Sixty-day public comment period open until 13 December 2018

[Brussels: Thursday, 11 October 2018] IP Europe – the coalition of IP intensive companies – and a number of international businesses involved in developing and using wireless technology standards, have completed a draft CEN-CENELEC Workshop Agreement titled “Principles and guidance for licensing Standard Essential Patents in 5G and the Internet of Things, including the Industrial Internet”[1]

Previous generations of wireless standards (2G, 3G, 4G) have been implemented primarily in smartphones and the ICT sector, but the new 5G open wireless standard has been specifically designed to encourage new sectors to participate in the ‘Internet of Things’. Many new businesses – large and small – are expected to implement the 5G standard in products for the first time.

The principles and guidance distilled in the draft CEN-CENELEC Workshop Agreement will help new entrants understand the licensing environment and successfully negotiate licenses on Fair, Reasonable and Non-Discriminatory (FRAND) terms. This will be a vital first step to the European Union maximising its share of the $11.1 trillion of economic value predicted to be generated by the ‘Internet of Things’ by 2025.[2]

Francisco Mingorance, Executive Secretary of IP Europe, said: “The better SMEs and others understand wireless technology licensing the more the technology can flourish. As organisations with decades of experience in licensing Standard Essential Patents (SEPs) – both as owners and users – we hope our experience will make it easier for SMEs and new industries to access the technology.

“Providing information that supports a fair and efficient marketplace will help us transition from licensing the ICT sector to licensing new entrants and other industries. It will increase the incentives for SMEs and others to develop products and services for the ‘Internet of Things’ and enable developers to reinvest in the next generation of wireless technology. We all have a shared interest in realising the full potential of the ‘Internet of Things’ ecosystem.”

The CEN-CENELEC Workshop Agreement contains six best practice principles for conducting Fair, Reasonable and Non-Discriminatory licensing negotiations, and supplementary guidance on current practices in the ICT sector. Additionally, a Q&A section provides answers to some of the fundamental questions that businesses may have on first entering the wireless technology licensing market.

Kerry Miller, Chairman of the CEN-CENELEC Workshop Agreement group[3], said: “This document – developed and distilled from the work of many experts in the field– is a genuine effort to contribute to the creation of a successful and efficient Internet of Things. We hope these principles and guidance will also benefit the work of the European Commission’s Expert Group on SEP licensing as they examine how to ensure an efficient marketplace for new entrants.

“It is our initial effort to capture the licensing principles that have enabled the rapid development and deployment of 2G, 3G and 4G standardised mobile communication technologies in the smartphone and ICT sector. It is testament to their success that six billion smartphones are predicted to be in circulation by 2020.[4]

“A sixty-day public comment period will now begin on the principles and guidance that we have put forward and we very much welcome participation and feedback during that period. We also intend to evolve our guidance over time to help businesses and policymakers understand other licensing practices and solutions as new markets open and mature.”

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The six principles set out in the CEN-CENELEC Workshop Agreement are:

1. Owners of patent rights which are essential for using standardised technologies (SEPs) should allow access to that patented technology for implementing and using the standard.
2. Both the SEP owner and the potential licensee should act in good faith with respect to each other with the aim of concluding a FRAND licence agreement in a timely and efficient manner.
3. Each party should provide to the other party, consistent with the protection of confidentiality, information that is reasonably necessary to enable the timely conclusion of a FRAND licence.
4. “Fair and reasonable” compensation should be based upon the value of the patented standardised technology to its users.
5. A SEP owner should not discriminate between similarly situated competitors.
6. If the parties are unable to conclude a FRAND licence agreement within a reasonable timeframe they should seek to agree to third party determination of a FRAND licence either by a court or through binding arbitration

About the CEN-CENELEC Workshop Agreement:

The Workshop reached agreement on 5 October on a stable draft which is now available for public review and comment until 13 December 2018.[5] Comments can be submitted directly to the Workshop Secretary, Ms Melissa Jean (melissa.jean@afnor.org), using the commenting form.

Comments received will be reviewed by the Workshop during January 2019.  The consensus outcome of the Workshop will then be published as a CEN-CENELEC Workshop Agreement (CWA).

CEN-CENELEC Workshop Agreements are “publications intended to satisfy market demands for a more flexible and timelier alternative to the traditional European Standard (EN), but one which still possesses the authority derived from the openness of participation and agreement inherent in the operations of CEN or CENELEC and their national members. It is this openness that distinguishes the CWA from documents developed by industry consortia featuring limited participation (such documents are commonly known as de facto standards).”[6]

‘Contributors to’ the CENELEC Workshop Agreement:

Participants and contributors to the CEN-CENELEC Workshop Agreement titled “Principles and guidance on licensing Standard Essential Patents for 5G and the Internet of Things (IoT), including the Industrial Internet” include Ericsson, France Brevets, InterDigital, IP Europe, Mitsubishi, Nokia, Orange and Qualcomm. The document will now be published on the CEN-CENELEC website for a 60-day public comment period, before the workshop group make final amendments. At this point companies and organisations are free to become signatories of the document to show their support for its principles.

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About IP Europe

IP Europe brings together R&D intensive European companies and research institutes committed to innovation, from SMEs to global enterprises and non-profit research entities operating in a variety of industrial sectors. They all share a common goal: to maintain, at all policy levels, strong patent protection for innovators and support recognized fair, reasonable and non-discriminatory standardisation policies adopted by consensus that preserve fair compensation for innovators. IP Europe supports the use of Injunctive Relief against patent infringers and free riders that rely on R&D investments made by others to earn higher profits.

IP Europe was originally launched by Ericsson, Airbus and France Brevets. The Fraunhofer Gesellschaft participates in IP Europe in its capacity of academic advisor.

For more information, contact: 

Laura Lichinski
laural@europa-insights.com
+32 493298882

[1] ftp://ftp.cencenelec.eu/EN/News/WS/2018/SEP/CWA-for-public-comments.pdf

[2] See McKinsey Global Institute study on ‘mapping value beyond the hype’

[3] Mr. Kerry Miller serves as Chairman of the CEN-CENELEC Workshop Agreement group, in addition to his role as Head of IP Regulatory Affairs at Nokia

[4] See ‘More than Six Billion Smartphones by 2020’, IHS Markit

[5] https://www.cencenelec.eu/news/workshops/Pages/WS-2018-011.aspx

[6] See ‘Characteristics of a CEN-CENELEC Workshop Agreement’