Position Statement of the Max Planck Institute for Innovation and Competition of 6 February 2024 on the Commission's Proposal for a Regulation on Standard Essential Patents

41 Pages Posted: 8 Feb 2024

See all articles by Josef Drexl

Josef Drexl

Max Planck Institute for Innovation and Competition; Ludwig Maximilian University of Munich (LMU)

Dietmar Harhoff

Max Planck Institute for Innovation and Competition; Ludwig-Maximilians-Universität München; Centre for Economic Policy Research (CEPR)

Beatriz Conde

Max Planck Institute for Innovation and Competition

Peter R. Slowinski

Max Planck Institute for Innovation and Competition

Date Written: February 6, 2024

Abstract

On 27 April 2023, the European Commission presented its Proposal for a Regulation on standard essential patents (SEPs). The proposed regulation aims at improving the licensing of SEPs by reducing the uncertainty that surrounds licensing negotiations and lowering transaction costs. In order to achieve these objectives, the Commission has considered different policy options. Of these, the Proposal implements (1) the setting up of a mandatory register for SEPs with essentiality checks of selected and representative random samples of SEPs, (2) the establishment of a process for determining a non-binding aggregate royalty rate, and (3) a mandatory pre-litigation conciliation procedure for FRAND royalty determination, combined with (4) voluntary guidance on SEP licensing. Institutionally, a new competence centre within the European Intellectual Property Office (EUIPO) is to be in charge of managing and performing these tasks.

In the Position Statement, the Institute assesses the Commission’s Proposal in the light of its adequacy to address the challenges of SEP licensing in the context of the Internet of Things and its potential for contributing to a balanced global SEP licensing. Preceding these assessments, the Institute elaborates on the legal and economic foundations of an innovation-oriented standardisation and outlines the context in which major problems addressed by the Commission’s Proposal arise.

Keywords: Standard essential patents (SEPs), Draft Regulation on SEPs, ICT sector, compatibility standards, licensing of SEPs, Internet of Things (IoT), innovation, transparency, SEP-register, essentiality checks, FRAND determination, aggregate royalty, level of licensing, global SEP-licensing

Suggested Citation

Drexl, Josef and Harhoff, Dietmar and Conde, Beatriz and Slowinski, Peter R., Position Statement of the Max Planck Institute for Innovation and Competition of 6 February 2024 on the Commission's Proposal for a Regulation on Standard Essential Patents (February 6, 2024). Max Planck Institute for Innovation & Competition Research Paper No. 24-03, Available at SSRN: https://ssrn.com/abstract=4719023 or http://dx.doi.org/10.2139/ssrn.4719023

Josef Drexl (Contact Author)

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany

HOME PAGE: http://www.ip.mpg.de

Ludwig Maximilian University of Munich (LMU)

Munich, 80539
Germany

Dietmar Harhoff

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany
+49 89 24246 550 (Phone)
+49 89 24246 599 (Fax)

HOME PAGE: http://www.ip.mpg.de

Ludwig-Maximilians-Universität München ( email )

Munich, 80539
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Beatriz Conde

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany

Peter R. Slowinski

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany

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