Introduction
Standard essential patents (SEPs) are patents that protect technology that has been declared as potentially essential to a technical standard or specification developed by a standard development organisation (SDO). The draft SEP regulation, as amended by the European Parliament (EP) in February 2024, covers European patents declared to standards that will be adopted after the new regulation comes into force, except for standards where there is sufficient evidence that licensing negotiations “do not give rise to significant difficulties or inefficiencies affecting the functioning of the internal market.”
However, the text of SEP regulation, specifically Article 1(4), provides that, if adopted, the regulation will also apply to European patents declared to some standards published before the date on which the regulation becomes applicable. The scope of such existing standards to be covered will be determined in a delegated act (“DA”) after the regulation has come into force, and will potentially include important standards such as 4G, on which many IoT applications run. Whether such standards will be retrospectively included may have significant bearing on the scale of the implementation.
Delegated acts are increasingly used to expand the scope of laws or to introduce substantive and onerous new requirements. This is perceived as controversial when the Commission operates in a more politicised and less technocratic way. Critics have argued that the Commission has often ignored negative opinions from stakeholders and more expert bodies when drafting delegated acts, although there is admittedly no binding obligation for the responsible Directorate to “consider all evidence and expert opinions” as referred to in Article 65c of the draft SEP Regulation. Rather research suggests that many DAs were introduced without a proper impact assessment, while opinions of stakeholders and expert bodies have often been ignored. Furthermore, the surge in reliance on executive acts such as DAs, which are not subject to any form of prior ‘competitiveness check’, is the subject of increasing criticism.
This paper focuses on a particular feature of the planned DA – that is, the retroactive effects of the proposed regulation. It assesses the legality of the proposed approach in the current draft Article 1(4), which provides that the regulation could apply to standards published before the entry into force of the Regulation, therefore giving potential retroactive effect to it. It asks if powers can be legally delegated to the European Commission to determine which existing standards will be covered by the new regime and on the basis of procedures and substantive criteria which it would further develop in a delegated act. It investigates four sets of relevant questions on the potential impact of these regulatory procedures in greater detail and concludes that the proposed approach is highly problematic.
