European Union efforts to resolve a patent dispute between tech companies and carmakers have hit a roadblock after experts enlisted for advice failed to agree on the level of royalties or who should pay them.
Tech firm Nokia and automaker Daimler are locked in battle in German courts over the level of royalties for key navigation and communications technologies and who should pay them.
The issues are relevant for the wider digital and electronics sectors and internet-connected devices in energy, health and smart manufacturing, prompting EU regulators to look into the matter.
Set up in 2018, the team of 13 experts including judges, executives from Audi, Ericsson and Robert Bosch, patent experts, economists and academics were tasked by the European Commission to look into the licensing of standard essential patents (SEP).
The experts’ report issued late Wednesday contained divergent proposals, underlying the difficulties of finding common ground, and with Ericsson executive Monica Magnusson writing a sole dissenting opinion.
The Commission sought to dampen expectations, saying the report should be read holistically and a combination of different proposals rather than a single one may work better.
“An important issue is whether fair, reasonable and non-discriminatory (FRAND) terms and conditions should be set uniformly across IoT (internet of things) verticals or should be allowed to differ among different IoT verticals,” the report said, referring to the chain of inputs used to create products.
“For some members this implies that valuations done for SEP licenses for different products in various IoT verticals may differ. Yet, there is no consensus amongst members on this matter.”
The group also failed to agree how to identify patent holders, which patents are necessary for a technology to work, where to license in the value chain, how to set fair royalties and who should handle disputes.
The Commission has said it will consider regulatory reforms such as setting up an independent system of third-party essentiality checks to vet patents.
(Reporting by Foo Yun Chee. Editing by Mark Potter)
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