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EU to probe 'lax' patent regulations

By Tobias Buck, FT.com, Jun 13 2005 21:0
 

The European Union's top antitrust regulator is investigating the EU's main telecommunications standard-setter to determine whether companies can exploit the body's rules to pull off a so-called "patent ambush".

Officials fear that companies may have the ability to turn their patented technologies into universal industry standards without telling rival groups about their patent claims.

Once their technology becomes a standard, they can then demand royalties from other groups forced to use the same technology.

The body under investigation by the European Commission is the European Telecommunications Standards Institute, responsible for standardisation of information and communication technology in Europe.

Based in southern France, the body brings together 688 members from 55 countries, including manufacturers, network operators and research bodies. ETSI's biggest success to date has been the creation of the GSM mobile phone standards.

A spokesman for the Brussels regulator said: "The European Commission is examining ETSI's intellectual property rights rules with a view to ensuring that these rules are framed in such a way that patent ambush situations within ETSI are avoided, and that standards are agreed according to transparent criteria."

According to a Commission letter to the body dating from last December, the regulator is concerned that ETSI's rules are too lax. The letter, seen by the FT, states: "The rules, and the implementation guidelines for those rules, do not appear to be able to prevent a situation where a company can potentially acquire a dominant position via a 'patent ambush' (ie. by withholding an essential IPR claim, and information about that claim, until after a standard is agreed)." The letter added that the issue "remains a matter of significant concern" to the Commission.

A spokesman for ETSI said: "The European Commission has asked ETSI to review its IPR policy. ETSI is working closely with the Commission and the Members of our institute, to ensure that our IPR policy remains fair and reasonable." The probe highlights the growing concern among regulators on both sides of the Atlantic about the threat that patent ambushes pose to the drive for universal telecommunications and software standards.

In the US, the issue came to the fore in 2002, when the Federal Trade Commission charged Rambus, a US memory chip technology company, with violating antitrust provisions.

The agency had alleged that Rambus had withheld information about its patent applications from a standard-setting group called Jedec a move that allowed the company later to claim royalties from chip producers such as Samsung, Toshiba and Hitachi.
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