Context: The proposed EU regulation on standard-essential patents (SEPs) is an ill-conceived bill, though ip fray does acknowledge that the balance should be redressed in German SEP case law (May 20, 2024 ip fray article).
What’s new: Yesterday, the United States Patent and Trademark Office (USPTO) and its British counterpart, the UK Intellectual Property Office (UKIPO), announced a memorandum on SEP policy (June 6, 2024 announcement by the USPTO) signed by USPTO Director Kathi Vidal and UKIPO CEO Adam Williams. ip fray has learned from a reliable source that a key objective of this Anglo-Saxon SEP alliance is to dissuade the EU from unilateral regulatory excess in the form of the proposed SEP Regulation.
Direct impact: The U.S. government, including but not limited to the USPTO, has previously criticized the EU SEP Regulation. The UKIPO has been more subtle about it. It is currently weighing different policy options, and has already made it clear that nothing incisive is on the agenda.
Wider ramifications: The U.S. and UK patent offices have a point that balanced SEP policies are needed and that the way to improve the SEP ecosystem is through international cooperation rather than unilateral action.
The official summary of the memorandum contains various general objectives, such as transparency and educating small and medium-sized enterprises (SMEs). The last bullet point is vague, which is not unheard of in the field of diplomacy:
“Discuss means to incorporate additional jurisdictions into the USPTO’s and the UKIPO’s activities concerning SEPs, including exploring a venue for such broader discussions.”
But there’s more here than meets the eye. As ip fray has learned, the primary reason for the two patent offices to formalize their policy alliance on this subject is that last item: they want to encourage other jurisdictions to adopt a balanced and transparent approach as well, and a very high priority in this context is to dissuade the European Union from unilateralism and unhelpful regulatory overreach.
Update (June 12, 2024): The UKIPO has reached out to deny that objective. Here’s the statement:
“The objective of the MoU, as part of wider ongoing co-operation, is to allow both offices to work together on certain matters related to SEPs.
“This includes for example outreach and education activities to raise awareness of SEPs issues. The MOU is not intended to spur advocacy with respect to any particular point of view on any particular proposed regulatory action.”
James Thomson, Head of External Affairs, UK IPO
However, ip fray‘s sources stand by their claim that the U.S. and UK governments agree on the unhelpfulness of the EU proposal. At an ongoing event, IPBC Global, USPTO Director Kathi Vidal indeed stressed that SEP regulation requires global coordination (LinkedIn post by IAM reporter Adam Houldsworth). She said at that conference that different stakeholders expressed different views, with licensors voicing concerns over a proposal that struck them by surprise.
Notably, USPTO Director Kathi Vidal is known to have very balanced views. As an attorney in private practice, she represented Big Tech clients known to be in favor of low SEP royalties. Her predecessor in office was definitely very much on the side of patentees, and particularly non-practicing entities (NPEs). No one can reasonably suspect Mrs. Vidal of advancing the agenda of NPEs. In fact, she is frequently criticized by U.S. patent litigators for measures (such as with respect to the Patent Trial & Appeal Board) that have been described as favoring defendants over plaintiffs.
The UKIPO has also taken a very reasonable approach so far. Instead of falling for deceptive lobbying practices (also called “astroturfing”) involving fake SME organizations, the UKIPO wanted to hear from actual SMEs and, quite tellingly, it turned out that only a small minority of SMEs ever have to deal with SEP issues. That’s why only a few dozen SMEs participated in a consultation at all.
The EU SEP Regulation is an ill-conceived, poorly-crafted proposal. Even though ip fray hopes that German SEP case law (given that Germany is the only EU jurisdiction in which there are any serious SEP issues) will become more balanced, the EU proposal is nonsensical in some ways, unworkable in others, and does nothing to promote innovation.
One of the fundamental flaws of that bill is the completely mistaken assumption that the EU just has to be first to pass a comprehensive SEP Regulation in order to take the lead and make an EUIPO-led process the world’s arbiter of SEP licensing disputes. The reality is, however, that international conflicts of law are not a question of who is first to legislate or regulate. There is nothing that would stop other jursisdictions from adopting a similar approach and advancing interests that run counter to those of the EU.
The U.S. and UK patent offices have a better understanding of the actual issues involved than the European Commission’s Directorate-General for the Internal Market (DG GROW). They know that unilateralism is not going to solve any problem here.
ip fray hopes that competent criticism of the EU’s misguided policy approach by its key Western partners will bear weight with the decision makers in the EU Council. The EU Commission has failed to provide written answers to a long list of questions, some of which were very much on point. The EU Parliament rushed to a vote, with the speeches of key proponents of the SEP Regulation, first and foremost the Parliament’s rapporteur on this bill (Marion Walsmann MEP), demonstrating misconceptions and containing unbelievable falsehoods (March 4, 2024 ip fray article). The Council is now the one EU institution that can act as a voice of reason and prevent the bloc from shooting itself in the foot.
In this context, ip fray reached out to the EUIPO’s press office earlier this week to obtain confirmation of a recruitment decision that is relevant to the further legislative process. The EUIPO asked whether ip fray had a particular deadline. There is no hard deadline, but ip fray asked for an answer preferably this week (which is now drawing to a close) or otherwise next. One way or the other, the topic will have to be discussed, as it may also serve to explain in part the motivation behind the Parliament’s premature vote.