The European Union Proposes Rules To Reduce Patent Disputes On Smart Technology

The European Commission proposes patent-fixing rules for technology. (photo: dock. pexels)

JAKARTA - The European Commission proposed rules on Thursday 27 April, to regulate patents increasingly needed for technologies used on smart devices such as drones, connected cars, and cell phones, in order to reduce legal disputes.

The commission said the patent system known as standard-essential patents (SEPTs), fragmented, less transparent, caused long disputes, and that autoregulation was unsuccessful.

SEPTs protects technologies such as 5G, Wi-Fi, or Bluetooth needed by equipment manufacturers to comply with international standards.

Over the past decade, mobile technology has led to widespread patent disputes, involving companies such as Apple Inc, Microsoft, HTC Corp, Motorola, Samsung Electronics, and Nokia.

According to proposals from EU executive agencies, patent holders in the fields of telecommunications, computers, payment terminals, and other smart technologies, will be required to register their essential patents with the EU Intellectual Property Office (EUIPO).

EUIPO will oversee the process of determining fair, reasonable, and non-discriminatory royalties (FRAND), which should be completed within nine months.

Both disputed parties can ask the court to provide provincial injections regarding potential royalties even as both parties negotiate.

Those given the injunction said it helped protect their rights, while opponents said it could exaggerate royalties and hinder competition.

The lobbying group IP Europe, whose members include Nokia and Qualcomm, said the proposal placed a series of barriers ahead of patent holders, including a nine-month delay, and argued that it would actually hinder the research conducted by European companies.

Automaker Mercedes and Volkswagen welcomed the proposed system and said it offered more transparency and balance in licensing negotiations.

In 2021, Mercedes parent Daimler agreed to pay Nokia fees for using his patent, ending a legal dispute in Germany over the use of technology by automakers.

The EU proposal also includes a new additional protection certificate to extend patents for five years for pharmaceutical products or plant protection. This will complement the EU unitary patent which will launch on June 1.

Other elements of the proposal will allow the government to certify the use of patented discoveries without the consent of patent holders in emergency cases, such as for medical technology during the COVID-19 pandemic.