If the decision makers in Brussels knew and understood the facts and the law, they'd realize that the proposed EU regulation on standard-essential patents (SEPs) is misguided and should be tossed (in favor of a complete do-over) regardless of whether one is more sympathetic to one camp or the other. But political dynamics are sometimes detached from reality, especially in the EU, whose economic policy track record is abysmal.
That's why influential voices of reason are needed. Granted, the collective voting weight of the Netherlands, Finland, and Sweden falls far short of a blocking minority in the EU Council. But it's a critical mass of member state governments opposing the bill in its current (or any similar) form in order to get the attention of all the experts. Council working groups are composed of experts, who obviously get political directions from above, but the likelihood of them being receptive to technical (in terms of "legally technical") arguments is far greater than when you're dealing with politicans seeking reelection or higher office based on faux achievements.
That also applies to issues concerning fundamental rights. The EP(P) rapporteur on this one, Marion Walsmann MEP (EPP-Germany), even seeks to exacerbate the bill. Mrs. Walsmann's voting record with a view to human rights should be subjected to scrutiny. And just like the totalitarian political system in which she started her career, she seeks to silence and suppress rather than listen to critical voices:
According to what I heard from Brussels sources, Mrs. Walsmann is none too pleased with the draft opinion authored by her party colleague Professor Danuta Hübner (Poland), who is the international trade committee's (INTA) rapporteur. Mrs. Walsmann incredibly argues that INTA oversteps its competency by commenting on a wide range of aspects of the draft regulation, but a WTO treaty named TRIPS (trade-related aspects of intellectual property rights) is reason enough for the INTA committee to look at the proposal holistically, with or without Mrs. Walsmann's blessings or misgivings. And if any additional reason was needed (it is not), the perspective of the EU's largest trading partner should be considered as well. INTA has no shortage of reasons to be profoundly concerned and to make its presence felt, for the sake of protecting the EU's reputation on the world trade stage.
Back to the EU Council, which would be in the best position to prevent an idiocy that could even turn out a tragedy.
1. The Netherlands
The Dutch government was the first one to formally voice criticism of the proposal. Others may have previously done so behind closed doors, though.
I'll now quote a few passages based on the English-language summary provided by IP Europe on its live blog (the two original documents--in Dutch--are also available: 1, 2):
"the intrusiveness of the initiatives relative to the perceived magnitude of the problem"
"the potentially adverse confluence of the proposal with the launch of the Unified Patent Court and existing (market) mechanisms such as patent pools and existing alternative dispute resolution options"
"the risk that by regulating the licensing practice for SEPs, the EU loses attractiveness both as a standardization environment and the place to resolve disputes effectively and efficiently"
2. Sweden
The Swedish government--which is not simply in Ericsson's pocket but also has major implementers of all sizes to take into consideration--discussed the EU proposal at a recent parliamentary committee hearing (minutes in Swedish). From a machine translation:
"the proposal put forward introduces a comprehensive and highly binding regulatory framework in an area where there was previously no regulation and places extensive tasks on the EUIPO, which has not previously handled similar tasks"
"the background analysis presented by the Commission does not support the view that such restrictive measures are necessary"
"it seems doubtful whether the proposed limitations on the ability of patent holders to prosecute infringements can be regarded as proportionate restrictions on their intellectual property rights"
"The Government therefore intends to work to ensure that the proposed regulatory framework is not introduced or, in any case, that the regulation is as limited, flexible and predictable as possible. In this respect, the Government intends, among other things, to work to ensure that patent holders' ability to prosecute infringements is limited as little as possible and that the authorisations granted to the Commission in the Regulation are limited as far as possible."
Sweden's Social Democrats went even further, saying inter alia that "a proposal as far-reaching and intrusive as the present one should not be used as a basis for legislation."
3. Finland
The Finnish government circulated a "U-letter" that discussed various policy issues including the EU SEP Reg (Finnish document). Based on a translation and a summary that I've obtained, the Finnish government has declared itself "highly critical" of DG GROW's proposal. Here are some key points:
"the proposed regulation is disproportionately burdensome on the right-holders and thus “likely to discourage European companies from participating in the development of international standards"
the scope of the regulation - the standards that it will apply to - is left to the Commission to define via a delegated act, which may confer disproportionate, inappropriate and unjustified powers on the Commission
the FRAND determination process restricts fundamental right to judicial review and thus raises the question of compliance with the WTO-level TRIPS agreement
Here's a translation of a longer passage:
"The Government considers it important that the regulation of businesses is clear, predictable, proportionate, competition-neutral, technology-neutral and innovation-friendly. An environment that encourages and inspires entrepreneurship means that businesses and citizens are not discouraged by excessive regulation. Intangible rights, such as patents, encourage businesses to innovate and promote the use of innovation in society. They are therefore an important part of innovation policy, which aims to build conditions in Finland that encourage companies to innovate boldly, innovate and grow internationally.
"The Government is highly critical of the Commission's proposed regulation on patents essential to the standard. The Council of State considers the objectives of the Regulation to improve the licensing of essential patents and to increase transparency to be important, but considers that the measures proposed by the Commission do not fully comply with the principle of proportionality. The proposed new regulation would create a significant regulatory burden, in particular for holders of essential patents, which is likely to discourage European companies from participating in the development of international standards. As such, the Council of State welcomes the fact that the Commission has taken into account the role of small and medium-sized enterprises (SMEs) in its initiative. However, the negotiations must ensure that a balance is maintained between taking into account the interests of essential patent holders and users of standards, which promotes the dissemination of standardised technologies and the development of new technologies and products, without placing an unduly burdensome new regulatory burden on enterprises.
"The Government is highly critical of the Commission's proposal that the proposed regulation would also apply, under certain conditions, to standards or parts thereof published before its entry into force and that the Commission would define such standards by delegated act. The negotiations must ensure that the powers conferred on the Commission are sufficiently precise, proportionate, appropriate and justified.
"The Government is highly critical of the Commission's proposal for a compulsory settlement procedure to determine the FRAND conditions for licensing essential patents. Negotiations must ensure that the regulation does not unduly restrict the right to judicial review, which is a fundamental right. The negotiations must also ensure that the proposed procedures comply with the terms of the World Trade Organisation (WTO) TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights."
