Draft Regulation – The EU Commission Proposes A New Framework For The Licensing Of Standard Essential Patents (“SEPs”)

By:  Peter Camesasca, Martin Juhasz & Tristan Reis (Covington Competition)

Under the aegis of DG GROW, but in close consultation with DG COMP, the Commission seeks to address what some have perceived as lack of transparency and predictability in the licensing of SEPs.  The Commission had previously expressed its concern in its Intellectual Property (IP) Action Plan of 2020 and 2017 Communication and suggested that this situation could lead to a cumbersome and costly licensing process for both owners and implementers of SEPs.  The Commission sought feedback via a public consultation between February and April 2023.

The draft SEPs Framework Regulation would:

• Establish a Competence Centre to register SEPs at the European Union Intellectual Property Office (“EUIPO”) and an electronic register and database for SEPs that includes extensive information about SEPs;
• Oblige the owners of SEPs to register any claimed SEP in the database;
• Create additional essentiality checks through the Competence Centre;
• Establish an out-of-court procedure to determine fair, reasonable, and nondiscriminatory (”FRAND”) conditions and aggregate royalties for use of a given standard.

Relevance

At a time of growing standardization, the Draft SEPs Framework Regulation has the potential to materially change the landscape of SEP licensing in the EU.  It will impact both net licensors and net licensees alike, developing further the rules and procedures contained in precedential Commission case practice and EU case law (see European Commission in Samsung and Motorola and European Court of Justice in Huawei v. ZTE) and in the Horizontal Guidelines that are being revised (see here)…

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