Wednesday, November 25, 2020

European Commission's Action Plan on Intellectual Property deemphasizes automotive industry concerns, prioritizes upload filters

Today the European Commission formally adopted and announced its Action Plan on Intellectual Property ("IP Action Plan").

A near-final draft of the document already leaked last week and generated some media attention. I elected to wait for the final document (also because I'm very busy with the impending launch of my iOS and Android game). Given that some significant changes have been made, I'm glad I did hold off.

So here's my rapid response, and I may go into more detail on some of these issues later or in a follow-up post:

  • While a draft version of the document placed a great deal of emphasis on the need to engage with the automotive sector (given the particular issues it is facing with a view to the licensing of standard-essential patents (SEPs)), the final plan downgrades that industry's problems or at least seeks to defocus from them:

    "Although currently the biggest disputes seem to occur in the automotive sector, they may extend further as SEPs licensing is relevant also in the health, energy, smart manufacturing, digital and electronics ecosystems." (emphasis added)

    "With a view to clarifying these issues and identify [sic] best practices, the Commission has launched a study, with a specific focus on strategic sectors including the healthcare and automotive sectors." (emphasis added)

    The fact that the Commission deemphasizes the automotive industry's SEP issues may be attributable to the immense lobbying firepower and persistent, highly professional efforts by major SEP holders such as Nokia and Ericsson, which is not a conspiracy theory but based in fact (and would serve to explain the repeated postponement of the publication of this document). The automotive industry's lobbying departments are basically one-trick ponies that only know about emissions standards and similar topics. Those organizations may need another decade or two before they figure out IP policy.

    I actually doubt that the automotive industry would have had to expect anything positive to come out from the Commission's DG GROW (formerly called DG MARKT) "brokering" an agreement between the automotive sector and major SEP holders. That's because the commissioner in charge of DG GROW, Thierry Breton, is totally in the tank for Nokia and Ericsson, even up to the point where he describes fake news as "a fact! A fact! It is a fact!".

  • The paper recognizes that small and medium-sized enterprises (SMEs) don't account for lots of patent filings. But basically the answer this plan attempts to give is just a combination of ever more internationalization and subsidies. Nowhere does the plan recognize that many SMEs would rather be protected from patents than by patents.

  • One of the top two or three fallacies in the patent policy context is reiterated by the IP Action Plan:

    "Between 2010 and 2019, the number of European patents granted rose from 58 000 to 137 000, approximately - although the rise is less marked than in other parts of the world, notably Asia, where economies are quickly catching up on IP generation."

    A European patent is a patent that can be asserted in Europe--not a patent granted to a European company. None of the top four filers with the European Patent Office (EPO) is European.

  • Artificial Intelligence (AI) patents are software patents, which actually shouldn't be granted in Europe in the first place. Here's what the paper says about Europe's low share of AI patent applications:

    "[A]lthough 26% of high-value research publications on AI comes from Europe, only 4 out of the top 30 applicants (13%) and 7% of businesses, engaged in AI patenting worldwide, are European."

    The reason for that is mostly that major platform companies (in the digital platform economy, Europe is at a level with Africa and irrelevant compared to the U.S. and Asia) generate a lot of income from their core businessees and invest some of that money into AI, enabling them to offer the most attractive working conditions to researchers--and to file for many patents in that field. I can't see how the IP Action Plan would change a thing about that.

  • The Commission loves its upload filters:

    "A crucial part of this work concerns the implementation of Article 17 of the Copyright Directive, which sets out a specific legal regime for the use of copyright-protected content by user-uploaded content sharing platforms. The Commission has carried out an extensive stakeholder dialogue to gather the views of relevant stakeholders on the main topics related to this article's application. Taking into account the results of the dialogue, the Commission will soon issue guidance to support Member States in implementing this provision."

    Just last week, a senior Commission official actually acknowledged that Article 17 may not survive a pending court challenge. I opposed it (even spoke at a couple of demonstrations against it).

  • While this is outside the industry focus of this blog, I believe it would make a whole lot of sense for the Commission to "to introduce a unified [Supplementary Protection Certificate] grant mechanism and/or create a unitary SPC title," which the IP Action Plan mentions as possibilities.

The IP Action Plan is per se underwhelming and unspecific, but that doesn't mean that the initiatives it outlines as potential measures couldn't be impactful in the end--possibly even with respect to SEPs. We'll have to stay tuned.

[Update] The Fair Standards Alliance (FSA) just issued a statement, saying the organization "welcomes the European Commission’s goal to bring more transparency to standard essential patent (SEP) licensing." [/Update]

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