EU Parliament votes for new SEP regulation in Europe

The European Parliament has voted in favour of a new regulation for standard essential patents. Previously, the EU Commission's proposal had passed the Committee on Legal Affairs under the strong influence of industry and interest groups, with the committee making minor changes. However, the EU Council must now approve the proposed legislation.

The European Parliament has voted by 454 to 83 in favour of the European Commission’s proposal for a new regulation for SEPs. The legislation, which had previously been agreed with the EU Council, has now passed the first parliamentary hurdle.

Parliament discussed the draft legislation on Tuesday. However, the speeches did not concern making substantial changes to the content. Instead, they focused on whether to approve or reject the proposal.

The Committee on Legal Affairs passed the draft atthe end of January. Since then, it has made no further changes to the key points. The EU’s main concerns are greater transparency in SEPs, reduced over-declaration and fewer lengthy court proceedings.

Concerns over competence

The EU plans to establish a competence centre under the umbrella of the European Union Intellectual Property Office (EUIPO). Currently, the office is mainly concerned with copyright and trademark issues. As such, experts are criticising its limited expertise in SEPs and FRAND.

In the future, the EUIPO will carry out non-binding essentiality checks. A FRAND determination by mediators would be mandatory, if non-binding, before parties can then litigate in UPC countries.

Owners would be prohibited from enforcing their SEPs against implementers in court during the EUIPO’s examination. This would also affect the Unified Patent Court, where, since last week,cases concerning telecom and computer patents have made up the largest groupfor the first time since the court launched in June 2023.

Battling a fierce headwind

The draft by the European Commissioner for Internal Market, Thierry Breton, and the executive vice-president for A Europe Fit for the Digital Age, Margrethe Vestager, was leaked in March 2023. The draft immediately met with widespread opposition. A great deal of criticism came from patent pools and SEP holders in particular, including Sisvel, Nokia and Ericsson. Implementers, on the other hand, largely approve of the project.

Similar tothe reform of the automatic injunction in the German Patent Acttwo years prior, the EU regulation faces an unprecedented lobbying campaign by the SEP industry. In addition, sectors experiencing increasing connectivity, such as the automotive industry, are also making their voices heard.

During its negotiations, the Committee of Legal Affairsreceived 70 opinions from industry, interest groups and academia.

EU states have final say

EU member states still have to vote on the final outcome of the SEP regulation project. As EU legislative projects are usually subject to amendments, stakeholders are likely to increase the pressure on the member states in the coming weeks.

The legislative proposal follows the EU’s ordinary legislative procedure (COD). The EU Council must now give its approval. If the member states propose amendments, the EU Commission and EU Parliament will remain involved.

Re-elections for the EU Parliament take place in June; the current EU Commission’s term of office ends in October, which may have a delaying effect. The current EU Commission president, Ursula von der Leyen, intends to stand for re-election.