EU Competition Official Addresses Standard-Essential Patent Abuse in Bar Association Speech

This posting was written by Cheryl Beise, contributor to IP Law Daily.

Speaking today at the International Bar Association Antitrust Conference in Madrid, Joaquín Almunia, European Commission Vice President responsible for Competition Policy, emphasized the need for reform of the standard-setting process. In his address titled “Higher Duty for Competition Enforcers,”  Alumnia added his voice to the growing international concern over the abuse of standard-essential patents to block competition.

Alumnia acknowledged the importance of standard-setting organizations in integrating markets, making products and services available, and ensuring the technical interoperability of devices, but said more needs to be done to ensure that the standard-setting process is “competitive, open, and transparent.”

Standards should be set and adopted in an open and transparent manner to prevent established market leaders from sidelining innovative technologies, Alumnia said. “I think that we need to have a constructive conversation with stakeholders and with regulators on the best way to achieve this goal.”

Standard-essential patent owners also must provide access to their technologies on fair, reasonable, and nondiscriminatory (FRAND) terms. The problem of standard-essential “patent ambush” requires clarification in the implications of FRAND and how FRAND negotiations should be conducted, according to Alumnia.

In particular, Alumnia expressed concern about the use of court injunctions to circumvent the effective access inherent to FRAND patents. “We need to find good answers soon, because consumers cannot be held hostage to litigation. Both competition authorities and the courts should intervene to ensure that standard-essential patents are not used to block competition,” Alumnia said.

Industry also has a role to play in guaranteeing the proper functioning of the standardization system, Alumnia added. “I would therefore strongly encourage industry players to come together in the relevant standard-setting organisations and elaborate clear rules on the basis of these guiding principles to prevent the misuse of standard-essential patents.”

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