European industry today urged the European Commission to reconsider scrapping the proposed regulation on standard-essential patents, in a letter seen by MLex. The 62 signatories argue that withdrawing the proposal would create legal uncertainty, increase costs and enable patent abuse. Supporters of the regulation, including automakers, oppose the commission’s decision, while SEP holders continue to argue it would have harmed Europe’s competitiveness.
Companies such as Amazon, Microsoft, Cisco and Deutsche Telekom today called on the European Commission to “reconsider its intention” to scrap its proposed regulation on standard-essential patents, or SEPs. The letter is addressed to Commission President Ursula von der Leyen and seven European Commissioners. It has 62 signatures from trade associations and companies which depend on the use of technology patents essential for device connectivity, including dozens of small and medium-sized companies.
“By withdrawing the SEP regulation, the commission would deprive large and small innovative businesses from fair access to essential infrastructure such as 5G,” said the letter, seen by MLex and addressed to industry commissioner Stéphane Séjourné, digital commissioner Henna Virkkunen, competition commissioner Teresa Ribera and others.
Earlier this month, the commission included the controversial regulation in a list of bills it would withdraw (see here), citing a lack of a foreseeable political agreement.
The industry letter notes that this reasoning does not correctly apply to the SEP regulation, given it was passed with a majority in the European Parliament one year ago, and it was scheduled to be discussed by EU ministers this week.
The proposal on SEPs was designed to increase transparency in the licensing process and would have required patent holders such as Nokia and Ericsson to register their SEPs publicly and undergo independent assessments of essentiality. Patent holders widely lobbied against the regulation, while patent licensees supported it.
“Withdrawing the SEP regulation will only exacerbate the existing uncertainty for European businesses, enable continued exposure to increased legal and administrative burdens, including lengthy, complex and costly court proceedings and opaque licensing conditions, and will permit abuse,” today’s letter said.
Without the regulation, patent users worry that holders will abuse their power with high royalties for technology standards that would harm innovation, “leaving European customers with less choice and more expensive connected devices,” said the letter said. It is also signed by carmakers including Volkswagen, Mercedes-Benz and Toyota.
The industry letter follows a call from a group of members of the European Parliament, who also oppose the commission’s decision to withdraw the regulation (see here).
Patent holders and legal experts have previously warned EU decisionmakers that the regulation would have harmed Europe’s competitiveness globally and presented unreconcilable legal issues when it came to the role of European courts (see here).
Please e-mail editors@mlex.com to contact the editorial staff regarding this story, or to submit the names of lawyers and advisers.