• The European Commission has published its proposed new patent pricing regulation
• It believes that there’s a fairer and more efficient way to deal with the licensing and management of the standard essential patents (SEPs) that are vital to the development and production of technology products such as smartphones and internet of things (IoT) devices
• But according to industry experts and the industry bodies that represent patent holders and those who pay to use SEPs, the proposed regulation would make matters worse, not better

The European Commission is pressing ahead with its contentious new plan to put the European Union Intellectual Property Office (EUIPO) in charge of setting and managing “fair” technology patent prices, something that is currently managed between patent holders and their licensees or ruled upon in courts of law, and it seems that, as the result of some recent tweaks and amendments, the proposed new regulations are now attracting the ire of not just patent holders but licensees too.

The initial plan has, in recent months, been described as “contentious” and “madness” by some with knowledge and experience of mobile patent developments, and it seems the commission decided that some amendments were necessary before the draft regulations (which still need to be discussed and agreed by the European Parliament and the Council of the European Union before being adopted and becoming enforceable) were published late last week. 

According to intellectual property expert Florian Mueller, who shares his thoughts via his Foss Patents blog, the biggest problem with the proposed patent regulation plan is that all parties affected by the move think it stinks.

IP Europe, which represents the interests of patent licence holders, such as Ericsson, InterDigital, Nokia, Orange, Qualcomm and many more, issued a damning statement, noting that it “regrets the European Commission’s decision to propose a harmful and unbalanced Regulation on Standard Essential Patents without a thorough public consultation on its detailed proposals,” and called on the   European Parliament and European member states to “defend the time-tested balance of interests already offered by Europe’s current system of patent protection.”

Collette Rawnsley, chair of IP Europe, noted: “It is ironic and deeply disappointing that the European Commission has chosen the day after World Intellectual Property Day to publish a draft regulation that would undermine intellectual property protection and Europe’s leadership in open standards development and its commitments under international law. We call on the European Parliament and European Union member states to respect and defend the current balance of interests that is the result of decades of case law and industrial policy. This is critical to ensure ongoing investment in global standards, where Europe should maintain its leading role,” she concluded. 

So those who hold and make money from patents aren’t happy with the plan, but what about those that license standard essential patents (SEPs) in their manufacturing processes?

Well, while they believe the EC has the potential to do something helpful and useful, it seems they’re not happy with the draft regulations either, according to the Fair Standards Alliance FSA), which represents their interests. 

In its statement, the FSA noted that while it agrees with the commission that “the system for licensing SEPs needs to be more predictable and transparent” and appreciates the commission’s efforts, it regrets that “the proposal fails to live up to the objectives that earlier drafts sought to aspire to. A number of new considerations have been introduced that risk undermining the implementation of a fair and transparent licensing system for all stakeholders.”

Oh dear. 

Ief Daems, chair of the FSA, noted: “While many details remain to be assessed and further improved, we shouldn’t lose sight [of] the initial and overall objective from the commission with this review: Improving the much-needed licensing of Standard Essential Patents. The commission is acknowledging that companies active in the most innovative EU industries struggle to get licences on fair and reasonable terms. That should not be the case and we trust that policymakers will work to address this effectively.” 

As for Mueller, he made it clear in his blog what he thinks: “The current proposal amounts to a lot of bureaucracy and some uncertainty – but ultimately for nothing… It's useless,” he wrote.

But European Commission bigwigs clearly believe the approach will be a catalyst for technology innovation amongst Europe’s small- and medium-sized enterprises (SMEs): During a presentation last week about the proposed regulations, Thierry Breton, commissioner for the internal market of the EU, noted (seemingly without his tongue in his cheek) that “IP stands for Europe's Industrial Power. With patented technologies, Europe’s industries are at the forefront of innovation, from automotive to IoT. Today, we are modernising our framework for standard-essential patents, making it more transparent, SME-friendly and ready for the economy of tomorrow.” 

It’s likely that Breton’s inbox might be full again today…

You can read about the commission’s proposed regulations in this announcement and about the concerns previously raised by industry experts in this article. 

- Ray Le Maistre, Editorial Director, TelecomTV