By Foo Yun Chee
BRUSSELS (Reuters) -The European Union patent body will oversee a new process to set fair royalties on patents for technology widely used in products like cellphones, according to a draft EU regulation that seeks to reduce litigation over royalty disputes.
Standard-essential patents cover technology that devices must include to comply with international standards like 4G, Wi-Fi and USB. Some standards entail thousands of essential patents, and their owners are required to offer licenses on fair and reasonable terms.
Users of the standards are usually producers of telecoms equipment, mobile phones, computers, tablets and increasingly also makers of connected cars, drones, payment terminals and other smart devices.
The royalty process overseen by the European Intellectual Office (EUIPO) is aimed at resolving disputes between patent holders and users of such standards.
“The FRAND determination procedure should simplify and speed up negotiations concerning FRAND terms and reduce costs. The EUIPO should administer the procedure,” said the document seen by Reuters on Tuesday.
FRAND (fair, reasonable and nondiscriminatory) terms are often used in relation to technical standards that are developed through an industry-led standardisation process.
The FRAND-setting process should be concluded within nine months and is a mandatory step before patent holders can take legal action against infringements, the document said.
“This is necessary because disagreements about the FRAND terms are the main reason to seek recourse in courts,” the document said.
European Commission Vice President Margrethe Vestager is scheduled to announce the draft regulation on April 26, according to a Commission agenda.
(Reporting by Foo Yun Chee; Editing by Richard Chang and Cynthia Osterman)
