EU Commission to intervene in patent dispute between technology and automakersNovember 20, 2020
The European Commission plans to intervene in a patent dispute between technology companies and automakers and may set up a system to check whether certain patents are material to a technology standard as claimed, according to a Commission document.
The move by the EU leadership is prompted by the fact that the Finnish telecommunications equipment manufacturer Nokia and the German automaker Daimler are litigating in German courts over the level of licensing fees for key navigation and communication technologies.
The proposals are set out in the Commission’s Action Plan on Intellectual Property, which will be presented on 24 November by EU Competition Commissioner Margrethe Vestager and EU Head of Digital Technologies Thierry Breton.
As a first step, the Commission will work with the automotive sector to explore the possibility of effective licensing solutions, the document says, adding that the industry’s needs are most pressing.
While the automotive industry currently faces most of the challenges between Standard Core Patent (SEP) holders and licensees, the issue is also relevant in the digital, electronics and Internet-connected devices in energy, healthcare and smart manufacturing.
The Commission has so far refrained from disputes and urged companies to resolve the issue on their own. However, automakers see this as an antitrust problem as Daimler is filing a complaint with Vestager.
Patents are a lucrative source of revenue for Nokia, which generates € 1.4 billion in licensing revenues annually. It says Daimler uses its SEP patents without permission. Daimler, however, wants Nokia to license its suppliers rather than the company itself, which could lower fees.
The document says that to further clarify the regulatory framework for declaring, licensing and enforcing SEP compliance, the Commission will consider regulatory reforms such as establishing an independent third-party materiality review system.
Such a review would determine whether some patents are material to the standard claimed by the patent holders, as well as allay concerns that some royalties are being calculated at too high a level due to companies licensing unnecessary patents.
Experts say, however, that materiality checks can be difficult to carry out in the global marketplace and that it can be difficult to find a qualified body with the technical expertise to carry them out.
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