A guide to the UPC and the UP - Flipbook - Page 49
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The obligation to offer a FRAND licence for SEPs is necessary because otherwise the owner
of the patent could have a dominant position in the market which it might then abuse, for
example, by excluding a certain party from taking a licence. Although all patents are monopoly
rights, that monopoly is greatly enhanced once the patent technology is taken up in a standard
and thus prescribed for all market players making and selling the products and services
covered by the standard. In the absence of a licence, infringement is inevitable.
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The FRAND obligation for a proprietor of a SEP may thus go in parallel with the registration
of a LOR statement and the proprietor will benefit from lower renewal fees. It is presumably
for that reason that art.9(1)(c) Unitary Patent Regulation, which deals with the registration
and withdrawal of a statement that LORs are available also provides that reference can be
made in the dedicated register to commitments already made by the proprietor of the
Unitary patent vis-à-vis standardisation bodies.
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Clearly, there is no indication that the breadth of art.8 Unitary Patent Regulation is limited to
SEPs. Having a patent on a certain technology may provide a “mini-monopoly” but the way of
exploiting that patent does not necessarily mean that there is an abuse of a dominant position
in terms of EU competition law. Therefore, it is unlikely that an offer for a LOR must be FRAND
(except in relation to SEPs), that a patentee cannot limit the number of its licensees or that the
patentee cannot grant licences on different terms to different licensees.
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It is not yet clear whether the declaration specified in art.8 Unitary Patent Regulation must
contain all conditions of the possible licence agreement, but it is unlikely to be the case.
The Unitary Patent Regulation does not contain such a requirement nor do the Unitary Patent
Rules. In fact, earlier versions of the Unitary Patent Rules did contain specific conditions for
such licences. A previous draft version of the Unitary Patent Rules 46 provided that the
interested future licensee should state in a declaration how it intended to use the invention
and, once the declaration had been made, the future licensee was entitled to use the invention
subject to quarterly reporting on the use made of it. The EPO Select Committee explained that
this provision was inspired by r.10 Implementing Regulations to the CPC. 47 The EPO Select
Committee seemingly did not want to go so far as the Implementing Regulations to the CPC,
but nevertheless the provision was met with considerable criticism on the basis that it was not
for the Select Committee to set specific terms for licence agreements 48 and the provisions were
subsequently deleted.
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This might suggest that anyone is authorised to exploit the invention as long as appropriate
consideration has been paid. The result seems rather undesirable and it is believed that it is
better to regard the statement as a starting point and that further negotiations will be needed.
Indeed, art.8(2) Unitary Patent Regulation provides that the licence obtained under the LOR
concept shall be treated as a contractual licence, meaning that the declaration is merely an
announcement that the patent owner is willing to license.
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There is another reason to believe that the statement will merely be a starting point from
which a detailed licence agreement is to be negotiated. If one were to accept that art.8(2)
Unitary Patent Regulation is designed on the basis of the current system of the offer of a FRAND
licence for SEPs, there is more for the patentee to negotiate than just the licence fee, for
example, the term of the agreement and accounting obligations. Even with FRAND licences for
SEPs, detailed negotiations are necessary. Another reason is that in practice, the licensee would
also want to warrant that certain obligations by the patentee are met during the lifetime of the
licence agreement such as the continued payment of renewal fees, a reasonable termination
46
47
48
SC/C 2/13 dated 6 June 2013 amended by SC/16/13 dated 30 August 2013.
r.10(2) Implement Regulations to the CPC (OJ No. L 401, 30.12.89, p.28) states “The declaration shall state how the invention is
to be used. After the declaration has been made, the person making it shall be entitled to use the invention in the way he has
stated.” This suggests that no further conditions in the licence agreement are necessary and no further conditions could be
imposed on such a licensee.
Pors W E, “Property and contractual aspects of Unitary Patents and of patents in the UPC system”, available at:
https://www.lexology.com/library/detail.aspx?g=a9f58672-48a8-44de-add6-87310fb62cb9 [Accessed 23 March 2023].
© Bird & Bird LLP | May 2023
A Guide to the UPC and the UP 39
