EU throws its innovative industry under the [omni]bus

By slashing a proposed regulation on standard essential patents, the European Commission turns away from its promise to promote competitiveness and simplify rules of operation for innovative businesses in Europe.

The withdrawal leaves SMEs and innovators stuck in a broken system that rewards opacity over fairness. We need courage to fix what’s clearly not working, not silence in the face of few vested interests. Barely a handful of companies stand to benefit from the withdrawal, the rest of Europe remains exposed to systematic abuse by major overseas patent holders.

On 31 July, the Commission’s spokesperson reportedly told media about the decision to withdraw the proposed regulation on standard essential patents (SEP Regulation). This is a major blow to all businesses in Europe embracing digitisation, now coerced into accepting unfair licensing terms for essential technologies like Wi-Fi and wireless charging.

The Fair Standards Alliance (FSA) is encouraged by the Commission’s intention “to keep monitoring the SEP licensing frictions” and fully agrees with the Commission’s spokesperson who was quoted as saying that the proposed SEP Regulation was “an adequate measure to address SEP market failures.”

Without the SEP Regulation, innovative businesses in Europe are stripped of a chance at fair access to essential infrastructure such as 5G. The withdrawal Europe’s strategic dependencies instead of strengthening its industry.

The decision to withdraw the SEP Regulation disregards years of pleas for legal and business certainty, for consistent and transparent regime across Europe for companies seeking to integrate standardised connectivity technologies into their products and services. The FSA represents both small and medium businesses such as European semiconductor makers as well as many of Europe’s most successful large businesses.  Their products and services are valued by millions of EU consumers every day.

The Commission’s spokesperson reportedly stated that “neither the Parliament nor the Council adopted a clear signal of support for the [standard essential patent, SEP] proposal.” The FSA disagrees with this interpretation. The SEP Regulation saw the overwhelming support of the European Parliament and many EU Member States.  It has been designed to create a balanced framework for licensing standardised technologies. Its withdrawal sends a terrible signal to innovators and businesses who rely on a predictable and fair SEP licensing system.

The FSA has long called for eliminating obstacles for entire industries in Europe to thrive – from semiconductor manufacturers to smart energy solutions providers, to medical device manufacturers, to makers of devices that bring connectivity to every aspect of lives of European people. Incoherent framework for licensing standardised connectivity technologies has been a major roadblock in this respect.