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.  

September

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 — 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 — 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 — 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.