By Foo Yun Chee
BRUSSELS (Reuters) -EU draft rules aimed at staving off spats over patents essential to key technologies for telecoms equipment and connected cars appear to put the onus and cost on patent owners, which could undermine Europe's leadership in such areas, Nokia (HE:NOKIA) said.
The comments from the Finnish telecoms equipment maker, whose standard essential patents (SEPs) generate about 1.5 billion euros ($1.7 billion) in revenues and account for almost 40% of its profits, come two days before the European Commission is scheduled to present the draft rules.
Under the proposal seen by Reuters, patent holders are required to register their patents with the EU Intellectual Property Office (EUIPO) if they want to charge patent fees or take legal action.
EUIPO will also oversee the process to determine fair, reasonable and non-discriminatory (FRAND) royalties, which should be concluded within nine months.
The proposal is unbalanced and ignores a key problem for patent owners, said Nokia's head of IP policy Collette Rawnsley.
"The leaked draft regulation appears one-sided with additional obligations, burdens and costs falling on SEP owners rather than implementers," she told Reuters in an interview.
"Unfortunately, there is nothing in the proposal to address the issue of hold-out, where bad faith implementers avoid or delay taking a licence and paying for innovative technology that they are using."
She said Europe, currently home to leaders in cellular standards, could even lose its lead under the draft rules.
"EU regulatory intervention and changes to the framework for SEP licensing risk making European forums for standardisation less attractive. This risks undermining European leadership in these critical technologies," Rawnsley said.
She dismissed regulator's concerns of patent spats which in the previous decade involved Apple (NASDAQ:AAPL), Samsung (LON:0593xq), Nokia, Microsoft (NASDAQ:MSFT) and others.
"The majority of patent licensing agreements are agreed amicably. Litigation is rare and always a last resort. Regrettably, litigation is sometimes necessary to get recalcitrant implementers to the table to negotiate in good faith a FRAND licence," she said.
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