Comments to the UK Intellectual Property Office on the Proposed Regulatory Framework for Establishing a Rate Determination Track (RDT) to Solve Rate Disputes for Standard Essential Patents (SEPs)

Abstract

The UK Intellectual Property Office (UKIPO) is considering whether to expand the power of its IP Enterprise Court (IPEC) by allowing it to recommend royalty rates in licensing negotiations between Standard Essential Patent (SEP) holders and implementers. UKIPO is also contemplating whether to provide an opinion service on the essentiality of specific SEPs.

These proposals would increase, rather than reduce, incentives for technology holdup that harms both innovation and consumers. These proposals would also (1) diminish incentives for research firms to invest in cutting-edge technologies, (2) increase bureaucratic costs, and (3) override the competency of existing courts and essentiality determinations made by standards-setting organizations (SSOs). SSOs have greater expertise than IPEC in this area. By devaluing IP rights, the proposals threaten industries that are critical to the UK economy, where IP rights account for more than 50 percent of total export goods value and nearly 20 percent of domestic employment.

The proposals would also undermine the UK’s trade and geopolitical objectives, while emboldening rival economies such as China to curtail Western IP rights. For these reasons, the UKIPO should follow the lead of the European Commission, which abandoned a similar proposal earlier this year. 

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