An article written by Sisvel founder Roberto Dini explains how best in class joint licensing programmes deliver the transparency, predictability and efficiency regulators rightly want

The EU’s approach to FRAND issues is at a crossroads. The Commission has signalled its intent to withdraw the SEP regulation, and there is no consensus within the Council on moving forward with the controversial legislation.

In an article published by IAM on Saturday – “Patent pools should have a central role in European SEP policy” – Sisvel founder Roberto Dini presented a clear way forward.

Policymakers have a chance to re-think SEP policy in the months and years ahead, Dini writes, but there is no need to start over from scratch. There are, he argues, two critical building blocks that European leaders can use as they plot a way forward.

The first is a broad consensus about what success looks like when it comes to creating a healthy SEP market, namely: transparency, predictability and efficiency. No good-faith IP stakeholder objects to these goals – they were, in fact, the stated aims of the SEP regulation.

The problem with the proposed legislation, Dini explains, was not what it was aiming for. Instead, its failure to balance the interests of SEP licensors and licensees meant the desired outcomes were never going to be achievable.

The second building block is a time-tested, Commission-endorsed blueprint for ensuring transparency, predictability and efficiency in SEP licensing: the patent pool.

Robust legal framework

There is a very robust European legal framework for the formation and operation of patent pools that create efficient and pro-competitive markets for SEPs. The current TTBER Guidelines state that pools reduce transaction costs and limit cumulative royalties, adding:

The creation of a pool allows for one-stop licensing of the technologies covered by the pool. This is particularly important in sectors where intellectual property rights are prevalent, and licences need to be obtained from a significant number of licensors in order to operate on the market.

As recently as 2017, the Commission told the European Parliament that patent pools creation should be encouraged given their ability to address SEP licensing challenges, particularly among SMEs and in industries such as IoT.

Sisvel operates licensing programmes within the strict structures set out in the TTBER Guidelines. These include strong guardrails around patent pools, including:

• A transparent pool creation process.

• That only complementary patents and patents relevant to the standard are included in the pool.

• The participation of independent evaluators to determine the patents truly essential to a particular standard.

• Strong safeguards against the exchange of sensitive information.

• Licensing terms that are fair, reasonable and non-discriminatory (FRAND).

• The freedom to challenge validity of the patents in a pool, as well as whether they are truly relevant to the standard.

• The freedom to develop competing products and technologies.

• Independent dispute resolution mechanisms.

• That licensees must always have the choice to license bilaterally from individual pool licensors.

• Retention of highly experienced legal counsel by pool administrators to ensure full compliance with all applicable antitrust laws.

It is perplexing and frustrating that Europe’s robust legal framework around joint licensing, and the legacy of European leadership in patent pools, were overlooked by the Commission in its push to enact the SEP regulation.

Ready to work

Fortunately, there is now an opportunity for a more joined-up policy approach to FRAND. As Dini concludes in the article:

When you factor in the multiple benefits of what they deliver, as well as the strict legal regime under which they must operate, it is clear pools have a huge amount to offer in terms of simplifying, speeding-up and reducing the cost of the SEP licensing process. They offer the transparency, the efficiency and the essentiality checks the Commission put at the heart of the SEP regulation. These issues are particularly important for rapidly evolving, complex technology areas such as the IoT, wireless communications and AI.

Sisvel stands ready to work with the Commission and other policy makers in Europe and to provide the information they need to understand how our patent pools operate, as well as the benefits they deliver. We look forward to doing so.

The full article by Roberto Dini is available for IAM subscribers here.