Context: A little over two weeks ago, the European Commission (EC) withdrew its proposal for a regulation on standard-essential patents (February 11, 2025 ip fray article). A footnote to the EC’s working program noted that pending legislative proposals would be withdrawn within six months. Yesterday the Working Group on IP of the EU Council (the bloc’s most powerful decision-making body) met to discuss the withdrawal as we reported beforehand (February 27, 2025 ip fray article). In the build-up to the meeting, there were various calls to keep the proposal
What’s new: The outcome of a vote held at yesterday’s Council Working Group meeting was that 10 member states supported the withdrawal, 9 were indifferent and only 8 wanted to keep it alive.
Direct impact: This result validates the EC’s decision, not because there was unanimous resistance to the proposal but because it showed once again that the Council is not foreseeably in a position to reach a political agreement on the bill. A political agreement in the Council requires a dual qualified majority: a majority of the 27 member states as well as a collective poplation size of 65%. On the adoption of a common position, abstentions have the same effect in the Council as no votes.
Wider ramifications: While there is (and probably always will be) room for improvement in the SEP licensing and enforcement context, the EU is facing economic, societal and security problems that are far worthier of attention than SEPs. Sluggish growth particularly in the eurozone (a subset of EU member states with a common currency) and the financial markets’ dwindling faith in Germany, the country that used to give the euro currency stability, are fundamental issues that could even result in the dismantling of the EU, at least if former German chancellor Angela Merkel was right (regardless of her own contributions to the situation) with her prophecy that “if the euro fails, Europe fails.”
We have received from an unofficial source the following voting result:
- in favor of the withdrawal: Belgium, Bulgaria, Croatia, Finland, Greece, Ireland, Lithuania, Malta, the Netherlands, Sweden
- no position (or didn’t participate in the vote): Cyprus, the Czech Republic, Denmark, Estonia (which asked a lot of questions based on what we learned), France, Hungary, Poland (which is the current Council presidency, Portugal, Slovenia
- against the withdrawal: Austria, Germany, Italy, Latvia, Luxembourg, Romania, Slovakia, Spain
Interestingly, besides the current Council presidency (which might have preferred to abstain for diplomatic reasons), the next two countries to take over the rotating presidency (Denmark and Cyprus) didn’t oppose the withdrawal either. The three countries form a “trio” of presidencies that is supposed to pursue certain common objectives.
It’s important to consider the basis on which the Commission announced the withdrawal of the proposal: the fact that no political agreement was foreseeable at this point. A deeply divided Council supports that assessment.
The dual qualified majority requirement in the Council is a reasonably high hurdle. It is what effectively makes even a limited number of member state governments more powerful than a majority of the Members of the European Parliament: it doesn’t take all that much to block a proposal in the Council, but it’s extremely hard to do so in the Parliament (which requires a majority of its members at second reading, meaning that abstainers and absentees effectively vote for the Council).
So what does yesterday’s picture mean form a dual qualified majority angle?
First, the 10 countries that oppose would just need four more to join them and they could block a proposal based on their number (regardless of size). That’s the first prong of the dual qualified majority requirement.
Second, the EU’s official Council majority calculator app (link) shows that the countries opposing withdrawal collectively represent only about 50% of the EU population, short of the 65% needed to approve a common position. But even those who agree that the proposal should be kept alive are not necessarily aligned on its substance.
All in all, the likelihood of the Council reaching a common position on a particular text in less than six months is rather low. It would now make more sense for the EC
- to execute the withdrawal as announced,
- to recognize that there are many MEPs and various member states who would like to legislate on SEPs, which would justify starting new consultations with full stakeholder involvement and specific proposals as opposed to commonplace statements as the starting point, and
- to ask itself how high a priority this topic should be at a point where even the poorest U.S. state, which is already way ahead of the EU average, is going to surpass Germany in per-capita GDP this year and lender confidence in Germany has hit a new record low as the chart below (a harbinger of inflation and other negative developments) shows.
