EU lawmakers approve draft rules on telecoms patents, face criticism from patent holders

BRUSSELS — European Union lawmakers on Wednesday approved draft rules governing patents crucial to technologies used in telecom equipment and connected cars. The proposals, put forward by the European Commission in April 2021, aim to end costly and lengthy litigation over patents used in technologies for telecoms equipment, mobile phones, computers, connected cars, and smart devices. The European Parliament will now engage in negotiations with EU countries to finalize the legislation.

Patent holders such as Nokia, Ericsson, and Siemens have raised concerns about the draft rules, with bodies like the European Patent Office and standard-setting body ETSI voicing similar concerns. In a letter to EU lawmakers in January, these companies claimed that the proposals would reduce incentives to contribute to open standards, leading to the re-emergence of closed standards, reduced EU competitiveness, and slower innovation.

Lobbying group IP Europe, whose members include Nokia, Ericsson, and Qualcomm, has reiterated its opposition to the draft rules. "The beneficiaries would not be SMEs as claimed but big tech," IP Europe's managing director, Patrick McCutcheon, said ahead of the lawmakers' vote.

However, the Fair Standards Alliance, which represents companies including BMW, Volkswagen, Stellantis, Tesla, Toyota, Apple, Google, and Amazon, welcomed the lawmakers' vote, calling it a step towards more equitable licensing terms for standard-essential technologies. "This is unfortunately a far cry from reality today," said Evelina Kurgonaitė, secretary general of the Fair Standards Alliance.

The draft rules aim to facilitate the licensing of standard-essential patents, which are necessary for manufacturers to comply with industry standards for technologies like 5G, 4G, Wi-Fi, and Bluetooth. Patent holders who refuse to license their technologies at fair and reasonable terms can now be subject to commitments based on competition rules. The proposed rules will also establish a new arbitration system to resolve licensing disputes.

In a statement, Belgian MEP Philippe Lamberts, who is leading the Parliament's negotiations with EU countries, said the legislation would help create a European Digital Innovation Hub. "With this legislation, we want to strike a balance between the interests of inventors and producers, and guarantee access to technologies for all, taking into account the interests of consumers and small and medium-sized enterprises," he said.

An EU spokesman said the commission remained committed to reaching a balanced and meaningful outcome of the legislative process.