The European Union is to set up a court to regulate license costs for what may be the West’s most important commercial technology.
China stands to benefit greatly from the proposed scheme, which was revealed to Reuters in late March.
The European Union plan would empower the European Union Intellectual Property Office (EUIPO) to determine royalties for standard-essential patents, or SEPs, which are probably America’s most valuable intellectual property rights.
These patents have traditionally protected American economic dominance, particularly in 5G communications. And now the EU wants to take over management of them. The proposal would empower the EUIPO to evaluate whether patent royalties are owed and to set royalty rates.
The plan would also compel corporations with SEPs to register their patents in a new registry before charging royalties or taking legal action in the EU. According to the leaked EU strategy paper, the new method will “simplify and speed up negotiations.”
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Defining Fairness
SEP holders, in general, willingly agree to license their patents under FRAND (fair, reasonable, and nondiscriminatory) conditions. Of course, SEP holders—in the telecommunications sector, America’s Qualcomm, Finland’s Nokia, and Sweden’s Ericsson—and consumers sometimes differ on what defines FRAND conditions.
“This proposal is a head scratcher,” said Brian Pomper, executive director of the Innovation Alliance in Washington, D.C.”What problems are they attempting to solve in Brussels? What harm are they witnessing?” There are nearly twice as many mobile devices as people on the earth.
What market distortion justifies such an intrusion?”The United States and China disagree on standards.”
Huawei Technologies, based in China, intends to set the international standard for 5G, which would enable the much-discussed “Internet of Things,” which will link nearly everyone and every gadget everywhere.
Of course, Huawei, which made headlines earlier this month with the unveiling of its ground-breaking Mate 60 Pro smartphone, does not have to worry about getting royalties to sustain its R&D.
The Wall Street Journal claimed at the end of 2019 that Beijing has invested up to $75 billion in the corporation through tax incentives, cheap financing, and other measures.
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Source: News Week
