Scope

The legal act will affect patent holders, when the invention is considered to be a standard (SEP), such as 5G-technology or USB. Standards are developed by businesses through standard-setting organizations (SSO). Such technology is essential for many devices or activities in everyday life and are therefore inevitable.

Relevance

Although the initiative is not of EEA-relevance, it is worth having knowledge of the proposal when dealing with SEP’s and FRAND-licensing.

Key takeaways

The proposal concerns the licensing of SEP’s. In order to use a SEP, third parties will need a license to use the patent. SSOs require SEP-owners to provide licenses on FRAND-terms (fair, reasonable, and non-discriminatory). Today, many disputes arise during negotiations of FRAND-terms, and the system of obtaining a license is non-transparent and unforeseeable.

The Commission Proposal creates a framework for SEP-licensing. SEP-owners must register their standard in a database at EUIPO and will be object to a maximum royalty rate when licensing their technology. In addition, EUIPO will facilitate dispute resolution to determine FRAND-terms. The framework will not aim to standardize the FRAND-terms in advance, as the exact contents of a license should be negotiated between the parties.