Context:
- The EU has a fundamental economic problem: for lack of innovative strength, it has become a Second World continent that does not have a single company among the world’s 25 most valuable ones. Not a single AI or quantum researcher has left the U.S. for Europe over disagreement with President Trump’s policies.
- This realization has started to dawn on Brussels, but practical and useful effects are hard to come by. One of a few exceptions was the withdrawal of the EU standard-essential patent (SEP) regulation this year (July 31, 2025 ip fray article) as part of an “omnibus” package designed to curb overregulation.
- The European Commission’s (EC) ability to learn from failure and to listen to real players is still doubtful. A couple of months ago, the EC’s Directorate-General for Competition (DG COMP) published draft technology transfer guidelines that threaten to legalize time-limited group boycott (September 11, 2025 ip fray article) named licensing negotiation groups (LNGs) based on a peculiar market definition (October 4, 2025 ip fray opinion piece). The proposed guidance would also impose new requirements on patent pools. On balance, the SEP-related parts of the proposal look like an attempt to sneak some of the ideas behind the failed SEP Regulation in again through the regulatory backdoor.
What’s new: Yesterday, the EC held a “reality check” webinar. Two of its three parts were SEP-related. Representatives of patent pools and SEP licensors warned against the harmful consequences of the proposals. A fake SME (small and medium-sized enterprise) group that is funded by Big Tech, an in-house patent attorney from an automaker and some other advocates of net-licensee interests essentially argued that SEP holders enjoyed too much leverage from patent injunctions, which they believe justifies the EC’s plans to put a thumb on the scales of the SEP licensing process.
Direct impact:
- Just like during the so-called consultations ahead of the SEP Regulation proposal, the EC conducted an online poll, as if a vote among the participants in a webinar was meaningful in any way. Oddly, one question about the participants’ background offered multiple SME-related choices, but based on the user list, not a single SME was actually on the call. The only organization there to claim to speak for SMEs was a notorious astroturfing group (November 2, 2025 ip fray article).
- The EC officials on the call asked prepared questions, but (as expected) did not react to the feedback from participants in any way. For now, the assumption is that they will forge ahead with an ill-conceived set of draft guidelines, but if they actually listened to the concerns, they should see that imposing additional requirements on pools and legalizing buyers’ cartels are both bad ideas.
Wider ramifications:
- The EU is not the only jurisdiction in which the lobbying efforts of net licensees have led to legislative and/or regulatory initiatives. A few months ago, the UK government made a step in the same direction (July 15, 2025 ip fray article).
- The EC is contemplating measures, and through a comfort letter to an automotive LNG already has taken at least one, that are at odds with the IP and trade policies of the Trump Administration (October 10, 2025 ip fray article).
The EC has not yet published the submissions to the recent consultation. Yesterday’s “reality check” webinar showed that serious issues have been raised, but it remains to be seen whether it leads to a revised proposal.
SEP licensees are perfectly entitled to the view that certain jurisdictions, particularly within the EU, liberally grant SEP holders injunctions. If that is a concern, then it must be addressed, such as through the EC’s amicus curiae brief in VoiceAge EVS v. HMD, a case that will be heard by the Bundesgerichtshof (Federal Court of Justice of Germany) on January 27, 2026 (November 12, 2025 LinkedIn post by ip fray). But it is unhelpful to try to make the lives of patent pool administrators miserable (which is like cutting one’s nose to spite one’s face) through unrealistically exacting demands and to ignore the fact that pools are but an option. Nowhere does the EC appear to realize that pools that compete with bilateral licenses do not, without more, raise competition concerns: if they don’t provide enough information or charge too much, implementers will take bilateral licenses instead.
As long as the licensors and the license fees are clear, implementers know what they will get if they opt for a pool license. And if there is a need for further clarification, they can engage in discussions and will receive more information subject to the conclusion of non-disclosure agreements.
Sophisticated licensees such as car makers know exactly what they can get from a pool. They also know the alternative well: bilateral licenses. The sole meaningful criterion for a safe harbor benefiting patent pools is optionality. That is the be all and end all in this context.
A perceived or actual imbalance in SEP enforcement does not justify a departure from longstanding principles governing competition enforcement against purchasing cartels. The EC is apparently turning a blind eye
- to technical and commercial realities that clearly establish the existence of different licensing markets even for the patents that read on the same standard, and
- to the traditional propensity of automakers to form cartels and coordinate their behavior in unlawful ways.
LNGs as a mirror image of patent pools are a fundamental misconception. An implementer must license all patents that read on a given standard regardless of whether the licensors work together, and a license to one licensor’s patents is not a defense to the infringement of another licensor’s IP. By contrast, while a SEP holder (or a pool) will also want to do license deals with every implementer in a given market, it can often develop that business more efficiently by striking deals with willing and enforcing against unwilling licensees.
DG COMP’s proposed revisions and additions to the SEP-related parts of its technology transfer guidelines are not deserving of a different fate than the EU SEP Regulation.