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May. 1, 2023

Law 360: Questions Abound On EU Plan For New Essential Patent Rules by Ryan Davis

The European Union‘s call to create a new body to set royalty rates for standard-essential patents before lawsuits could be filed has drawn a skeptical response, with experts questioning how the plan would work and whether it would achieve its goal of streamlining disputes.

The European Commission released its proposal on Thursday, saying the move is aimed at bringing more transparency and predictability to a complex area of the law that has led to heated disputes and litigation.

When patents must be used in a product in order for it to operate on industry standards like Wi-Fi and 5G, the patent owner pledges to license them on terms that are fair, reasonable and nondiscriminatory, or FRAND. However, what constitutes such a rate often spurs legal clashes, and the EU proposal could reshape them in unpredictable ways.

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