EU lawmakers disputing the European Commission’s withdrawal of a bill on standard essential patents face a steep legal test at the bloc's highest court as they challenge the limits of the executive branch’s power to pull draft laws.
The European Parliament will have to clear a high bar if it is to convince judges that a controversial bill on standard-essential patents was wrongly scrapped by the EU's executive arm. To win, lawmakers must prove that the European Commission overstepped its powers when it pulled the proposal from legislative talks and thus breached concrete treaty obligations.
The parliament’s legal basis is laid out in in Article 263 of the Treaty of the Functioning of the EU, which allows the EU Court of Justice to review the legality of acts by other EU bodies on grounds such as infringement of the rules, procedural errors, lack of competence or misuse of powers.
The lawsuit was confirmed after a vote in a parliament plenary session on Tuesday (see here), which backed a committee recommendation to challenge the withdrawal of the SEP Regulation from the commission’s annual work program at the start of the year (see here).
Parliament President Roberta Metsola had already lodged the lawsuit* on Nov. 14 to meet procedural deadlines.
The request before the EU's highest court is to annul this withdrawal. If the parliament wins, the bill would revert to where it was before, namely about a third of the way through the negotiations process.
— Divisions escalated —
Originally, the draft law sought to introduce transparency into licensing for technologies such as 5G and Wi-Fi. It would have brought relief to companies implementing SEPs, including phonemakers and carmakers, that are worried about unequal bargaining power and opaque licensing demands from patent holders.
It was opposed by companies that develop and own these standardized technologies for adding regulatory burdens and the legal complexities it proposed.
The bill has split lawmakers and industry since it was proposed in 2023, a rift that has now deepened with the court dispute set to play out over the coming few years.
Officials justified junking the proposal because of a lack of “foreseeable agreement.” Some lawmakers aren’t happy with this, given that the parliament agreed on its own negotiating position with a significant majority in 2024.
Socialist lawmaker Tiemo Wölken called it a “flimsy excuse” that was “clearly fabricated,” and center-right lawmaker Marion Walsmann said the commission axed the bill “without informing parliament, without consulting the co-legislators [member states and parliament], and worse still, without giving any reasons.” Both lawmakers helped negotiate the bill in parliament.
Other lawmakers argue that opposing the commission’s decision goes against its agenda of simplifying EU law for businesses and results in an institutional confrontation.
— Possible arguments —
The parliament will have to overcome a precedent that largely favors the commission’s discretion to withdraw its own proposals.
The court will examine whether the decision complied with the treaties’ minimum legal standards, especially the obligation to state reasons under Article 296 in the Treaty of the Functioning of the EU and the duty of “sincere cooperation” between the EU’s legislative institutions, namely the Council of the EU, which represents member states, and the parliament, in Article 13(2) in the Treaty of the EU.
These arguments were used in a decade-old case in which national governments challenged the withdrawal of a macro-financial assistance proposal.
— Past rulings —
The court ruled in 2015** that the commission may withdraw its own legislative proposals even if member states’ work is not completed, as part of its treaty-based right of initiative.
Judges held that a withdrawal is lawful so long as the commission provides “cogent evidence” or arguments to explain its reasoning and respects the principle of sincere cooperation, even if negotiations with the parliament and member states are advanced.
Back then, the commission said the amendments from the parliament and member states would have reshaped the proposal so drastically that it no longer served its intended purpose — a line of reasoning that the court accepted as sufficient.
The ruling may leave parliament with a high bar, since the court supported the commission’s withdrawal in a case where ministers had already consolidated their position. On the SEP Regulation, while parliament had completed its work, member states had not when the withdrawal was announced at the start of this year.
The 2015 ruling also fed into a broader reform in how the EU handles withdrawals with the introduction of the so-called better law-making framework — a set of rules meant to make the legislative process more transparent and predictable.
Other past rulings from the high court show a limited obligation for the commission to state elaborate reasons for legislative withdrawal.
In a 2012 ruling*** related to EU asset-freeze sanctions, judges held that the commission's requirement to provide justification is sufficient if it is clear in context, even if brief. And in a 2019 case**** on a citizens’ initiative, the court again stated the commission’s broad discretion in legislative initiative and subjected its choices to only limited judicial review.
— Policy and market shifts —
The SEP Regulation was published at the end of the commission’s previous mandate. Ursula von der Leyen’s second term as president began a year ago with an agenda sharply focused on deregulation to support a market that competes with the US and China.
The SEP bill, viewed by some as heavy-handed, became an early target of the commission’s pivot in priorities.
Before the EU Court of Justice, the commission may point to changes in these policy priorities to defend the withdrawal as a legitimate reassessment rather than an institutional overreach.
Since 2023, when the regulation was proposed, the patent licensing and litigation market has seen significant advancements shifting the industry. Those include a new venue for SEP litigation, and soon mediation (see here), at the Unified Patent Court or revisions to EU competition guidance on technology licensing (see here).
Industry has also moved to fill some of the gaps that the SEP Regulation sought to address, such as the recent pledge from major SEP holders, including Nokia and Qualcomm, to offer confidential mediation to smaller businesses as a first step in certain SEP disputes, and to suspend litigation while talks are ongoing (see here)
This could strengthen the commission’s argument that market-led mechanisms are emerging without legislative intervention.
By the time the Court of Justice delivers its judgment, and possibly reverts the bill to its place in the lawmaking pipeline, the SEP landscape in Europe will look different from the one the commission set out to regulate in 2023.
— Parliament’s push —
The SEP Regulation is not the only bill that has been withdrawn and put the commission at odds with parliament. Lawmakers will vote next week on whether to challenge a decision to scrap the AI Liability Directive (see here).
It remains to be seen if this challenge will be escalated to the Court of Justice, as was the case for the SEP Regulation. If so, the court may choose to join the cases if they both land on its register.
At stake is whether such challenges mark a more assertive parliament willing to test the limits of the commission’s executive right of initiative.
* C-727/25
** C-409/13
*** C-417/11
**** C-418/18
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