FORUM IP Talks: Georg Nolte on the EU SEP Regulation

Jean-Claude: The European Parliament has overwhelmingly voted for the controversial Regulation on Standard Essential Patents. You are among the critics of the SEP Regulation in the current form. What are your thoughts now?

Georg: Thanks for having me, Jean-Claude! Please note that I speak here in my personal capacity and not as Panasonic or as Chair of the DVB IPR Module.

It is for sure a pity that the European Parliament did not scrutinize the Proposed Regulation from the European Commission as it should have done. There are so many flaws in the Draft that are not yet cured by the agreed amendments, not to speak about the unknown impact of the Regulation if it comes into force. I still miss a proper impact assessment. Currently the Draft is based on no hard facts and just assumptions of future problems that could occur in the Internet of Things space. This is not according to the "Better Regulation" principles. When even the experts of the European Commission say that there is no need for a regulation, that speaks for itself.

The critics of the SEP Regulation have lost the first battle, but not the war. On the same day as the vote, the President of the EPO has given an interview voicing concerns about the Regulation. Do you expect the governments of the Member States to take into consideration this and other critical voices more than the European Parliament?

Yes, I think so. The Council has shown much more diligence until today. They asked the European Commission some 250 questions which the European Commission does not want to answer in writing, though just oral replies are not enough for some of those complex questions. As mentioned, the current impact assessment does not address a lot of the real issues. I really hope the Council will take its time to review the Draft in detail and ultimately reject it and ask the European Commission to create a new draft based on a proper impact assessment and stakeholder consultations. The EPO is for sure one of those stakeholders that should be consulted. After all it grants the European and Unitary Patents on which the Regulation is built.

In a worst case for you, if the Regulation passes the Trilogue substantially without modifications, what mitigation measures can you imagine for SEP holders to take?

If the Draft would be adopted as just amended by the EP it would be a disaster. One thing would be clear: Licensing negotiations would be prolonged by the mandatory aspects of the regulation, which also means that remuneration for SEP holders would be delayed. Besides this, the income for SEP holders would be reduced if they fail (for whatever reason) to register their SEPs in time. Uncertainty will increase as the aggregate royalties published by the EUIPO will most likely not be correct and it will remain unclear which standard will be subject to the Regulation and which not. Depending on how the FRAND determination will be done by the experts, it could divert R&D efforts for standardized technology out of Europe. Without the proper remuneration for SEPs companies will reduce their patenting activities in Europe. And for sure litigation will happen elsewhere, without that nine-month delay introduced by the Regulation. All-in-all not a bright future for Europe, though I hope to be proven wrong in about 5 years from now.

Thank you for the interview, Georg!

About the interviewee:

Georg Nolte is the Patent Representative at the Panasonic R&D Center Germany (PRDCG). After getting his technical degree in television techniques and working in R&D as well as leading international R&D projects, he now works with patents since 20 years and is responsible for all patent related matters at PRDCG. Besides this he's the chair of the IPR Module of the DVB Project and represents Panasonic in IPR topics at various industry groups and international standards bodies like ETSI, ITU, IEEE, Digital Europe and the German Bitkom and ZVEI. He's also representing or advising Panasonic in several patent pools for various technologies. Finally he's a board member of IP Europe in Brussels.