{"id":2012,"date":"2025-03-06T19:31:05","date_gmt":"2025-03-06T19:31:05","guid":{"rendered":"https:\/\/ipfray.com\/?p=2012"},"modified":"2025-03-06T19:31:05","modified_gmt":"2025-03-06T19:31:05","slug":"i-fail-to-understand-why-licensing-negotiation-groups-are-needed-avanci-ericsson-question-why-lngs-should-intervene-in-sep-licensing","status":"publish","type":"post","link":"https:\/\/ipfray.com\/staging1\/i-fail-to-understand-why-licensing-negotiation-groups-are-needed-avanci-ericsson-question-why-lngs-should-intervene-in-sep-licensing\/","title":{"rendered":"\u2018I fail to understand why Licensing Negotiation Groups are needed\u2019: Avanci, Ericsson question why LNGs should intervene in SEP licensing"},"content":{"rendered":"\n
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Context:<\/strong> Last week, the European Commission (EC) launched a public consultation on its current antitrust rules for vertical agreements in the automotive sector (February 28, 2025 EC press release<\/a>). The consultation suggests that it may introduce a framework for Licensing Negotiation Groups and poses a series of questions around whether they have positive or negative effects on competition, as well as whether the existing framework is fit for purpose. The EC\u2019s move comes after the Bundeskartellamt (Germany\u2019s Federal Cartel Office (FCO)) announced last June that it would \u201ctolerate\u201d the formation of an Automotive LNG for standard-essential patents (SEPs) (June 10, 2024 ip fray<\/strong> article<\/a>) \u2013 while the formation of the proposed LNG wouldn\u2019t be considered per se illegal, if SEP holders decline to negotiate with an automotive LNG, no information exchange will ever take place, the automotive LNG will remain an empty shell, and SEP enforcement will not be impaired.<\/p>\n\n\n\n

What\u2019s new:<\/strong> At a conference on SEPs in the Polish capital of Warsaw today, panellists clashed over the existence and practicality of LNGs \u2013 particularly for patent pools and licensors. While Peter Chrocziel<\/a> at Chrocziel Legal<\/a> and Felix Engelsing<\/a>, Chairman of the 4th Decision Division at the FCO, emphasized that there is a place for LNGs in reaching FRAND SEP licensing agreements, Uta Schneider<\/a>, Vice President of Global Government Affairs at Avanci and Patrick Hofkens<\/a>, Head of IPR Policy at Ericsson agreed that there is no certainty that they are \u201cexactly needed\u201d. Mrs. Schneider, in particular, said there would be no situation in which an LNG would need to be involved in a pool licensing negotiation \u2013 whether that is at the start of a new programme or to expand an existing one: \u201cjoint licensing gives you a simpler solution that already constitutes a discount \u2013 what are you going to use the LNG for?\u201d<\/p>\n\n\n\n

Direct impact and wider ramifications:<\/strong> The FCO\u2019s decision last June does not mean LNGs couldn\u2019t run into regulatory issues elsewhere \u2013 as nowhere else has such organisations been given the green light. But the EC\u2019s public consultation, which runs until April 25, 2025, indicates that the topic of LNGs is now on the EU\u2019s table \u2013 despite licensors and patent pools being clearly disgruntled.<\/p>\n<\/div>\n\n\n\n

Speaking on a panel this afternoon, Ericsson\u2019s Patrick Hofkens said he was \u201cquite surprised\u201d when the EC first suggested introducing the LNG framework. The discussion around LNGs had started from the perspective of SMEs as it would help smaller companies work together so they could engage in licensing negotiations. But, he said, \u201cwhat we are seeing happening now is not at all SMEs \u2013 it\u2019s the opposite of SMEs.\u201d<\/p>\n\n\n\n

While noting that we are currently in \u201ca bit of a vacuum\u201d and having LNG guidance may be helpful, Mr. Hofkens pointed to scenarios in which such groups have taken positions and that these positions are not really facilitating licensing: <\/p>\n\n\n\n

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\u201cThey actively ask for boycott, not using interesting solutions. So there is a risk of organised delay, of holdout, and organised level setting of prices that is too low. Another risk is if you really aggregate a market into these kinds of solutions, you will have fewer and fewer reference points.\u201d<\/p>\n<\/blockquote>\n\n\n\n

Mr. Hofkens listed several more questions regarding competition, including: if there is no binding nature, how does this help the market?<\/p>\n\n\n\n

He noted that at the end of the whole discussion, there should be a license:<\/p>\n\n\n\n

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\u201cIt\u2019s interesting to talk \u2013 but talking too much is not very helpful. We\u2019ve learned that in Europe the hard way.\u201d<\/p>\n<\/blockquote>\n\n\n\n

So, if the discussions only lead to information sharing then these questions come to the surface:<\/p>\n\n\n\n