New Harmonised EU Patent Rules Tackle Standard Essential Patents, Compulsory Licensing of Patents, and Revision of Supplementary Protection Certificates Regulations
The EU Commission’s proposed Regulations on standard essential patents, compulsory licensing of patents in crisis situations, and the revision of the legislation on supplementary protection certificates will create a more transparent, effective and futureproof intellectual property rights framework, thus enhancing innovation, investment and competitiveness in the Single Market.
According to the EU Commission, “intangible assets like brands, designs, patents and data are increasingly important in today’s knowledge economy. Intellectual property (IP) is a key driver for economic growth as it helps companies gain value from their intangible assets. IP-intensive industries account for almost half of all GDP and over 90% of all EU exports. In the period 2017–2019, nearly 76% of intra-EU trade was generated by patent-intensive industries.”
The new EU regulations will stand alongside the Unitary Patent system, which will be operational as of 1 June 2023. The legislative proposals are based on existing provisions and principles of international and EU IP law, but they each intend to make the patents system more effective by further eliminating Single Market fragmentation, reducing red tape, and enhancing efficiency.
This solid patent framework will empower economic operators and competent authorities to better protect innovation while ensuring fair access, including during emergency situations.
These new legislative initiatives will regulate the following key aspects:
- Standard Essential Patents
Standard essential patents (SEPs) are patents that protect technology that has been declared essential for the implementation of a technical standard adopted by a standard developing organisation (SDO). Such standards relate for instance to connectivity (e.g., 5G, Wi-Fi, Bluetooth, NFC) or audio/video compression and decompression standards.
In order to develop a product that is standard-compliant, an implementer is obliged to use the relevant “essential” patents. The monopoly granted by such specific patents is balanced by SEP holders’ commitment to license these patents on fair, reasonable and non-discriminatory (FRAND) terms, allowing access to market to implementers.
To counter the lack of transparency, predictability, and lengthy disputes and litigation generated by the current system, the new SEP licensing framework intends to create a balanced system, setting a global benchmark for SEP transparency, reduction of conflicts and efficient negotiations. Therefore, the propose framework has two main objectives:
- Ensuring that both EU SEP owners and implementers innovate in the EU, make and sell products in the EU and are competitive on global markets.
- Ensuring that end users, including SMEs and consumers, benefit from products based on the latest standardised technologies at fair and reasonable prices.
Consequently, the EU proposal establishes measures on the following aspects: a SEP register, database and essentiality checks; expert opinions on SEP aggregate royalty; FRAND determination by means of conciliation in lieu of costly litigation; SME support measures; and the establishment of a ‘Competence centre’ at the European Union Intellectual Property Office (EUIPO).
A well-functioning EU system that enables access to technologies, while rewarding innovation, is vital for the EU’s technological sovereignty – especially as the applicability of SEPs (particularly for connectivity standards) is going to increase with the rise of the “Internet of Things” (IoT).
- Compulsory Licensing
Compulsory licensing of patents makes possible for a government to authorise the use of a patented invention without the consent of the patent holder.
The new rules provide for a new EU-wide compulsory licensing instrument that would complement EU crisis instruments, such as the Single Market Emergency Instrument, HERA regulations and the Chips Act – to further increase the Union’s resilience to crises.
- Supplementary Protection Certificates
A Supplementary Protection Certificate (SPC) is an IP right that extends the term of a patent (by up to five years) for a human or veterinary pharmaceutical product, or a plant protection product, that has been authorised by regulatory authorities.
The proposal establishes a unitary SPC to complement the Unitary Patent. The SPC reform also introduces a centralised examination procedure, implemented by EUIPO, in close cooperation with EU national IP offices – in order to boost innovation and support growth and jobs in the relevant sectors.
For further information, please read the following:
Intellectual property: harmonised EU patent rules (europa.eu)
PDF document download:
https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_23_2454/IP_23_2454_EN.pdf