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DRAFT REPORT (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

JURI-PR-753697

Committee on Legal Affairs · Rapporteur: Marion Walsmann

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The Committee on Legal Affairs' draft report sets out Parliament's position on the proposed regulation on standard essential patents (SEPs) and amending Regulation (EU) 2017/1001. It amends the Commission proposal to define 'significant difficulties or inefficiencies', to let the Commission list exempt use cases by delegated act, and to require SEP holders to notify the competence centre. It adds rules on patent pools, essentiality checks, aggregate royalty determination and a FRAND determination procedure, and creates a one-stop shop for MSMEs. It asks the Commission to evaluate the impact of the new systems on the global competitiveness of Union SEP holders and on innovation in the Union.

Committee position. The rapporteur supports the Commission's initiative and proposes amendments to increase legal clarity, define 'significant difficulties or inefficiencies', strengthen transparency of patent pools, allow review of prior essentiality checks, let parties decide on compliance with the FRAND outcome after learning it, and create a one-stop shop for MSMEs.

Key points

  1. The regulation would apply to patents declared essential to a published standard, whether or not the SEP holder made a FRAND commitment, and not subject to a royalty-free policy.
  2. Articles 17, 18 and 34(1) would not apply to use cases the Commission lists by delegated act as not giving rise to significant difficulties or inefficiencies; the Commission would review the list yearly.
  3. For existing standards, the Commission would determine by delegated act which standards, parts or use cases can be notified and which procedures apply.
  4. New definitions would cover 'use case', 'significant difficulties or inefficiencies', 'royalty free', 'conciliator', 'evaluator', 'peer evaluator' and 'patent assertion entity'.
  5. The competence centre at the EUIPO would set up and maintain an electronic register and database, rosters of evaluators and conciliators, the essentiality check system and the FRAND determination process.
  6. Patent pools would have to publish accurate and updated information on their websites, and the competence centre would verify it at least once a year and report to the Commission.
  7. SEP holders would notify the competence centre of patents declared essential to a standard for which FRAND commitments were made, and may jointly notify an aggregate royalty.
  8. The competence centre would select annually a sample of registered SEPs for essentiality checks, excluding micro and small enterprises unless they are patent assertion entities or controlled by non-MSMEs.
  9. An evaluator could review a prior essentiality check if there is sufficient reason to believe it was inaccurate, and conduct a fresh check if needed.
  10. Parties to a FRAND determination would not have to commit to comply with its outcome; they could decide after learning the result, and a party could request termination or unilateral continuation.
  11. A competent court would not examine the merits of a FRAND or SEP infringement claim subject to the FRAND determination unless served with a notice of termination.
  12. The competence centre would set up a free one-stop shop for MSMEs to identify relevant SEPs and licensors or licensees, offer training and support, but not for patent assertion entities.

Who is affected

  • SEP holders: must notify the competence centre, update register information within 6 months of changes, and may jointly notify aggregate royalties.
  • SEP implementers: can request a FRAND determination, benefit from the one-stop shop if MSMEs, and face provisional injunctions of a financial nature.
  • Patent pools: must publish accurate and updated licensing information on their websites and inform the competence centre.
  • Micro, small and medium-sized enterprises: benefit from reduced fees, free support, exclusion from sampling, and a one-stop shop, unless they are patent assertion entities.
  • Patent assertion entities: excluded from the MSME exceptions and help from the competence centre.

Figures and deadlines

  • 30 days from publication for stakeholders to express interest in participating in the aggregate royalty expert opinion process.
  • Suspension of the expert opinion procedure for an initial period of no longer than 6 months, extendable for another period of 3 months.
  • SEP holders must update register and database information within 6 months from the change occurring.
  • Time limit of no less than 2 months for the SEP holder to request a correction of the register entry or database information.
  • Responding party must notify the competence centre within 15 days from receipt of the FRAND determination request notification.
  • Requesting party must indicate within seven days whether it requests continuation of the FRAND determination.
  • Commission to determine the detailed methodology for essentiality check sampling by 18 months from entry into force.
  • Commission to evaluate the impact of the essentiality check, aggregate royalty and FRAND determination systems by 2 years from entry into force.

Legal basis: Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union.