Opinion
The European Commission (EC) presented a draft of its revised Technology Transfer Guidelines (TTG) last year (September 11, 2025 ip fray article). The striking part was the one about licensing negotiation groups (LNGs).
Soft law
Now the EC has published its new TTGS, which “will enter into force on 1 May 2026.” But what does entry into force mean in this case? This is “soft law”. Actually, “soft” is more accurate than “law”. It’s not binding on the courts of law, and whatever the EC decides in a competition enforcement proceeding is still subject to judicial review. That is different from EU directives and (formal) regulations.
Such guidelines are of particularly little relevance when someone engages in potentially unlawful conduct and wants it cleared. Even if the EC says in guidelines that something is “likely” no violation, or even lays out an explicit safe harbor, it doesn’t mean that private enforcement is barred. It just means that the EC’s Directorate-General for Competition (DG COMP) won’t act. By contrast, if the EC explicitly warns against some behavior, it doesn’t mean that it is illegal as that is ultimately for the courts to decide. But it can lead to antitrust inquiries everyone would rather avoid, even if one is confident of being able to prevail on appeal.
Politically motivated pool skepticism
For a long time, the EC used to be in favor of patent pools. The practical reality is that pools are part of the solution, not part of the problem — so long as they are optional.
Let’s say there are 50 standard-essential patent (SEP) holders that make their relevant portfolios available through a pool. And let’s furthermore assume that any licensor is still free to grant a bilateral license. Does the world become a better place if the pool is prohibited on “antitrust” grounds? No, because if the patents in question are SEPs, then you need a license to all of them anyway, and a license to one patent or portfolio is not a defense to the infringement of another patent or portfolio. So the worst-case scenario is that the optional pool doesn’t offer terms you like. In that case, you’re in no worse place than if the pool had never been created in the first place.
As if SEP pools actually could have market power even when competing with bilateral alternatives subject to FRAND (fair, reasonable, and non-discriminatory licensing) requirements, the new TTGs outline vague concerns over SEP pools potentially exercising “market power”.
Of course, if you had a limited set of alternative techniques in a field, such as alternative manufacturing processes, and a (non-optional) pool aggregated them all, you might end up being forced to take a pool license. But that is not the case with SEP pools that relate to a single standard.
In para. 280, the EC talks about competition concerns related to “substitute technologies”. Presumably, they do not mean SEPs (for the reasons stated above) when they say the following toward the end of para. 280:
To alleviate the competition concerns, it is not sufficient that the parties remain free to license independently. This is because the parties are likely to have little incentive to license independently in order not to undermine the licensing activity of the pool, which allows them to jointly exercise market power.
It would have been good, however, to explicitly recognize the key difference that optionality makes for SEPs, especially given that each SEP holder is bound by a FRAND licensing obligation.
In para. 292, the EC talks about criteria for potentially deeming a patent pool anticompetitive. That is a context in which optionality should have been given consideration. For example, if a pool does not license all implementers, but they can go to the actual patent holders, there is no antitrust issue.
Instead of promoting innovation, the EC’s soft requirements for patent pools (such as an “effective disclosure of essentiality check methodologies” that would change nothing about the subjective nature of any such check) amount to red tape. It looks as if the decision makers were pandering to stakeholders with an interest in SEP devaluation as opposed to looking for ways to make Europe more competitive. Patent pools help innovators get paid. There was a time when there was a consensus in Brussels that the virtuous cycle of innovation should be fostered.
LNGs: no more safe harbor, and no chance of materializing over U.S. objections
In the LNG context, the EC has backtracked a little since last year’s draft. For example, there is no more explicit safe harbor. And there is a stronger recognition of the potential anticompetitive effects.
What the EC still does not acknowledge, however, is that further transactional efficiency gains are not achievable where patent pools already provide them. It is a fallacy to believe that aggregation on both sides is the best outcome. Much to the contrary, it complicates the search for solutions by injecting another intermediary into a process where one intermediary is the sweet spot.
The EC still does not correctly define the relevant antitrust market for LNGs: it focuses on the technology rather than the field of use. But the EC contradicts itself when it then says in para. 332:
Efficiency gains that are attained by means of indispensable restrictions must be passed on to consumers […] Consumer pass-on is more likely where the members of the LNG do not have market power in downstream markets.
There, for a fraction of a second, the EC is actually on to something: the problem is that LNGs are purchasing cartels formed by companies competing with each other in specific product markets.
Another internal contradiction is that the EC says (when discussing pools, as shown further above) that patentees may not have an incentive to license bilaterally as they’d rather exercise collective market power, but then in para. 321 (in the part on LNGs) talks about the possibility of “the members of the LNG engage in coordinated action aimed at coercing the technology holder to negotiate with the LNG” as if it was merely a residual concern. The incentive for the members of a purchasing cartel to point patent holders to the LNG instead of engaging in good-faith bilateral negotiations is, however, very strong.
Does it matter? Not as long as U.S. antitrust enforcers decline to condone LNGs.
There are preliminary investigations of the Automotive LNG (ALNG) by the United States Department of Justice (USDOJ or DOJ). Given the global nature of the markets in question, LNGs can’t take off as long as the DOJ maintains its stance. The Trump Administration has almost three years left to go. And no matter which party wins the 2028 presidential election, the U.S. is highly unlikely to waver in its backing of innovative companies.
What’s the EC’s plan?
By portraying patent pools more negatively and viewing LNGs in a more favorable light than they deserve, the EC is apparently trying to be “all things to all people”. Some political decision makers wanted to be able to tell different stakeholders: “Look what we’ve done for you.”
Various advocacy groups can claim victory. But for the reasons discussed above, these updated TTGs do not move the needle.