Abstract: 

Licensing of patents is crucial for achieving broad and rapid diffusion of innovation. This requires a successful balancing of the incentives to invest in R&D against the benefits for the economy at large of a wide diffusion of knowledge.

Efficient and effective licensing of standard-essential patents (SEPs) is key to the success of the standard and the creation of incentives to further engage in R&D and standardisation. To ensure that Europe is well positioned in today’s global competitive environment, it should provide the right framework conditions, ensuring that SEP implementers take licenses on SEPs on FRAND terms. Unnecessary barriers in the licensing market should be removed. Potential market failures should be analysed and it should be assessed if the current system provides the right solutions to the problems that are being raised or if a careful and balanced recalibration is required.

European value creation and the viability of the European standardisation system may be at stake if in the long run the system does not provide sufficient incentives on either side, i.e. the granting and taking licenses on SEPs.