to redistribute income from Europe to other parts of the world.”

29 October 2023 — Writing in his capacity as President of the Intellectual Property Judges’ Association, Professor Sir Robin Jacobs, a former Lord Justice of Appeal of the Court of Appeal of England and Wales, said the Commission’s proposal for a mandatory 9-month ban on legal action by SEP owners against unwilling licensees represents “a significant curb on access to justice. After all an unlicensed implementer of a patent is a wrongdoer and remains such unless and until it is granted a license under the patent. To impose a substantial delay on access to the courts whilst an administrative body not of the patentee’s choosing proposes a non-binding settlement is likely to be a serious interference with the patentee’s rights and its right to go to court.” Moreover, he said, “An absolute ban could be a gross interference with justice in the case of an implementer determined to defer judgment against it for as long as possible.” You can read the full letter here.

25 October 2023 — Knut Blind, Professor of Innovation Economics at the Technical University of Berlin, told a meeting at the Joint Research Centre of the European Commission that standardisation is important for technological sovereignty. He reminded participants of his paper published in July. One conclusion of that paper was that technology sovereignty could be “a means to achieving the central objectives of innovation policy–sustaining national competitiveness and building capacities for transformative policies. By doing so, we position ourselves between a naive globalist position which largely neglects the risks of collaboration and the promotion of near autarky, which disregards the inevitable costs of creating national redundancies and reducing cooperative interdependencies.”

23 October 2023 — European Patent Office President António Campinos has told the European Parliament’s Legal Affairs Committee that the European Commission refused to consult with the EU patent office while it was developing its conversion new proposal to regulate standard-essential patents. In a letter to the chair and vice-chair of the committee, he underlined the EPO’s experience in technology-related patents, standards and licensing questions; says “some of the proposed changes may be ill-suited to achieve [the Commission’s] stated goals; says the proposed measures “may impose disproportionate regulatory burdens and hamper and delay access to justice, which could result in legal insecurity, not only for patent holders but also for third parties implementing the standards concerned”; says there’s no compelling need for a new regulation at all; and says the proposed regulation generally had “significant drawbacks.” You can read Campinos’ full letter here.

September

28 September 2023 — Justus Baron is Senior Research Director at the Center on Law, Business, and Economic at Northwestern University’s Pritzker School of Law. In a webinar with 4IP Council, he presented his paper “SEP Regulation: proposed mechanisms in determining a reasonable aggregate royalty.” Baron argues that frequent calls for an aggregate cap on royalties from SEPs, including in the European Commission’s proposed SEP Regulation, are unjustified. “The observable aggregate royalty yield in SEP-intensive industries has been shown not to exceed 5%. It is therefore unsurprising that there is no evidence that concerns about potential royalty burdens are hampering the success of technology standards.” After laying out several unintended but likely consequences of a push for aggregate royalty caps he concludes that that part of the Commission proposal is “an unhelpful and unnecessary distraction.”

25 September 2023 — The Economic and Social Committee (EESC) of the EU published a report calling on the Commission to “further investigate the project” and “consider further involving experts and competent authorities, including the Unified Patent Court.” It justified this call as a result of the “major challenge for this project due to its technical and legal complexity.” While the Commission proposed to hand most of the responsibility for regulating SEPs over to the EU Intellectual Property Office–which has no prior experience in patents–the EESC said “The UPC judges, and especially the technically qualified judges, are the most suitable people to deal with the complex technical and legal issues concerned in all three projects.”

25 September 2023 — In a commentary published on Lexology, Michele Giunta of specialised IP law firm Hoffmann Eitle describes the Commission proposal as a gift to patent implementers and a punishment for patent owners. “The proposed Regulation seems to be designed from the [implementer] perspective, as it imposes constraints on SEP holders, such as the registration requirement, the payment of fees to the EUIPO, and the at least one-year delay before being able to go to court, while not imposing any specific constraints on implementers… We therefore see a real risk that, with this Draft Regulation, technological innovation may be stifled rather than encouraged, as it will be more difficult for SEP holders to obtain economic return from royalties, and companies that participate in defining standards may be discouraged from investing further in research.”

21 September 2023 — Gene Quinn, a patent attorney and a leading commentator on patent law and innovation policy, wrote in IP Watchdog that implementer comments to a recent U.S. Congressional inquiry were “self-serving and extraordinarily naïve”, lacking “statements was “any understanding of business reality, or common sense.” For example, he wrote, “How is an R&D company that innovates and sells no tangible product supposed to remain out of bankruptcy and continue as a going concern if they are not able to monetize the technologies they create, and which others incorporate? The product of these innovators is the technology they create, which is theirs because of the patents obtained to protect the innovations others want to use. So, it is disingenuous, if not purposefully misleading, to say that innovators will innovate because they must in order to stay on the cutting edge. The cutting edge of what? Are they supposed to innovate for free, or very little, so that product companies can implement what they have created and literally make hundreds of billions of dollars? Yes, apparently—at least if you listen to implementers.” You can read his whole article here.

20 September 2023 — Brian Pomper, Executive Director of the Innovation Alliance, told a U.S. Congressional hearing that “U.S. policymakers must not follow the lead of China and the European Union to devalue patents essential to standardized technologies.” The European Union’s SEPs proposal “legitimizes China’s efforts to devalue IP,” he said. “We strongly support continued work with our allies to ensure global standards setting processes are technically sound and independent, and to resist efforts by countries like China to leverage state resources and power to promote their own standards “designed solely to entrench market dominance” and undermine international standards development. You can read his full testimony here.

August

10 August 2023 — Didier Patry, a former CEO of France Brevets who is now an independent IP management consultant, makes a strong case that the Commission has misdiagnosed the problem facing European SMEs. Their main handicap globally is that too few of them invest in patents themselves. Another is that the European patent system is too complex, not because of SEPs, but because there are three different kinds of patents. That’s too complex for SMEs to navigate. “Adding new rules and administrative barriers for licensing SEPs will not send the right signal to the European industry,” he said. “This new SEP regulation needs to be seriously reviewed and simplified, based on feed-back from practitioners and SMEs, and in particular from corporations which do not fully use the patent system or do not license out their patents, in order to take their comments into account and provide solutions that may promote the patent filing and licensing activities seriously,” he said.

10 August 2023 — CEN-CENELEC, the main European electrotechnical standards organisation, criticised several aspects of the Commission proposal, including the call to create an entirely new European SEPs database. “Multiple layers of SEP disclosure already exist,” they noted. “Adding a new layer of SEP disclosure is likely to increase administrative burden on participants to standardization activities and disincentivize innovators voluntarily bringing their contributions to standards. This would also create market confusion such that standards implementers may not be fully aware of declared essential patents given that they might be relying on the wrong SEP database,” it said. You can read their full response here.

10 August 2023 — AFNOR, the French standards organisation, has criticized the Commission proposal for potentially increasing the administrative burden facing SEP owners in Europe (“European standards organisations already have their own database” of SEPs) and insists that the Commission’s fixation on essentiality checking is Quixotic: “the assessment of whether a patent is essential to the implementation of a standard is only conceivable ex-post; It cannot be done ex ante, when the standard is being drawn up.” You can read their full statement here.

10 August 2023 — David Cohen, president of Kidon IP Corp., commented on the Commission proposal in his personal capacity as a SEPs expert and strategist for more than 15 years. He called DG Grow’s proposals “unbalanced”, “containing complicated one size fits all mandatory provisions that will unfairly skew” the alternative dispute resolution (ADR) negotiation and its likelihood of success. “The scope of the proposed regulations necessarily makes one wonder why they are being proposed, why now, and what need is being met. As has been detailed extensively in the literature, the cumulative royalty of most devices that infringe SEPs is less than 5% of the average sales price.” Moreover, he notes, “Even a casual review of SEP litigation filed in Europe will show that SMEs are almost never targeted in EU courts by SEP owners; … almost the entirety of the automotive industry is licensed under the Avanci 4G pool and the vast majority of all SEP litigation in Europe involves large, multinational corporations. So the classic question – is cui bono – Who benefits? Given the massive lobbying by Big Tech implementers and their astroturfers, it is reasonable to conclude that all this effort is really for their benefit.”  

10 August 2023 — Canon, the Japanese electronics company, very diplomatically questioned whether the Commission had correctly assessed the need–or lack thereof–for a new regulation. “Canon doubts that sufficient evidence of problems has been obtained prior to the announcement of the present Regulation, especially of problems affecting SMEs who in practice are rarely, if ever, the target of SEP licensing,” it said. Canon also described the Commission’s proposed remedies to a problem whose existence Canon questions in the first place as “over-ambitious,” “heavy-handed” and “out of proportion to any actual problems which exist in SEP licensing.” You can read their statement in full here.

10 August 2023 — Avanci, which manages the biggest independent patent pool for SEPs in the automotive sector, said the proposed regulation, if adopted, “would lead to a significant, and unwarranted, increase of the bureaucratic burden on SEP licensing” and “are likely to hamper” the development of patent pools.” You can read their full feedback here.

10 August 2023 — The European Patent Institute (epi) represents European patent attorneys. It described the Commission proposal as a set of “radical changes” to European patent law not justified “by any empirical evidence” and unlikely to achieve the Commission’s objectives. Among other specific criticisms, it notes that an EU SEPs register “wouldn’t add any value to implementers in an international environment” and says the added value of a new out-of-court dispute resolution (ADR) mechanism is “questionable” given that there are already well-established and accepted ADR systems. You can read their full response to the Commission here.

10 August 2023 — Dr. Bowman Heiden is Executive Director of the Tusher Initiative for the Management of Intellectual Capital at the Haas School of Business at UC-Berkeley and Co-Director of the Center for Intellectual Property (CIP) in Gothenburg, Sweden. He criticized a number of aspects of the European Commission’s impact assessment and proposal in response to the latter’s request for feedback. Among other points, he notes that a market analysis does not justify regulatory intervention today; more time is needed to assess the impact on national and international legal commitments to the protection of property and access to justice; the “asymmetrical” nature of the proposal, with all the burden falling on SEP holders and none on SEP implementers; and the fact the Commission proposal “all but requires SMEs to pay SEP licenses to every SEP holder in the EUIPO database.”

10 August 2023 — GovStrat, a consultancy firm dedicated to help SMEs contribute to Standards Development Organisations and define their Intellectual Property Rights strategy, says the Commission proposal is based on insufficient evidence. It cites in particular the “very small number of SMEs consulted” by the Commission, although the latter has publicly described the initiative as being intended to help European SMEs. You can read its full feedback here.

10 August 2023 — Adam Mossoff, a law professor at George Mason University in Arlington, Virginia, said the European Commission’s SEPs proposal, warned of “significant” implications of regulatory over-reach: “Regulatory regimes that create additional costs without eliminating proven inefficiencies in clearly identified systemic market failures will stifle innovation and throttle economic growth with ill effects for both producers and consumers,” he told the Commission. He argues that the EU policy initiative “does not reflect proper evidence-based policymaking by the EC.” Rather, he said, “It is in fact driven by policy rhetoric derived from “patent holdup” theory, as reflected in Commissioner Breton’s statement in his official release of the Proposed SEP Regulation on 27 April 2023 that ‘We are really going to bust these de facto monopolies.'”

10 August 2023 — JAMA, the Japanese Automotive Manufacturers Association, criticised important aspects of the Commission proposal, including its assumption that there will be a plentiful supply of SEP experts who are also neutral for the purpose of conducting essentiality checks. While JAMA generally supports the Commission initiative, it said it is “concerned that if the essentiality checks, FRAND determination and expert opinions on aggregate royalties are (or are perceived as being) of insufficient quality and/or biased, the institutions and procedures set forth in the Proposed Regulation wi‖ become an additional burden for the industry rather than a relief.” By “industry”, we assume JAMA is referring to the automotive industry, because it’s clear that JAMA’s proposal for a panel of three experts for each essentiality check would only add to the cost and complexity of the process that the Commission proposed and which we presume SEP owners would initially have to pay for. You can read JAMA’s full feedback here.

4 August 2023 — The Chamber of Deputies of the Italian Parliament told the European Parliament that “the indirect and far-reaching international effects of the proposal should be assessed with regard to compliance with the proportionality principle.” In a routine commentary in the context of the Commission proposal, the Italian Parliament also said “the cost-benefit analysis in the Commission’s impact assessment also lacks convincing data.” You can read its full statement here.

4 August 2023 — Fredrik Erixon and Oscar Guinea, Director and Senior Economist at the European Centre for International Political Economy (ECIPE), warn that the Commission proposal, if implemented as written, would “harm Europe’s economic and institutional interests in the world of patents and standards.” The Commission proposal “causes confusion and undermines [the] EU’s competitiveness,” it said. The Commission’s view that SEP holders have too much market power and that they are using it to the detriment of SEP implementers is at best “a one-sided view of the observed problems in the SEP system” and its proposed remedies “may do irreparable harm to the delicate balance” between SEP holders and SEP implementers, it warned. You can read their full statement here.

July

26 July 2023 — In a hearing of the U.S. Senate Judiciary Committee, Kathi Vidal, Director of the U.S. Patent and Trademark Office, said the European Commission’s proposed SEPs regulation was “extremely problematic.” In a world in which standards are designed to be global, “individual countries weighing in in these ways can be extremely problematic,” she said. You can watch the whole hearing here.

25 July 2023 — Siemens AG, the German industrial group, didn’t mince words: “We believe that there is no need for this EU Regulation,” it said (emphasis in the original). It also warned of a likely “increase of costs for all stakeholders which in consequences leads to higher consumer prices”; said the Commission should be encouraging patent pools rather than discouraging them; encouraged the use of existing alternative dispute resolution systems including those of the World Intellectual Property Organisation, International Chamber of Commerce and the new European United Patent Court. You can read their full statement here.

June

14 June 2023 — The Hudson Institute, a U.S.-based thank tank, criticised the Commission proposal as a gift to China. The latter has been trying to reduce the amount that its handset manufacturers have to pay to western companies whose technology is included in many global standards. “The primary beneficiaries of the European Commission’s proposal will be Chinese phone makers, and the losers will be research-intensive innovators in the West who created these revolutionary technologies,” the Hudson Institute said in its response to the Commission’s ongoing consultation.

12 June 2023 — Respected independent industry expert and analyst Patrick Moorhead calls the EU’s draft SEPs regulation “frankly alarming.” In a long analysis on Forbes.com, he writes: “These regulations seem certain to do a lot of harm,” which isn’t a surprise when you assign bureaucrats to set prices. I have no idea why the EU thinks that agency officials with no experience in operating a business, let alone negotiating SEP deals, will be able to administer prices for patents that affect everything from cellular telephony to semiconductors, but that’s what they’re proposing to do.” Read the full article on Forbes.com.

11 June 2023 — Industry analyst Keith Mallinson criticised the Commission’s the anticipated methodologies for setting aggregate and individual SEP royalty charges by the new competence centre at an expanded European Union Intellectual Property Office (EUIPO). “There is no basis whatsoever, let alone supporting evidence, to infer there is market failure or harm to be fixed, or that established benchmarks for royalty charges need to be replaced,” he said in response to the Commission’s public consultation. You can read his full comments here.

3 June 2023 — Mang Zhu, Chief IP Strategy Officer and Head of Patent Asset Management for ZTE Corporation, took issue with one of the European Commission’s main claims to justify a new SEPs regulation: alleged over-declaration of patents that are “essential” to a standard. “The increased number of patent declarations or over-declarations is a natural consequence of the ETSI IPR rules, which require that any potentially standard relevant patent must be disclosed,” she told Tim Pohlmann, CEO and Founder of IPlytics, in an SEP Couch interview. “This increases transparency and one can always evaluate single portfolios during licensing negotiations to identify what is essential and what is not,” she said. You can read or listen to the whole interview here.

May

31 May 2023 — The European Association of Research and Technology Organisations (EARTO), whose network counts more than 350 public and private research and technology organisations in more than 32 countries, mostly in Europe, expressed “great concern” with several aspects of the proposed regulation, describing it as “unbalanced,” “too far-reaching” and “out of tune with other EU policies.” It said the proposal, if adopted as written, would “disrupt the global process for technology transfer”, “severely increase costs”, and trigger copycat action by other jurisdictions. Read EARTO’s full paper and recommendations here.  

30 May 2023 – Klaus Grabinski, the most senior judge of the EU’s new Unified Patent Court, sharply criticised the European Commission’s draft regulation. “I fully support the Commission’s aim to enhance transparency, but access to justice is a core fundamental right,” he said. Grabinski questioned why SEP owners should not be able to bring infringement actions in the EU while they could in the UK and China. You can read the full story here.  

22 May 2023 — Science|Business convened a roundtable of experts on standard-essential patents to discuss the European Commission’s recent proposed regulation. The event took place in the context of a larger Science|Business event on Europe in the Digital World. In case you missed the event, you can read Science|Business’s write-up of the roundtable here. You can also watch the full recording of the discussion here. 

15 May 2023 — The Dutch Ministry of Economic Affairs and Climate Policy, in a note sent to the Dutch Parliament, sharply criticizes the EC SEPs proposal for

• “the intrusiveness of the initiatives relative to the perceived magnitude of the problem (proportionality);
• the additional regulatory and administrative burden for both patent holders and companies implementing standards, including SMEs;
• the potentially adverse confluence of the proposal with the launch of the Unified Patent Court and existing (market) mechanisms such as patent pools and existing alternative dispute resolution options;
• investing the execution of technically highly complex procedures related to patents to the EU Intellectual Property Office (EUIPO), which normally focuses on trademark and design rights;
• and the risk that by regulating the licensing practice for SEPs, the EU loses attractiveness both as a standardization environment and the place to resolve disputes effectively and efficiently” (via Deepl translation).

You can find the ministry’s memo to the Dutch Parliament (in Dutch) here and a longer statement here.

April

26 April 2023 — In a hearing before the U.S. Senate Appropriations Committee, U.S. Secretary of Commerce Gina Raimondo expressed the Biden Administration’s ‘concerns’ over the EU SEPs regulation proposal. She also communicated them to the EU Commission. You can see the hearing here or read Foss Patents’ write-up of the hearing here.

20 April 2023 – Even before the new Commission proposal was published, a group of former senior U.S. government officials sent the European Commission a highly critical letter in response to a leaked draft of the SEPs proposal.   

14 April 2023 – In a letter to the European Commission, ETSI, the European Telecommunications Standards Institute, strongly urged the EU executive agency to reconsider its then-draft Regulation on Standard-Essential Patents. “We are particularly concerned of an obligation on SDOs, such as ETSI, to provide certain information to the Competence Centre (the EUIPO),” ETSI Director General Luis Jorge Romero Saro writes in the letter. “This places a significant burden on SDOs, in particular the requirement to provide details of “known implementations of the standard”. ETSI does not have the tools or resources to comply with such an obligation. We also doubt the usefulness of this obligation, as those who wish to implement ETSI’s standards will be more aware of the relevant implementations than our members or we would be.” He also said the creation of a second register in the EUIPO “would only confuse and possibly disincentivize innovators to disclose their SEPs in Europe” and that “the proposed creation of inter alia a register in an EU agency risks damaging EU’s leadership in digital standardisation” and undermining European competitiveness.