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EC acts on patent ambushes

New rules on IP disclosure

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The European Commission has closed an antitrust investigation into the rules used by the European Telecommunications Standardisation Institute (ETSI), after the standard-setting body changed its rules to remove the risk of “patent ambushes”.

Patent ambushes occur where a participant in a standard-setting body hides the fact that it owns intellectual property rights that are essential for the implementation of a particular standard. Once the standard has been developed and agreed, the participant declares and identifies its rights, obtaining control over the standard.

The practice can result in a potentially unjustified barrier to entry. Even if the essential intellectual property right claim is in itself valid, the company’s actions mean that the possibility of considering alternative technologies has been artificially removed, and that the competitive process has been distorted.

The Commission began investigating ETSI’s rules after concerns were raised that the rules did not sufficiently protect against the risk of patent ambush during ETSI standard-setting procedures.

However, at its General Assembly of 22nd November, ETSI unanimously approved changes put forward by the Commission, which tighten early disclosure requirements.

“Standards are of increasing importance, particularly in hi-tech sectors of the economy,” said Competition Commissioner Neelie Kroes, welcoming the changes.

“It is crucial that standard-setting bodies establish rules which ensure fair, transparent procedures and early disclosure of relevant intellectual property. We will continue to monitor the operation of standard-setting bodies in this regard,” she added.

Copyright © 2005, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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