BREAKING NEWS:
The European Telecommunications Standards Institute (ETSI) has urged senior European Commission officials to reconsider a regulation on standard-essential patents (SEPs) that the European Commission's Directorate-General for the Internal Market (DG GROW) has drafted and would like to put on the table as a formal legislative proposal next week (you can find a list of my previous writings on that topic toward the end of this post).
Apple has formally objected to ETSI's letter to the Commission, making it clear who hopes to benefit from the measure more than any European company: the world's richest company, which spends only about 1-2% of the price of an iPhone on SEP royalties.
As always, I must protect my sources, but I can assure you that the following document is authentic and was sent by ETSI to cabinet-level EU Commission officials on Friday (April 14):
The letter, signed by ETSI's Director-General (Luis Jorge Rmoero Saro), is addressed to Anthony Whelan, EC President Ursula von der Leyen's Digital Adviser. Mr. Whelan has also been in charge of competition policy and enforcement. Copied are members of the cabinets of commissioners Thierry Breton (Internal Market), Margrethe Vestager (Digital Agenda, Competition), and Valdas Dombrovskis (Trade).
It is hard to overstate the significance of that letter, given that ETSI is essentially a creation--or brainchild--of the European Commission. While Europe's global market share in wireless devices is negligible, ETSI remained as important as ever, but its role is now under threat by not only the draft SEP regulation but also other Commission ideas.
ETSI's letter stresses that ETSI already maintains its own database that contains not only essentiality declarations (as the EU's envisaged SEP register would) but also technical specifications:
"This system in ETSI and 3GPP puts Europe on the global standards map and constitutes an undeniable competitive asset for Europe." (emphasis added)
The second concern raised in ETSI's letter is that the draft regulation would impose "an obligation on SDOs, such as ETSI, to provide certain information to the Competence Centre (the EUIPO)." ETSI explains that this would "place[] a significant burden on SDOs, in particular the requirement to provide details of “known implementations of the standard." Even ETSI--a major standard-setting organization--"does not have the tools or resources to comply with such an obligation." And the contemplated requirement makes no sense "as those who wish to implement ETSI’s standards will be more aware of the relevant implementations than [ETSI's] members or [ETSI itself] would be."
ETSI therefore asks the European Commission not to put out the proposal on April 26, but to organize "an in-depth dialogue to find a modus operandi to keep European innovation capability at its best."
If there was any doubt about the weight that ETSI's message to the EC will presumably bear, Apple eliminated it.
Earlier today, an Apple lobbyist expressed concern over ETSI's letter to the Commission:
From: ETSIBOARD: Board distribution list ETSIBOARD[REDACTED] on behalf of Helene Workman [REDACTED]@APPLE.COM
Date: Monday, 17 April 2023 at 04:02
To: ETSIBOARD@[REEDACTED]
Subject: Re: Draft EU SEP regulation - ETSI letter to the European Commission
Dear Luis and colleagues,
I am very surprised and concerned to see this letter to these EC Cabinets stating that the letter provides ETSI’s views on a leaked draft version of the EU’s proposal for a regulation on SEPs. This letter takes extreme positions on topics for which there are diverse views amongst the ETSI membership going so far as to request that the EC not release the SEP Legislation. As you may be aware, there are sharply divided views among ETSI’s membership on the topic of SEPs, the proposed EU regulation, and whether it should promptly be enacted. I’m concerned that the ETSI Director Genera commented on a leaked draft that is not even an officially released proposal and that it purports to express ETSI’s views on this topic without consultation of the Board, ETSI IPR SC or the general ETSI membership. Accordingly, I am respectfully requesting that the ETSI Secretariat retract the letter and provide the Board with an explanation as to how this letter was developed and who was involved.
Additionally, I would note that the letter requests that the EC not release the SEP legislation based largely on implementation details that could be discussed with the EC and EUIPO later during the development of the Implementation Plan and as the EUIPO Competence Center is established. The fact that ETSI has a database does not preclude the EC from setting up a more general registry through the EUIPO. The specifics of how the EU registry will run are not even in the leaked draft regulation, so any concerns as to the interaction with the ETSI database are no reason to delay the regulation.
Thanks.
Best regards,
Helene
The above makes it clear that Apple--while even itsown astroturfers don't deny that some issues need to be addressed--wants the EU Commission to take an anti-SEP-holder initiative sooner rather than later. "SEP devaluation now!"
No company in the world would benefit from the EU initiative more than Apple. It doesn't even matter whether the proposal is workable. What Apple wants is a political statement that will weaken patent rights and which Apple's lobbyists around the globe would use to push for similar (and potentially more well-thought-out) initiatives in other jurisdictions.
In its own country, Apple was unable to persuade the federal government to adopt a SEP policy statement favoring net licensees.
The Chairman of ETSI's Board, Dirk Weiler, responded to Apple today:
Dear Helene,
ETSI is not a lobbying organization. Therefore, such a topic is not up for developing ETSI membership position statements as it happens in industry associations.
There have been many statements from industry, academia and others on this draft regulation, and mostly very negative on several elements.
The letter from the Director-General addresses only issues which clearly would cause substantial problems for ETSI itself. These are topics which have been extensively discussed in ETSI, where ETSI has invested a lot of efforts and money to make ETSI the role model for SDOs with regard to the handling of patents in areas at the forefront of technology.
And it is the role of the Director General to speak up on such topics which threaten ETSI.
I am therefore grateful that Luis has swiftly reported these points to the European Commission.
On a personal note, I have not been involved in the development of this letter.
Best regards
Dirk
While Mr. Weiler works for Nokia, he wrote that email in his capacity as Chairman of the Board, representing ETSI's institutional interests.
It shouldn't be hard for the EC to discern which side--Apple or ETSI--is more likely to promote European economic and strategic interests...
Links to prior FOSS Patents posts on the envisaged EU SEP regulation
In chronological order:
