One of the most closely watched developments in the standard essential patent (SEP) space has been the European Commission’s controversial proposal for a framework governing SEP licensing and dispute resolution in the European Union (EU). While that legislation appeared to be gaining momentum in early 2024 despite pushback from SEP owners and other stakeholders, the Commission took the unexpected step of withdrawing the proposal entirely on February 11—a move that followed shifts in the political landscape in Europe and beyond.

That proposal, introduced in April 2023, sought to address concerns raised by the Commission—the legislative body responsible for proposing most EU legislation—over transparency with respect to patent ownership, essentiality, and licensing rates, and concerns over existing dispute resolution mechanisms. The legislation sought to address those concerns through three overarching proposals: It would have created a public register in which patent owners would have to register patents they believe to be essential before they could assert them in litigation; a system requiring nonbinding essentiality checks of an annually selected subset of those patents; and a new, out-of-court process for determining fair, reasonable, and nondiscriminatory (FRAND) licensing terms that patent owners would have to complete before asserting relevant patents in court, though again with nonbinding results. All aspects of this new framework would have been administered by the EU Intellectual Property Office (EUIPO), which currently focuses solely on trademarks and design rights, through a newly created “competence centre”. The EUIPO would have also been responsible for a new, optional process for determining FRAND rates, which could be initiated by either party unilaterally and would in part determine the maximum aggregate royalty rate for a given standard.

On January 24, 2024, the bill was approved by a slight majority of the Legal Affairs Committee (JURI) of the European Parliament (EP), with only minor amendments that had been proposed by Member of Parliament (MEP) Marion Walsmann, the EP’s rapporteur for the proposed SEP regulation (i.e., the MEP responsible for guiding the proposed legislation toward passage). The legislation then came before the full Parliament, which passed the bill in the form adopted by JURI in a first-reading plenary vote held on February 28, 2024.

Despite that momentum, stakeholders remained divided over the Commission’s proposal. As previously detailed by RPX, advocacy in favor on the implementer side included industry groups like the Fair Standards Alliance (FSA), which counts among its membership a host of companies offering mobile devices, networking and cellular services, and automobiles and related components. The FSA, which has pushed for to make SEP licensing terms more “transparently available” in order to level the playing field, characterized the proposed EU regulation, on the same day as the plenary vote, as a positive “attempt[] . . . to redress imbalance” in the SEP space, points echoed by FSA member Continental soon after.

In contrast, some licensors weighed in against the SEP proposal. Among them was patent pool operator Sisvel International S.A., for which President Mattia Fogliacco argued in a January 2024 editorial that despite the Commission’s stated focus on helping European small and medium-sized enterprises (SMEs) in SEP matters, the regulation may in fact harm them by forcing patent owners to either target SMEs to retain their margins, or to scale back their standards-focused R&D activity. Additionally, in December 2023, Nokia published an editorial that expressed support for the regulation’s goals of “transparency and predictability” but argued that there are better ways to achieve them. In a counterproposal, the company argued in part that a global standards-development organization (SDO) like the European Telecommunications Standards Institute (ETSI) would be better equipped to handle the proposed SEP competence center and SEP register, that essentiality checks should be voluntary, and that the FRAND determination process should run in parallel with SEP enforcement proceedings, not come before them.

Opposition also came from various government stakeholders. For instance, European Patent Office (EPO) President António Campinos criticized the Commission for moving too quickly on the regulation, also raising questions about whether its proposals were proportionate or even necessary. Even more pointed criticism came from Unified Patent Court (UPC) Judge Rian Kalden, who took particular issue with the Commission’s view that courts were ill-equipped to handle SEP disputes—countering that the Commission was seeking to impose a new SEP framework before the UPC, which now has jurisdiction over patent claims spanning up to 18 EU member states, had even had the chance to show it could handle SEP cases. (The UPC has since done so, issuing its first two decisions dealing with FRAND licensing and related jurisdictional issues in the fourth quarter of 2024, as detailed in RPX’s latest quarterly report.)

Meanwhile, the SEP proposal’s momentum appeared to hit a wall due to leadership changes in the wake of the elections held for the European Parliament in June 2024. In September, Thierry Breton, until that point the Commissioner for the Internal Market and the regulation’s primary sponsor, resigned after revealing that EC President Ursula von der Leyen (who was reelected in July after her European People’s Party won the most seats in the EP the month before) had asked French President Emmanuel Macron to withdraw his nomination for a second term with the College of Commissioners due to allegedly “personal issues”. His replacement, Stéphane Séjourné, has been less outspoken on SEP issues, commenting only briefly on the regulation in a questionnaire submitted during his confirmation process. Meanwhile, also in September, Finland’s Henna Virkkunen—an outspoken critic of the SEP regulation—was named as Executive Vice-President for Tech Sovereignty, Security and Democracy.

The bill also received less support before the Council of the European Union, which represents the governments of EU member states and is one of two legislative bodies with a veto over bills proposed by the Commission (the other being the European Parliament). As noted by IAM, the Council submitted 250 questions for the Commission about the regulation that, in part, revealed opposition from Finland, the Netherlands, and Sweden, among other countries—the Commission and Council subsequently sparring over whether the Commission’s responses to those questions had been sufficient. In December, Spanish MEP Adrián Vázquez Lázara revealed during a roundtable discussion that the proposal had stalled in the Council. MEP Vázquez Lázara, a critic of the SEP proposal, stated that “at the Council level no one is willing to continue” and that it was “blocked in the Council”, remarking that if efforts to pass it resumed it could “stay there blocked for ten years”.

However, the Commission abruptly pulled the SEP proposal from consideration on February 11, when it released a “work programme” giving an update on pending initiatives that listed the bill as among those being withdrawn. The reason given for the withdrawal was simply that there was “[n]o foreseeable agreement”, the document further stating that “the Commission will assess whether another proposal should be tabled or another type of approach should be chosen”.

Despite the aforementioned setbacks, the withdrawal apparently came as a surprise to many, even to some within the Commission: JUVE Patent reports that around two days beforehand, “a representative of the EU Commission announced at an SEP conference in Brussels that the Polish government”—which has held the Council presidency since the start of January 2025—“intends to push ahead with the proposal for an SEP regulation”.

Observers have framed the proposal’s withdrawal as part of a broader shift in the political climate in favor of deregulation (see, e.g., here, here, and here). That shift was partly reflected in a closely scrutinized report on the future of European competitiveness released in September by Mario Draghi, former European Central Bank President and former Prime Minister of Italy. The so-called Draghi Report characterized Europe’s competitiveness as poor and asserted that this was “largely explained by the tech sector”, arguing that the EU is “weak in the emerging technologies that will drive future growth”. Per Draghi, Europe is “failing to translate innovation into commercialization”, and the reason is that “innovative companies” are being hampered by “inconsistent and restrictive regulations”.

Tech Sovereignty EVP Virkkunen echoed those concerns in a statement about the SEP regulation’s withdrawal, asserting that Europe “needs less bureaucracy and more space for innovation and entrepreneurship” and adding, “We want to cut the red tape and work smarter”. Others welcoming withdrawal included some stakeholders who previously voiced opposition to the proposal; Nokia, for instance, reiterated its support for the Commission’s goals of improved transparency and efficiency in a statement to IAM but argued that the proposal was “flawed and would not have delivered on these objectives”. In contrast, the FSA urged the Commission to reconsider withdrawal, which it characterized as “send[ing] a terrible signal to innovators and businesses who rely on a predictable and fair SEP licensing system”.

Despite the Commission’s indication that further attempts at regulation could be possible, the aforementioned emphasis on deregulation could forestall such action in the near term; JUVE Patent, for one, speculates that further changes may not happen until a new Commission is appointed in five years.

In the meantime, the focus may now shift back toward the courts, both in the EU and beyond. As noted above, the UPC has been rapidly fleshing out its approach to FRAND issues, while the end of 2024 brought significant developments in some of the world’s other top SEP venues—including the US, Germany, and China.

For more on those recent SEP milestones and other key trends from the past year, see RPX’s review of the fourth quarter and 2024.