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Standard essential patents

TA-9-2024-0100 · P9_TA(2024)0100 · PE753.697

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Parliament's amended version of a proposed regulation on standard essential patents (SEPs) sets up a competence centre within the European Union Intellectual Property Office (EUIPO) to run a register, essentiality checks, aggregate royalty opinions and FRAND determination. SEP holders must register patents claimed essential to a standard within 6 months; unregistered SEPs cannot be enforced or earn royalties until registered. It introduces a mandatory FRAND determination before SEP infringement or FRAND court claims, with a 9-month procedure and possible provisional financial injunctions. It provides support for micro, small and medium-sized enterprises (SMEs) and start-ups, including a SEP Licensing Assistance Hub and more favourable FRAND terms. It amends Regulation (EU) 2017/1001 to give EUIPO these tasks and defers application by 24 months after entry into force.

Key points

  1. The regulation applies to patents in force in one or more member states claimed essential to a published standard, whether or not a FRAND commitment was made, and not subject to a royalty-free policy.
  2. A competence centre within EUIPO is set up to maintain an electronic register and database, run essentiality checks, aggregate royalty processes and FRAND determination, and support SMEs.
  3. SEP holders must register their SEPs within 6 months of the registration opening or of grant, and update registrations within 6 months of changes.
  4. A SEP not registered in time cannot be enforced and its holder cannot receive royalties or claim damages until registration.
  5. The competence centre conducts annual sampling essentiality checks by independent evaluators, with results published and usable as evidence but not legally binding.
  6. SEP holders and implementers may request a non-binding expert opinion on aggregate royalty from a panel of three conciliators.
  7. A FRAND determination must be initiated before SEP infringement or FRAND court claims, lasts up to 9 months, and can be terminated if a party does not engage.
  8. Parties may request a provisional injunction of a financial nature during the FRAND determination, excluding seizure of property or products.
  9. The competence centre sets up a SEP Licensing Assistance Hub offering free training, advice and support to SMEs and start-ups.
  10. SEP holders should consider more favourable FRAND terms, discounts, interest-free instalments or royalty-free licensing for low sales volumes for SMEs.
  11. Patent assertion entities are excluded from SME benefits and support.
  12. The Commission may adopt delegated acts to identify standards or implementations with no significant licensing difficulties, and to open registration for existing standards.

Who is affected

  • SEP holders: must register patents, update details, and face limits on enforcement and royalties if late.
  • Implementers: can request essentiality checks, FRAND determination, and provisional financial injunctions.
  • SMEs and start-ups: get free support, reduced fees, and more favourable FRAND terms.
  • Patent pools: must publish licensing information and commit to FRAND terms.
  • EUIPO: gains new tasks, including running the competence centre and amending its regulation.

Figures and deadlines

  • 6 months to register SEPs after registration opening or grant.
  • 1 month grace period before suspension for late registration or updates.
  • 9 months maximum duration for FRAND determination.
  • Up to 100 registered SEPs may be proposed annually by SEP holders or implementers for essentiality checks.
  • 30 days to notify a standard after publication of the latest technical specification.
  • 120 days to notify aggregate royalty after standard publication or new implementation.
  • 20% of all SEPs of a standard needed to request a conciliator for aggregate royalty.
  • 24 months after entry into force before the regulation applies.

Legal basis: Article 114 of the Treaty on the Functioning of the European Union.