Monday, February 26, 2024

New rules to promote standard-setting innovation in new technologies

The Legal Affairs Committee adopted on Wednesday, with 13 votes for, no votes against and 10 abstentions, its position on new rules to support the so-called standard-essential patents (SEPs). These patents protect cutting-edge technologies, such as Wi-Fi or 5G, which are essential to a technical standard, meaning that e.g. no Internet of Things (IoT) products can be developed without using them. They also play a key role in the development of connected vehicles, smart cities and technologies to mitigate climate change.

The aim is to encourage SEP holders and implementers to innovate in the EU and create products based on the latest standardised technologies that will benefit businesses and consumers.

Emphasis on small companies

MEPs want to task the European Union Intellectual Property Office (EUIPO) to create a SEP Licensing Assistance Hub as a one-stop shop to provide free-of-charge training and support to small and medium-sized enterprises (SMEs) and start-ups. EUIPO should also help small companies to identify which standard essential patent they will need to use and thus pay for when developing their products and on how to best enforce their rights, including how to be paid if they hold such a patent.

EUIPO competence centre

MEPs agreed on tasking EUIPO with new powers to help reduce litigations and increase transparency. EUIPO will create a register of holders of standard essential patents, it will verify which patents are really essential to a particular standard, what is the fair payment for the use of such a patent and provide help in related negotiations between companies. EUIPO should also set up an electronic database with detailed information on SEPs terms for registered users, including academic institutions.

The EUIPO competence centre would also train evaluators of SEPs and conciliators mediating between parties and establish rosters of EU candidates for these positions. MEPs added provisions to ensure these candidates have the necessary qualifications and are impartial. The competence centre would further cooperate with national and international patent offices as well as authorities of third countries dealing with SEPs to get information about the SEPs-related rules outside the EU.

Quote

Following the committee vote, rapporteur Marion Walsmann (EPP, DE) said: “The new instruments will bring much-needed transparency to an opaque system, make negotiations fairer and more efficient, and strengthen European technological sovereignty. For instance, in 5G almost 85% of the standard essential patents are in fact non-essential. The new essentiality test will stop the occurrence of over-declaration and strengthen EU SEP holders´ position in global markets. SEP holders will also benefit from an increased number of licenses, faster agreements, more predictable returns, and a reduced risk of litigation. SEP implementers, 85% of which are small and medium-sized enterprises, will benefit from legal and financial predictability.”

Next steps

The agreed text needs to be adopted by Parliament as a whole before talks with EU countries on the final shape of the legislation can start.

Background

The current SEPs market is fragmented, as there is no organisation in charge of informing firms about who holds which key patents and how much they ask for their use. This makes it difficult for companies to develop new devices using the technologies covered by these patents. The Commission proposed a new regulation on standard essential patents in April 2023 as part of the ‘EU patent package’. The proposal reacts to Parliament resolution from 11 November 2021, where MEPs called for a strong, balanced and robust intellectual property system.

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