Senior Associate David Katz co-authored an expert analysis published in Law360 about the European Commission’s proposed reforms for the standard-essential patent (SEP) licensing process. Katz deep dives into the fundamental problems with the current SEP licensing process and why the US policy on foreign SEP licensing is essential to establish.
Excerpt: “The commission's proposed regulation includes four basic reforms that, despite some provisions with problematic drafting, should help to create transparency and provide additional information for SEP licensees. By reducing the information asymmetry between SEP licensors and licensees, these reforms will promote a more efficient SEP-licensing market and more vibrant adoption of technological standards.”
As Katz writes, the core issue with the current SEP licensing process boils down to an asymmetry of information between buyer and seller. He describes the process as a “Market for Lemons,” where one cannot verify the quality of a SEP portfolio. Katz goes on to break down the four reforms in the Commission’s proposed SEP Regulation: SEP Registry, Essentiality Evaluations, Aggregate Royalty Determination and Bilateral FRAND Determination, and how they may potentially solve the “Lemons problem.”