European Parliament’s JURI Committee gives backing to proposed SEPs Regulation

European Parliament’s JURI Committee gives backing to proposed SEPs Regulation

On 24th January the European Union’s (EU) JURI Committee voted to adopt its position on the proposed standard essential patent (SEP) regulation, giving the proposal its backing, with 13 votes in favour, none against and ten abstentions.

The European Committee on Legal Affairs, known as JURI, has given its approval to the text that would require the EU Intellectual Property Office (EUIPO) – based in Alicante, Spain – to maintain a register of SEPs, complete essentiality checks, and establish fair, reasonable and non-discriminatory (FRAND) rates. Under the proposal, it would also establish an electronic database with detailed information on SEPs terms and the EUIPO would be responsible for training SEP evaluators and conciliators.

JURI’s endorsement includes all seven Compromise Amendments, proposed by three committees. JURI itself published its draft report on 2nd October 2023, suggesting amendments. Both the Committee on International Trade (INTA) and the Committee on the Internal Market and Consumer Protection (IMCO) also issued draft opinions in October 2023 requesting amendments to the text and procedural alterations. The Industry, Research and Energy Committee (ITRE) determined not to give an opinion.

The bill also places emphasis on small- and medium-sized enterprises (SMEs) and startups, with MEPs wishing to task the EUIPO with creation of a “one-stop shop” SEPs Licensing Assistance Hub to provide training and support to SMEs without charge.

OxFirst has previously written in detail about the regulation’s proposals and highlighted that it places the emphasis on patent valuation. We discussed the patent valuation approach being put forward by the proposal and the implications of global FRAND rate setting through the EUIPO. Consideration was also made to the practicalities of implementing the proposal, given the specialised skillsets associated with essentiality checks and standard essential patent valuations. That is something MEPs were also conscious of, and one amendment – now endorsed – requires that candidates be properly qualified and impartial.

In a press release following the vote, Marion Walsmann, JURI’s rapporteur and vice-chair, suggested SEPs owners will “benefit from an increased number of licenses, faster agreements, more predictable returns, and a reduced risk of litigation”, whilst SEPs implementers “will benefit from legal and financial predictability”. Reception to the vote has not been as universally positive: whilst the Fair Standards Alliance (FSA), representing SEPs implementers, has welcomed the vote outcome, IP Europe, representing SEPs owners, suggests it will undermine European technology leadership.

The full Parliament must approve the text before talks with the European Council and European Commission can progress. Some member states, including Finland, Sweden and the Netherlands, have stated their opposition to the proposal from the outset. The regulation’s progression is also complicated by upcoming European elections in June, when the current Commission’s term will end, and after which the next Commission will have to determine if they continue on with the regulation.