EU commissioner: SEP owners ‘cannot go back’ on FRAND promise

Companies that own standard-essential patents (SEPs) must stick to their obligation of licensing them on fair, reasonable and non-discriminatory (FRAND) terms, the EU commissioner for competition has said.

In a speech given to the College of Europe’s Global Competition Law Centre last week, EU commissioner Margrethe Vestager said: “I think the principle is clear: companies that own these patents can’t go back on the promise to license on FRAND terms that allowed their technology to be included in a standard in the first place, if there’s a willing licensee on the other side.”

She said rules on licensing SEPs on FRAND terms “can be a more efficient way than cases to provide guidance and legal certainty”.

But she added such guidelines are developed through European bodies issuing rulings on SEP disputes.

She cited last year’s Court of Justice of the European Union ruling in the Huawei v ZTE case, as well as the commission’s own decisions in two separate SEP disputes involving Motorola and Samsung in 2014, as a way of such bodies assisting in “formulating appropriate [SEP] guidelines”.

The full text of her speech, which WIPR did not attend, was published on her profile page on the EU commission website.

Her comments have been welcomed by the Fair Standards Alliance (FSA), an industry group representing a number of intellectual property rights owners in supporting the strengthening of rules around SEP guidelines.

“We are delighted to see the commissioner giving such a clear message that companies simply must license patents on the FRAND terms that they have committed to,” said Robert Pocknell, chair of the FSA, on February 5.

Vestager’s comments were part of a wider speech outlining the priorities of the commission in tackling anti-competition disputes.

She said the competition commission employs 250 staff to monitor 250 million businesses across the EU, a situation that forces the commission to be more “efficient” with its resources.