“The leaked proposal takes what used to be closed-door negotiations backed by a judicial process and puts the entire standard-setting apparatus into the hands of a continent-wide bureaucracy. , which favors implementers and throws the balance away from innovators.”
The European Union is reportedly considering sweeping out new regulations on licensing and litigation of standard-essential patents (SEPs), and fair-minded observers have taken responsibility at the European Commission (EC). I wonder if there are any sane adults out there who owe it. The EU’s proposed new regulatory regime is due to be unveiled by the European Commission’s (EC) Directorate General for Internal Market, Industry, Entrepreneurship and Small and Medium Enterprises (DG GROW) on his April 26th. And a recently leaked draft suggests that the proposal would include sweeping new regulations that would effectively end the licensing and litigation of SEPs that currently exist.
According to a leaked draft, the proposed regulatory regime would require SEP owners to register their patents in a database maintained by the EU Intellectual Property Office (EUIPO), making the EUIPO the sole arbitrator for all SEPs. person. The EUIPO determines which patents are in fact standard essential through a so-called “essential check” exercise. The EUIPO determines the royalty rate for the license of SEPs, mandates the publication of license agreements, and identifies potential SEPs that have not been registered, are identified as essential, and are not specified at the established royalty rate. No Licensing or Litigation. All relevant SEPs. In other words, the EUIPO will take over completely from top to bottom as far as SEP litigation and licensing are concerned.
Oh irony!
As the EC is ready to debate the wisdom of multi-industry acquisitions that favors authoritarian statutes on meaningless FRAND (i.e. fair, reasonable and non-discriminatory) licensing promises, The European Union continues to promote unfair trade. It has filed a lawsuit against China at the World Trade Organization (WTO), arguing that “China’s policies are extremely damaging to European innovation and growth.”
As explained by the European Commission in February 2022:
Since August 2020, Chinese courts have issued rulings known as “anti-litigation injunctions” to pressure EU companies with high-tech patents to prevent them from legitimately protecting their technology. I’m here. Chinese courts have also used the threat of heavy fines to dissuade European companies from suing foreign courts.
This put European tech companies at a huge disadvantage when fighting for their rights. Chinese manufacturers are demanding these anti-litigation injunctions to benefit from cheaper or even free access to European technology.
Fourteen months later, as the dispute between Europe and China heads for ruling, the European Commission next week began advocating that governments take over the SEP controversy, giving patent owners the right to sue their pending patents. Take a method of deprivation. Unless the SEP is registered and actually found to be essential (currently an area of negotiation and a matter for eventual judicial decree), it is unlikely that the requested royalties will be within a reasonable tolerance. No infringement is permitted unless
Even China’s actions in the ongoing WTO dispute pale in comparison to the brazenly schizophrenic property grabs predicted by DG GROW.
China has been targeted by the WTO for issuing an anti-litigation injunction, China’s attempt to take over all SEP licenses and litigation, which requires SEP litigation in China. At least it’s a case where fairness is clearly at stake. But the leaked proposal takes what was an independent negotiation backed by a judicial process, leaving the entire standard-setting apparatus in the hands of a continent-wide bureaucracy.
The European Commission is ostensibly very concerned that China is interfering with the legally acquired rights of European tech companies, and at the same time, the Commission is vowing to thoroughly crack down on standard essential patents. I support taking over the . of the underlying technology. What is the European Commission thinking? No, China, you have to stop what you are doing. Is it because we want to take over full and complete control of SEPs and, as a result, all standard-setting and related innovations more generally? It’s also special for
In a post-property world, innovators don’t use patents
There is a very ignorant worldview that suggests that innovators innovate, and innovators innovate, so it doesn’t matter if they can still make money by the innovation they innovate. Obviously that’s not true.
Innovators will innovate if first the capital markets support their efforts and consumers approve of the desirability of the innovations brought to market. Capital markets shrink in markets where innovators are unable to adequately pay the costs of their innovation. Investors find it safer, if not more lucrative, to invest elsewhere. It’s that simple.
Patents are the lifeblood of innovation because they are the gateway to the investment superhighway and the revenue that ultimately makes the risk versus reward calculation at least acceptable. Making it too difficult to generate enough income from innovation forces investors, even innovators who want to continue to innovate, to do other things and make different choices. Some avoid innovation altogether, while others pursue different types of innovation that require less capital and can be protected by proprietary mechanisms other than full disclosure of a patent portfolio.
For those who continue to innovate, after governments get rid of anything like property rights and institute schemes of bureaucracy in their place, the reduction to trade secrets and siloed innovation instead of cross-platform is a big deal. We can expect a rise. Currently implemented as standard.
