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21 December 2017
The European Commission recently presented its guidance on standard-essential patent (SEP) licensing.(1) This is a particularly sensitive issue, as a clear SEP licensing regime is widely regarded to be essential for the functioning and development of the Internet of Things, which is a priority area for the European Union. In the development of the Internet of Things, a variety of different companies will need access to SEP-protected technologies (eg, WiFi and long-term evolution technology standards and 5G technology once adopted). While IT companies already have experience in SEP licensing, with the evolution of the Internet of Things more and more companies (eg, household appliance and automobile manufacturers) will also need access for the development of products.
So far, regulators and antitrust authorities have dealt with the question of the availability of injunctions for SEP holders and the interpretation of fair reasonable and non-discriminatory (FRAND) SEP holders' obligation to license SEPs on the basis of fair, reasonable and non-discriminatory terms. The European Commission's decisions in the abuse of dominance cases against Samsung and Motorola in 2014 and the European Court of Justice judgment in Huawei v ZTE in 2015 clarified the limits of SEP holders' rights to seek injunctions against implementers under EU competition law. However, these cases left a number of important issues unresolved, including what constitutes an offer on FRAND terms and how FRAND should be determined.
The new battleground on which the European Commission was expected to provide clarity, relates to the determination of:
In its guidance, the European Commission decided to adopt a neutral stance and did not explore any of the above issues. The guidance covered the following key points with regard to licensing:
However, further intervention is not excluded – the European Commission will continue to monitor developments and assess whether further measures will be required to ensure a balanced framework for the licensing of SEPs.
The guidance covered the following key points with regard to enforcement:
"The proportionality assessment needs to be done carefully on a case-by-case basis. The Commission feels that considerations need to be given to the relative relevance of the disputed technology for the application in question and the potential spill-over effects of an injunction on third parties."
In its guidance the European Commission has pledged to:
For further information on this topic please contact Aliki Benmayor at Baker McKenzie by telephone (+32 2 639 36 11) or email (firstname.lastname@example.org). The Baker McKenzie website can be accessed at www.bakermckenzie.com.
(1) Communication from the European Commission to the European Parliament, the Council and the European Economic and Social Committee (COM 712 final, November 29 2017), "Setting out the EU approach to Standard Essential Patents".
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