Tech firms ramp up pressure on EU over ‘flawed’ SEP proposals
Letter to MEPs insists patents plan would increase Europe’s “dependence on technologies developed elsewhere” | Vote on proposed amendments attracted a slew of abstentions | Proposal condemned as “a worrying development” that moves the EU “closer to an act of self-harm”.
European members of parliament (MEPs) are being urged to vote against a controversial proposal designed to regulate standard-essential patents (SEPs) on the basis that it is “deeply flawed” and will “hamper access to justice”.
Technology membership group IP Europe sent an “urgent” email to all MEPs on February 22 imploring them to reject the proposal amendments outlined in the draft report by German MEP Marion Walsmann.
The organisation—a coalition of technology firms and research institutes—counts Ericsson, Nokia, Orange, Fractus, Fraunhofer, Philips, Sisvel, Dolby, InterDigital, Panasonic and Qualcomm among its members.
With its much-scrutinised framework, first published in April 2023, the European Commission set out to implement ‘fair’ royalties for SEPs through licensing on fair, reasonable and non-discriminatory (FRAND) terms.
But the proposal immediately faced widespread criticism, with Qualcomm’s senior vice president and general manager for technology licensing, John Han, sharing his fears to WIPR that the Commission simply “doesn’t get our market”.
In response to such mounting concerns, the European Parliament’s Committee on Legal Affairs (JURI) published an October report by Walsmann on the draft regulations that suggested some compromise amendments.
Key vote marred by abstentions
In a majority vote held in late January, JURI adopted Walsmann’s position on the controversial new rules to support standard-essential patents (SEPs).
However, out of 23 members, 10 abstained—raising concerns that substantial opposition to the amendments remained.
At the time, patent licensing company Sisvel criticised the outcome of the vote as “worrying development”, arguing that it moves the EU closer to a major act of self-harm.
However, JURI rapporteur Walsmann insisted that the new rules “will bring much-needed transparency to an opaque system, make negotiations fairer and more efficient, and strengthen European technological sovereignty”.
IP Europe has now escalated calls for European lawmakers to reject the proposal, noting that “despite the efforts of some MEPs to mitigate the damage the regulation would do, the amendments we have seen do not go far enough and do not address many of the important legal issues we have raised”.
Proposals ‘violate human rights’
In its recent letter, the coalition recommends that all MEPs vote against the report and avoid “an own goal for Europe”.
IP Europe notes that “it supports the European Commission’s stated objectives of greater transparency, balance and efficiency in the licensing of standard essential patents in order to continuously improve the system and to incentivise European firms to participate in standardisation”.
However, the coalition argues that the proposal as amended by the JURI Committee will not achieve those objectives and “is deeply flawed”.
It further contends that if the plan is adopted:
● it will increase costs and administrative burdens to EU innovators, including SMEs;
● it will cause delays, uncertainties, and complexities in licensing negotiations; and
● it will violate fundamental rights, notably the right to property (including IP) and access to justice, and EU law generally.
The proposal, adds IP Europe, is also “disproportionate and not backed by evidence showing the need for regulatory intervention”.
The effects of the plan will be detrimental to European technological leadership and global competitiveness, adds IP Europe, because it will reduce incentives to invest in the European development of new technologies and open standards.
What’s more, the coalition insists that it would stifle European leadership in open standards and increase Europe’s dependence on technologies developed elsewhere—leading to “more proprietary solutions that lock in end-users” to closed platforms.
“Given the expedited nature of the procedure at the European Parliament, IP Europe believes there is no other choice at this stage but to vote against the report,” concludes the letter.
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