To preserve the competitiveness of industry in Europe, including SMEs, the EU must act to make licensing of standardised technologies, such as WiFi or 5G, more transparent, predictable and fair
As European industry across multiple sectors is digitising, businesses already are or will soon become licensees for standardised technologies such as WiFi, LTE and other wireless communications. European businesses and consumers already pay billions to holders of patents for these technologies that are predominantly based in Asia and the US. These figures are set to grow exponentially.
That is why so many voices have expressed strong support for the European Commission’s proposal for Standard Essential Patent (SEP) Regulation – including dozens of companies from sectors that are critical to Europe’s competitiveness and the transition to a greener, more digital Europe. The SEP Regulation is “long overdue”, says Gilles Mabire, CTO, Automotive Technologies, Continental. “The SEP Regulation is a lifeline for SMEs – without it, they are left defenceless in a minefield of opaque negotiations, legal threats, and exploitation,” added Raymond van Eck, CEO of Fairphone.
European industry is a powerhouse driving innovation – from smart devices to connected vehicles, to cutting-edge semiconductors enabling the IoT. However, its competitiveness is threatened by highly unfair licensing of standardised technologies such as 4G and 5G
Central to achieving digital and green transition, as well as keeping Europe competitive, are semiconductors – strategic assets for key industrial value chains, including autonomous cars, smart energy and other countless IoT offerings. However, “the 4G licensing system is ineffective for both European semiconductor manufacturers and their many SME IoT customers”, says Kristian Sæther, Product Director, Cellular IoT at Nordic Semiconductor, one of the few European companies manufacturing wireless technology semiconductors.
Europe’s smart energy solutions providers are set to be at the receiving end of the highly unbalanced licensing of standardised connectivity technologies. That’s why the European Association of Gas Meter Manufacturers, European Association of Water Meter Manufacturers, and the European Smart Energy Solution Providers are amongst many supporting the SEP Regulation.
European industry is a powerhouse driving innovation – from smart devices to connected vehicles, to cutting-edge semiconductors enabling the IoT. However, its competitiveness is threatened by highly unfair licensing of standardised technologies such as 4G and 5G. A handful of companies that hold the largest patent portfolios for 5G technologies are headquartered outside Europe. Not only do they own significant 5G patent portfolios but also sell products using 5G technologies.
Without the SEP Regulation, Europe’s innovative industry will lose ground to competitors from overseas.
“In theory, European industry should be able to use standardised technologies by getting licences on fair, reasonable and non-discriminatory (FRAND) terms – that’s what SEP holders have promised. Unfortunately, there are SEP holders that don’t honour this promise,” says Gilles Mabire. “This affects all manufacturers of connected goods and applications for the IoT.”
Dr Gerd Thiedemann, Vice President Products at AVM, says that as a medium-sized European company, AVM “is regularly drawn into SEP licensing disputes, especially with non-European players who act with high pressure to monetise their patents for standardised technologies such as WiFi”.
“Most IoT players are SMEs,” notes Kristian Sæther. “They have very limited resources to navigate a licensing system that’s unpredictable and untransparent.”
Linus Eklund, Vice President Patents, Volvo Group, concludes: “We are among many companies from a broad range of sectors who have spoken in favour of the Regulation.”
Sign up to The Parliament's weekly newsletter
Every Friday our editorial team goes behind the headlines to offer insight and analysis on the key stories driving the EU agenda. Subscribe for free here.