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Attention Innovators: New Rules for Patents
Attention Innovators: New Rules for Patents

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In the coming months, we will witness many new developments in European patent standards.

Today 1 June marks the first milestone in which, after a process lasting more than 50 years, there will a patent with validity in almost all the countries of the European Union, this patent being known as the “Unitary Patent”.

This day ends the three-month period that holders had in order to request to ‘opt-out’ in advance, meaning that their patents would not fall within the exclusive jurisdiction of the new Unified Patent Court.

In the months ahead we will see if the Spanish Government makes any approach to form part of this mechanism or if it continues to be the only EU country to not sign this treaty.

The second major topic that we will have to follow is the development of the new European Commission regulations proposed last April on three relevant matters: standard-essential patents (SEP), supplementary protection certificates (SCPs) and compulsory licensing.

Standard-essential patents (SEP) are patents that protect technology that is implemented in telecommunication standards such as 5G, Wi-Fi, Bluetooth, NFC, video compression, etc.

To make a product that is standard-compliant, the implementer is required to use the relevant “essential” patents. The monopoly granted by these specific patents is balanced by the commitment of SEP holders to licence these patents on fair, reasonable and non-discriminatory (FRAND) terms, allowing market access to the implementers.

For many years, the current system has suffered from a lack of transparency and predictability, as well as lengthy disputes and litigation, as first recognised in the 2017 Communication from the Commission on standard-essential patents.

The applicability of SEPs (particularly for the telecommunications sector) is going to increase with the rise of the ‘Internet of Things’ (IoT). It is already a common topic in the automotive industry and will spread to other areas in the coming years.

The proposed SEP licensing framework aims to create a balanced system, setting a global benchmark for SEP transparency, conflict reduction and efficient negotiations.

“With certain optimism” the European Commission proposes a framework that provides the model with additional transparency by introducing measures such as a SEP register, database and essentiality checks; expert opinions on SEP aggregate royalty; FRAND determination by means of conciliation and the establishment of a ‘Competence Centre’ at the European Union Intellectual Property Office (EUIPO).

One of the sources used by the Commission for this analysis are the results of the R&D project belonging the Horizon 2020 programme called CIFRA, funded by the Commission and headed by Telefónica, which already established some recommendations in this regard six years ago. (https://cordis.europa.eu/project/id/731940/results/fr)

To understand the truly ambitious nature of the challenge, it should be noted that just one mobile phone can have more than 100,000 essential patents and that conducting a rigorous inventory of the patents declared essential will not be easy.

The proposed Regulation will apply to all standards that are published after its entry into force. However, the Commission will determine which of the standards, their implementations or use cases will be excluded from the aggregate royalty setting and FRAND conciliation process, in situations where the respective SEP licensing does not pose significant difficulties or inefficiencies that affect the functioning of the internal market.

As for compulsory licensing, most national patent laws include this possibility, although their potential implementation had not been seriously considered until the pandemic. Currently there is a patchwork of 27 national compulsory licensing regimes, despite the fact that many value chains operate across the EU. This can be a source of legal uncertainty for both owners and users of intellectual property rights.

This “compulsory licensing” of patents allows a government to authorise the use of a patented invention without the consent of the patent holder. Voluntary licensing agreements with manufacturers are usually the preferred tool to boost production, but if voluntary agreements are not available or are not suitable, compulsory licensing can help to provide access to key crisis-relevant products and technologies as a last resort in times of crisis.

The new standards foresee a new EU-wide compulsory licensing instrument.

The third aspect included in the new EU regulations are the so-called “supplementary protection certificates” (SPC). It is an intellectual property right that extends the term of a patent (by up to five years) for a human or veterinary pharmaceutical product, or a plant protection product, that has been authorised by the regulatory authorities. To date, SPCs are only available nationwide. The EU proposes a unitary SPC to supplement the unitary patent.

SPC reform also introduces a centralised examination procedure, implemented by the EUIPO, in close cooperation with EU national IP offices. Under this regime, a single application will undergo a single examination process that, if successful, will result in the granting of national SPCs for each of the Member States designated in the application. The same procedure can also lead to the granting of a unitary SPC.

It is important to note that the EU has proposed the EUIPO, the European agency based in Alicante and responsible for managing new trademarks and designs, as the organisation responsible for the new SEP and SPC processes, and not the EPO, which focuses on granting new patents, such as the new unitary patents.

A third major area, in addition to the entry into force of the “unitary patent” and the discussion of the new regulations proposed by the EU in the coming months, relates to the European Design Directives and, possibly, the directive on plant varieties which will have to be reviewed.

It should be recalled that during the second half of 2023, Spain will assume the presidency of the European Council, meaning that we will play a key role in promoting these measures.

This entails extending communication standards to sectors with “connected things”, in view of new vaccines such as those for COVID-19, and given the development of technology, artificial intelligence and biotechnology.

The challenge will be to ensure that industrial property regulations, which were created in Venice more than 500 years ago, continue to be updated to promote innovation, entrepreneurship, and scientific and business activity.

Discover how the Unitary Patent can boost your company’s growth and success, contact us.

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