Forslag til EUROPA-PARLAMENTETS OG RÅDETS FORORDNING om standardessentielle patenter og om ændring af forordning (EU) 2017/1001

EN EN
EUROPEAN
COMMISSION
Brussels, 27.4.2023
COM(2023) 232 final
2023/0133 (COD)
Proposal for a
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on standard essential patents and amending Regulation (EU)2017/1001
(Text with EEA relevance)
{SEC(2023) 174 final} - {SWD(2023) 123 final} - {SWD(2023) 124 final} -
{SWD(2023) 125 final}
Offentligt
KOM (2023) 0232 - Forslag til forordning
Europaudvalget 2023
EN 1 EN
EXPLANATORY MEMORANDUM
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Standardisation is a key contributor to industrial innovation and competitiveness. Successful
standards rest on cutting-edge technologies, which require substantial investments in research
and development. Under the rules of many standards development organisations (SDOs), such
as the ETSI1
and the IEEE2
, companies and individuals may patent their technical
contributions to a standard. Patents that protect technology essential to a standard are known
as standard-essential patents (SEPs). Typically, SDOs require that any person or company
wishing to have their patented technology included in a standard commit to licensing the
relevant patents to others who may wish to use the standard (firms using/implementing a
standard are also known as ‘implementers’3
). These licences must be granted to implementers
on fair, reasonable and non-discriminatory (FRAND) terms and conditions. If the patent
holder refuses to make such a commitment, their patented technology cannot be included in
the standard.
The overall objectives of this proposed initiative are to: (i) ensure that end users, including
small businesses and EU consumers benefit from products based on the latest standardised
technologies; (ii) make the EU attractive for standards innovation; and (iii) encourage both
SEP holders and implementers to innovate in the EU, make and sell products in the EU and be
competitive in non-EU markets. The initiative aims to incentivise participation by European
firms in the standard development process and the broad implementation of such standardised
technologies, particularly in IoT industries.
In this context, the initiative seeks to: (i) make available detailed information on SEPs and
existing FRAND terms and conditions to facilitate licensing negotiations; (ii) raise awareness
of SEP licensing in the value chain and (iii) provide for an alternative dispute resolution
mechanism for setting FRAND terms and conditions.
The Commission’s 2017 Communication ‘Setting out the EU approach to Standard Essential
Patents’4
, called for a comprehensive and balanced approach to SEP licensing to incentivise
the contribution of best technology to global standardisation efforts and foster efficient access
to standardised technologies. The Commission acknowledged the need for increased
transparency and addressed certain aspects of FRAND licensing and SEP enforcement. The
Commission’s views were supported by Council conclusions 6681/185
, with the Council
stressing the importance of increased transparency.
1
European Telecommunications Standards Institute.
2
Institute of Electrical and Electronics Engineers.
3
In certain cases, a SEP holders can be an implementer and vice versa – in fact, many companies
participating in standards development are vertically integrated and therefore fall under both categories.
Thus, it is not fully accurate to divide the world of SEPs into two entirely separate groups – SEP
holders and implementers. However, for ease of reference in this impact assessment, those terms will be
used to refer to companies that own SEPs (i.e., SEP owner) and those that implement SEPs in their
products (i.e., implementer).
4
Communication on Setting out the EU approach to Standard Essential Patents, COM(2017)712 final,
29.11.2017.
5
Council conclusions on the enforcement of Intellectual Property Rights, as approved by the Council
(Internal Market, Industry, Research and Space) at its meeting on 12 March 2018
EN 2 EN
On 10 November 2020, by Council conclusions 12339/206
, the Council invited the
Commission to present proposals for future EU IP policy. The Council encouraged the
Commission to swiftly present the announced IP action plan, with initiatives to make IP
protection more effective and more affordable, especially for small and medium-sized EU
enterprises (‘SMEs’)7
, and to promote the effective sharing of IP, in particular critical assets
such as SEPs, while ensuring adequate and fair compensation for technology developers.
On 25 November 2020, the Commission published the intellectual property action plan8
,
where it announced its goals of promoting transparency and predictability in SEP licensing,
including by improving the SEP licensing system, for the benefit of EU industry and
consumers, and in particular SMEs. The action plan noted increases in SEP licensing disputes
in the automotive sector and the potential for other IoT sectors to become subject of such
disputes as they begin using connectivity and other standards. The plan was supported by
Council conclusions of 18 June 20219
and by the European Parliament (EP) in its
Resolution10
. The EP acknowledged the need for a strong, balanced and robust IPR system
and agreed with the Commission’s position that the transparency necessary for fair licensing
negotiations depends in large part on the availability of information about the existence, scope
and essentiality of SEPs. The EP also asked the Commission to provide more clarity on
various aspects of FRAND, and to consider possible incentives for more efficient SEP
licensing negotiations and reducing litigation.
In parallel with this initiative, the Commission has updated the Standardisation strategy11
and
is revising the Horizontal guidelines12
. The new Standardisation strategy, published in
February 2022, aims to strengthen the EU’s role as global standard-setter, driving
international competitiveness and enabling a resilient, green and digital economy. The present
SEPs initiative is complementary to the Standardisation strategy and the Horizontal
guidelines13
, currently under review.
This initiative is also important in the context of global developments. For example, certain
emerging economies are taking a much more aggressive approach in promoting home-grown
standards and providing their industries with a competitive edge in terms of market access and
technology roll-out.Courts in the UK, US and China have, with their own particular
characteristics, also decided that they have jurisdiction to determine global FRAND terms and
6
Council conclusions on Intellectual property policy and the revision of the industrial designs system in
the Union, as adopted at its meeting on 10 November 2020
7
https://single-market-economy.ec.europa.eu/smes/sme-definition_en
8
Communication from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions Making the most of the EU’s
innovative potential An intellectual property action plan to support the EU’s recovery and resilience of
25 November 2020, COM(2020) 760 final.
9
Council conclusions on intellectual property policy, as approved by the Council (Economic and
Financial Affairs) at its meeting on 18 June 2021.
10
European Parliament resolution of 11 November 2021 on an intellectual property action plan to support
the EU’s recovery and resilience (2021/2007(INI))
11
COM(2022) 31 final, 2.2.2022, An EU Strategy on Standardisation. Communication on An EU Strategy
on Standardisation - Setting global standards in support of a resilient, green and digital EU single
market. COM(2022) 31 final. Brussels 02.02.2022.
12
Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on
the Functioning of the European Union to horizontal co-operation agreements, OJ C 11, 14.01.2011, pp.
1 (currently under review)
13
Chapter 7, para 263
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conditions in specific cases which may impact the EU industry.14
Some countries have
released15
or are considering guidelines governing SEP licensing negotiations as well.16
• Consistency with existing policy provisions in the policy area
Standardisation agreements usually produce significant positive economic effects. The
‘potential SEP’ holder need to declare to the SDO whether they are willing to license their
patents on FRAND terms and conditions when the standard is implemented in products or
relevant components thereof. If a patent holder does not provide a FRAND commitment in
line with SDO’ IPR policy, their SEP contributions may not be included in the standard.
However, by including a patented technology in a standard, the SEP holder has a strong
economic position vis-à-vis a potential standard implementer, because implementers that want
to incorporate standards cannot work around these patents and must either pay for a licence or
forego manufacturing of products that use the standard. The more widespread the application
of the standard is, the stronger the position of the holder can become, which again might lead
to anticompetitive behaviour of the SEP holder.
The Horizontal Guidelines provide guidance for SDOs on how to self-assess compliance with
Article 101(1) and Article 101(3) TFEU for standardisation agreements. They set out the
following four principles to be considered by SDOs in their self-assessment: (i) participation
in the standard-setting is unrestricted; (ii) the procedure for adopting the standard is
transparent; (iii) there is no obligation to comply with the standard; (iv) there is effective
access to the standard on FRAND terms. In light of this, SDO’s IPR policies typically require
that participants in standard development disclose the existence of patents (including pending
patent applications) that may be or become essential to the relevant standard. In principle,
implementers would need a licence from the patent holders to practice the standard.
Typically, SEP holders would invite the implementers to take such a licence on FRAND
terms and conditions. In its landmark judgment in Huawei v. ZTE17
, the Court of Justice of the
European Union (CJEU) recognised the right of the SEP holder to seek to enforce its patents
in national courts and set out the conditions (steps) that must be fulfilled to prevent an abuse
of dominant position by the SEP holder when seeking an injunction. Since a patent confers on
its owner the exclusive right to prevent any third party from using the invention without the
owner’s consent only in the jurisdiction for which it is issued (i.e. Germany, France, the US,
14
Judgment of the United Kingdom’s Supreme Court of 26 August 2020, Unwired Planet v. Huawei,
UKSC 2018/0214, [2020] UKSC 37, Decision of the United States District Court for the Central
District of California, TCL v Ericsson, Case No 8:14-cv-00341-JVS-DFM with consent of both parties.
Chinese Supreme Court’s ruling of 19 August 2021, OPPO v Sharp, Zui Gao Fa Zhi Min Xia Zhong
No. 517, Order of the Wuhan Intermediate Court of 23 September 2020, Xiaomi v. Interdigital, (2020)
E 01 Zhi Min Chu 169 No 1; Order of the Wuhan Intermediate Court, Samsung v Ericsson [2020], Case
E 01 Zhi Min Chu No 743.
15
Japanese Patent Office Guide to Licensing Negotiations Involving Standard Essential Patents; South
Korean Guidelines on unfair exercise of Intellectual Property Rights; Singapore’s Competition &
Consumers Commission Guidelines on the treatment of Intellectual Property Rights
16
The United States of America withdrew its Policy Statement on Licensing Negotiations and Remedies
for Standards-Essential Patents Subject to F/RAND Commitments and concluded a Memorandum of
Understanding with the WIPO Arbitration and Mediation Centre. The UK has launched a process in
2021 on SEPs and innovation, which is ongoing. India’s Department of Telecommunications is
discussing a proposal to set up a Digicom Intellectual Property Management Board to facilitate IPR
licensing and IP management in the telecommunication sector. China has consulted on the draft
amendments to the implementing regulations of its Anti Monopoly Law. Japan’s Patent Office is
revising its guidelines and METI launched a Study Group on Licensing Environment of SEPs.
17
Judgment of the Court of justice of 16 July 2015, Huawei Technologies Co. Ltd v ZTE Corp. and ZTE
Deutschland GmbH, C-170/13, ECLI:EU:C:2015:477.
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China, etc.), patent disputes are governed by national patent laws and civil proceedings or
enforcement laws.18
• Consistency with other Union policies
The Commission has recently updated its standardisation strategy.19
The new EU Strategy on
Standardisation, published in February 2022, aims to strengthen the EU’s global
competitiveness, to enable a resilient, green and digital economy and to enshrine democratic
values in technology applications while preserving the high-quality output of European
standards. This initiative is complementary to the Standardisation Strategy in that it aims to
encourage, and reward the continued contribution of cutting-edge technologies to standards
by facilitating the licensing of the patented technologies incorporated in the standards.
The initiative is also complementary to the Horizontal guidelines, currently under review. The
latter address issues related to the standardisation process and ensure access to the standard on
FRAND terms and conditions. The initiative provides tools to facilitate the SEP licensing
process after the publication of the standard without taking a position on competition-related
issues.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The initiative relates to standards to which a patent holder has contributed a patented
technology and for which it has committed to an SDO to license on FRAND terms and
conditions. Standards for which patent holders make FRAND commitments are applied cross-
border among Member States and globally. SEP licensing is also seldom national. Usually,
licensing contracts are global and may take into account certain regional aspects. The
international standards in question cover technologies such as 4G, 5G, Wi-Fi, HEVC, AVC,
DVB and others that ensure interoperability of products worldwide.
Article 114 TFEU constitutes the appropriate legal basis as the objective is to improve the
conditions for the establishment and functioning of the single market. The initiative seeks to
ensure the efficiency of SEPs licensing, facilitating lawful access to the standards and
promoting wider adoption of standards. There are no specific EU or national rules on SEPs
apart from certain specific competition law related guidance or court judgments20
. In addition,
as acknowledged by the CJEU in Huawei v ZTE, apart from common rules relating to the
grant of a European patent, a European patent remains governed by the national law of each
of the Contracting States for which it has been granted as is also the case for national patents.
The CJEU has confirmed21
that recourse to Article 114 TFEU is possible if the aim is to
prevent the emergence of obstacles to trade between Member States resulting from the
18
Harmonised by Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004
on the enforcement of intellectual property rights (‘IPRED’), OJ L 157, 30.4.2004, p. 45.
19
Communication from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions - An EU Strategy on
Standardisation; Setting global standards in support of a resilient, green and digital EU single market,
2.2.2022, COM(2022) 31 final.
20
Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on
the Functioning of the European Union to horizontal co-operation agreements, OJ C 11, 14.01.2011, pp.
1-72, CELEX: and CJEU case-law., in particular Huawei v. ZTE, Case C-170/13, EU:C:2015:477
21
Judgment of the Court of Justice of 12 December 2006, Germany v. Parliament and Council, C‑380/03,
EU:C:2006:772, para. 38 and the case-law cited, and judgment of the Court of Justice of 10 February
2009, Ireland v. Parliament and Council, C‑301/06, EU:C:2009:68, para. 64; see also, to that effect,
judgment of the Court of Justice of 2 May 2006, United Kingdom v. Parliament and Council, C-217/04,
EU:C:2006:279, paras. 60 to 64.
EN 5 EN
divergent development of national laws. However, the emergence of such obstacles must be
considered likely and the measure in question must be designed to prevent them.
Certain courts in Member States, in particular Dutch22
, French23
and German24
courts have
been considering FRAND-related issues in national litigation based on on the circumstances
of the disputes brought before them. Those cases show different approaches (not necessarily
different results) with regard to FRAND determination concerning SEPs covering regional or
global standards. It is difficult for competent courts in the Member States to handle SEP-
related cases and make detailed and consistent FRAND determinations. This is in large part
due to the lack of transparency and complexity of the issues that are central to such
determinations, such as the essentiality of patents, comparable licences and compliance with
FRAND requirements. While the initiative will neither interpret the CJEU case-law nor adopt
methodologies for FRAND determination per se, it will establish mechanisms that promote
the necessary transparency, increase certainty and reduce the potential for inconsistent rulings.
This will be a significant improvement in the courts’ abilities to handle SEP disputes.
• Subsidiarity (for non-exclusive competence)
Measures taken at national, regional or local level to increase transparency and facilitate
licensing of SEPs may not be efficient for the following reasons. First, instead of an EU-wide
solution for SEPs, there might be different national solutions for the SEPs on a specific
standard. Second, under an EU-wide approach, it will not be necessary to conduct more than a
essentiality check per patent family to find that patents are indeed truly essential to a standard.
The check would be done based on a single EU-wide methodology. Third, non-centralised
alternative dispute resolution processes may come to different results for the same SEP
portfolio, opening the door to ‘forum shopping’ within the EU. An EU-wide approach can
help avoid these problems.
• Proportionality
The initiative is limited to what is necessary to achieve transparency with regard to SEPs and
pricing and provide stakeholders with tools to negotiated SEP licensing agreements. Action at
EU level will be efficient and save costs for stakeholders, in particular SEP holders, and for
Member States. For example, there could be one register instead of many registers, one
essentiality check for the whole EU, one methodology for carrying out such checks, and a
streamlined and transparent FRAND determination process. SEP holders and implementers
will not have to repeatedly incur the same costs in each EU Member state that has chosen to
introduce SEP specific rules.
• Choice of the instrument
EU-wide rules on transparency regarding SEPs and FRAND terms would have a harmonising
effect within the EU which would facilitate the work of national courts and the future
Unified Patent court. The instrument to implement this initiative should be a regulation. A
22
Court of Appeal of The Hague, judgment of 2 July 2019, Philips v Wiko, Case number :
C/09/511922/HA ZA 16-623; Hoge Raad, Judgment of 25 February 2022, Wiko v Philips, Nummer
19/04503, ECLI:NL:HR:2022:294; District Court The Hague, Judgment of 15 December 2021, Vestel v
Access Advance, ECLI:NL:RBDHA:2021:14372.
23
Paris Court, order of the pre-trial judge of 6 February 2020, TCT v Philips, RG 19/02085 – Portalis
352J-W-B7D-CPCIX; TJ Paris, 3.3, judgment of 7 December 2021, Xiaomi v Philips and ETSI, RG
20/12558.
24
German Federal Court of Justice (‘Bundesgerichtshof – BGH’), judgement of 5 May 2020, Sisvel v.
Haier, KZR 36/17, and German Federal Court of Justice, judgment of 24 November 2020, FRAND-
Einwand II, KZR 35/17; Order of 24 June 2021, Nokia Technologies v Daimler, C-182/21,
EU:C:2021:575 (request for a preliminary ruling from the Landgericht Düsseldorf, removed from the
Register).
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regulation would be directly applicable, including by empowering an EU agency with the
tasks of managing a register of SEPs, and establishing a common FRAND determination
procedure that would ensure uniformity across the EU and provide greater legal certainty.
These outcomes cannot be achieved by means of a Directive.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER
CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
Not applicable
• Stakeholder consultations
The Commission has conducted a series of webinars25
. The statistics for the webinars can be
summarised as follows: 16 hours of content; by over 60 speakers; over 450 interactions in the
Q&A field; over 1 700 impressions on the events; over 800 people in the Commission SEP
Teams group; and over 1 000 respondents to the Commission surveys in total.
The call for evidence was published on 14 February 2022 and was open until 9 May 2022.
During that period 97 replies and 49 position papers were submitted.
The public consultation took place between 14 February 2022 and 9 May 2022. During that
period 74 replies were submitted.
A targeted survey for start-ups and SMEs was published on 28 October 2022 and was closed
on 20 November 2022. At the request of a number of stakeholders, the survey was re-opened
on 25 November 2022 without a closing date to enable stakeholders keep on responding as the
markets on the Internet of Things (‘IoT’) develop. By the end of 2022, the Commission had
received 39 replies.
Discussion with Member States' representatives took place in within the Commission Expert
Group on IP Policy and relevant Council working parties.
The positions of the main stakeholders such as SEP holders, implementers, their consultants
and experts as well as their representative associations are largely known. For this reason, the
public consultation addressed very specific SEP-related issues and sought views on concrete
potential actions.
Around half of all respondents assessed the impact of the current SEP licensing framework on
SMEs and start-ups as negative, a third thought there was no impact, and around 5 % deemed
it positive.
Almost three quarters of respondents would request a licence in order not to infringe a SEP
and 60 % to be able to plan production and costs. The main reasons for having/licencing SEP
are securing a return on investment on R&D (70 % of answers), followed by use of SEP for
defensive/bargaining purposes (60 %) and participation in standardisation process in the
future (40 %).
Lack of transparency on the FRAND royalty rate, on SEP landscape (who owns SEPs) and
divergent court rulings were named as the key problems by three quarters of all respondents,
including all respondents in the groups of those with predominantly implementer-friendly
views (implementers). For the group of those with predominantly SEP-holder-friendly views
(SEP holders) the main problems were hold-out and anti-suit injunctions.
25
See webpage https://ec.europa.eu/growth/content/webinar-series-standard-essential-patents_en
EN 7 EN
Respondents asked for more public information on SEPs as regards ‘patent and application
number’ (88 % of all responses), ‘relevant standard, version, section of the standard’ (80 %),
‘contact details of SEP holder’ (80 %), ‘transfer of ownership’ (77 %), ‘licensing
programmes’ (76 %) and ‘standard FRAND terms and conditions’ (72 %). Around 60 % of all
respondents and 90 % of implementers supported third-party essentiality checks as long as
independent experts do them. Only 24 % of SEP holders supported such a solution. A third of
all respondents considered that essentiality checks should not have legal consequences.
Around two thirds of all respondents and around 80 % of implementers thought that
essentiality assessment might help in assessing a product's SEP exposure and deciding whom
to negotiate with, smoothen licensing negotiation and prevent over pricing. More than half of
SEP holders disagreed with these impacts but agreed that checks might provide a reliable
overview of the share of each SEP holders’ essential patents.
Around three quarters of respondents agreed that fair and reasonable terms and conditions
might depend on functionalities of the standard implemented in a product. Around 70 %
thought these terms should be independent of the level of licencing.
70 % of all respondents and 100 % of implementers argued that it is important to know the
reasonable aggregate royalty rate for a product. Only 20 % of SEP holders shared that view.
Arbitration (53 % of all answers) was deemed more useful than mediation (35 %) for FRAND
assessment, especially by SEP holders and academia/authorities/non-governmental
organisations.
• Collection and use of expertise
The impact assessment relied primarily, but not excusively, on two external studies and the
contribution of the SEP Expert Group:
'Baron, J., Arque-Castells, P., Leonard, A., Pohlmann, T., Sergheraert, E., Empirical
Assessment of Potential Challenges in SEP Licensing, European Commission, DG
GROW, 2023';
'Charles River Associates, Transparency, Predictability, and Efficiency of SSO-based
Standardization and SEP Licensing, European Commission, DG GROW, 2016,
https://ec.europa.eu/docsroom/documents/48794';
‘Group of Experts on Licensing and Valuation of Standard Essential Patents – Contribution to
the Debate on SEPs’ (2021).
The Commission has conducted many studies, the most relevant of which are:
‘European Commission, Joint Research Centre, Bekkers, R., Henkel, J., Tur, E. M., et al.,
Pilot study for essentiality assessment of standard essential patents, Publications Office of the
European Union, 2020';
‘Landscape study of potentially essential patents disclosed to ETSI’, JRC study (2020);
‘Licensing Terms of Standard Essential Patents: A Comprehensive Analysis of Cases’, JRC
study (2017);
‘Patents and Standards: A modern framework for IPR-based standardisation’ (2014).
In addition, the Commission reviewed numerous papers and positions submitted by
stakeholders, professional articles on the subject and studies conducted on behalf of other
authorities. The Commission analysed initiatives on SEPs in non-EU countries. To prepare
the impact assessment and the draft regulation, the Commission consulted with leading
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experts, judges and academics. Finally, the Commission attended numerous webinars and
conferences.
• Impact assessment
The Commission conducted an impact assessment and submitted it to the Regulatory Scrutiny
Board in February 2023 and received a positive opinion on 17 March 2023 (REF to be
added). The final impact assessment takes into account comments contained in that opinion.
In the impact assessment, the Commission considered the following problems: high licensing
transaction costs and uncertainty about the SEP royalty burden. Due to lack of sufficient
information, implementers cannot assess their SEP exposure far enough in advance to take
into account the licensing costs when planning their product business. On the other hand, SEP
holders complain about long and expensive negotiations, especially with large implementers.
More specifically, the following causes of these problems were identified. First, there is only
limited information on who owns SEPs, and it is not certain that all patents for which licences
are sought are really necessary (essential) to implement a standard. Second, there is very little
information on SEP licence fees (FRAND royalty), so implementers with little or no expertise
or resources find it impossible to assess the reasonableness of a SEP holder’s royalty demand.
Finally, licensing disputes can be time- and cost-intensive.
Consequently, the initiative aims at facilitating SEP licensing negotiations and lowering
transaction costs for both SEP holders and implementers by (i) providing more clarity on who
owns SEPs and which SEPs are truly essential; (ii) providing more clarity on FRAND royalty
and other terms and conditions, including awareness raising with regard to licensing in the
value chain; and (iii) facilitating SEP dispute resolution.
The following options were considered to achieve these objectives (the policy options are
built incrementally, each adds new elements to the preceding one):
Option 1: Voluntary guidance. This would involve establishing non-binding guidance on
SEP licensing. A competence centre on SEPs created within the European Union Intellectual
Property Office (EUIPO) would provide free advice to SMEs on licensing negotiations
(including trainings) and monitor the SEP market, conduct studies on SEP licensing and
promote alternative dispute resolution.
Option 2: SEP register with essentiality checks. SEP holders seeking to license their SEPs
for royalty and to enforce them in the EU would have to register the patents in the SEP
register. To ensure the quality of the register, essentiality checks would be conducted by an
independent evaluator using a methodology to be determined by the Commission at EU level
and a system administered by the EUIPO. Sub-options are: to (i) check all registered patents;
or (ii) check a small number of patents pre-selected by SEP holders and a random sample of
patents registered by each SEP holder.
Option 3: SEP register with essentiality checks and conciliation (FRAND
determination) procedure. Before launching a litigation, parties to SEP licensing dispute
would have to go through a mandatory conciliation process. An independent conciliator
would seek to help parties reach mutually acceptable licensing terms and conditions. At the
end of the process, if the parties fail to reach agreement, the conciliator will issue a non-
binding report with recommendations on the FRAND rate (with a confidential and a non-
confidential part).
Option 4: Aggregate royalty for SEP. Processes would be established for determining an
aggregate royalty (i.e. total maximum price) for using a standard before or shortly after its
publication. SEP holders would be expected to agree on such royalty (potentially with the
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help of an independent facilitator from the competence centre). Additionally, both
implementers and SEP holders could request an expert opinion on the aggregate royalty,
where all the interested parties would be able to present their views. Finally, an aggregate
royalty could be determined during the conciliation if the parties so request. This aggregate
royalty would equally not be binding and would be published in the SEP register.
Option 5: SEP clearing house. Establishment of a one-stop-shop for implementers to acquire
SEP licences by depositing an aggregate royalty with the competence centre. SEP
holders should inform the centre how to allocate the aggregate royalty among them, failing
which they would not be able to collect their royalty payments. They should also sign licence
agreements with any implementer who would make a deposit. Any royalties not collected by
SEP holders within a year from the deposit would be returned to the implementers.
Option 4 (voluntary guidance, SEP register with essentiality checks, FRAND
determination procedure and aggregate royalty determination for SEPs) is the preferred
option. The option reduces information asymmetry between a SEP holder and an implementer
by providing the latter with information who the relevant SEP holders are, how many SEPs
they have registered in the register and what their essentiality rate is (derived from a
representative random sample of all registered SEPs) and what the potential [or maximum]
total cost of using a standardised technology (aggregate royalty) is. A pre-trial obligatory
conciliation is likely to reduce SEP dispute settlement costs to about 1/8 as the conciliator will
assist both parties in reaching an agreement. A competence centre will provide objective
information, guidance and support to SMEs on SEPs and SEP licensing. Benefits and costs
are presented in the table below.
Table 1: Average total approximated annual costs and benefits of the preferred option per
affected party and location (EUR million).
EU non-EU Total
SEP
implementer
s
Costs -0.77 -0.77 -1.5
Benefits 12.89 13.03 25.9
Net 12.11 12.26* 24.4
SEP holders Costs -8.13 -46.04 -54.2
Benefits 3.79 21.50 25.3
Net -4.33 -24.54 -28.9
Subtotal (net effect for
implementers and holders)
7.8 -12.3 -4.5
European or national patent
office benefit
29.0 29.0
Total net benefit 36.8 -12.3 24.5
* concerns non-EU implementers with subsidiaries in the EU
Note: numbers rounded which may affect totals
EN 10 EN
• Regulatory fitness and simplification
This initiative is not part of the REFIT simplification effort as there are currently no EU rules
on SEPs that could be simplified or made more efficient.
• Fundamental rights
The proposal should improve the conduct of business for both SEP holders and implementers,
and ultimately other businesses downstream (Article 16 of the Charter).
The proposal respects the intellectual property rights of patent holders (Article 17(2) of the
EU Charter of Fundamental Rights), although it includes a restriction on the ability to enforce
a SEP that has not been registered within the prescribed time-limits and introduces a
requirement to conduct conciliation (FRAND determination) prior to enforcing individual
SEPs. Limitations on the exercise of IP rights are allowed under the EU Charter, provided that
the proportionality principle is respected. According to settled case-law, fundamental rights
can be restricted provided that those restrictions correspond to objectives of general interest
pursued by the EU and do not constitute, with regard to the aim pursued, a disproportionate
and intolerable interference which infringes the very essence of the rights guaranteed26
. In that
respect, the proposal is in the public interest in that it provides a uniform, open and
predictable information and outcome on SEPs for the benefit of SEP holders, implementers
and end users, at Union level. It aims at dissemination of technology for the mutual advantage
of the SEP holders and implementers. Furthermore, the rules concerning the FRAND
determination are time-limited and aimed at improving and streamlining the process but are
not ultimately binding.27
The FRAND determination is also consistent with the right to an effective remedy and to
access to justice (Article 47 of the EU Charter) as the implementer and the SEP holder fully
retain that right. If the SEP is not registered, the exclusion of the right to effective
enforcement is temporary, thus limited, and necessary, and meets objectives of general
interest. As confirmed by the CJEU28
, a mandatory dispute resolution as a precondition to
access to courts would be deemed to be compatible with the principle of effective judicial
protection. The FRAND determination follows the conditions for mandatory dispute
resolution outlined in the CJEU judgments, taking into account the particular characteristics
of SEP licensing.
4. BUDGETARY IMPLICATIONS
This proposal would have no impact on the European Union. The SEP system introduced with
the initiative will remain fully self-funded, using fees paid by EUIPO competence centre
service users. EUIPO is going to finance set up costs (including IT costs) of the competence
centre, the SEP register and other services. It is expected to recuperate these set up costs by
fees charged when the system is fully operational.
26
Judgment of the Court of Justice of 13 December 1979, Hauer v. Land Rheinland-Pfalz, C-44/79,
EU:C:1979:290, para. 32; judgment of the Court of Justice of 11 July 1989, Hermann Schräder HS
Kraftfutter GmbH & Co. KG v. Hauptzollamt Gronau, C-256/87, EU:C:1999:332, para. 15, and
judgment of the Court of Justice of 13 July 1989, Hubert Wachauf v. Bundesamt für Ernährung und
Forstwirtschaft, C-5/88, ECLI:EU:C:1989:321, paras. 17 and 18.
27
The conciliation procedure follows the conditions for mandatory recourse to alternative dispute
settlement procedures as a condition for the admissibility of an action before the courts, as outlined in
the judgment of the Court of Justice of 18 March 2010, Rosalba Alassini v Telecom Italia SpA (C-
317/08), Filomena Califano v Wind SpA (C-318/08), Lucia Anna Giorgia Iacono v Telecom Italia SpA
(C-319/08) and Multiservice Srl v Telecom Italia SpA (C-320/08), Joined cases C-317/08, C-318/08, C-
319/08 and C-320/08, ECLI:EU:C:2010:146, taking into account the specificities of SEP licensing.
28
see footnote above.
EN 11 EN
The EUIPO estimates that set-up cost of the competence centre and register including IT
infrastructure will amount to around EUR 2.4 million and may involve work of up to
12 FTEs. The EUIPO running cost of the new system will require around EUR 2 million
annually (excluding services of external experts such as essentiality experts or conciliators).
The costs will be higher in the initial year(s) when registration of an estimated number of
72 000 patent families, and essentiality checks for an estimated number of 14 500 SEPs are
expected (which are estimated to be the peak of all registrations and essentiality checks). In
the subsequent years, the number of registrations and essentiality checks is expected to drop
to 10% of the peak numbers. During the operational period, the competence centre would
require on average around 30 FTEs in the peak year(s), and around 10 FTEs in the following
years. The financial and budgetary impacts of this proposal are presented in the legislative
financial statement annexed to this proposal. Detailed calculation of costs are presented in
Annex 7.1 of the Impact Assessment.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The Commission will use the data collected by the competence centre (EUIPO) to monitor
implementation of this proposal and the achievement of its objectives. The monitoring
activities would take into account the required implementation period (including the time
needed to enact the necessary new implementing legislation based on implementing powers to
be conferred to the Commission) and the time needed for market participants to adapt to the
new situation. The set of pertinent indicators referred to in Section 9 of the impact assessment
would be considered for evaluating the changes.
A first evaluation will be scheduled for 8 years after entry into force of the Regulation
(allowing for the fact that the Regulation will start to apply 24 months after entry into
force). The implementing acts need to be adopted, and the competence centre needs to be set
up organisationally during that time. Subsequent evaluations will be carried out every 5 years.
• Detailed explanation of the specific provisions of the proposal
Title I determines the subject matter and the scope of the proposal.
The proposal provides for enhanced transparency with regard to information necessary for
SEP licensing; registration of SEPs; procedure for evaluating the essentiality of registered
SEPs; and procedure for determination FRAND terms and conditions for a SEP licence.
The proposal applies to SEPs in force in one or more Member States. It concerns standards
published by a standard development organisation (SDO) that calls on SEP holders to commit
to licensing on fair, reasonable and non-discriminatory (FRAND) terms and conditions. It
does not apply to SEPs that are subject to royalty-free intellectual property policy of the
SDO that has published the standard. The proposal does not apply to claims of invalidity and
infringement of SEPs unrelated to the scope of this Regulation.
Title II of the proposal creates a competence centre within EUIPO to administer databases, a
register and the procedures for essentiality checks of SEPs and the FRAND determination.
The competence centre will also provide training, support and general advice on SEPs to
SMEs and raise awareness of SEP licensing.
Title III This Title includes provisions detailing the process of notifying standards and
aggregate royalty, registration of SEPs and expert opinion on aggregate royalty. It also
includes provisions concerning the information and data that the competence centre would
include in the register and databases. The registration will be subject to a fee.
EN 12 EN
The SEP registration process is triggered when contributors or implementers notify the
competence centre of a standard and/or aggregate rates for a standard and specific
implementations of the standard. The competence centre publishes a notice inviting SEP
holders to register. SEP holders have 6 months to register. To incentivise timely registration
following the 6 months, SEP holders cannot enforce their SEPs until they register. A SEP
holder that has not registered within the 6 months may also not seek royalties and damages
prior to the registration. This is not only to encourage registration but also to ensure legal
certainty for implementers.
The rules take account of the fact that certain SEPs may be granted by a patent office after the
6 month period and certain implementations of a standard may not be known at the time of
publication of the standard. A SEP may be removed from the register only where the SEP has
expired, has been invalided or found non-essential. The registration can be modified and
should be updated by the SEP holder. Any stakeholder can signal that a registration is
incorrect or incomplete and needs to be modified.
Contributors or implementers may request an expert opinion on the aggregate royalty, subject
to a fee. The competence centre would then appoint a panel of three conciliators to deliver the
expert opinion. Any stakeholder can participate in the process and express its views provided
that it demonstrates its interest. The expert opinion should also consider potential impacts on
the value chain in question. The expert opinion will not be binding but will serve to provide
the industry with some guidance in respect of individual SEP licensing negotiations.
In addition to the data provided by the SEP holders in the register and/or the databases on
individual SEPs, public licensing arrangements and contact details, the competence centre
should collect data on case law worldwide, rules of third countries and public information on
FRAND terms and conditions. It should also produce statistics and commission studies. The
objective would be to have a one-stop shop for everything a stakeholder needs to know about
SEPs and SEP licensing. Most of the information will be available free of charge to the
public. Some specific detailed information, for example, on particular SEPs or on reports
from FRAND determinations will be available only on registration and for a fee. SMEs will
benefit from reduced fees.
Title IV of the proposal contains rules for the selection of candidate evaluators and
conciliators to carry out tasks assigned to them in proceedings set out in the proposal. The
evaluators or conciliators should not only have the requisite technical competence but should
demonstrate that they are independent and no biased. The competence centre should establish
a roster of candidates that satisfy all conditions. The competence centre should regularly
review the rosters that a sufficient number of qualified candidates is maintained.
Title V of the proposal pertains to essentiality checks of SEPs. Determining whether a patent
is essential to a standard is a very difficult technical task. Despite the best efforts of the SEP
holders, there may be registered SEPs that are not actually essential to the standard for which
they are registered. Essentiality checks are thus very important to ensure the quality of the
register and also to prevent any potential abuse, because of a lack of checks on the registered
data. Essentiality checks are also important for SEP holders or implementers, who may wish
to submit some of their SEPs for such a check to demonstrate essentiality or non-essentiality
during negotiations. The essentiality checks will be subject to a fee payable by the SEP
holders whose SEPs are checked and by the implementers who request such checks. The lack
of an essentiality check should not preclude licensing negotiations or any court or
administrative procedure in relation to such SEPs.
Essentiality checks on claimed SEPs entered into the SEP register will be conducted by
evaluators who have expertise in the relevant technical field and whose independence is
EN 13 EN
beyond doubt. Such checks will be made annually on a sampling basis and there will be only
one essentiality check per patent family. The checks will be conducted based on methodology
that ensures a fair and statistically valid selection capable of producing sufficiently accurate
results about the percentage of truly essential patents among each SEP holder's registered
SEPs.
If the during the check, the evaluator has reasons to believe that the claimed SEP may not be
essential to the standard, she or he should inform the SEP holder through the competence
centre of any such reasons and give the SEP holder time to submit its observations. Only after
considering the response will the evaluator deliver its final reasoned opinion. The SEP holder
would be able to request a peer evaluation before a negative opinion by the evaluator is
issued. The results of the peer evaluation should serve to improve the essentiality check
process and ensure consistency.
Title VI of the proposal establishes provisions for the determination of FRAND terms and
conditions. The FRAND determination must be initiated by the SEP holder or implementer
before initiating respective court proceedings in the EU. A FRAND determination may also
be initiated by one of the parties voluntarily to resolve disputes related to FRAND terms and
conditions.
Where the responding party does not reply to the request, the competence centre will either
terminate the procedure or, upon request of the requesting party, continue with the FRAND
determination. This may be necessary either to establish that an offer is FRAND or to
determine the amount of the security.
If both parties engage in the process, or in case the proceedings are continued with one party
only, a conciliator will be appointed. The parties or party, as applicable, will be requested to
make submissions and proposals. They can also commit to comply with the outcome of the
FRAND determination. The conciliator will assist them in an independent and impartial
manner in their endeavour to reach a FRAND rate determination. The conciliator will be
empowered to proactively seek information, consult all information available in the register
and databases, including the confidential reports of other FRAND determinations and
hear any experts, where necessary. The conciliator will make proposal(s) to the parties. The
procedure should not last longer than 9 months. If, at the end of the procedure, the parties
have not yet settled, the conciliator will make a final proposal, which the parties may or may
not accept.
If the parties settle, the conciliator will terminate the procedure without a report. If the parties
do not settle at the end of the procedure, the conciliator will terminate the procedure and issue
a report on the determination of FRAND terms and conditions. The non-confidential part of
that report will contain their last proposal and the methodology the conciliator applied for the
determination, and will be available for consultation in the register/database(s).
If a party obstructs the FRAND determination or seeks resolution in other jurisdictions, the
conciliator may propose that the other party either terminate or continue with the procedure.
The complying party will decide how to proceed depending on its needs.
Title VII of the proposal contains provisions setting out the treatment of micro-enterprises
and small and medium-sized enterprises taking into account their specific needs. The
competence centre will offer training and provide support on SEP-related matters for micro-
enterprises, small and medium-size enterprises free of charge. The costs will be borne by the
EUIPO. When negotiating a SEP licence with micro, small and medium-sized enterprises,
SEP holders will be required to consider offering them more favourable FRAND terms and
conditions.
EN 14 EN
Title VIII of the proposal contains rules as regards the fees and charges for the services of the
competence centre. Those fees should be reasonable and reflect the costs for the service
rendered. The Commission will adopt implementing acts to determine the administrative fees,
and the fees for expert opinions on aggregate royalty, evaluators and conciliators, the amounts
to be charged and the payment method. Fees should be appropriate to the needs of micro,
small and medium-sized enterprises.
Title IX of the proposal contains final provisions. The proposed regulation applies to
standards published after its date of application. There may also be a need to cover certain
important standards such as 4G on which many IoT applications run and for which SEP
licencing is inefficient. Such standards shall be determined in a delegated act and may
consequently be notified to the competence centre within a limited time-period after the date
of application to trigger the registration process. This Title also includes the empowerment of
the Commission to adopt delegated and implementing acts and the evaluation and review
clause. Finally, the Title contains provisions to amend Regulation (EU) 2017/1001.
EN 15 EN
2023/0133 (COD)
Proposal for a
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on standard essential patents and amending Regulation (EU)2017/1001
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular
Article 114 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Economic and Social Committee29
,
Having regard to the opinion of the Committee of the Regions30
,
Acting in accordance with the ordinary legislative procedure,
Whereas:
(1) On 25 November 2020, the Commission published its intellectual property action
plan31
, where it announced its goals of promoting transparency and predictability in
licensing of standard essential patents (SEPs), including by improving the SEP
licensing system, for the benefit of Union industry and consumers, and in particular
small and medium-sized enterprises (SMEs)32
. The action plan was supported by
Council Conclusions of 18 June 202133
and by the European Parliament in its
Resolution34
(2) This Regulation aims at improving the licensing of SEPs, by addressing the causes of
inefficient licensing such as insufficient transparency with regard to SEPs, fair,
reasonable and non-discriminatory (FRAND) terms and conditions and licensing in the
value chain, and limited use of dispute resolution procedures for resolving FRAND
disputes. All these together reduce the overall fairness and efficiency of the system
and result in excess administrative and transactional costs. By improving the licensing
of SEPs, the Regulation aims to incentivise participation by European firms in the
standard development process and the broad implementation of such standardised
29
OJ C , , p. .
30
OJ C , , p. .
31
Communication from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions Making the most of the EU’s
innovative potential An intellectual property action plan to support the EU’s recovery and resilience of
25 November 2020, COM(2020) 760 final.
32
OJ L 124 of 20.05.2003, p. 36.
33
Council conclusions on intellectual property policy, as approved by the Council (Economic and
Financial Affairs) at its meeting on 18 June 2021.
34
European Parliament resolution of 11 November 2021 on an intellectual property action plan to support
the EU’s recovery and resilience (2021/2007(INI)).
EN 16 EN
technologies, particularly in Internet of Things (IoT) industries. Therefore,
this Regulation pursues objectives that are complementary to, but different from that
of protecting undistorted competition, guaranteed by Articles 101 and 102 TFEU. This
Regulation should also be without prejudice to national competition rules.
(3) SEPs are patents that protect technology that is incorporated in a standard. SEPs are
‘essential’ in the sense that implementation of the standard requires use of the
inventions covered by SEPs. The success of a standard depends on its wide
implementation and as such every stakeholder should be allowed to use a standard. To
ensure wide implementation and accessibility of standards, standard development
organisations demand the SEP holders that participate in standard development to
commit to license those patents on FRAND terms and conditions to implementers that
chose to use the standard. The FRAND commitment is a voluntary contractual
commitment given by the SEP holder for the benefit of third parties, and it should be
respected as such also by subsequent SEP holders. This Regulation should apply to
patents that are essential to a standard that has been published by a standard
development organisation, to which the SEP holder has made a commitment to license
its SEPs on fair, reasonable and non-discriminatory (FRAND) terms and conditions
and that is not subject to a royalty-free intellectual property policy, after the entry
into force of this Regulation.
(4) There are well established commercial relationships and licensing practices for certain
use cases of standards, such as the standards for wireless communications, with
iterations over multiple generations leading to considerable mutual dependency and
significant value visibly accruing to both SEP holders and implementers. There are
other, typically more novel use cases – sometimes of the same standards or subsets
thereof - with less mature markets, more diffuse and less consolidated implementer
communities, for which unpredictability of royalty and other licensing conditions and
the prospect of complex patent assessments and valuations and related litigation weigh
more heavily on the incentives to deploy standardised technologies in innovative
products. Therefore, in order to ensure a proportionate and well targeted response,
certain procedures under this Regulation, namely the aggregate royalty determination
and the compulsory FRAND determination prior to litigation, should not be applied to
identified use cases of certain standards or parts thereof for which there is sufficient
evidence that SEP licensing negotiations on FRAND terms do not give rise to
significant difficulties or inefficiencies.
(5) Whereas transparency in SEP licensing should stimulate a balanced investment
environment, along entire Single Market value chains, in particular for emerging
technology use cases underpinning Union objectives of green, digital and resilient
growth, the Regulation should also apply to standards or parts thereof, published
before its entry into force where inefficiencies in the licensing of the relevant SEPs
severely distort the functioning of the internal market. This is particularly relevant for
market failures hindering investment in the Single Market, the roll-out of innovative
technologies or the development of nascent technologies and emerging use cases.
Therefore, taking into account those criteria, the Commission should determine by a
delegated act the standards or parts thereof that have been published before the entry
into force of this Regulation and the relevant use cases, for which SEPs can be
registered.
(6) Because a FRAND commitment should be made for any SEP declared to any standard
intended for repeated and continuous application, the meaning of standards should be
EN 17 EN
broader than in Regulation (EU) No 1025/2012 of the European Parliament and of the
Council35
.
(7) Licensing on FRAND terms and conditions includes licensing royalty-free. Given that
most issues arise with royalty-bearing licensing policies, this Regulation does not
apply to royalty-free licensing.
(8) In view of the global character of SEP licensing, references to aggregate royalty and
FRAND determination may refer to global aggregate royalties and global FRAND
determinations, or as otherwise agreed by the notifying stakeholders or the parties to
the proceedings.
(9) In the Union, standard setting and the application of competition law rules related to
FRAND obligation to standard essential patents are guided by the Horizontal
Guidelines36
and the Court of Justice judgment of 16 July 2015 in case C-170/13,
Huawei Technologies Co. Ltd v ZTE Corp. and ZTE Deutschland GmbH37
. The Court
of Justice recognised the right of a SEP holder to seek to enforce its patents in national
courts subject to certain conditions that must be fulfilled to prevent an abuse of
dominant position by the SEP holder when seeking an injunction. Since a patent
confers on its holder the exclusive right to prevent any third party from using the
invention without the holder’s consent only in the jurisdiction for which it is issued,
the patent disputes are governed by national patent laws and civil proceedings and/or
enforcement laws harmonised by Directive 2004/48/EC of the European Parliament
and of the Council38
.
(10) As there are specific procedures for assessing the validity and the infringement of
patents, this Regulation should not affect such procedures.
(11) Any reference to a competent court of a Member State in this Regulation includes the
Unified Patent Court where the conditions are met.
(12) To facilitate the implementation of this regulation, the European Union Intellectual
Property Office (EUIPO) should perform the relevant tasks by means of a competence
centre. The EUIPO has extensive experience with managing databases, electronic
registers and alternative dispute settlement mechanisms, which are key aspects of the
functions assigned under this Regulation. It is necessary to equip the competence
centre with necessary human and financial resources to fulfil its tasks.
(13) The competence centre should set up and administer an electronic register and an
electronic database containing detailed information on SEPs in force in one or more
Member States, including essentiality check results, opinions, reports, available case-
law from jurisdictions across the globe, rules relating to SEPs in third countries, and
results of studies specific to SEPs. In order to raise awareness and facilitate SEP
35
Regulation (EU) No 1025/2012 of the European Parliament and of the Council of 25 October 2012 on
European standardisation, amending Council Directives 89/686/EEC and 93/15/EEC and Directives
94/9/EC, 94/25/EC, 95/16/EC, 97/23/EC, 98/34/EC, 2004/22/EC, 2007/23/EC, 2009/23/EC and
2009/105/EC of the European Parliament and of the Council and repealing Council Decision
87/95/EEC and Decision No 1673/2006/EC of the European Parliament and of the Council (OJ L 316,
14.11.2012, p. 12.)
36
Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on
the Functioning of the European Union to horizontal co-operation agreements, OJ C 11, 14.01.2011, pp.
1 (currently under review)
37
Judgment of the Court of Justice of 16 July 2015, Huawei Technologies Co. Ltd v ZTE Corp. and ZTE
Deutschland GmbH, C-170/13, ECLI:EU:C:2015:477
38
DIRECTIVE 2004/48/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 29
April 2004 on the enforcement of intellectual property rights (OJ L 157, 30.4.2004, p. 45.)
EN 18 EN
licensing for SMEs, the competence centre should offer assistance to SMEs. The
setting up and administering a system for essentiality checks and processes for
aggregate royalty determination and FRAND determination by the competence centre
should include actions improving the system and the processes on a continuous basis,
including through the use of new technologies. In line with this objective, the
competence centre should establish training procedures for evaluators of essentiality
and conciliators for providing opinions on aggregate royalty as well as on FRAND
determination and should encourage consistency in their practices.
(14) The competence centre should be the subject of Union rules on access to documents
and data protection. Its tasks should be designed to increase transparency by making
existing information relevant to SEPs available to all stakeholders in a centralised and
systematic way. Therefore, a balance would have to be made between the free public
access to basic information and the need to finance the functioning of the competence
centre. In order to cover the maintenance costs a registration fee should be requested to
access detailed information contained in the database, such as results of any
essentiality checks and non-confidential FRAND determination reports.
(15) Knowledge of the potential total royalty for all SEPs covering a standard (aggregate
royalty) applicable to the implementations of that standard is important for the
assessment of the royalty amount for a product, which plays a significant role for
the manufacturer’s cost determinations. It also helps SEP holder to plan expected
return on investment. The publication of the expected aggregate royalty and the
standard licensing terms and conditions for a particular standard would facilitate SEP
licensing and reduce the cost of SEP licensing. Thus, it is necessary to make public
the information on total royalty rates (aggregate royalty) and the standard FRAND
terms and conditions of licensing.
(16) SEP holders should have the opportunity to first inform the competence centre of the
publication of the standard or the aggregate royalty which they have agreed upon
among themselves. Except for those use cases of standards for which the Commission
establishes that there are well established and broadly well-functioning licensing
practices of SEPs, the competence centre may assist the parties in the relevant
aggregate royalty determination. In this context, if there is no agreement on an
aggregate royalty among SEP holders, certain SEP holders may request the
competence centre to appoint a conciliator to assist the SEP holders willing to
participate in the process in determining an aggregate royalty for the SEPs covering
the relevant standard. In this case, the role of the conciliator would be to facilitate the
decision-making by the participating SEP holders without making any
recommendation for an aggregate royalty. Finally, it is important to ensure that there is
a third independent party, an expert, that could recommend an aggregate royalty.
Therefore, SEP holders and/or implementers should be able to request the competence
centre for an expert opinion on an aggregate royalty. When such a request is made, the
competence centre should appoint a panel of conciliators and administer a process in
which all interested stakeholders are invited to participate. After receiving information
from all of the participants, the panel should provide a non-binding expert opinion
for an aggregate royalty. The expert opinion on the aggregate royalty should contain a
non-confidential analysis of the expected impact of the aggregate royalty on the SEP
holders and the stakeholders in the value chain. Important in this respect would be to
consider factors such as, efficiency of SEP licensing, including insights from any
customary rules or practices for licensing of intellectual property in the value chain
EN 19 EN
and cross-licensing, and impact on incentives to innovate of SEP holders and different
stakeholders in the value chain.
(17) In line with the general principles and objectives of transparency, participation and
access to European standardisation, the centralised register should make information
regarding the number of SEPs applicable to a standard, the ownership of relevant
SEPs, and the parts of the standard covered by the SEPs publicly available. The
register and the database will contain information on relevant standards,
products, processes, services and systems, which implement the standard, SEPs in
force in the EU, standard SEP licensing FRAND terms and conditions or any licensing
programmes, collective licensing programmes and essentiality. For SEP holders the
register will create transparency with regard to the relevant SEPs, their share of all
SEPs declared to the standard and the features of the standard covered by the patents.
SEP holders will be in a better position to understand how their portfolios compare
with other SEP holders’ portfolios. This is important not only for negotiations with
implementers but also for the purpose of cross-licensing with other SEP holders. For
implementers, the register will provide a trusted source of information on the SEPs,
including with regard to the SEP holders from whom the implementer may need to
obtain a licence. Making such information available in the register will also help
shorten the length of technical discussions during the first stage of the SEP licensing
negotiations.
(18) Once a standard has been notified or an aggregate royalty is specified, whichever is
made first, the competence centre will open the registration of SEPs by holders of
SEPs in force in one or more Member States.
(19) In order to ensure transparency of about SEPs, it is appropriate to require from SEP
holders to register their patents which are essential to the standard for which the
registration is open. SEP holders should register their SEPs within 6 months following
the opening of the registration by the competence centre or the grant of the relevant
SEPs, whichever is first. In case of timely registration, SEPs holders should be able to
collect royalties and claim damages for uses and infringements that happened before
the registration.
(20) SEP holders may register after the indicated time limit. However, in that case, SEP
holders should not be able to collect royalties and claim damages for the period of
delay.
(21) Clauses in licensing agreement that set a royalty for a large number of patents –
present or future – should not be affected by the invalidity, non-essentiality, or
unenforceability of a small number of those patents when they do not affect the overall
amount and enforceability of the royalty or other clauses in such agreements.
(22) SEP holders should ensure that their SEP registration(s) are updated. Updates should
be registered within 6 months for relevant status changes, including ownership,
invalidation findings or other applicable changes resulting from contractual
commitments or public authorities’ decisions. Failure to update the registration may
lead to the suspension of the registration of the SEP from the register.
(23) A SEP holder may also request the modification of a SEP registration. An interested
stakeholder may also request the modification of a SEP registration, if it can
demonstrate that the registration is inaccurate based on a definitive decision by a
public authority. A SEP can only be removed from the register at the request of the
SEP holder, if the patent is expired, was invalidated or found non-essential by a final
EN 20 EN
decision or ruling of a competent court of a Member State or found non-essential
under this Regulation.
(24) To further ensure the quality of the register and avoid over-registration, essentiality
checks should also be conducted randomly by independent evaluators selected
according to objective criteria to be determined by the Commission. Only one SEP
from the same patent family should be checked for essentiality.
(25) These essentiality checks should be conducted on a sampling from SEP portfolios to
ensure that the sample is capable of producing statistically valid results. The results of
the sampled essentiality checks should determine the ratio of positively checked SEPs
from all the SEPs registered by each SEP holder. The essentiality rate should be
updated annually.
(26) SEP holders or implementers may also designate annually up to 100 registered SEPs
for essentiality checks. If the pre-selected SEPs are confirmed essential, the SEP
holders may use this information in negotiations and as evidence in courts, without
prejudicing the right of an implementer to challenge the essentiality of a registered
SEP in court. The selected SEPs would have no bearing on the sampling process as the
sample should be selected from all registered SEPs of each SEP holder. If a
preselected SEP and a SEP selected for the sample set are the same, only one
essentiality check should be done. Essentiality checks should not be repeated on SEPs
from the same patent family.
(27) Any assessment of essentiality of SEPs conducted by an independent entity prior to
the entry into force of the Regulation, for example through patent pools, as well as
essentiality determinations by judicial authorities should be indicated in the register.
Those SEPs should not be re-checked for essentiality after the relevant evidence
supporting the information in the register is provided to the competence centre.
(28) The evaluators should work independently in accordance with the rules of procedure
and Code of Conduct to be determined by the Commission. The SEP holder would be
able request a peer evaluation before the issuance of a reasoned opinion. Unless a SEP
is the subject of a peer review, there would be no further review of the essentiality
check results. The results of the peer evaluation should serve to improve the
essentiality check process, to identify and remedy shortcomings and improve
consistency.
(29) The competence centre would publish the results of the essentiality checks, whether
positive or negative, in the register and the database. The results of the essentiality
checks would not be legally binding. Thus, any subsequent disputes with regard to
essentiality would have to be addressed in the relevant court. The results from the
essentiality checks, whether requested by a SEP holder or based on a sample, may,
however, be used for the purpose of demonstrating essentiality of those SEPs in
negotiations, in patent pools and in court.
(30) It is necessary to ensure that the registration and ensuing obligations provided for in
this Regulation are not circumvented by removing a SEP from the register. When an
evaluator finds a claimed SEP non-essential, only the SEP holder can request its
removal from the register and only after the annual sampling process has been
completed and the proportion of true SEPs from the sample has been established and
published.
(31) The purpose of the FRAND commitment is to facilitate adoption and use of the
standard by making SEPs available to implementers on fair and reasonable terms and
EN 21 EN
to provide the SEP holder a fair and reasonable return for its innovation. Thus, the
ultimate goal of enforcement actions by SEP holders or actions brought by
implementers based on a SEP holder’s refusal to license should be to conclude a
FRAND licence agreement. The main objective of the Regulation in this regard is to
facilitate the negotiations and out of court dispute resolution that can benefit both
parties. Ensuring access to swift, fair and cost-efficient ways of resolving disputes on
FRAND terms and conditions should benefit SEP holders and implementers alike. As
such, a properly functioning out-of-court dispute resolution mechanism to determine
FRAND terms (FRAND determination) may offer significant benefits for all parties. A
party may request a FRAND determination in order to demonstrate that its offer is
FRAND or to provide a security, when they engage in good faith.
(32) The FRAND determination should simplify and speed up negotiations concerning
FRAND terms and reduce costs. The EUIPO should administer the procedure. The
competence centre should create a roster of conciliators that satisfy established
competence and independence criteria, as well as a repository of non-confidential
reports (the confidential version of the reports will be accessible only by the parties
and the conciliators). The conciliators should be neutral persons with extensive
experience in dispute resolution and substantial understanding of the economics of
licensing on FRAND terms and conditions.
(33) The FRAND determination would be a mandatory step before a SEP holder would be
able to initiate patent infringement proceedings or an implementer could request a
determination or assessment of FRAND terms and conditions concerning a SEP before
a competent court of a Member State. However, the obligation to initiate FRAND
determination before the relevant court proceedings should not be required for SEPs
covering those use cases of standards for which the Commission establishes that there
are no significant difficulties or inefficiencies in licensing on FRAND terms.
(34) Each party may choose whether it wishes to engage in the procedure and commit to
comply with its outcome. Where a party does not reply to the FRAND determination
request or does not commit to comply with the outcome of the FRAND determination,
the other party should be able to request either the termination or the
unilateral continuation of the FRAND determination. Such a party should not be
exposed to litigation during the time of the FRAND determination. At the same time,
the FRAND determination should be an effective procedure for the parties to reach
agreement before litigation or to obtain a determination to be used in further
proceedings. Therefore, the party or parties that commit to complying with the
outcome of the FRAND determination and duly engage in the procedure should be
able to benefit from its completion.
(35) The obligation to initiate FRAND determination should not be detrimental to the
effective protection of the parties’ rights. In that respect, the party that commits to
comply with the outcome of the FRAND determination while the other party fails to
do so should be entitled to initiate proceedings before the competent national court
pending the FRAND determination. In addition, either party should be able to request
a provisional injunctionof a financial nature before the competent court. In a situation
where a FRAND commitment has been given by the relevant SEP holder, provisional
injunctions of an adequate and proportionate financial nature should provide the
necessary judicial protection to the SEP holder who has agreed to license its SEP on
FRAND terms, while the implementer should be able to contest the level of FRAND
royalties or raise a defence of lack of essentiality or of invalidity of the SEP. In those
national systems that require the initiation of the proceedings on the merits of the case
EN 22 EN
as a condition to request the interim measures of a financial nature, it should be
possible to initiate such proceedings, but the parties should request that the case be
suspended during the FRAND determination. When determining what level of the
provisional injunction of financial nature is to be deemed adequate in a given case,
account should be taken, inter alia, of the economic capacity of the applicant and the
potential effects for the effectiveness of the measures applied for, in particular for
SMEs, also in order to prevent the abusive use of such measures. It should also be
clarified that once the FRAND determination is terminated, the whole range of
measures, including provisional, precautionary and corrective measures, should be
available to parties.
(36) When the parties enter into the FRAND determination, they should select a conciliator
for the FRAND determination from the roster. In case of disagreement, the
competence centre would select the conciliator. The FRAND determination should be
concluded within 9 months. This time would be necessary for a procedure that ensures
that the rights of the parties are respected and at the same time is sufficiently swift to
avoid delays in concluding licences. Parties may settle at any time during the process,
which results in the termination of the FRAND determination.
(37) Upon appointment, the conciliation centre should refer the FRAND determination to
the conciliator, who should examine whether the request contains the necessary
information, and communicate the schedule of procedure to the parties or the party
requesting the continuations of the FRAND determination.
(38) The conciliator should examine the parties’ submissions and suggestions for the
determination of FRAND terms and conditions, and consider the relevant negotiation
steps, among other relevant circumstances. The conciliator, upon its own initiative or
the request of a party, should be able to require the parties to submit evidence it deems
necessary for the fulfilment of its task. It should also be able to examine publicly
available information and the competence centre’s register and reports of other
FRAND determinations, as well as non-confidential documents and information
produced by or submitted to the competence centre.
(39) If a party fails to engage in the FRAND determination after the conciliator has been
appointed, the other party may request the termination or may request that the
conciliator issues a recommendation for a FRAND determination on the basis of the
information it was able to assess.
(40) If a party initiates a procedure in a jurisdiction outside the Union resulting in legally
binding and enforceable decisions regarding the same standard that is subject to
FRAND determination and its implementation, or including SEPs from the same
patent family as SEPs subject to FRAND determination and involving one or more of
the parties to the FRAND determination as a party; before or during of the FRAND
determination by a party, the conciliator, or where he/she has not been appointed has
not been established, the competence centre, should be able to terminate the
procedure upon the request of the other party.
(41) At the conclusion of the procedure, the conciliator should make a proposal
recommending FRAND terms and conditions. Either party should have the option to
accept or reject the proposal. If the parties do not settle and/or do not accept its
proposal, the conciliator should draft a report of the FRAND determination. The report
would have a confidential and a non-confidential version. The non-confidential
version of the report should contain the proposal for FRAND terms and conditions and
the methodology used and should be provided to the competence centre for publication
EN 23 EN
in order to inform any subsequent FRAND determination between the parties and
other stakeholders involved in similar negotiations. The report would thus have a dual
purpose to encourage the parties to settle and to provide transparency as to the process
and the recommended FRAND terms in cases of disagreement.
(42) The Regulation respects the intellectual property rights of patent owners (Article 17(2)
of EU Charter of Fundamental Rights), although it includes a restriction on the ability
to enforce a SEP that has not been registered within a certain time-limit and introduces
a requirement to conduct a FRAND determination before enforcing individual SEPs.
The limitation on the exercise of intellectual property rights is allowed under the EU
Charter, provided that the proportionality principle is respected. According to settled
case-law, fundamental rights can be restricted provided that those restrictions
correspond to objectives of general interest pursued by the Union and do not
constitute, with regard to the aim pursued, a disproportionate and intolerable
interference which infringes the very essence of the rights guaranteed39
. In that
respect, this Regulation is in the public interest in that it provides a uniform, open and
predictable information and outcome on SEPs for the benefit of SEP holder,
implementers and end users, at Union level. It aims at dissemination of technology for
the mutual advantage of the SEP holders and implementers. Furthermore, the rules
concerning the FRAND determination are temporary thus limited and aimed at
improving and streamlining the process but are not ultimately binding.40
(43) The FRAND determination is also consistent with the right to an effective remedy and
to access to justice as laid down in Article 47 of the Charter of Fundamental Rights of
the European Union as the implementer and the SEP holder fully retain that right. In
case of failure to register within the prescribed time limit, the exclusion of the right to
effective enforcement is limited and necessary and meets objectives of general
interest. As confirmed by the CJEU41
, the provision of a mandatory dispute resolution
as a precondition to access to competent courts of Member States is deemed to be
compatible with the principle of effective judicial protection. The FRAND
determination follows the conditions for mandatory dispute resolution outlined in the
CJEU judgments, taking into account the particular characteristics of SEP licensing.
(44) When determining the aggregate royalties and making FRAND determinations the
conciliators should take into account in particular any Union acquis and judgments of
the Court of Justice pertaining to SEPs as well as guidance issued under this
39
Judgment of the Court of Justice of 13 December 1979, Hauer v. Land Rheinland-Pfalz, C-44/79,
EU:C:1979:290, para. 32; judgment of the Court of Justice of 11 July 1989, Hermann Schräder HS
Kraftfutter GmbH & Co. KG v. Hauptzollamt Gronau, C-256/87, EU:C:1999:332, para. 15, and
judgment of the Court of Justice of 13 July 1989, Hubert Wachauf v. Bundesamt für Ernährung und
Forstwirtschaft, C-5/88, EU:C:1989:321, paras. 17 and 18.
40
The conciliation procedure follows the conditions for mandatory recourse to alternative dispute
settlement procedures as a condition for the admissibility of an action before the courts, as outlined in
the CJEU judgments; Joint Cases C‑317/08 to C‑320/08 Alassini and Others of 18 March 2010, and
Case C‑75/16 Menini and Rampanelli v. Banco Popolare Società Cooperativa of 14 June 2017, taking
into account the specificities of SEP licensing.
41
Judgment of the Court of Justice of 18 March 2010, Rosalba Alassini v Telecom Italia SpA (C-317/08),
Filomena Califano v Wind SpA (C-318/08), Lucia Anna Giorgia Iacono v Telecom Italia SpA (C-
319/08) and Multiservice Srl v Telecom Italia SpA (C-320/08), Joined cases C-317/08, C-318/08, C-
319/08 and C-320/08, EU:C:2010:146, and judgement of the Court of Justice of 14 June 2017,Livio
Menini and Maria Antonia Rampanelli v Banco Popolare – Società Cooperativa, C‑75/16,
EU:C:2017:457
EN 24 EN
Regulation, the Horizontal Guidelines42
and the Commission’s 2017 Communication
‘Setting out the EU approach to Standard Essential Patents’.43
Furthermore, the
conciliators should consider any expert opinion on the aggregate royalty or in the
absence thereof, should request information from the parties before it makes its final
proposals well as guidance issued under this Regulation, as well as guidance issued
under this Regulation.
(45) SEP licensing may cause friction in the value chains that have so far not been exposed
to SEPs. It is, therefore, important that the competence centre raises awareness
concerning SEP licensing in the value chain through any of the tools at its disposal.
Other factors would include the ability of upstream manufacturers to pass the cost of a
SEP licence downstream and any potential impact of existing indemnification clauses
within a value chain.
(46) SMEs may be involved in SEP licensing both as SEP holders and implementers. While
there are currently a few SME SEP holders, the efficiencies produced with this
Regulation are likely to facilitate the licensing of their SEP. Additional conditions are
necessary to relieve the cost burden on such SMEs such as reduced administration fees
and potentially reduced fees for essentiality checks and conciliation in addition to free
support and trainings. The SEPs of micro and small enterprises should not be the
subject of sampling for essentiality check, but they should be able to propose SEPs for
essentiality checks if they wish to. SME implementers should likewise benefit from
reduced access fees and free support and trainings. Finally, SEP holders should be
encouraged to incentivise licensing by SMEs through low volume discounts or
exemptions from FRAND royalties.
(47) In order to supplement certain non-essential elements of this Regulation, the power to
adopt acts, in accordance with Article 290 of the Treaty on the Functioning of the
European Union, should be delegated to the Commission in respect of the items to be
entered in the register or in respect of determining the relevant existing standards or to
identify use cases of standards or parts thereof for which the Commission establishes
that there are no significant difficulties or inefficiencies in licensing on FRAND
terms. It is of particular importance that the Commission carry out appropriate
consultations during its preparatory work, including at expert level, and that those
consultations be conducted in accordance with the principles laid down in the
Interinstitutional Agreement of 13 April 2016 on Better Law-Making44
. In particular,
to ensure equal participation in the preparation of delegated acts, the European
Parliament and the Council receive all documents at the same time as Member States’
experts, and their experts systematically have access to meetings of Commission
expert groups dealing with the preparation of delegated acts.
(48) In order to ensure uniform conditions for the implementation of the relevant provisions
of this Regulation, implementing powers should be conferred on the Commission to
adopt the detailed requirements for the selection of evaluators and conciliators, as well
as adopt the rules of procedure and Code of Conduct for evaluators and conciliators.
The Commission should also adopt the technical rules for the selection of a sample of
SEPs for essentiality checks and the methodology for the conduct of such essentiality
42
Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on
the Functioning of the European Union to horizontal co-operation agreements, OJ C 11, 14.01.2011, pp.
1 (currently under review)
43
Communication on Setting out the EU approach to Standard Essential Patents, COM(2017)712 final,
29.11.2017.
44
OJ L 123, 12.5.2016, p. 1.
EN 25 EN
checks by evaluators and peer evaluators. The Commission should also determine any
administrative fees for its services in relation to the tasks under this Regulation
and fees for the services evaluators, experts and conciliators, derogations thereof and
payment methods and adapt them as necessary. The Commission should also
determine the standards or parts thereof that have been published before the entry into
force of this Regulation, for which SEPs can be registered. Those powers should be
exercised in accordance with Regulation (EU) No 182/2011 of the European
Parliament and of the Council.45
(49) Regulation (EU) 2017/1001 of the European Parliament and of the Council46
should be
amended to empower EUIPO to take on the tasks under this Regulation. The functions
of the Executive Director should also be expanded to include the powers conferred on
him under this Regulation. Furthermore, the EUIPO’s arbitration and mediation centre
should be empowered to set up processes such as the aggregate royalty determination
and the FRAND determination.
(50) The European Data Protection Supervisor was consulted in accordance with Article
42(1) of Regulation (EU) 2018/1725 of the European Parliament and of the Council.47
(51) As EUIPO, the Commission and stakeholders should be given time to prepare for the
implementation and application of this Regulation, its application should be deferred.
(52) Since the objectives of this Regulation to increase transparency with regard to SEP
licensing and to provide an efficient mechanism to resolve disagreements on FRAND
terms and conditions cannot be sufficiently achieved by the Member States because of
multiplication of costs but can rather, by reason of efficiencies and scale, be better
achieved at Union level, the Union may adopt measures, in accordance with the
principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In
accordance with the principle of proportionality as set out in that Article, this
Regulation does not go beyond what is necessary in order to achieve those objectives.
HAVE ADOPTED THIS REGULATION:
Title I
General Provisions
Article 1
Subject matter and scope
1. This Regulation establishes the following rules on patents essential to a standard
(‘SEPs’):
(a) rules providing for enhanced transparency with regard to information necessary
for SEP licensing;
(b) rules on the registration of SEPs;
45
Regulation (EU) No 182/2011 of the European Parliament and of the Council laying down the rules and
general principles concerning mechanisms for control by the Member States of the Commission’s
exercise of implementing powers (OJ L 55, 28.2.2011, p. 13.)
46
Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the
European Union trade mark (OJ L 154, 16.6.2017, p. 1.)
47
Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the
protection of natural persons with regard to the processing of personal data by the Union institutions,
bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No
45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39.)
EN 26 EN
(c) a procedure to evaluate the essentiality of registered SEPs;
(d) a procedure for the amicable settlement of disputes related to fair, reasonable
and non-discriminatory nature of terms and conditions (‘FRAND
determination’);
(e) competences for the EUIPO for the fulfilment of the tasks set out in this
Regulation.
2. This Regulation shall apply to patents that are essential to a standard that has been
published by a standard development organisation, to which the SEP holder has
made a commitment to license its SEPs on fair, reasonable and non-discriminatory
(FRAND) terms and conditions and that is not subject to a royalty-free intellectual
property policy,
(a) after the entry into force of this Regulation, with the exceptions provided in
paragraph 3;
(b) before the entry into force of this Regulation, in accordance with Article 66.
3. Articles 17 and 18 and Article 34(1) shall not apply to SEPs to the extent that they
are implemented for use cases identified by the Commission in accordance with
paragraph 4.
4. Where there is sufficient evidence that, as regards identified use cases of certain
standards or parts thereof, SEP licensing negotiations on FRAND terms do not give
rise to significant difficulties or inefficiencies affecting the functioning of the internal
market, the Commission shall, after an appropriate consultation process, by means of
a delegated act pursuant to Article 67, establish a list of such use cases, standards or
parts thereof, for the purposes of paragraph 3.
5. This Regulation shall apply to holders of SEP in force in one or more Member
States.
6. This Regulation shall not apply to claims of invalidity or claims of infringement
unrelated to the implementation of a standard notified under this Regulation.
7. This Regulation is without prejudice to the application of Articles 101 and 102
TFEU or to the application of corresponding national competition law rules.
Article 2
Definitions
For the purposes of this Regulation, the following definitions shall apply:
(1) ‘standard essential patent’ or ‘SEP’ means any patent that is essential to a standard;
(2) ‘essential to a standard’ means that the patent contains at least one claim for which it
is not possible on technical grounds to make or use an implementation or method
which complies with a standard, including options therein, without infringing the
patent under the current state of the art and normal technical practice;
(3) (‘standard’ means a technical specification, adopted by a standard development
organisation, for repeated or continuous application, with which compliance is not
compulsory;
EN 27 EN
(4) ‘technical specification’ means a document that prescribes technical requirements to
be fulfilled by a product, process, service or system as defined in Article 2 of
Regulation (EU) No 1025/2012 of the European Parliament and of the Council48
;
(5) ‘standard development organisation’ means any standardising body that is not a
private industrial association developing proprietary technical specifications, that
develops technical or quality requirements or recommendations for products,
production processes, services or methods;
(6) ‘SEP holder’ means an owner of a SEP or a person holding an exclusive licence for a
SEP in one of more Member States;
(7) ‘implementer’ means a natural or legal person that implements, or intends to
implement, a standard in a product, process, service or system;
(8) ‘FRAND terms and conditions’ means fair, reasonable and non-discriminatory terms
and conditions of licensing SEPs;
(9) ‘FRAND determination’ means a structured procedure for the determination of the
FRAND terms and conditions of a SEP licence;
(10) ‘aggregate royalty’ means the maximum amount of royalty for all patents essential to
a standard;
(11) ‘patent pool’ means an entity created by an agreement between two or more SEP
holders to license one or more of their patents to one another or to third parties;
(12) ‘peer evaluation’ means a process for the re-examination of the preliminary results of
essentiality checks by evaluators other that those that carried out the original
essentiality check;
(13) ‘claim chart’ means a presentation of correspondence between the elements
(features) of one patent claim and at least one requirement of a standard or
recommendation of a standard;
(14) ‘requirement of a standard’ means expression, in the content of a document, that
conveys objectively verifiable criteria to be fulfilled and from which no deviation is
permitted if conformance with the document is to be claimed;
(15) ‘recommendation of a standard’ means expression, in the content of a document, that
conveys a suggested possible choice or course of action deemed to be particularly
suitable without necessarily mentioning or excluding others;
(16) ‘patent family’ means a collection of patent documents that cover the same invention
and whose members have the same priorities;
(17) ‘stakeholder’ means any person that can demonstrate a legitimate interest in SEPs,
including a SEP holder, an implementer, an agent for a SEP holder or an
implementer, or an association representing the interests of SEP holders and
implementers;
48
Regulation (EU) No 1025/2012 of the European Parliament and of the Council of 25 October 2012 on
European standardisation, amending Council Directives 89/686/EEC and 93/15/EEC and Directives
94/9/EC, 94/25/EC, 95/16/EC, 97/23/EC, 98/34/EC, 2004/22/EC, 2007/23/EC, 2009/23/EC and
2009/105/EC of the European Parliament and of the Council and repealing Council Decision
87/95/EEC and Decision No 1673/2006/EC of the European Parliament and of the Council (OJ L 316,
14.11.2012, p. 12.).
EN 28 EN
(18) ´competence centre’ means the EUIPO administrative units that fulfil the tasks
entrusted to EUIPO under this Regulation.
Title II
Competence centre
Article 3
Tasks of the competence centre
1. The tasks under this Regulation shall be performed by a competence centre
established within the EUIPO with the necessary human and financial resources.
2. The competence centre shall support transparency and FRAND determination in
relation to SEPs and shall perform the following tasks:
(a) set up and maintain an electronic register and an electronic database for SEPs;
(b) set up and manage rosters of evaluators and conciliators;
(c) set up and administer a system for assessment of the essentiality of SEPs;
(d) set up and administer the process for the FRAND determination;
(e) provide training to evaluators and conciliators;
(f) administer a process for aggregate royalty determination;
(g) enhance transparency and information sharing through:
(i) publishing the results and reasoned opinions of the essentiality checks
and non-confidential reports of the FRAND determinations;
(ii) enabling access to case-law (including alternative dispute resolution) on
SEPs, including from third country jurisdictions;
(iii) compiling non-confidential information on FRAND determination
methodologies and FRAND royalties;
(iv) enabling access to SEP-related rules of third countries;
(h) provide training, support and general advice on SEPs to SMEs;
(i) conduct studies and any other necessary activities to support the objectives of
this Regulation;
(j) raise awareness about SEP licensing, including SEP licensing in the value
chain.
3. Using the powers conferred by Article 157 of Regulation (EU) 2017/1001, the
Executive Director of the EUIPO shall adopt the internal administrative instructions
and shall publish the notices that are necessary for the fulfilment of all the tasks
entrusted to the competence centre by this Regulation.
EN 29 EN
Title III
Information on SEP made available through the competence
centre
Chapter 1
General Provisions
Article 4
Register of standard essential patents
1. A Union register for SEPs ('the register') is established.
2. The register shall be maintained in electronic format by the competence centre.
3. The register shall contain the following entries:
(a) information on relevant standards;
(b) registered SEPs identification, including the country of registration and patent
number;
(c) the standard version, the technical specification and the specific sections of the
technical specification for which the patent is considered essential;
(d) reference to the terms of the SEP holder’s FRAND licensing commitment to
the standard development organisation;
(e) name, address and contact details of the SEP holder;
(f) if the SEP holder is part of a group of companies, the name, address and
contact details of the parent company;
(g) name, address and contact details of the SEP holder’s legal representatives in
the Union, where relevant;
(h) the existence of any public standard terms and conditions, including SEP
holder’s royalty and discount policies;
(i) the existence of any public standard terms and conditions for SEP licensing to
SMEs;
(j) availability for licensing through patent pools, where applicable;
(k) contact details for licensing, including licensing entity;
(l) the date of registration of the SEP in the register and the registration number.
4. The register shall also contain the following entries, each accompanied by the date of
recording of such entry:
(a) changes in the contact details of entries referred to in paragraph (3), points (e),
(f), (g) and (k);
(b) the grant or transfer of a licence through patent pools, where applicable
pursuant to Article 9;
(c) information on whether an essentiality check or peer evaluation have been
performed and reference to the result;
EN 30 EN
(d) information on whether the SEP is expired or invalidated by a final judgment
of a competent court of a Member State;
(e) particulars regarding proceedings and decisions on SEPs pursuant to Article
10;
(f) date of publication of information pursuant to Article 19(1) in conjunction with
Article 14(7), Article 15(4) and Article 18(11);
(g) the date of suspension of the SEP from the Register pursuant to Article 22;
(h) corrections of the SEP, pursuant to Article 23;
(i) the date of removal of the SEP from the register pursuant to Article 25 and the
grounds for removal;
(j) the correction to or removal from the register of the item referred to in points
(b), (e) and (f).
5. The Commission is empowered to adopt delegated acts in accordance with Article
67, amending paragraphs (3) and (4) to determine items other than those referred to
in paragraphs (3) and (4) that are to be entered in the Register for the purposes of this
Regulation.
6. The competence centre shall collect, organise, make public and store the items
referred to in paragraphs (3) and (4), including any personal data for the purposes of
this Regulation.
7. The competence centre shall keep the register easily accessible for public inspection.
The data shall be considered to be of public interest and may be accessed by any
third party free of charge.
Article 5
Electronic database
1. The competence centre shall establish and maintain an electronic database for SEPs.
2. The following information in the database shall be accessible to any third party
subject to the registration with the competence centre:
(a) patent bibliographic data on the claimed SEP or SEP, including priority date,
family members, grant date and expiration date;
(b) public standard terms and conditions, including SEP holder’s royalty and
discount policies pursuant to Article 7, first paragraph, point (b), if available;
(c) public standard terms and conditions for SEP licensing to SMEs pursuant to
Article 62(1), if available;
(d) information regarding known products, processes, services or systems and
implementations pursuant to Article 7, first paragraph, point (b);
(e) information pertaining to essentiality pursuant to Article 8;
(f) non-confidential information on FRAND determinations pursuant to Article
11;
(g) information on aggregate royalties pursuant to Articles 15, 16 and 17;
(h) expert opinions referred to in Article 18;
EN 31 EN
(i) non-confidential reports of the conciliators pursuant to Article 57;
(j) SEPs selected for essentiality checks pursuant to Article 29, the reasoned
opinions or the final reasoned opinions pursuant to Article 33;
(k) the date and the grounds for removal of the SEP from the database pursuant to
Article 25;
(l) information on SEP related rules in third countries pursuant to Article 12;
(m) case-law and reports pursuant to Article 13(3) and (5);
(n) awareness raising and training materials.
3. Access to the information pursuant to paragraph (2), points (f), (h), (i), (j) and
(k) may be subject to the payment of a fee.
4. However, public authorities, including courts, shall have full access to the
information in the database referred to in paragraph (2) free of charge subject to
registration with the competence centre.
Article 6
Common provisions on the register and the database
1. When a party requests that data and documents of the database be kept confidential,
that party shall provide a non-confidential version of the information submitted in
confidence in sufficient detail to permit a reasonable understanding of the substance
of the information submitted in confidence. The competence centre may disclose that
non-confidential version.
2. The competence centre shall keep the files of any procedure relating to the
registration of the SEP. The Executive Director of the EUIPO shall determine the
form in which those files shall be kept and made available. The competence centre
shall keep the files for 10 years after the removal of the registration of the SEP. Upon
request, personal data may be removed from the register or the database after 18
months from the expiry of the SEP or removal of the SEP from the register.
3. The competence centre may correct any information contained in the register or the
database pursuant to Article 23.
4. The SEP holder and its legal representative in the Union shall be notified of any
change in the register or the database when that change concern a particular SEP.
5. Upon request, the competence centre shall issue registration certificates or certified
copies of the data and documents in the register or the database. The registration
certificates and certified copies may be subject to the payment of a fee.
6. The Commission shall determine the conditions of access to the database, including
the fees for such access, or for registration certificates and certified copies from the
database or the register, by means of an implementing act. The implementing act
shall be adopted in accordance with the examination procedure referred to in Article
68(2).
Article 7
Identification of implementations of a standard and related SEP licensing terms and
conditions
EN 32 EN
A SEP holder shall provide to the competence centre the following information:
(a) information as regards the products, processes, services or systems in which
the subject-matter of the SEP may be incorporated or to which it is intended to
be applied, for all existing or potential implementations of a standard, to the
extent such information is known to the SEP holder.
(b) where available, its standard terms and conditions for SEP licensing, including
its royalty and discount policies, within 7 months from the opening of the
registration for the relevant standard and implementation by the competence
centre.
Article 8
Information pertaining to essentiality
A SEP holder shall provide to the competence centre the following information to be included
in the database and referenced in the register:
(a) a final decision on essentiality for a registered SEP made by a competent court
of a Member State within 6 months from the publication of such decision.
(b) any essentiality check prior to [OJ: please insert the date = 24 months from
entry into force of this regulation] by an independent evaluator in the context
of a pool, identifying the SEP registration number, the identity of the patent
pool and its administrator, and the evaluator.
Article 9
Information to be provided by patent pools
Patent pools shall publish on their websites at least the following information and inform the
competence centre thereof:
(a) standards subject to collective licensing;
(b) the administrative entity’s shareholders or ownership structure;
(c) process for evaluating SEPs;
(d) roster of evaluators having residence in the Union;
(e) list of evaluated SEPs and list of SEPs being licensed;
(f) illustrative cross-references to the standard;
(g) list of products, services and processes that may be licensed through the patent
pool or the entity;
(h) royalties and discount policy per product category;
(i) standard licence agreement per product category;
(j) list of licensors in each product category;
(k) list of licensees for each product category.
Article 10
Information on decisions on SEPs
EN 33 EN
1. Competent courts of Member States shall notify the competence centre within 6
months from the adoption of a judgment concerning SEPs on:
(a) injunctions;
(b) infringement proceedings;
(c) essentiality and validity;
(d) abuse of dominance;
(e) determination of FRAND terms and conditions.
2. Any person may inform the competence centre about any judicial proceeding or
alternative dispute resolution proceeding concerning a SEP.
Article 11
Information on FRAND determinations
1. Persons involved in alternative dispute resolution proceedings concerning SEPs in
force in a Member State shall disclose to the competence centre within 6 months
from the termination of the procedure the standards and the implementations
concerned, the methodology used for the calculation of FRAND terms and
conditions, information on the name of the parties, and on specific licensing rates
determined.
2. No confidential information shall be disclosed by the competence centre without the
prior consent of the affected party.
Article 12
Information on SEP related rules in third countries
1. The competence centre shall collect and publish in the database information on any
SEP related rules in any third country.
2. Any person may provide the competence centre with such information as well as
information on updates, corrections and public consultations. The competence centre
shall publish that information in the database.
Article 13
Enhancing transparency and information sharing
1. The competence centre shall store in the database all the data provided by
stakeholders, as well as opinions and reports of evaluators and conciliators.
2. The collection, storage and processing of such data shall serve the purposes of:
(a) administering the registrations of SEPs, essentiality checks and conciliation
proceedings pursuant to this Regulation;
(b) accessing the information necessary for conducting those proceedings more
easily and efficiently;
(c) communicating with the parties to the proceedings;
EN 34 EN
(d) producing reports and statistics enabling the competence centre to improve its
operations and the functioning of the registration of SEPs and the proceedings
under this Regulation.
3. The competence centre shall include in the database case-law from competent courts
of Member States, from third country jurisdictions and alternative dispute resolution
bodies.
4. The competence centre shall collect all information on FRAND terms and
conditions, including any discounts, which have been made public by SEP
holders, disclosed to it pursuant to Article 11 and included in the FRAND
determination reports and shall make such disclosures accessible to public authorities
in the Union, including competent courts of Member States, subject to a written
request. Confidential documents shall be accompanied by a non-confidential
version of the information submitted in confidence in sufficient detail to permit a
reasonable understanding of the substance of the information submitted in
confidence.
5. The competence centre shall publish in the database an annual report on
methodologies for FRAND determinations based on information from court and
arbitration decisions and statistical information on licences and licensed products
from the FRAND determinations.
6. Upon a reasoned request by a stakeholder, any confidential information shall be
redacted in a non-confidential format before the competence centre publishes or
transmits such information.
Chapter 2
Notification of a standard and an aggregate royalty
Article 14
Notification of a standard to the competence centre
1. Holders of a patent in force in one or more Member States which is essential to a
standard for which FRAND commitments have been made shall notify to the
competence centre, where possible through the standard development organisation or
through a joint notification, the following information:
(a) the commercial name of a standard;
(b) the list of relevant technical specifications that define the standard;
(c) the date of the publication of the latest technical specification;
(d) implementations of the standard known to the SEP holders making the
notification.
2. Such notification shall be made within 30 days of the publication of the latest
technical specification.
3. In the absence of the notification under paragraph (1), any holder of a SEP in force in
one or more Member State shall notify individually, no later than 90 days from the
publication of the latest technical specification, to the competence centre the
information referred to in paragraph (1).
EN 35 EN
4. In the absence of notification under paragraph (1) or under paragraph (3) any
implementer may notify, to the competence centre the information referred to
in paragraph (1).
5. The competence centre shall also notify the relevant standard development
organisation of the publication. In case of notification pursuant to paragraphs (3) and
(4), it shall also notify, where possible, known SEP holders individually or request
confirmation from the standard development organisation that it has duly notified the
SEP holders.
6. The competence centre shall publish on the EUIPO website the notifications made
pursuant to paragraphs (1), (3) and (4) for comments by stakeholders. Stakeholders
may submit their comments to the competence centre within 30 days from the
publication of the list.
7. After expiry of the time limit referred to in paragraph (6) the competence centre shall
consider all comments received including all relevant technical specifications and
implementations and publish the information pursuant to paragraph (1).
Article 15
Notification of an aggregate royalty to the competence centre
1. Holders of SEPs in force in one or more Member States for which
FRAND commitments have been made may jointly notify the competence centre the
aggregate royalty for the SEPs covering a standard.
2. The notification made in accordance with paragraph (1) shall contain the information
on the following:
(a) the commercial name of the standard;
(b) the list of technical specifications that define the standard;
(c) the names of the SEP holders making the notification referred to in paragraph
(1);
(d) the estimated percentage the SEP holders referred to in paragraph (1) represent
from all SEP holders;
(e) the estimated percentage of SEPs they own collectively from all SEPs for the
standard;
(f) the implementations known to the SEP holders referred to in point (c);
(g) the global aggregate royalty, unless the notifying parties specify that the
aggregate royalty is not global;
(h) any period for which the aggregate royalty referred to in paragraph (1) is valid.
3. The notification referred to in paragraph (1) shall be made at the latest 120 days
after:
(a) the publication of a standard by the standard development organisation for
implementations known to the SEP holders referred to in paragraph (2), point
(c); or
(b) a new implementation of the standard becomes known to them.
EN 36 EN
4. The competence centre shall publish in the database the information provided under
paragraph (2).
Article 16
Revision of aggregate royalty
1. In case of revision of the aggregate royalty, the SEP holders shall notify the
competence centre about the revised aggregate royalty and the reasons for the
revision.
2. The competence centre shall publish in the database the initial aggregate royalty, the
revised aggregate royalty and the reasons for the revision in the register.
Article 17
Process for facilitating agreements on aggregate royalty determinations
1. Holders of SEPs in force in one or more Member States representing at least 20 % of
all SEPs of a standard may request the competence centre to appoint a conciliator
from the roster of conciliators to mediate the discussions for a joint submission of an
aggregate royalty.
2. Such a request shall be made no later than 90 days following the publication of the
standard or no later than 120 days following the first sale of new implementation on
the Union market for implementations not known at the time of publication of the
standard.
3. The request shall contain the following information:
(a) the commercial name of the standard;
(b) the date of publication of the latest technical specification or the date of the
first sale of new implementation on the Union market;
(c) the implementations known to the SEP holders referred to in paragraph (1);
(d) the names and contact details of the SEP holders supporting the request;
(e) the estimated percentage of SEPs they own individually and collectively from
all potential SEPs claimed for the standard.
4. The competence centre shall notify the SEP holders referred to in paragraph (3),
point (d) and request them to express their interest in participating in the process and
to provide their estimated percentage of SEPs from all SEPs for the standard.
5. The competence centre shall appoint a conciliator from the roster of conciliators and
inform all SEP holders that expressed interest to participate in the process.
6. SEP holders that submit to the conciliator confidential information shall provide a
non-confidential version of the information submitted in confidence in sufficient
detail to permit a reasonable understanding of the substance of the information
submitted in confidence.
7. Where the SEP holders fail to make a joint notification within 6 months from the
appointment of the conciliator, the conciliator shall terminate the process.
8. If the contributors agree on a joint notification, the procedure set out in Article 15(1),
(2) and (4) shall apply.
EN 37 EN
Article 18
Non-binding expert opinion on aggregate royalty
1. A SEP holder or an implementer may request the competence centre for a non-
binding expert opinion on a global aggregate royalty.
2. The request referred to in paragraph (1) shall be made no later than 150 days after:
(a) the publication of the relevant standard for known implementations; or
(b) new implementations are first sold on the Union market.
3. That request shall include:
(a) commercial name of the standard;
(b) list of relevant technical specifications that define the standard;
(c) list of relevant products, processes, services or systems or implementations;
(d) list of known stakeholders and contact details.
4. The competence centre shall notify the relevant standard development
organisation and all known stakeholders of the request. It shall publish the request on
EUIPO's website and invite stakeholders to express interest in participating in the
process within 30 days from the day when the request was published.
5. Any stakeholder may request to participate in the process after explaining the basis
of its interest. SEP holders shall provide their estimated percentage of those SEPs of
all SEPs for a standard. Implementers shall provide information on any relevant
implementations of the standard, including any relevant market share in the Union.
6. If the requests for participation include SEP holders representing collectively at least
an estimated 20% of all SEPs for the standard, and implementers holding collectively
at least 10% relevant market share in the Union or at least 10 SMEs, the competence
centre shall appoint a panel of three conciliators selected from the roster of
conciliators with the appropriate background from the relevant field of technology.
7. Stakeholders that submit to the panel confidential information shall provide a non-
confidential version of the information submitted in confidence in sufficient detail to
permit a reasonable understanding of the substance of the information submitted in
confidence.
8. Following the appointment, the panel shall request the participating SEP holders to,
within one month:
(a) propose an aggregate royalty, including the information referred to in Article
15(2), or
(b) submit justification on the impossibility to propose an aggregate royalty due to
technological, economic, or other considerations.
9. The panel shall duly consider the submissions provided for in paragraph 8 and
decide:
(a) to suspend the procedure for the expert opinion on aggregate royalty for an
initial period of no longer than 6 months, which can be further extended on the
basis of a duly justified request by one of the participating SEP holders, or
(b) to provide the expert opinion.
EN 38 EN
10. The panel shall provide the expert opinion within 8 months of the end of the
suspension period pursuant to paragraph 8(a) or of the decision referred to in
paragraph 8(b). The opinion shall be supported by at least two of the three
conciliators.
11. 1The expert opinion shall include a summary of the information provided in the
request, the information referred to in Article 15(2), the names of the conciliators, the
procedure, the reasons for the opinion on the aggregate royalty and the underlying
methodology. The reasons for any divergent views shall be specified in an annex to
the expert opinion.
12. The expert opinion shall include an analysis of the value chain concerned and the
potential impact of the aggregate royalty on the innovation incentives of both SEP
holders and stakeholders in the value chain where licensing is to take place.
13. The competence centre shall publish the expert opinion and notify the participants of
that publication.
Chapter 3
Registration of SEPs
Article 19
Administration of the register of standard essential patents
1. The competence centre shall create an entry in the register for a standard for which
FRAND commitments have been made within 60 days from the earliest of the
following events:
(a) publication by the competence centre of the standard and related information
pursuant to Article 14(7);
(b) publication by the competence centre of an aggregate royalty and related
information pursuant to Article 15(4) and Article 18(11).
2. The competence centre shall publish a notice on the EUIPO website informing
stakeholders that an entry in the register has been made and refer to the publications
referred to in paragraph (1). The competence centre shall notify known SEP holders
individually by electronic means and the relevant standard development
organisation of the notice in this paragraph.
Article 20
Registration of standard essential patents
1. Upon request of a SEP holder the competence centre shall register any patent in force
in one or more Member States and falling within the scope of this Regulation that is
essential for a standard, for which the competence centre has published a notice
pursuant to Article 19(2).
2. For a SEP to be included in the register, at least one patent claim shall correspond
with at least one requirement or recommendation to the standard, identified by
standard name, version (and/or release) and sub-clause.
3. The request for registration shall be made within 6 months from the publication of
the notice pursuant to Article 19(2). In case the SEP is only granted by a national or
European patent office after the publication of the notice pursuant to Article 19(2),
EN 39 EN
the request for registration shall be made within 6 months from the grant of the SEP
by the relevant patent office.
4. The request shall include the information set out in Article 4(3) and Article 5(2),
points (a), (b), (d) and (e).
5. A SEP holder shall update the information in the register and database to reflect
relevant changes in relation to its registered SEP by notifying the competence centre
within 6 months from the change occurring.
6. The request for registration will only be accepted following the payment of the
registration fee by the SEP holder. The Commission shall determine the registration
fee in the implementing act issued based on Art. 63(5). The registration fee shall
include, in case of medium and large enterprises, the expected costs and fees of the
essentiality check for SEPs selected pursuant to Article 29(1).
Article 21
Date of registration
1. The date of registration shall be the date on which the competence centre has
received a registration request pursuant to Article 20(2), (4) and (5) .
2. The competence centre shall publish the registered SEPs in the register within 7
working days from the date of registration.
Article 22
Examination of the conditions of registration
1. A sample of SEP registrations shall be checked annually for completeness and
correctness.
2. The EUIPO shall adopt a methodology for selecting a sample of SEP registrations for
checks.
3. Where the registration does not contain the information in accordance with Articles 4
and 5 or contains incomplete or inaccurate information, the competence centre shall
request the SEP holder to provide the complete and accurate information within the
set time limit of no less than 2 months.
4. If the SEP holder fails to provide the correct and complete information, the
registration shall be suspended from the register, until such time as the
incompleteness or inaccuracy is remedied.
5. A SEP holder whose SEP has been suspended from the register pursuant
to paragraph (4) and considers that the finding of the competence centre is incorrect
may apply before the Boards of Appeal of the EUIPO for a decision on the matter.
The application shall be made within 2 months from the suspension. Within 2
months from the application, the Boards of Appeal of the EUIPO shall either reject
the application or request the competence centre to correct its finding and inform the
requesting person.
6. Any completing or correcting information on a SEP pursuant to this article shall be
made free of charge.
EN 40 EN
Article 23
Correction of an entry in the register or information in the database
1. A SEP holder may request a correction of its SEP registration or of the information
contained in the database by filing an appropriate request to the competence centre,
except as provided for in paragraph (2).
2. Any third party may request the competence centre to correct a SEP registration or
information contained in the database. The request shall contain the following
information:
(a) the name and contact details of the requesting person;
(b) the registration number of the registered SEP;
(c) the reasons for the request;
(d) evidence from an independent source supporting the request.
3. The competence centre shall notify the request to the SEP holder and invite the SEP
holder to correct the entry in the register or the information submitted for the
database, where relevant within a time limit no less than 2 months.
4. The competence centre shall notify the SEP holder and invite the SEP holder to
correct the entry in the register or the information submitted for the database, where
relevant within a time limit no less than 2 months, when the competence centre is
informed by a competent court of a Member State pursuant to Article 10(1) or a
patent office or any third party of:
(a) the expiry of a registered SEP
(b) the invalidation of a registered SEP by a competent authority; or
(c) a final judgment that the registered SEP is not essential to the relevant
standard.
5. If the SEP holder fails to correct the entry in the register or the information submitted
for the database within the given time limit, the registration shall be suspended from
the register, until such time as the incompleteness or inaccuracy is remedied.
6. A SEP holder whose SEP has been suspended from the register pursuant
to paragraph (5) and considers that the finding of the competence centre is incorrect
may apply before the Boards of Appeal of the EUIPO for a decision on the matter.
The application shall be made within 2 months from the suspension. Within two
months from the application, the Boards of Appeal of the EUIPO shall either reject
the application or request the competence centre to correct its finding and inform the
requesting person.
7. The treatment of requests for correction pursuant to This article by the competence
centre shall be suspended from the selection of the SEP for essentiality check
pursuant to Article 29 until the publication of the result of the essentiality check in
the register and the database pursuant to Article 33(1).
8. The competence centre may correct any linguistic errors or errors of transcription
and manifest oversights or technical errors attributable to it in the register and in the
database of its own motion.
9. Any corrections pursuant to this article shall be made free of charge.
EN 41 EN
Article 24
Effects of absence of registration or suspension of registration of SEPs
1. A SEP that is not registered within the time-limit set out in Article 20(3) may not be
enforced in relation to the implementation of the standard for which a registration is
required in a competent court of a Member State, from the time-limit set out in
Article 20(3) until its registration in the register.
2. A SEP holder that has not registered its SEPs within the time-limit set out in Article
20(3) shall not be entitled to receive royalties or seek damages for infringement of
such SEPs in relation to the implementation of the standard for which registration is
required, from the time-limit set out in Article 20(3) until its registration in the
register.
3. Paragraphs (1) and (2) are without prejudice to provisions included in contracts
setting a royalty for a broad portfolio of patents, present or future, stipulating that the
invalidity, non-essentiality or unenforceability of a limited number thereof shall not
affect the overall amount and enforceability of the royalty or other terms and
conditions of the contract.
4. Paragraphs (1) and (2) apply also in case the registration of a SEP is suspended,
during the suspension period pursuant to Article 22(4) or 23(5), except where the
Boards of Appeal request the competence centre to correct its findings in accordance
with Article 22(5) and 23(6).
5. A competent court of a Member State requested to decide on any issue related to a
SEP in force in one or more Member States, shall verify whether the SEP is
registered as part of the decision on admissibility of the action.
Article 25
Removing a SEP from the register and the database
1. A SEP holder may request the removal of its registered SEP from the register and the
database, on the following grounds:
(a) expiry of the patent;
(b) invalidation of the patent by a competent authority;
(c) final judgment of a competent court of a Member State that the registered
patent is not essential to the relevant standard;
(d) as a consequence of a negative result from the essentiality check pursuant to
Article 31(5) and Article 33(1).
2. Such a request may be made at any time, except from the selection of the SEP for
essentiality check pursuant to Article 29 until the publication of the result of the
essentiality check in the register and database pursuant to Article 33(1).
3. The competence centre shall remove the SEP from the register and the database.
EN 42 EN
Title IV
Evaluators and Conciliators
Article 26
Evaluators and conciliators
1. An evaluator shall conduct essentiality checks.
2. A conciliator shall conduct the following tasks:
(a) mediate among parties in establishing an aggregate royalty;
(b) provide a non-binding opinion on an aggregate royalty;
(c) serve in a FRAND determination.
3. The evaluators and conciliators shall adhere to a code of conduct.
4. The competence centre shall appoint [10] evaluators from the roster of evaluators as
peer evaluators for a period of [three] years.
5. By [OJ: please insert the date = 18 months from entry into force of this regulation],
the Commission shall by means of an implementing act adopted in accordance with
the examination procedure referred to in , lay down the practical and operational
arrangements concerning:
(a) the requirements for evaluators or conciliators, including a Code of Conduct;
(b) the procedures pursuant to Articles 17, 18, 31 and 32 and Title VI.
Article 27
The selection procedure
1. The competence centre shall conduct a procedure of selecting candidates based on
the requirements established in the implementing act referred to in Article 26(5).
2. The competence centre shall establish a roster of suitable candidates for evaluators or
conciliators. There may be different rosters of evaluators and conciliators depending
on the technical area of their specialisation or expertise.
3. Where the competence centre has not yet established roster of candidates evaluators
or conciliators at the moment of the first registrations or FRAND determination, the
competence centre shall invite ad hoc renowned experts who satisfy the requirements
set out in the implementing act referred to in Article 26(5).
4. The competence centre shall regularly review the rosters that a sufficient number of
qualified candidates is maintained.
Title V
Essentiality checks of standard essential patents
Article 28
General requirement for essentiality checks
EN 43 EN
1. The competence centre shall administer a system of essentiality checks, ensuring that
they are conducted in an objective and impartial manner and that confidentiality of
the information obtained is safeguarded
2. The essentiality check shall be conducted by an evaluator selected pursuant to Article
27. Evaluators shall conduct essentiality checks of registered SEPs for the standard
for which they are registered.
3. Essentiality checks shall not be done on more than one SEP from the respective
patent family.
4. The lack of an essentiality check or an ongoing essentiality check shall not
preclude licensing negotiations or any court or administrative procedure in relation to
a registered SEP.
5. The evaluator shall summarise the result of the essentiality check and the reasons for
it in a reasoned opinion, or, in case of peer evaluation, in a final reasoned opinion,
which shall not be legally binding.
6. The result of the essentiality check conducted and the reasoned opinion of the
evaluator or the final reasoned opinion of the peer evaluator may be used as evidence
before stakeholders, patent pools, public authorities, courts or arbitrators.
Article 29
Administration of essentiality checks
1. The competence centre shall select annually a sample of registered SEPs from
different patent families from each SEP holder and with regard to each specific
standard in the register for essentiality checks. Registered SEPs of micro and small
enterprises shall be excluded from the annual sampling process. The checks shall be
conducted based on a methodology that ensures the establishment of a fair and
statistically valid selection that can produce sufficiently accurate results about the
essentiality rate in all registered SEPs of a SEP holder with regard to each specific
standard in the register. By [OJ: please insert the date = 18 months from entry into
force of this regulation] the Commission shall, by means of an implementing act,
determine the detailed methodology. That implementing act shall be adopted in
accordance with the examination procedure referred to in Article 68(2).
2. The competence centre shall notify the SEP holders about the SEPs selected for
essentiality checks. Within the time limit established by the competence centre, the
SEP holders may submit within the same time period a claim chart with a maximum
amount of five correspondences between the SEP and the relevant standard, any
additional technical information that may facilitate the essentiality check and
translations of the patent requested by the competence centre.
3. The competence centre shall publish the list of SEPs selected for essentiality check.
4. If a SEP selected for essentiality check was already the subject of a previous or
ongoing essentiality check pursuant to This title or of an essentiality decision or
check referred to in Article 8, no additional essentiality check shall be done. The
result from the previous essentiality check or decision shall be used for the
determination of the percentage of sampled per SEP holder and per specific
registered standard that has passed successfully the essentiality check.
EN 44 EN
5. Each SEP holder may voluntarily propose annually up to 100 registered SEPs from
different patent families to be checked for essentiality with regard to
each specific standard for which SEP registration was made.
6. Any implementer may voluntarily propose annually up to 100 registered SEPs from
different patent families to be checked for essentiality with regard to
each specific standard for which SEP registrations have been made.
7. The competence centre shall allocate the SEPs for essentiality check to evaluators
based on the roster of evaluators established pursuant to Article 27 and shall
provide access to the evaluator access to the complete documentation provided by
the SEP holder.
8. The competence centre shall ensure that the identity of the evaluator remain
undisclosed to the SEP holders during the examination of the essentiality pursuant to
Article 31 or during the peer evaluation pursuant to Article 32. All the
communication between the SEP holder and the evaluator shall pass through the
competence centre.
9. In case of failure to respect formal requirements pursuant to Article 28, other
procedural requirements or the code of conduct, the competence centre may, at the
request of any stakeholder submitted within one month from the publication of the
reasoned opinion or final reasoned opinion or on its own initiative, review the
examination and decide to:
(a) maintain, or
(b) revoke
the results of examination of the essentiality of a registered SEP or of the peer
evaluation.
10. Where the competence centre revokes the results pursuant to paragraph 9(b), the
competence centre shall appoint a new evaluator or peer evaluator to conduct a new
examination of the essentiality check pursuant to Article 31 or new peer evaluation
pursuant to Article 32.
11. The party that requests the review of the examination of the essentiality check or
peer evaluation and re-appointment of the evaluator and considers that the finding of
the competence centre is incorrect may apply before the Boards of Appeal of the
EUIPO for a decision on the matter. The application shall be made within 2 months
from the finding of the competence centre. The Boards of Appeal of the EUIPO shall
either reject the application or request the competence centre to appoint a new
evaluator and inform the requesting person and, where relevant, the SEP holder
Article 30
Observations by stakeholders
1. Within 90 days following the publication of the list of registered SEPs selected for
sampling, any stakeholder may submit to the competence centre written observations
concerning the essentiality of the selected SEPs.
2. The observations referred to in paragraph (1) shall be communicated to the SEP
holder who may comment on them within the time limit established by the
competence centre.
EN 45 EN
3. The competence centre shall provide the observations and the responses by the SEP
holder to the evaluator following the expiry of the set time limits.
Article 31
Examination of the essentiality of a registered SEP
1. The examination of essentiality shall be conducted following procedure that ensures
sufficient time, rigorousness and high-quality.
2. The evaluator may invite the SEP holder concerned to file observations, within a
period to be fixed by the evaluator.
3. Where an evaluator has reasons to believe that the SEP may not be essential to the
standard, the competence centre shall inform the SEP holder of any such reasons and
specify a period within which the SEP holder may submit its observations, or submit
an amended claim chart.
4. The evaluator shall duly consider any information provided by the SEP holder.
5. The evaluator shall issue his reasoned opinion to the competence centre within 6
months from its appointment. The reasoned opinion shall include the name of the
SEP holder and of the evaluator, the SEP subject to the essentiality check, the
relevant standard, a summary of the examination procedure, the result of the
essentiality check and the reasons on which that result is based.
6. The competence centre shall notify the reasoned opinion to the SEP holder.
Article 32
Peer evaluation
1. Where the competence centre has informed the SEP holder pursuant to Article 31(3),
the SEP holder may request peer evaluation before the expiry of the period to submit
its observations pursuant to Article 31(3).
2. If the SEP holder requests a peer evaluation, the competence centre shall appoint a
peer evaluator.
3. The peer evaluator shall duly consider all the information submitted by the SEP
holder, the reasons of the initial evaluator why the SEP may not be essential to the
standard and any amended claim chart or additional observations provided by the
SEP holder.
4. In case the peer evaluation confirmed the preliminary conclusions of the evaluator
that the evaluated SEP may not be essential to the standard for which it was
registered, the peer evaluator shall inform the competence centre and provide the
reasons for this opinion. The competence centre shall inform the SEP holder and
invite the SEP holder to submit its observations.
5. The peer evaluator shall duly consider the observations of the SEP holder and issue a
final reasoned opinion to the competence centre within 3 months from its
appointment. The final reasoned opinion shall include the name of the SEP holder, of
the evaluator and of the peer evaluator, the SEP subject to the essentiality check, the
relevant standard, a summary of the examination and peer evaluation procedure, the
preliminary conclusion of the evaluator, the result of the peer evaluation and the
reasons on which that result is based.
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6. The competence centre shall notify the final reasoned opinion to the SEP holder.
7. The results of the peer evaluation shall serve to improve the essentiality check
process and ensure consistency.
Article 33
Publication of the results of the essentiality checks
1. The competence centre shall enter the result of the essentiality check or of the peer
evaluation in the register and the reasoned opinion and final reasoned opinion in the
database. The result of the essentiality check under this Regulation shall be valid for
all SEPs from the same patent family.
2. The competence centre shall publish in the register the percentage of sampled SEPs
per SEP holder and per specific registered standard that passed successfully the
essentiality test.
3. Where the publication of the results contains an error attributable to the competence
centre, the competence centre shall of its own motion or at the request of the SEP
holder registrant correct the error and publish the correction.
Title VI
FRAND determination
Article 34
Initiation of the FRAND determination
1. The FRAND determination in respect of a standard and implementation for which an
entry in the register has been created, shall be initiated by any of the following
persons:
(a) SEP holder, prior to any initiation of a SEP infringement claim before a
competent court of a Member State;
(b) an implementer of a SEP prior to any request for the determination or
assessment of FRAND terms and conditions of a SEP licence before a
competent court of a Member State.
2. The party requesting the FRAND determination shall be referred to as the
‘requesting party’, any party responding to the request as the ‘responding party’, and
both shall be referred to as the ‘parties’ for the purposes of FRAND determination.
3. The FRAND determination may be initiated by a party or entered into by the parties
to resolve disputes related to FRAND terms and conditions voluntarily.
4. The obligation to initiate FRAND determination pursuant to paragraph 1 prior to the
court proceedings is without prejudice to the possibility for either party to request,
pending the FRAND determination, the competent court of a Member State to issue a
provisional injunction of a financial nature against the alleged infringer. The
provisional injunction shall exclude the seizure of property of the alleged infringer
and the seizure or delivery up of the products suspected of infringing a SEP. Where
national law provides that the provisional injunction of a financial nature can only be
requested where a case is pending on the merits, either party may bring a case on the
merits before the competent court of a Member State for that purpose. However, the
parties shall request the competent court of a Member State to suspend the
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proceedings on the merits for the duration of the FRAND determination. In deciding
whether to grant the provisional injunction, the competent court of a Member States
shall consider that a procedure for FRAND determination is ongoing.
5. Once the FRAND determination is terminated, the whole range of measures,
including provisional, precautionary and corrective measures, shall be available to
parties.
Article 35
Rules of procedure
The FRAND determination shall be governed by Article 34 to Article 58, as further
implemented pursuant to Article 26(5).
Article 36
Content of the request to initiate a FRAND determination
1. The FRAND determination shall be initiated by a written request to the competence
centre that shall contain the following information:
(a) the name and contact information of the requesting party;
(b) the name and address of the responding party;
(c) the registration numbers of the relevant SEPs in the register;
(d) the commercial name of the standard and the name of the standard developing
organisation.
(e) a summary of the licensing negotiations to date, if applicable;
(f) references to any other FRAND determination, if applicable.
2. Where the request to initiate a FRAND determination is made by a SEP holder, in
addition to the information listed in paragraph (1), it shall contain the following
information:
(a) claim charts mapping patent claims to the standard of selected registered
SEPs;
(b) proof of essentiality checks, if available.
3. The request to initiate a FRAND determination may include a proposal for a FRAND
determination.
Article 37
Duration of the FRAND determination
1. Unless otherwise agreed by the parties, the period from the date of the submission of
the request to continue the FRAND determination in accordance with Article
38(5)(b) or Article 38(3)(c) or Article 38(4)(a), second sentence, or Article 38(4)(c),
as applicable, until the date of the termination of the procedure shall not exceed
9 months.
2. The period for the time barring of claims before a competent court of a Member
State shall be suspended for the duration of the FRAND determination.
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Article 38
Notification of the FRAND determination request and response
1. The competence centre shall notify the request to the responding party within 7 days
and shall inform the requesting party thereof.
2. The responding party shall notify the competence centre within 15 days from the
receipt of the notification of the request for FRAND determination from the
competence centre in accordance with paragraph (1). The response shall indicate
whether the responding party agrees to the FRAND determination and whether it
commits to comply with its outcome.
3. Where the responding party does not reply within the time limit laid down in
paragraph (2) or informs the competence centre of its decision not to participate in
the FRAND determination, or not to commit to comply with the outcome, the
following shall apply:
(a) the competence centre shall notify the requesting party thereof and invite it to
indicate within seven days whether it requests the continuation of the FRAND
determination and whether it commits to comply with the outcome of the
FRAND determination;
(b) where the requesting party requests the continuation of the FRAND
determination and commits to its outcome, the FRAND determination shall
continue, but Article 34(1) shall not apply to the court proceedings for the
requesting party in relation to the same subject matter.
(c) where the requesting party fails to request, within the time limit referred to in
subparagraph (a), the continuation of the FRAND determination, the
competence centre shall terminate the FRAND determination.
4. Where the responding party agrees to the FRAND determination and commits to
comply with its outcome pursuant to paragraph (2), including where such
commitment is contingent upon the commitment of the requesting party to comply
with the outcome of the FRAND determination, the following shall apply:
(a) the competence centre shall notify the requesting party thereof and request to
inform the competence centre within seven days whether it also commits to
comply with the outcome of the FRAND determination. In case of acceptance
of the commitment by the requesting party, the FRAND determination shall
continue and the outcome shall be binding for both parties;
(b) where the requesting party does not reply within the time limit referred to in
subparagraph (a) or informs the competence centre of its decision not to
commit to comply with outcome of the FRAND determination, the competence
centre shall notify the responding party and invite it to indicate within seven
days whether it requests the continuation of the FRAND determination.
(c) where the responding party requests the continuation of the FRAND
determination, the FRAND determination shall continue, but Article 34(1)
shall not apply to the court proceedings for by the responding party in relation
to the same subject matter;
(d) where the responding party fails to request, within the time-limit referred to in
subparagraph (b), the continuation of the FRAND determination, the
competence centre shall terminate the FRAND determination.
EN 49 EN
5. Where either party commits to comply with the outcome of the FRAND
determination, while the other party fails to do so within the applicable time limits,
the competence centre shall adopt a notice of commitment to the FRAND
determination and notify the parties within 5 days from the expiry of the time-limit to
provide the commitment. The notice of commitment shall include the names of the
parties, the subject-matter of the FRAND determination, a summary of the procedure
and information on the commitment provided or on the failure to provide
commitment for each party.
6. The FRAND determination shall concern a global SEP licence, unless otherwise
specified by the parties in case both parties agree to the FRAND determination or by
the party that requested the continuation of the FRAND determination. SMEs that are
parties to the FRAND determination may request to limit the territorial scope of the
FRAND determination.
Article 39
Selection of conciliators
1. Following the reply to the FRAND determination by the responding party in
accordance with Article 38(2), or the request to continue in accordance with Article
38(5), the competence centre shall propose at least 3 candidates for the FRAND
determination from the roster of conciliators referred to Article 27(2). The parties or
party shall select one of the proposed candidates as a conciliator for the FRAND
determination.
2. If the parties do not agree on a conciliator, the competence centre shall select one
candidate from the roster of conciliators referred to in Article 27(2).
Article 40
1. The selected candidate shall communicate to the competence centre the acceptance to
take up the task of a conciliator for the FRAND determination, which shall notify the
communication of acceptance to the parties.
2. The day following the notification of the acceptance to the parties, the conciliator is
appointed, and the competence centre shall refer the case to him/her.
Article 41
Preparation of the proceedings
If during the FRAND determination a conciliator is unable to participate, withdraws or needs
to be replaced because he or she does not comply with the requirements as provided for
in Article 26, the procedure provided for in Article 39 shall apply. The time period referred to
in Article 37 shall be extended for the time necessary for the appointment of the new
conciliator for the FRAND determination.
Article 42
Preparation of the proceedings
1. After the case is referred to the conciliator in accordance with Article 40(2), he/she
shall examine whether the request contains the information required under Article
36 in accordance with the Rules of procedure.
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2. He/she shall communicate to the parties or the party requesting the continuation of
the FRAND determination the conduct as well as the schedule of procedure.
Article 43
Written procedure
The conciliator shall invite each party to file written submissions setting out its arguments
concerning the determination of the applicable FRAND terms and conditions, including
supporting documentation and evidence, and set appropriate time limits.
Article 44
Objection to the FRAND determination
1. A party may submit an objection stating that the conciliator is unable to make a
FRAND determination on legal grounds, such as a previous binding
FRAND determination or agreement between the parties, no later than in the first
written submission. The other party shall be given opportunity to submit its
observations.
2. The conciliator shall decide on the objection and either reject it as unfounded before
considering the merits of the case or join it to the examination of the merits of the
FRAND determination. If the conciliator overrules the objection or joins it to the
examination of the merits of the determination of FRAND terms and conditions, it
shall resume consideration of the determination of FRAND terms and conditions.
3. If the conciliator decides that the objection is founded, it shall terminate the FRAND
determination and shall draw up a report stating the reasons of the decision.
Article 45
Conduct of the FRAND determination
1. The conciliator shall assist the parties in an independent and impartial manner in
their endeavour to reach a determination of FRAND terms and conditions.
2. The conciliator may invite the parties or the party requesting the continuation of the
FRAND determination to meet with him/her or may communicate with him/her
orally or in writing.
3. The parties or the party requesting the continuation of the FRAND determination
shall cooperate in good faith with the conciliator and, in particular, shall attend the
meetings, comply with his/her requests to submit all relevant documents, information
and explanations as well as use the means at their disposal to enable the conciliator to
hear witnesses and experts whom the conciliator might call.
4. The responding party may join the FRAND determination at any moment before its
termination.
5. At any stage of the procedure upon request by both parties, or the party requesting
the continuation of the FRAND determination, as applicable, the conciliator shall
terminate the FRAND determination.
Article 46
Failure of a party to engage
EN 51 EN
1. If a party:
(a) fails to comply with any request of the conciliator, Rules of procedure or
schedule of procedure referred to in Article 42(2),
(b) withdraws its commitment to comply with the outcome of the FRAND
determination as set out in Art. 38, or
(c) in any other way fails to comply with a requirement relating to the FRAND
determination,
the conciliator shall inform both parties thereof.
2. Having received the notification of the conciliator, the complying party may ask the
conciliator to take one of the following actions:
(a) make a proposal for a FRAND determination in accordance with Article
55 based on the information available to it, attaching such weight as it
considers fit to any evidence submitted to it,
(b) terminate the procedure.
3. If the party requesting the continuation of the FRAND determination fails to comply
with any request of the conciliator or in any other way fails to comply with a
requirement relating to the FRAND determination, the conciliator shall terminate the
procedure.
Article 47
Parallel proceedings in a third country
1. For the purposes of this article a parallel proceeding means a proceeding that satisfies
the following conditions:
(a) any procedure before a court, tribunal, an administrative or state authority of a
third country taking legally binding and enforceable decisions on
patent assertion, injunction, infringement, abuse of a dominant market
position or a determination of FRAND terms and conditions;
(b) concerning a licensing dispute regarding the same standard and implementation
and a patent which in substance has the same claims as the SEPs that is subject
to the FRAND determination;
(c) involving one or more of the parties to the FRAND determination as a party.
2. Where a parallel proceeding has been initiated before or during the FRAND
determination by a party, the conciliator, or where he/she has not been appointed, the
competence centre, shall terminate the FRAND determination upon the request of
any other party.
Article 48
Evidence
1. Without prejudice to the protection of confidentiality in accordance with Article
54(3) at any time during the FRAND determination, at the request of a party or on its
own motion, the conciliator may request the production of documents or other
evidence.
EN 52 EN
2. The conciliator may examine publicly available information and the competence
centre’s register and confidential and non-confidential reports of other FRAND
determinations, as well as non-confidential documents and information produced by
or submitted to the competence centre.
Article 49
Witnesses and experts
The conciliator may hear witnesses and experts requested by either party provided that the
evidence is necessary for the FRAND determination and that there is time to consider such
evidence.
Article 50
Proposal for a determination of FRAND terms and conditions
1. At any time during the FRAND determination, the conciliator or a party on its own
motion or by invitation of the conciliator may submit proposals for a determination
of FRAND terms and conditions
2. If the requesting party has submitted a written proposal for FRAND terms and
conditions in its written submission, the responding party shall be given opportunity
to comment on it and/or submit a written counter-proposal in its reply.
3. When submitting suggestions for FRAND terms and conditions, the
conciliator shall take into account the impact of the determination FRAND terms and
conditions on the value chain and on the incentives to innovation of both the SEP
holder and the stakeholders in the relevant value chain. To that end, the conciliator
may rely on the expert opinion referred to in Article 18 or, in case of absence of such
an opinion request additional information and hear experts or stakeholders.
Article 51
Recommendation of a determination of FRAND terms and conditions by the conciliator
The conciliator shall notify the parties a written recommendation of a determination of
FRAND terms and conditions at the latest 5 months before the time limit referred to in Article
37.
Article 52
Submission of reasoned proposals for determination of FRAND terms and conditions by
the parties
Following the notification of the written recommendation of FRAND terms and conditions by
the conciliator, either party shall submit a detailed and reasoned proposal for a determination
of FRAND terms and conditions. If a party has already submitted a proposal for the
determination of FRAND terms and conditions, revised versions shall be submitted, if
necessary, taking into account the recommendation of the conciliator.
Article 53
Oral procedure
EN 53 EN
If the conciliator considers it necessary or if a party so requests, an oral hearing shall be held
within 20 days after the submission of reasoned proposals for determination of FRAND terms
and conditions.
Article 54
Disclosure of information
1. When the conciliator receives information for the purposes of FRAND
determination from a party, it shall disclose it to the other party so that the other
party has the opportunity to present any explanation.
2. A party may request the conciliator that specific information in a submitted
document is kept confidential.
3. When a party requests the information in a document it had submitted to be kept
confidential, the conciliator shall not disclose that information to the other party. The
party invoking confidentiality shall also provide a non-confidential version of the
information submitted in confidence in sufficient detail to permit a reasonable
understanding of the substance of the information submitted in confidence. This non-
confidential version shall be disclosed to the other party.
Article 55
Reasoned proposal for a determination of FRAND terms and conditions by the
conciliator
1. At the latest 45 days before the end of the time limit referred to in Article 37, the
conciliator shall submit a reasoned proposal for a determination of FRAND terms
and conditions to the parties or, as applicable, the party requesting the continuation
of the FRAND determination.
2. Either party may submit observations to the proposal and suggest amendments to the
proposal by the conciliator, who may reformulate its proposal to take into account
the observations submitted by the parties and shall inform the parties or the party
requesting the continuation of the FRAND determination, as applicable, of such
reformulation.
Article 56
Termination of the FRAND determination and notice of termination
1. In addition to the termination of the FRAND determination for reasons provided
for Article 38(4), Article 44(3), Article 45(5), Article 46(2), point (b), Article
46(3) and Article 47(2), the FRAND determination shall be terminated in any of the
following ways:
(a) a settlement agreement is signed by the parties;
(b) a written declaration is signed by the parties accepting the reasoned proposal
for a determination of FRAND terms and conditions by the conciliator referred
to in Article 55;
(c) a written declaration is made by a party not to accept the reasoned proposal of
a determination of FRAND terms and conditions by the conciliator referred to
in Article 55;
EN 54 EN
(d) a party has not submitted a reply to the reasoned proposal of a determination of
FRAND terms and conditions by the conciliator referred to in Article 55.
2. In case of termination of the FRAND determination, the competence centre shall
adopt a notice of termination of the FRAND determination and notify the parties
within 5 days from termination. The notice of termination shall include the names of
the parties and the conciliator, the subject-matter of the FRAND determination, a
summary of the procedure and the reasons for its termination.
3. The notice of termination notified to the SEP owner shall be considered to constitute
a document within the meaning of Article 6(3) point (c) of Regulation (EU)
No 608/2013 with regard to any request for a customs action against goods suspected
to infringing its SEP.
4. A competent court of a Member State, asked to decide on determination of FRAND
terms and conditions, including in abuse of dominance cases among private parties,
or SEP infringement claim concerning a SEP in force in one or more Member States
subject to the FRAND determination shall not proceed with the examination of the
merits of that claim, unless it has been served with a notice of termination of the
FRAND determination, or, in the cases foreseen in Article 38(3)(b) and Article
38(4)(c), with a notice of commitment pursuant to Article 38(5).
5. In the cases foreseen in Article 38(3)(b) and in Article 38(4)(c), Article 34(5) shall
apply mutatis mutandis in the proceedings before a competent court of a Member
State.
Article 57
Report
1. The conciliator shall provide the parties with a written report following the
termination of the FRAND determination in cases listed in Article 56(1), point
(c) and Article 56(1), point (d).
2. The report shall include the following:
(a) the names of the parties;
(b) a confidential assessment of the FRAND determination;
(c) confidential summary of the main issues of disagreement;
(d) a non-confidential methodology and the assessment of the determination of
FRAND terms and conditions by the conciliator.
3. The confidential report shall be available only to the parties and to the competence
centre. The competence centre shall publish the non-confidential report in the
database.
4. Either party to the FRAND determination may file the report in any proceedings
before a competent court of a Member State against the other party to the FRAND
determination, notwithstanding any procedural bar.
Article 58
Confidentiality
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1. Except the methodology and the assessment of the FRAND determination by the
conciliator referred to in Article 57(2), point (d), the competence centre shall keep
confidential the determination of FRAND terms and conditions, any proposals for
determination of FRAND terms and conditions submitted during the procedure and
any documentary or other evidence disclosed during the FRAND determination
which is not publicly available, unless otherwise provided by the parties.
2. Notwithstanding paragraph (1), the competence centre may include information
concerning the FRAND determination in any aggregate statistical data that it
publishes concerning its activities, provided that such information does not allow
identification the parties or the particular circumstances of the dispute to be
identified.
Title VII
Procedural rules
Article 59
Communications to and notifications from the competence centre
1. The communication to and notifications from the competence centre shall be
conducted in principle by electronic means.
2. The Executive Director of the EUIPO shall determine to what extent and under
which technical conditions communications and notifications referred to in paragraph
(1) are to be submitted electronically.
Article 60
Time limits
1. Time limits shall be laid down in terms of full years, months, weeks or days.
Calculation shall start on the day following the day on which the relevant event
occurred.
2. The Executive Director of the EUIPO shall determine, before the commencement of
each calendar year, the days on which the EUIPO is not open for receipt of
documents or on which ordinary post is not delivered in the locality in which the
EUIPO is located.
3. The Executive Director of the EUIPO shall determine the duration of the period of
interruption in the case of a general interruption in the delivery of post in the
Member State where the EUIPO is located or, in the case of an actual interruption of
the EUIPO's connection to admitted electronic means of communication.
4. In cases of exceptional occurrences making the communication between the parties
to the proceedings and the competence centre very cumbersome, the Executive
Director of the EUIPO may extend all time limits that would otherwise expire on or
after the date of commencement of such an occurrence, as determined by the
Executive Director in relation to the following subjects:
(a) parties to the proceedings having their residence or registered office in the
region concerned;
(b) representatives or assistants with a place of business in the region concerned,
appointed by the parties.
EN 56 EN
5. When determining the length of extension referred to in the second subparagraph, the
Executive Director of the EUIPO shall take into account the end date of the
exceptional occurrence. If the occurrence referred to in the second subparagraph
affects the seat of the EUIPO, the determination of the Executive Director of the
EUIPO shall specify that it applies in respect of all parties to the proceedings.
Title VIII
Micro, Small and Medium-size Enterprises
Article 61
Training, advice and support
1. The competence centre shall offer training and support on SEP related matters for
micro, small and medium-size enterprises free of charge.
2. The competence centre may commission studies, if it considers it necessary, to assist
micro, small and medium-size enterprises on SEP related matters.
3. The costs of the services referred to in paragraph (1) and paragraph (2) shall be borne
by the EUIPO.
Article 62
FRAND terms for micro, small and medium-sized enterprises
1. When negotiating a SEP licence with micro, small and medium-sized enterprises,
SEP holders shall consider offering to them FRAND terms and conditions that are
more favourable than the FRAND terms and conditions they offer to enterprises that
are not micro, small and medium-sized for the same standard and implementations.
2. If a SEP holder offers more favourable FRAND terms and conditions to micro, small
and medium-sized enterprises, or concludes a SEP licence that includes more
favourable terms and conditions, pursuant to paragraph (1), such FRAND terms and
conditions shall not be considered in a FRAND determination, unless the FRAND
determination is conducted solely with regard to FRAND terms and conditions for
another micro, small or medium-sized enterprise.
3. SEP holders shall also consider discounts or royalty-free licensing for low sales
volumes irrespective of the size of the implementer taking the licence. Such
discounts or royalty-free licensing shall be fair, reasonable and non-discriminatory
and shall be available in the electronic database as set out in Article 5(2), point (b).
Title IX
Fees and Charges
Article 63
Fees and charges
1. The competence centre may charge administrative fees for the services it renders
under this Regulation.
2. Fees may be charged at least in respect of the following matters:
EN 57 EN
(a) for the conciliators facilitating agreements on aggregate royalty determinations
in accordance with Article 17;
(b) for the expert opinion on aggregate royalty in accordance with Article 18;
(c) for the essentiality check carried out by the evaluator in accordance with
Article 31 and by the peer evaluator in accordance with Article 32;
(d) for the conciliators for the FRAND determination in accordance with Title VI.
3. Where the competence centre charges fees in accordance with paragraph 2, the fees
shall be borne as follows:
(a) the fees referred to in paragraph (2), point (a) by the SEP holders that
participated in the process based on their estimated percentage of SEPs from all
SEPs for the standard;
(b) the fees referred to in paragraph (2), point (b) equally by the parties that
participated in the procedure of the expert opinion on aggregate royalty, unless
they agree otherwise, or the panel suggests a different apportionment based on
the size of the parties determined on the basis of their turnover;
(c) the fees referred to in paragraph (2), point (c) by the SEP holder that requested
an essentiality check pursuant to Article 29(5) or peer evaluation pursuant to
Article 32(1) and the implementer that requested an essentiality check pursuant
to Article 29(6);
(d) the fees referred to in paragraph (2), point (d) equally by the parties, unless
they agree otherwise, or the conciliator suggests a different apportionment
based on the level of participation of the parties in the FRAND determination.
4. The level of the fees shall be reasonable and shall correspond to the costs of the
services. It shall take into account the situation of micro, small and medium-sized
enterprises.
5. By [OJ: please insert the date = 18 months from entry into force of this Regulation],
the Commission shall adopt an implementing act determining the amounts of the fees
referred to in Article 63, the arrangement concerning the payment methods related to
the rules set out in paragraph (3) and paragraph (4) of this Article. The implementing
act shall be adopted in accordance with the examination procedure referred to
in Article 68(2).
Article 64
Payment of fees
1. Fees shall be paid to the EUIPO. All payments shall be made in euro. The Executive
Director of the EUIPO may establish which specific payment methods may be used.
2. If the amounts requested are not paid in full within 10 days after the date of the
request, the competence centre may notify the defaulting party and give it the
opportunity to make the required payment within [5] days. It shall submit a copy of
the request to the other party, in case of an aggregate royalty or FRAND
determination.
3. The date on which the payment shall be considered to have been made to the EUIPO
shall be the date on which the amount of the payment or of the transfer is actually
entered in a bank account held by EUIPO.
EN 58 EN
4. If any part of the required payment remains outstanding after the deadline
in paragraph (2), the competence centre may suspend access to the database of the
defaulting party, until payment is made.
Article 65
Financial provisions
1. The expenses incurred by the EUIPO or the evaluators or conciliators selected by the
EUIPO pursuant to Articles 26 and 27 in carrying out the tasks conferred to it in
accordance with this Regulation shall be covered by the administrative fees to be
paid to the EUIPO by the users of the services of the competence centre.
2. Regarding costs incurred by the EUIPO for activities entrusted to it by this
Regulation which are not covered by the fees under this Regulation, the EUIPO shall
finance those activities from its own budgetary means.
Title X
Final Provisions
Article 66
Opening registration for an existing standard
1. Until [OJ: please insert the date = 28 months from the entry into force of this
regulation] holders of SEPs essential to a standard published before the entry into
force of this Regulation (‘existing standards’), for which FRAND commitments have
been made, may notify the competence centre pursuant to Articles 14, 15 and 17 of
any of the existing standards or parts thereof that will be determined in the delegated
act in accordance with paragraph (4). The procedures, notification and publication
requirements set out in this Regulation apply mutatis mutandis.
2. Until [OJ: please insert the date = 28 months from entry into force of this regulation]
implementers of a standard, standard published before the entry into force of this
Regulation, for which FRAND commitments have been made may notify pursuant
to Article 14(4) the competence centre of any of the existing standards or parts
thereof, that will be determined in the delegated act in accordance with paragraph
(4). The procedures, notification and publication requirements set out in this
Regulation apply mutatis mutandis.
3. Until [OJ: please insert the date = 30 months from entry into force of this regulation]
a SEP holder or an implementer may request an expert opinion pursuant to Article
18 regarding SEPs essential to an existing standard or parts thereof, that will be
determined in the delegated act in accordance with paragraph (4). The requirements
and procedures set out in Article 18 apply mutatis mutandis.
4. Where the functioning of the internal market is severely distorted due to
inefficiencies in the licensing of SEPs, the Commission shall, after an appropriate
consultation process, by means of a delegated act pursuant to Article 67, determine
which of the existing standards, parts thereof or relevant use cases can be notified in
accordance with paragraph (1) or paragraph (2), or for which an expert opinion can
be requested in accordance with paragraph (3). The delegated act shall also
determine which procedures, notification and publication requirements set out in this
Regulation apply to those existing standards. The delegated act shall be adopted
EN 59 EN
within [OJ: please insert the date = 18 months from entry into force of this
regulation].
5. This article shall apply without prejudice to any acts concluded and rights acquired
by [OJ: please insert the date = 28 months from entry into force of this regulation].
Article 67
Exercise of delegation of power
1. The power to adopt the delegated acts is conferred on the Commission subject to the
conditions laid down in this Article.
2. The power to adopt a delegated act referred to in Articles 1(4), 4(5) and 66(4) shall
be conferred on the Commission for an indeterminate period of time from the date of
entry into force of this Regulation.
3. The delegation of power referred to in Articles 1(4), 4(5) and 66(4) may be revoked
at any time by the European Parliament or by the Council. A decision to revoke shall
put an end to the delegation of the power specified in that decision. It shall take
effect the day following the publication of the decision in the Official Journal of the
European Union or at a later date specified therein. It shall not affect the validity of
any delegated acts already in force.
4. Before adopting a delegated act, the Commission shall consult experts designated by
each Member State in accordance with the principles laid down in the
Interinstitutional Agreement of 13 April 2016 on Better Law-Making.
5. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to
the European Parliament and to the Council.
6. A delegated act adopted pursuant to Articles 1(4), 4(5) and 66(4) shall enter into
force only if no objection has been expressed either by the European Parliament or
the Council within a period of 2 months of notification of that act to the European
Parliament and the Council or if, before the expiry of that period, the European
Parliament and the Council have both informed the Commission that they will not
object. That period shall be extended by 2 months at the initiative of the European
Parliament or of the Council.
Article 68
Committee procedure
1. The Commission shall be assisted by a committee. That committee shall be a
committee within the meaning of Regulation (EU) No 182/2011.
2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No
182/2011 shall apply.
Article 69
Commission guidance
The Commission may issue guidance under this Regulation on matters covered by its scope,
excluding matters related to the interpretation of Article 101 and Article 102 TFEU.
EN 60 EN
Article 70
Evaluation
1. By [OJ: please insert the date = 5 years from entry into force of this regulation] the
Commission shall evaluate the effectiveness and efficiency of the SEP registration
and the essentiality check system.
2. By [OJ: please insert the date = 8 years from entry into force of this regulation], and
every five years thereafter, the Commission shall evaluate the implementation of this
Regulation. The evaluation shall assess the operation of this Regulation, in
particular the impact, effectiveness and efficiency of the competence centre and its
working methods.
3. When preparing the evaluation reports referred to in paragraphs (1) and (2), the
Commission shall consult the EUIPO and stakeholders.
4. The Commission shall submit the evaluation reports referred to in paragraphs (1) and
(2) together with its conclusions drawn based on those reports to the European
Parliament, to the Council, to the European Economic and Social Committee and to
the Management Board of the EUIPO.
Article 71
Amendments to Regulation (EU) 2017/1001
Regulation (EU) 2017/1001 is amended as follows:
1. Article 151(1) is amended as follows:
(a) the following point is inserted:
‘(ba) administration, promotion and support of the tasks conferred on it,
performed by a competence centre, under Regulation (EU) No … of the
European Parliament and of the Council+* ;
* Regulation (EU) .../... of the European Parliament and of the Council of ... on
standard essential patents (OJ ...).’;
(b) paragraph 3 is replaced by the following:
‘3. The Office may provide alternative dispute resolution services, including
mediation, conciliation, arbitration, determination of royalties and FRAND
determination.’;
2. in Article 157(4), the following point is added:
’(p) exercising the powers conferred on him or her under Regulation (EU) …++.’;
3. Article 170 is amended as follows:
(a) the title is replaced by the following:
‘Alternative Dispute Resolution Centre’;
(b) paragraphs 1 and 2 are replaced by the following
‘1. For the purposes of Article 151(3), the Office may establish an Alternative
Dispute Resolution Centre (‘the Centre’).
2. Any natural or legal person may use the services of the Centre for settling
disputes relating to intellectual property rights’;
EN 61 EN
(c) paragraph 15 is replaced by the following:
‘15. The Office may cooperate with other recognised national or international
bodies providing alternative dispute resolution services.’;
(d) the following paragraph is added:
‘16. Articles 18, 19 and Articles 34 to 58 of Regulation …++ shall apply to the
Centre in all proceedings relating to standard essential patents.’.
[+ OJ: Please insert in the text the number of this Regulation and insert the
number, date and OJ reference of this Regulation in the footnote.]
[++ OJ: Please insert in the text the number of this Regulation.]
Article 72
Entry into force and application
1. This Regulation shall enter into force on the twentieth day following that of its
publication in the Official Journal of the European Union.
2. It shall apply from … [OP: please insert the date = 24 months after the date of entry
into force of this Regulation].
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels,
For the European Parliament For the Council
The President The President
EN 1 EN
LEGISLATIVE FINANCIAL STATEMENT
1. FRAMEWORK OF THE PROPOSAL/INITIATIVE
1.1. Title of the proposal/initiative
1.2. Policy area(s) concerned
1.3. The proposal/initiative relates to:
1.4. Objective(s)
1.4.1. General objective(s)
1.4.2. Specific objective(s)
1.4.3. Expected result(s) and impact
1.4.4. Indicators of performance
1.5. Grounds for the proposal/initiative
1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for
roll-out of the implementation of the initiative
1.5.2. Added value of Union involvement (it may result from different factors, e.g.
coordination gains, legal certainty, greater effectiveness or complementarities). For
the purposes of this point 'added value of Union involvement' is the value resulting
from Union intervention, which is additional to the value that would have been
otherwise created by Member States alone.
1.5.3. Lessons learned from similar experiences in the past
1.5.4. Compatibility with the Multiannual Financial Framework and possible synergies
with other appropriate instruments
1.5.5. Assessment of the different available financing options, including scope for
redeployment
1.6. Duration and financial impact of the proposal/initiative
1.7. Method(s) of budget implementation planned
2. MANAGEMENT MEASURES
2.1. Monitoring and reporting rules
2.2. Management and control system(s)
2.2.1. Justification of the management mode(s), the funding implementation mechanism(s),
the payment modalities and the control strategy proposed
2.2.2. Information concerning the risks identified and the internal control system(s) set up
to mitigate them
2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio of "control
costs ÷ value of the related funds managed"), and assessment of the expected levels
of risk of error (at payment & at closure)
2.3. Measures to prevent fraud and irregularities
3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
EN 2 EN
3.1. Heading(s) of the multiannual financial framework and expenditure budget
line(s) affected
3.2. Estimated financial impact of the proposal on appropriations
3.2.1. Summary of estimated impact on operational appropriations
3.2.2. Estimated output funded with operational appropriations
3.2.3. Summary of estimated impact on administrative appropriations
3.2.3.1. Estimated requirements of human resources
3.2.4. Compatibility with the current multiannual financial framework
3.2.5. Third-party contributions
3.3. Estimated impact on revenue
EN 3 EN
1. FRAMEWORK OF THE PROPOSAL/INITIATIVE
1.1. Title of the proposal/initiative
Regulation of the European Parliament and of the Council on Standard Essential
Patents and amending Regulation (EU) 2017/1001
1.2. Policy area(s) concerned
Internal market
1.3. The proposal/initiative relates to:
 a new action
 a new action following a pilot project/preparatory action49
 the extension of an existing action
 a merger or redirection of one or more actions towards another/a new action
1.4. Objective(s)
1.4.1. General objective(s)
This initiative aims at: (i) ensuring that end users, including small businesses and EU
consumers benefit from products based on the latest standardised technologies at
reasonable prices; (ii) making the EU an attractive place for innovation and standards
development (including for global participants); and (iii) ensuring that both EU SEP
holders and implementers innovate in the EU, make and sell products in the EU and
are competitive on global markets.
1.4.2. Specific objective(s)
Specific objective No
• Provide more clarity on who owns SEP and which SEPs are truly essential.
• Provide clarity on FRAND royalty and other terms and conditions
• Facilitate SEP dispute resolution.
1.4.3. Expected result(s) and impact
Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.
Increase transparency of SEP licensing, lowering transaction cost and facilitating
SEP dispute resolution for both SEP holders and implementers.
1.4.4. Indicators of performance
Specify the indicators for monitoring progress and achievements.
Success indicators are defined in the impact assessment chapter 9Specify the
indicators for monitoring progress and achievements.Each indicator should be
accompanied by targets and baseline.
Table 1: Monitoring indicators
Research question Indicators
Specific Objective 1. Provide information on SEPs ownership and essentiality
49
As referred to in Article 58(2)(a) or (b) of the Financial Regulation.
EN 4 EN
Has access to
information on
SEPs improved?
- Number of standards with SEPs registered in the database
- Number of SEP holders registered
- Number of essentiality checks conducted (overall, per SEP holder, per standard)
- Is database up to date (when SEP is registered, is information updated)
- Number of times database is used (access rate) and how it is used (e.g. new private services
built on these data)
- Perception of quality of register and essentiality checks
- Results of peer evaluations (number of confirmed essentiality checks)
- Cost/quality of the central system in comparison to available private solutions
Specific Objective 2. Provide clarity on FRAND royalty
Has information on
FRAND price,
terms and
conditions
improved?
- Number of studies done by Competence Centre
- Number of SMEs receiving assistance
- Perception of quality of studies, assistance
- Number of standards, and their applications
- Number of aggregate royalties announced, or expert opinions provided
- Perception of the aggregate royalty rate setting process/and rate itself by implementers and
holders; use in court cases/judgements
- Frequency of changes of the aggregate royalty
- Cost/quality of the Competence Centre services in comparison to available private solutions
Specific Objective 3. Facilitate dispute resolution
How the new
systems changed
dispute resolution
- Usage of conciliation (number of cases per year, duration, quality assessment by courts,
usage in court proceedings and in judgments; usage in support of applications for customs’
action)
- Change in SEP litigation cost/duration due to conciliation
- Usefulness of guidelines (perception by stakeholders, usage in court cases,)
Sources of information: Competence Centre database; Feedback/Surveys of new system (Competence
Centre/register/conciliation/guidelines) users such as e.g. SEP holders and implementers, judges, essentiality
checkers; Court cases/judgements/injunctions analysis; dedicated evaluation studies; public consultations; desk
research
General objectives
Impact on SEP
holders
- Number of SEP holders based in the EU
- Number of SEPs registered by SEP holders based in the EU
- Length of licence negotiations, number of licensors
- Contribution of EU firms in standard development activities
- Localisation of production/R&D of such products/services (EU/third countries)
Impact on SEP
implementers
- Cost of SEP licence for EU firms, effort of obtaining a license
- Percentage of SEPs covered through licensing.
- Competitiveness of EU firms making SEP implementing products/services in the EU and
third countries.
- Localisation of production/R&D of such products/services (EU/third countries)
- Contribution of EU firms in standard development activities
Impact on EU
customers
- Time of introduction of new products/services using latest standards in the EU in comparison
to other countries, price of such products
Sources of information: Surveys, official statistics (e.g. Eurostat’s “Enterprises using IoT”, isoc_eb_iot), dedicated
evaluation studies; public consultations; desk research.
1.5. Grounds for the proposal/initiative
1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for
roll-out of the implementation of the initiative
Creation of the Competence Centre within the European Union Intellectual Property
Office (EUIPO), including setting up of a SEP register, necessary IT tools as well as
preparatory activities for the remaining components of the initiative (e.g. definition
of all processes, preparation of all the procedures, setting up quality controls,
compiling a list of SEP examiners, creating a roster of conciliators, training of SEP
examiners and conciliators, gathering information SEP related policies and case law
summaries, setting up SME assistance hub, preparation of training materials, etc.) is
EN 5 EN
expected to take up to two years. The system is expected to be fully operational
afterwards.
1.5.2. Added value of Union involvement (it may result from different factors, e.g.
coordination gains, legal certainty, greater effectiveness or complementarities). For
the purposes of this point 'added value of Union involvement' is the value resulting
from Union intervention, which is additional to the value that would have been
otherwise created by Member States alone.
Action at EU level is expected to save costs for stakeholders, both SEP holders and
implementers, and for Member States. For instance, there would be one register, one
essentiality check per patent family, one common methodology for the conduct of
such checks, and a streamlined and transparent conciliation (FRAND determination)
process. SEP holders and implementers would not have to incur the same costs in
each EU Member State which would be the case with national solutions, especially
in a situation where most standards are regional or global.
1.5.3. Lessons learned from similar experiences in the past
EUIPO will build on its experience with managing registers for other IP titles, as
well as its experience with assistance to SMEs and alternative dispute resolution
services.
1.5.4. Compatibility with the Multiannual Financial Framework and possible synergies
with other appropriate instruments
N/A
1.5.5. Assessment of the different available financing options, including scope for
redeployment
This initiative will be fully self-financed by the EUIPO (through fees).
EN 6 EN
1.6. Duration and financial impact of the proposal/initiative
 limited duration
–  in effect from [DD/MM]YYYY to [DD/MM]YYYY
–  Financial impact from YYYY to YYYY for commitment appropriations and
from YYYY to YYYY for payment appropriations.
 unlimited duration
– Implementation period expected to take up to two years, followed by full-scale
operation.
1.7. Method(s) of budget implementation planned50
 Direct management by the Commission
–  by its departments, including by its staff in the Union delegations;
–  by the executive agencies
 Shared management with the Member States
 Indirect management by entrusting budget implementation tasks to:
–  third countries or the bodies they have designated;
–  international organisations and their agencies (to be specified);
–  the EIB and the European Investment Fund;
–  bodies referred to in Articles 70 and 71 of the Financial Regulation;
–  public law bodies;
–  bodies governed by private law with a public service mission to the extent that
they are provided with adequate financial guarantees;
–  bodies governed by the private law of a Member State that are entrusted with
the implementation of a public-private partnership and that are provided with
adequate financial guarantees;
–  bodies or persons entrusted with the implementation of specific actions in the
CFSP pursuant to Title V of the TEU, and identified in the relevant basic act.
– If more than one management mode is indicated, please provide details in the ‘Comments’ section.
Comments
No EU budget involved, fully financed by the EUIPO from fees.
50
Details of budget implementation methods and references to the Financial Regulation may be found on
the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-
implementation/Pages/implementation-methods.aspx
EN 7 EN
2. MANAGEMENT MEASURES
2.1. Monitoring and reporting rules
Specify frequency and conditions.
Rules of EUIPO will apply. The regulation will be evaluated every five years in
accordance with Art 71 of the draft regulation.
2.2. Management and control system(s)
2.2.1. Justification of the management mode(s), the funding implementation mechanism(s),
the payment modalities and the control strategy proposed
Rules of EUIPO will apply.
2.2.2. Information concerning the risks identified and the internal control system(s) set up
to mitigate them
Rules of EUIPO will apply.
2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio of "control
costs ÷ value of the related funds managed"), and assessment of the expected levels
of risk of error (at payment & at closure)
Rules of EUIPO will apply.
2.3. Measures to prevent fraud and irregularities
Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy.
Rules of EUIPO will apply.
EN 8 EN
3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
3.1. Heading(s) of the multiannual financial framework and expenditure budget
line(s) affected
 Existing budget lines N/A
In order of multiannual financial framework headings and budget lines.
Heading of
multiannual
financial
framework
Budget line
Type of
expenditure
Contribution
Number Diff./Non-
diff.51
from
EFTA
countries
52
from
candidate
countries
and
potential
candidates
53
fromother
third
countries
other assigned
revenue
N/A Diff./Non
-diff.
YES/NO YES/NO YES/NO YES/NO
 New budget lines requested N/A
In order of multiannual financial framework headings and budget lines.
Heading of
multiannual
financial
framework
Budget line
Type of
expenditure
Contribution
Number Diff./Non-
diff.
from
EFTA
countries
from
candidate
countries
and
potential
candidates
from
other
third
countries
other assigned
revenue
N/A
YES/NO YES/NO YES/NO YES/NO
51
Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
52
EFTA: European Free Trade Association.
53
Candidate countries and, where applicable, potential candidates from the Western Balkans.
EN 9 EN
3.2. Estimated financial impact of the proposal on appropriations
3.2.1. Summary of estimated impact on operational appropriations
–  The proposal/initiative does not require the use of operational appropriations
–  The proposal/initiative requires the use of operational appropriations, as explained below:
EUR million (to three decimal places)
Heading of multiannual financial
framework
Number
DG: <…….>
Year
N54
Year
N+1
Year
N+2
Year
N+3
Enter as many years as
necessary to show the duration
of the impact (see point 1.6)
TOTAL
 Operational appropriations
Budget line55
Commitments (1a)
Payments (2a)
Budget line
Commitments (1b)
Payments (2b)
Appropriations of an administrative nature financed from the
envelope of specific programmes56
Budget line (3)
TOTAL appropriations
for DG <…….>
Commitments
=1a+1b
+3
Payments
=2a+2b
+3
54
Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first year of implementation (for instance: 2021). The same for the
following years.
55
According to the official budget nomenclature.
56
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.
EN 10 EN
 TOTAL operational appropriations
Commitments (4)
Payments (5)
 TOTAL appropriations of an administrative nature
financed from the envelope for specific programmes
(6)
TOTAL appropriations
under HEADING <….>
of the multiannual financial framework
Commitments =4+ 6
Payments =5+ 6
If more than one operational heading is affected by the proposal / initiative, repeat the section above:
 TOTAL operational appropriations (all
operational headings)
Commitments (4)
Payments (5)
TOTAL appropriations of an administrative nature financed
from the envelope for specific programmes (all operational
headings) (6)
TOTAL appropriations
under HEADINGS 1 to 6
of the multiannual financial framework
(Reference amount)
Commitments =4+ 6
Payments =5+ 6
Heading of multiannual financial
framework
7 ‘Administrative expenditure’
This section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative
Financial Statement (Annex 5 to the Commission decision on the internal rules for the implementation of the Commission section of the general
budget of the European Union), which is uploaded to DECIDE for interservice consultation purposes.
EUR million (to three decimal places)
Year
N
Year
N+1
Year
N+2
Year
N+3
Enter as many years as
necessary to show the duration
of the impact (see point 1.6)
TOTAL
EN 11 EN
DG: <…….>
 Human resources
 Other administrative expenditure
TOTAL DG <…….> Appropriations
TOTAL appropriations
under HEADING 7
of the multiannual financial framework
(Total commitments =
Total payments)
EUR million (to three decimal places)
Year
N57
Year
N+1
Year
N+2
Year
N+3
Enter as many years as
necessary to show the duration
of the impact (see point 1.6)
TOTAL
TOTAL appropriations
under HEADINGS 1 to 7
of the multiannual financial framework
Commitments
Payments
3.2.2. Estimated output funded with operational appropriations
Commitment appropriations in EUR million (to three decimal places)
Indicate
objectives and
outputs
Year
N
Year
N+1
Year
N+2
Year
N+3
Enter as many years as necessary to show the
duration of the impact (see point 1.6)
TOTAL
OUTPUTS
57
Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first year of implementation (for instance: 2021). The same for the
following years.
EN 12 EN
 Type58 Avera
ge
cost
No
Cost
No
Cost
No
Cost
No
Cost
No
Cost
No
Cost
No
Cost
Total
No
Total
cost
SPECIFIC OBJECTIVE No 159
…
- Output
- Output
- Output
Subtotal for specific objective No 1
SPECIFIC OBJECTIVE No 2 ...
- Output
Subtotal for specific objective No 2
TOTALS
58
Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.).
59
As described in point 1.4.2. ‘Specific objective(s)…’
EN 13 EN
3.2.3. Summary of estimated impact on administrative appropriations
–  The proposal/initiative does not require the use of appropriations of an
administrative nature
–  The proposal/initiative requires the use of appropriations of an administrative
nature, as explained below:
EUR million (to three decimal places)
Year
N 60
Year
N+1
Year
N+2
Year
N+3
Enter as many years as necessary to show the
duration of the impact (see point 1.6)
TOTAL
HEADING 7
of the multiannual
financial framework
Human resources
Other administrative
expenditure
Subtotal HEADING 7
of the multiannual
financial framework
Outside HEADING 761
of the multiannual
financial framework
Human resources
Other expenditure
of an administrative
nature
Subtotal
outside HEADING 7
of the multiannual
financial framework
TOTAL
The appropriations required for human resources and other expenditure of an administrative nature will be met by
appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the
DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.
60
Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first
year of implementation (for instance: 2021). The same for the following years.
61
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes
and/or actions (former ‘BA’ lines), indirect research, direct research.
EN 14 EN
3.2.3.1. Estimated requirements of human resources
–  The proposal/initiative does not require the use of human resources.
–  The proposal/initiative requires the use of human resources, as explained
below:
The table below presents an indicative number of FTEs that the EUIPO may need to use in
order to implement the proposal.
2024*
(implementation
period)
2025
(implementation
period)
2026
(operational period)
2027 and subsequent
(operational period)
EUIPO AD/AST staff 6 6 6 6
EUIPO contractual staff 6 6 24 4
total 12 12 30 10
*real date will depend on the adoption of the proposal by co-legislators
The high number of FTEs in the year three (first year of the system’s operation) is due to the
expected registration of up to 72 000 patent families, while in the subsequent years the
number of the registrations is expected to drop to around 10% of the initial registrations. The
actual take-up of the new system is, however, uncertain – these are our estimations based on
the impact assessment. It should be noted that the staff resources in the table above also
include four FTEs in each year for operational activities, such as the operation of the
Competence Centre, which will have the role of a back-office for FRAND determination
processes (conciliations) and aggregate royalty processes.
Additionally, during the operational period EUIPO will outsource services such as essentiality
checks and conciliations to external experts. We estimate that in the year three, around 82
FTEs of experts in the essentiality assessment will be necessary, going down to around eight
FTEs of experts from the year four onwards. We also estimate that service of around two
FTEs of conciliators will be required annually.
The table below presents an indicative cost of FTEs that EUIPO may need to use in order to
implement the proposal.
EUR million (to three decimal places) in constant prices
2024*
(implementation
period)
2025
(implementation
period)
2026
(operational period)
2027 and subsequent
(operational period)
EUIPO AD/AST staff 0.790 0.790 0.790
EUIPO contractual staff 0.810 3.120 0.520
Total 1.590 3.900 1.310
*real date will depend on the adoption of the proposal by co-legislators
Additionally, one-off IT expenditures are estimated at EUR 0.815 million, and annual IT
maintenance expenditures at EUR 0.163 million.
An estimate for the remuneration of the outsourced experts is presented below.
EUR million (to three decimal places) in constant prices
2024*-2025
(implementation period)
2026
(operational period)
2027 and subsequent
(operational period)
EN 15 EN
External experts 74.025 9.067
Detailed calculations and forecasts are presented in the impact assessment, annex A7.1.
Estimate to be expressed in full time equivalent units
Year
N
Year
N+1
Year
N+2
Year
N+3
Enter as many years as
necessary to show the duration
of the impact (see point 1.6)
 Establishment plan posts (officials and temporary staff)
20 01 02 01 (Headquarters and Commission’s Representation
Offices)
20 01 02 03 (Delegations)
01 01 01 01 (Indirect research)
01 01 01 11 (Direct research)
Other budget lines (specify)
 External staff (in Full Time Equivalent unit: FTE)62
20 02 01 (AC, END, INT from the ‘global envelope’)
20 02 03 (AC, AL, END, INT and JPD in the delegations)
XX 01 xx yy zz 63
- at Headquarters
- in Delegations
01 01 01 02 (AC, END, INT - Indirect research)
01 01 01 12 (AC, END, INT - Direct research)
Other budget lines (specify)
TOTAL
XX is the policy area or budget title concerned.
The human resources required will be met by staff from the DG who are already assigned to management of the
action and/or have been redeployed within the DG, together if necessary with any additional allocation which
may be granted to the managing DG under the annual allocation procedure and in the light of budgetary
constraints.
Description of tasks to be carried out:
Officials and temporary staff
External staff
62
AC= Contract Staff; AL = Local Staff; END= Seconded National Expert; INT = agency staff;
JPD= Junior Professionals in Delegations.
63
Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines).
EN 16 EN
3.2.4. Compatibility with the current multiannual financial framework
N/A, the proposal is managed by EUIPO and finance by fees
The proposal/initiative:
–  can be fully financed through redeployment within the relevant heading of the
Multiannual Financial Framework (MFF).
Explain what reprogramming is required, specifying the budget lines concerned and the corresponding
amounts. Please provide an excel table in the case of major reprogramming.
–  requires use of the unallocated margin under the relevant heading of the MFF
and/or use of the special instruments as defined in the MFF Regulation.
Explain what is required, specifying the headings and budget lines concerned, the corresponding
amounts, and the instruments proposed to be used.
–  requires a revision of the MFF.
Explain what is required, specifying the headings and budget lines concerned and the corresponding
amounts.
3.2.5. Third-party contributions
The proposal/initiative:
–  does not provide for co-financing by third parties
–  provides for the co-financing by third parties estimated below:
EUIPO will collect fees in order to cover all its costs as well as the remuneration of the
external experts. The table below presents the estimated value of fees collected by the
EUIPO.64
EUR million (to three decimal places) in constant prices
2024*-2025
(implementation period)
2026
(operation period)
2027 and subsequent
(operation period)
78.329 10.782
3.3. Estimated impact on revenue
–  The proposal/initiative has no financial impact on revenue.
–  The proposal/initiative has the following financial impact:
–  on own resources
–  on other revenue
– please indicate, if the revenue is assigned to expenditure lines 
64
Fees also cover the IT maintenance cost and a share of one-off costs (expected to be recovered during
ten years).