Published: 1 November 2019
The UK currently plays a major role in European standard-setting. How will Brexit affect this? By Andy Spurr (Fellow)
UK business’ access to standard-setting organisations such as ETSI, IEEE, ITU will not be affected by Brexit as companies can directly contribute to the technical and policy aspects of these standards bodies; the same applies for implementer access to standards produced by such bodies.
However, there are a number of EU-based organisations in which the UK currently participates via the British Standards Institution (BSI) to shape European standards policy, which may no longer be possible following Brexit. The most prominent of these organisations being the European Committee for Standardisation (CEN) and the European Committee for Electrotechnical Standardization (CENELEC).
The UK currently has voting rights regarding decisions made by these bodies and as such can influence the direction of standards to the benefit of UK businesses and consumers. In terms of SEP policy, CEN and CENELC have been active in engaging with stakeholders to determine ‘core principles’ for SEP licencing (see here and here). Again, the UK’s seat at the table currently enables some influence to be had in these policy decisions.
The BSI published a report in February 2018 advocating for maintenance of the UK’s membership in both CEN and CENELEC following Brexit. In this report they point out that CEN and CENELEC are not EU organisations, with the Republic of North Macedonia, Serbia and Turkey being members without being EU or EFTA members. However, this seems by virtue of them being ‘accession countries’, so it is not clear on what basis the UK could maintain its membership (particularly in the event of no-deal).
It should be noted that the initiation and development of many standards (and in particular SEP-heavy standards such as 5G) are directed via industry groups independent of organisations such as CEN and CENELC, and Brexit will have no direct impact on such industry-led groups
Given the global nature of standardised products and services, SEP holders have great degree of freedom in the selection of forum for conducting litigation. In recent years, the UK has been a popular forum.
However, the Unified Patent Court (UPC) may prove to be a more attractive forum as it would provide the potential for a broader injunction, assessment of damages, and setting FRAND licence rates. SEP holders may prefer to request unitary effect of their granted EP patents as a UP would provide cheaper territorial coverage (and hence increased net licensing revenue) – and due to the sheer number of SEPs relevant to any particular standard – the possibility of central revocation may be less of a detractor.
If Brexit means that the UK cannot take part in the UPC (but it goes ahead nonetheless), it is conceivable that the UK would no longer be as attractive a forum to resolve SEP disputes. However, any impact of Brexit may be outweighed by the upcoming decision of the UK Supreme Court1 scheduled for late 2020 which (amongst other issues) will decide whether the UK courts can set global FRAND rates – which would be a very attractive position for SEP holders. [Click here for more on the UPC.]
Interaction with competition law
The EU’s precedent for fair negotiation of FRAND terms is currently set out by the CJEU in Huawei v ZTE 2 – the UK application of which forming another aspect of the above UK Supreme Court decision. This UK ruling should provide some clarity on what conduct is required during FRAND negotiations in the UK. Following Brexit, only the parts of Huawei v ZTE ruled on by the Supreme Court may be binding on the UK courts, and further divergence may occur following future CJEU decisions.
As EU competition law has a ‘long arm’, it is likely that parties conducting SEP licence negotiations with a European component will choose to follow CJEU guidance during FRAND negotiations, and as such they may prefer to conduct litigation in states bound by such CJEU decisions. This may be via the UPC, or other national courts such as Germany or the Netherlands (which both have significant experience in SEP litigation).
Notes and references
- UKSC 2018/0214, UKSC 2019/0041 and UKSC 2019/0042 – this ruling is likely to be very influential on the UK’s global position with regard to litigating SEPs.
- C-170/13 Huawei Technologies
Andy Spurr (Fellow); the views and opinions expressed in this article are those of the writer and do not reflect the policy of any other organisation.
Also published in the Brexit edition of the CIPA Journal.