EU amends draft patent rules to ease royalty disputes

The European Commission has revised its draft patent rules to facilitate patent holders in suing companies over royalty disputes. The previous version had been criticised for favouring users and limiting patent owners from seeking injunctions. The new rules aim to end costly legal disputes over patents essential to key technologies such as telecoms equipment, mobile phones, computers, connected cars, and smart devices. The EU officials were particularly concerned about the potential for a patent war involving the automotive industry, the internet of things, and China’s increasing share of key patents.

The updated rules allow patent holders to request court injunctions against infringing companies even while they negotiate fair, reasonable, and non-discriminatory (FRAND) royalties under the European Intellectual Property Office’s (EUIPO) supervision. The latest draft also removes the earlier provision that blocked such legal action until the FRAND-setting process was completed within nine months. The revised draft emphasises that the obligation to initiate FRAND determination should not negatively affect the parties’ rights.

Patent owners believe that injunctions are necessary to protect their rights, while opponents argue that such bans can increase royalties and impede competition. The new rules are subject to approval by the EU countries and the European Parliament before they become law.

The previous decade saw numerous patent litigations involving mobile technology, including major players like Apple, Microsoft, HTC, Motorola, Samsung Electronics, and Nokia. With technology advancing and becoming increasingly integrated into everyday life, it is crucial to have clear and fair patent rules that protect intellectual property rights while ensuring competition and innovation.