Reaction Part II: Are Europe's SEP Proposals Fair?

The European Commission (EC) recently published proposed regulations on standard-essential patents (SEPs) and many are citing them as somewhat controversial.

Finnegan partner Erik Puknys told World Intellectual Property Review that “There could be more litigation in the US, where SEP owners at least get leverage through the threats of larger damages awards…”

“The new proposal risks the unintended consequence of driving SEP/FRAND litigation away from Europe and towards the US or the UK, where, compared to Germany and China, there is comparatively little SEP/FRAND litigation,” he said.

Further, “the dynamic as it currently exists is that Germany is generally considered more SEP-owner friendly, while China is perceived as being more implementer friendly. The proposed EU policy is far less patent-owner friendly than current policy. At the same time, implementers are also expressing serious concern with the policy. The EU proposal threatens to drive away litigation initiated by SEP owners without providing any incentive for implementers to view EU litigation more favorably. Implementers will still prefer China.

“The result could be more litigation in the US, where SEP owners at least get leverage through the threats of larger damages awards and greater litigation costs, even if their chances of getting injunctions remain low. The UK courts have also recently issued some pro-SEP-owner decisions, so we might see more litigation there as well.

“There also are serious questions about the competency of the EUIPO to determine patent essentiality and FRAND rates. This is not a knock on the EUIPO, but the issues of essentiality and FRAND are so complex, and the number of patents that will need to be considered so great, that dealing with those issues will be a truly Herculean task.”

Read “Reaction Part II: Are Europe's SEP Proposals Fair?”