Crucial Commission SEP licensing meeting ends without resolution, providing temporary relief to owners

A meeting held last Friday inside the European Commission between various directorates-general that was supposed to finalise the wording of a keenly-anticipated Communication on the licensing of standard essential patents broke up without resolution, IAM has learned. It had been expected that following very strong advocacy from the highly influential Competition DG the document would back a “license for all” approach to making SEPs available. This would have represented a major victory for big technology companies and other implementers, which had been lobbying hard for such an outcome, as well as a rejection of the so-called ‘use-based’ or ‘value-based’ licensing approach favoured by many SEP owners.

Given where things seemed to be heading last week, the fact that nothing was finalised on Friday must be regarded as a win for the SEP side of the debate, though it could be that this is more a temporary reprieve than anything final. IAM understands that the document will go back to the various DGs taking part in the process – including Internal Market and Research and Innovation, as well as Competition – for more consideration. It also seems likely that further input from industry will be requested, with an emphasis on individual businesses giving their views and sharing their experiences directly, rather than doing it through lobbying bodies. When all is said and done, though, the Competiton DG not yet getting its way does indicate that there is significant sympathy with the SEP owners' position inside the Commission.

The Communication was due to be made public on 29th November, but this latest development must put that date at risk. Although not a legally-binding document, a paper from the Commission outlining its views on SEP licensing for the age of 5G and the Internet of Things would be extremely influential, not only at the negotiating level, but also in courts hearing SEP-related disputes. This is even more the case given that, up to now, Europe has been seen as taking a much more balanced approach to SEP and FRAND issues than the US and many Asian jurisdictions, where the needs of technology implementers have gained the upper hand over those of the entities that created the technology in the first place.  

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