EU looks to new patent guidelines

The European Commission is set to step into the row of patents, an issue that has poisoned many business relationships and provoked a flurry of lawsuits.

According to a report from Reuters, the Commission has published a set of guidelines in an attempt to strike a balance between patent holders and their users. The last year alone has seen a collection of disputes, notably, in the mobile phone arena, between Apple and Qualcomm.

The European guidelines have acceded to some of the patent holders’ demands, for example, by no longer requiring patent owners to provide licenses to all. However, in a blow to the patent owners, the guidelines do not specifically back the system under which users pay different rates to use patents.

This latter recommendation will hit companies like Qualcomm who rely on use-based royalties. These base payments on how much value a technology adds to a product and can be an important way to boost revenue.

Connected devices

The Commission came under some intense lobbying before determining these guidelines. “Some people have asked us to take sides. We believe stakeholders should solve the issue themselves. Patent wars do not help anybody,” said Commission vice president Jyrki Katainen.

The guidelines are just part of the process. The Commission is looking to set rules for a wide range of internet-connected devices for cars, home automation and energy. The EU’s plans include an examination of licensing practices and intellectual property valuation. The commission is also looking at evaluating which patents are essential to ensure that different devices can work together.