June 30, 2022

Volume XII, Number 181

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European Commission Seeks Comments on Revised Horizontal Guidelines Draft

On 1 March 2022, the European Commission launched a public consultation inviting stakeholders to comment on a revised Horizontal Block Exemption Regulations on Research & Development and Specialisation (HBERs) draft, as well as on a revised draft of the guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union (TFEU) to horizontal co-operation agreements (Horizontal Guidelines). Comments are due no later than 26 April 2022.

This more general antitrust public consultation aims at drafting revised versions of existing normative texts and should not be confused with the European Commission’s more targeted “Call for Evidence” regarding a new framework for standard-essential patents (SEPs). Comments in response to the Call for Evidence must be submitted by 9 May 2022, and the new framework “may combine legislative and non-legislative action.” (For more information on the European Commission’s Call for Evidence, click here.) While these two EU public consultations are separate, they and their corresponding EU policies overlap on the question of SEPs.

Chapter 7 of the revised Horizontal Guidelines draft concerns SEP antitrust issues, such as the question of standardisation agreements and their compliance with EU antitrust law. The public consultation provides stakeholders in the SEP licensing and standardisation fields an opportunity to ensure that their interests will be considered during the drafting process of the revised Horizontal Guidelines.

The overall objective of the Horizontal Guidelines is to provide guidance on the European Commission’s application of the general norms prohibiting anticompetitive market behaviour set out in Art. 101 (1) and 101 (3) of the TFEU. The Horizontal Guidelines are de facto binding as EU courts and businesses use them to comply with Art. 101 (1) and (3) of the TFEU and to anticipate the European Commission’s enforcement of these norms.

The revised draft of the Horizontal Guidelines takes into consideration the evaluation process following a public consultation in 2019 that gave stakeholders the opportunity to review the 2011 version of the Horizontal Guidelines, which is currently in force. In the revised draft, Chapter 7 focuses on standardisation agreements as follows:

  • The new draft proposes to introduce more flexibility in the effects analysis by allowing (under specific circumstances) more limited participation in the development of a standard.

    • A standardisation agreement should not be considered to lead to restrictive effects on competition under Article 101 (1) of the TFEU if the restriction on the participants is limited in time with a view to progressing quickly and if, at major milestones, all competitors have an opportunity to be involved in terms of continuing the development of the standard (marginal no. 496).

    • A standardisation agreement should be considered as removing potential negative effects resulting from limited participation stakeholders as long as stakeholders are kept informed and consulted on the work in progress. The objective is to promote procedures that recognize the collective representation of stakeholders (e.g., consumers) (497).

  • The requirements of “good faith disclosure” should be specified.

    • The intellectual property rights (IPRs) disclosure should at least include the patent (or application) number and should be updated as the standard develops/when the standard is adopted, especially if there are any changes on the essentiality or validity of the listed IPRs (483).

    • Only when IPR information is not yet publicly available may IPR holders declare so-called “blanket-disclosures.” These are non-specific disclosures that include a (likely) rights claim to certain technology that could be important to the standard (483).

  • The new draft provides more methods for the assessment of the economic value of IPRs to determine when a proposal is fair, reasonable and non-discriminatory (FRAND).

    • The economic value can be based on the current added value of the IPR, but the market success of products unrelated to the patented technology must not be considered (486).

    • If an independent expert assessment is obtained, it may be appropriate to refer to disclosures before the industry has developed the standard (ex ante disclosure) including individual or aggregate royalties for the relevant IPR, in the context of a specific standard development process (487).

    • Similarly, a comparison of the licensing terms in the IPR holder’s agreements with those of other implementers of the same standard may serve as an indication of whether a proposed royalty rate is FRAND (487).

  • Standard development agreements should not, in principle, restrict competition within the meaning of Art. 101 (1) of the TFEU if they increase transparency by disclosing information on the characteristics and added value of each IPR to a standard (492), or provide for the ex ante disclosure of a maximum accumulated royalty rate by all IPRs (500).

© 2022 McDermott Will & EmeryNational Law Review, Volume XII, Number 97
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About this Author

Henrik Holzapfel, patent attorney, Dusseldorf, Germany, McDermott Law Firm
Partner

Dr. Henrik Holzapfel advises on all aspects of intellectual property law. He focuses on litigating patents, including the enforcement of patents essential to industry standards and FRAND defenses. Henrik also has extensive experience in litigating trade secret matters. Other areas of his practice include advising on IP licensing agreements, including advice on European competition law, drafting R&D agreements and advising on employees’ inventions. Henrik’s clients represent a wide variety of industries such as IT, pharmaceutical, biotech, medical devices, chemicals,...

+49 211 30211 230
Maximilian Kiemle Attorney IP Litigation McDermott Will Emery Dusseldorf
Associate

Maximilian Kiemle focuses his practice on IP litigation. Prior to joining McDermott as an associate, Maximilian worked at a range of international law firms where he gained exposure to a variety of areas which include patent, trademark, unfair competition, and advertising law.  Maximilian has particular automotive industry experience, including related sales and antitrust law, and contract drafting experience for automobile manufacturers.

He holds an LLM in IP and ICT Law from the Katholieke Universiteit Leuven, Belgium. Before studying in...

49-211-30211-335
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