Brussels drops telecoms standards probe

The European Commission has ended its antitrust probe into Europe’s leading telecommunications standard-setter, after the body agreed to tighten its rules on intellectual property rights.

The Brussels regulator had launched the investigation amid concerns that the rules governing IPR at the European Telecommunications Standards Institute (ETSI) were too lax to prevent cases of “patent ambush”. This practice usually involves companies trying to turn their patented technology into an industry standard without telling other companies about their patent claim. If their technology is accepted as a new standard, companies can then demand royalties from other groups forced to
use the patented technology.

Conflicts between patent holders and companies that have to pay for the use of patented technology have been on the rise and have become a growing concern to regulators on both sides of the Atlantic.

ETSI is of particular significance in this context because it is responsible for standardisation of information and communication technology in Europe. ETSI’s biggest success to date has been the creation of the GSM mobile phone standard but more recently its IPR policies have come under fire both from Brussels and from powerful companies such as Vodafone.

Following recent changes to ETSI’s rules, the regulator’s concerns appear to have been addressed. The Commission said it had ended its probe following a recent decision by ETSI to strengthen the “requirement for early disclosure of those intellectual property rights which are essential for the implementation of a standard”. This means patent holders are obliged to flag up the existence of their patent early on in the process of developing a new standard.

Neelie Kroes, the EU competition commissioner, said: “Standards are of increasing importance, particularly in high-tech sectors of the economy. 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.”

The Commission also noted that a recent meeting of ETSI’s general assembly voted to set up a group to examine further changes to the body’s standard-setting rules, following a request from a coalition of leading European telecoms groups.

The new group will examine in particular whether the licensing fees for the use of a patented technology should be set in advance of a new standard.