BRUSSELS – Before publishing any proposal regarding the licensing of Standard-Essential Patents (SEPs), the European Commission (EC) must ensure that it reflects and protects a sustainable open standards ecosystem. The proposal must be backed up with objective evidence and be fit for purpose.

The proposal should not be one-sided, nor biased against certain business models. Imposing additional obligations, administrative burdens and costs on SEP owners that rely on licensing revenue to continue investment in innovation would be disproportionate and unwarranted.

We strongly believe that the EC needs to address the critical problem in the marketplace; the practice of “hold-out”, where bad faith actors delay the conclusion of a licence and payment of legitimate, fair, reasonable, and non-discriminatory (FRAND) licence fees, for as long as possible. This creates vast competitive distortions in the marketplace. It is paramount that SEP holders can seek legal redress against “hold-out” without delays or limitations to their IP rights.

Patrick McCutcheon, Managing Director of IP Europe, highlights the issues further, saying “any such limitations in the forthcoming EC proposal will only exacerbate the issue of hold-out, potentially impacting FRAND-based licensing so fundamentally that Europe will be an outlier to the rest of the world.” He continued, “Any EC proposal to support SEP licensing needs to encourage continued investment in R&D as this will positively impact talent retention and employment in Europe and ensure continued contributions of the best technologies to open standards development.” 

 “Further reducing returns from investment in innovation will be detrimental to the EU’s leadership in standardisation and to its strategic autonomy. FRAND licensing of key enabling technologies has been the basis for today’s and tomorrow’s key technologies, such as 5G and 6G,” he concluded.

 Any EC proposal on SEPs should not undermine the efforts of the Commission’s Trade department to support the interests of IP holders and their right to enforce their IP rights, nor those of the Commission’s Research and Innovation department to encourage participation of European innovators in open standards development.

It would be tragic if, on World IP Day, the Commission adopts a proposal on European SEPs that curtails IP rights and undermines incentives to engage in open innovation.

We therefore urge the Commission to take account of the EU’s wider policy objectives and engage in a meaningful dialogue with industry stakeholders, especially those that will be adversely impacted, before adopting any proposal.

For further information, please contact IP Europe’s Managing Director Patrick McCutcheon