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OPINION (COM(2023)0232 – C90147/2023 – 2023\0133(COD))

On the Proposal for a Regulation of the European Parliament and of the Council on Standard essential patents and amending Regulation (EU)2017/1001

INTA-AD-753729

Committee on International Trade · Rapporteur: Danuta Maria Hübner

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The Committee on International Trade proposes amendments to the proposed regulation on standard essential patents (SEPs). It removes the aggregate royalty determination process and makes FRAND determination voluntary rather than mandatory before litigation. It limits the regulation to patents in force in one or more member states and to standards published after entry into force. It adds that the measures must comply with WTO rules and the TRIPS Agreement. It strengthens the competence centre's role in monitoring third-country rules, circumvention and impact on end-users, and in supporting small and medium-sized enterprises (SMEs). It replaces the single conciliator with a panel of three conciliators for FRAND determinations and sets a 9-month deadline for the procedure. It delays the competence centre's full operation to 24 months and the regulation's application to 36 months after entry into force.

Committee position. The Committee on International Trade proposes amendments to the proposed regulation on SEPs. It removes the aggregate royalty determination process, makes FRAND determination voluntary, limits the regulation's scope to patents in force in the EU and standards published after entry into force, and strengthens support for SMEs and monitoring of third-country rules.

Key points

  1. Deletes the aggregate royalty determination process from the regulation, including the notification, revision and conciliation procedures for aggregate royalties.
  2. Makes FRAND determination a voluntary step before litigation, not a mandatory one, and removes the requirement to commit to comply with its outcome.
  3. Limits the regulation to patents in force in one or more member states and to standards published after entry into force, and requires compliance with WTO rules and the TRIPS Agreement.
  4. Requires the competence centre to collect information on third-country SEP rules, compliance, circumvention and impact on end-users, and to cooperate with third-country authorities.
  5. Requires the competence centre to support SMEs, including through reduced fees, free training, and annual reporting by SEP holders on SME licensing.
  6. Replaces the single conciliator with a panel of three conciliators, one nominated by each party and one jointly agreed, for FRAND determinations.
  7. Sets a 9-month deadline for the FRAND determination and allows parties to settle at any time.
  8. Requires SEP holders to register patents and update registrations within 6 months, with a 2-month grace period before suspension for non-compliance.
  9. Removes the possibility for SEP holders and implementers to voluntarily propose up to 100 SEPs annually for essentiality checks.
  10. Requires the competence centre to be set up and fully functional 24 months after entry into force, and the regulation to apply from 36 months after entry into force.
  11. Requires the Commission to set up an expert stakeholder group to assess the regulation's impact on the European and global IP and innovation ecosystem and on competitiveness.
  12. Requires the Commission to review the regulation's application, enforcement and impact every three years and report to Parliament and the Council.

Who is affected

  • SEP holders: must register patents, update registrations, and report annually on SME licensing.
  • Implementers: must provide information on products compliant with standards requiring FRAND commitments.
  • SMEs: benefit from reduced fees, free support and training, and are not subject to sampling for essentiality checks.
  • Competence centre: tasked with monitoring third-country rules, supporting SMEs, and cooperating with international organisations.
  • EUIPO: empowered to take on tasks under the regulation, including setting up FRAND determination processes.

Figures and deadlines

  • 9 months: deadline for concluding the FRAND determination.
  • 6 months: deadline for SEP holders to update registrations for status changes.
  • 2 months: grace period before suspension for failure to register or update.
  • 24 months: deadline for the competence centre to be set up and fully functional.
  • 36 months: date from which the regulation applies after entry into force.
  • 18 months: deadline for the Commission to establish a list of use cases exempt from certain procedures.
  • 15 days: deadline for the responding party to notify the competence centre of its decision on FRAND determination.
  • 7 days: deadline for the requesting party to indicate whether it requests continuation of the FRAND determination.