COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(92) 445 final 
Brussels,27 October 1992 
COMMUNICATION FROM THE COMMISSION 
INTELLECTUAL PROPERTY RIGHTS AND STANDARDIZATION 
TABLE OF CONTENTS 
1. Introduction 
2. Principles of standard,zatlon 
(2.1) types of standards and obJectives of 
standardization 
(2.2) principles used In national and International 
standards bodies 
(2.3) use of standards by public authorities 
3. Principles of lntel lectual property protection 
(3.1) general principles 
(3.2) patents 
(3.3) copyright 
(3.4) semi-conductor products and other tntel lectual 
property rights 
(3.5) effects of lntel lectual property rights 
4. The standard making process 
(4.1) standards Incorporating no protected material 
(4.2) de facto standards 
( 4. 3) standards created to I ne I ude an I nte 1 1 ectua 1 
property right: agreement and refusal to 
It cence 
(4.4) late or non-disclosure of rights 
(4.5) 1 labl 1 lty for hon-dlscloeure 
( 4. 6) I dent If I cat ton of rIght ho I ders -I ne I us I on 
of protected tntel lectual property rights 
(4.7) avat labl I tty of I lcences 
(4.8) lndu~try- specific solutions 
5. Other pot Icy considerations 
(5.1) competition aspects 
(5.2) aval labt t tty of I lcences to third country 
entitles -trade polIcy aspects 
6. Conclusions 
(6.1) codes of practtce/guldel lnes/undertaklngs 
(8.2) general principles 
(6.3) Community action 
/ 
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1 ,. 0 . I NTRODUCT I ON 
1. 1. 1. Standard 1 zat 1 on and the protect I on of I nte I I ectua I 
property serve different obJectives but have to co~exlst 
1 n the same 1 ndustr 1 a I and commercIa I envIronment.· 
StandardIzatIon alms at dIffusIng techno I ogy l·n .>the 
pub 1 1 c 1 nterest, wh I I e I nte I I ectua I property rIghts a I m 
to secure private property protection. The 
standardlzatlon process cannot take place effectively If 
no clear solutions exist to resolve potential confl lets 
between the obJectives of standardization and the 
pr 1 ne 1 p 1 es of I nte I 1 ectua I property rIghts. At the same 
time, the Incentive to develop new products and processes 
on which to base future standardization wl I I be lost If 
the standard-makIng process Is carrIed out wIthout due 
regard for lntel lectual property rights. 
1.1.2. In December 1991 the Commission publ lshed Its follow up 
to the Green Paper on standards (COM( 91) 521) In wh I eh l;t 
was stated, In paragraph (xl) (other Issues 71), that the 
Comm 1 ss 1 on wou Id we 1 come the deve I opment by standard~ 
bodies of clear conditions for the Inclusion.· of 
lntel lectual property rights In standards, based on 
practice In the International standardlzat,lon 
organizations. lt was further Indicated that "In view of 
the Importance and complexity of the Issue for 
lntel lectual property rights, standardization, 
competition and trade pol lcles", the Commission Intended 
to produce a separate communication on the subJect. 
1.1.3. Given the voluntary nature of standard-making, the 
Commission Is not seeking to regulate standard-making 
directly by legislative proposals, If certain principles 
are not respected by standards bodies the Community wl I I 
not be able to use their standards and even less, to make 
them mandatory. Certain types of behaviour on the part 
either of standards bodies, or on the part of holder~ of 
I nte I I ectua I property rIghts cou Id brIng. t;.hem. t'pto 
conf I I et wIth the provIsIons of the Treaty, of :Con,mun i ty 
or national legislation, or of International cori~ent~dns. 
1. 1. 4. Therefore In thIs CommunI cat I on the CommIssIon sets ovt a .. 
number of principles which lt believes should form th6 
basIs of any I nterna I ru I es wh I eh standards bodIes may.-. 
wish to elaborate. Standards bodies remain free to 
structure their membership rules and their Internal 
organ I zat 1 ona I procedures as they wIsh. The resu Its of 
their activity, must, however correspond to the 
standardization needs of the Community and must be made 
In conform 1 ty wIth the I aws of the Comml:Jn t ty and Its 
International obl lgatlons. 
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2,.0. PRINCIPLES AND OBJECTIVES OF STANDARDIZATION 
2.1. TYPES OF STANDARDS 
2 . 1 . 1 . A standard I s a t ec h n I c a I spec I f I cat I on re I at I n g to a 
product or an operatIon wh I eh Is recognIzed by a I arge 
number of manufacturers and users. Councl I Directive 
83/189(1) lays down the fol lowlng definition In Its 
Article (2) "standard shall mean a technical 
specification approved by a recognized standardizing body 
for repeated and contInuous app I I cat I on comp I I ance wIth 
which Is In principle not compulsory". 
lt may be the result of a formal consensus-bul ldlng 
procedure managed by a recognized standardization body In 
order to permit a large number of manufacturers to adopt 
Identical solutions. Alternatively, the standard may 
arise spontaneously by the degree of penetration of the 
market of a partIcular techn I ea I so I ut I on (a so-ea I I ed 
"de facto" or "proprietary" standard). 
2.1.2. Standards may be developed for a wide variety of 
purposes, ranging from terminology and testing to 
detal led technical specifications for products, processes 
and services. They may be I lmlted to ensuring 
compatlbl I lty of products or systems at their points of 
Interconnection, or may extend to detal led specifications 
In respect of the design, dimensions and materials of the 
products themselves. In general terms, the Community 
a I ong wIth other PartIes to the Agreement on Techn 1 ea 1 
Barriers to Trade of the GATT ("TBTA") Is committed to 
specifying technical regulations and standards In terms 
of per forma nee rather than desIgn or descr 1 pt 1 ve 
characteristics. 
OBJECTIVES OF STANDARDIZATION 
2 . 1 . 3 . I n the m a J or I t y of I n dust r I e s , the ob J ec t I ve of the 
manufacturer whose product becomes a "de facto" standard 
may not be, at the outset of the commercial lzatlon of the 
technology, to see lt become an Industry standard. The 
objective of most manufacturers remains to achieve high 
I eve Is of market penetratIon and to be compet It 1 ve 1 n 
those markets In relation to other manufacturers. 
In certain Industries, where a high degree of 
standardization Is taking place, manufacturers must now, 
however, be aware of the posslbl I lty that some of their 
new technology may eventually form the basis of an 
Industry standard. 
( 1) 83/ 189/EEC: Counc I I DIrectIve of 28 March 1983 I ay I ng 
down a procedure for the provision of Information In 
the field of technical standards and re~ulatlons. 
OJ N° L 109, 26/04/83 p. 08 
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2 ~ 1. 4. 1 f a new product has e I ements protected by I nte I I ectua I 
property legislation, as Is most I lkely to be the case, 
the manufacturer w I I I exercIse those I nte I I ectua I 
property r 1 ghts v 1 gorous I y, as a means of securIng and 
maintaining his lead and his profitability In a given 
terr 1 tory. 1 n many hIgh techno I ogy IndustrIes, the 
highest costs are Incurred In the research and 
development phase when the lntel lectual Input )n terms of 
man-hours of work 1 s at Its greatest, the manufacturIng 
phase being a relatively low-cost operation. The economic 
value of the lntel lectual property rights In such a 
product wl 11 therefore constitute an Important factor In 
price calculations and figures prominently as a company 
asset. 
2.1.5. Once a certain level of penetration of the relevant 
market for his product has been achieved, the 
manufacturer wl I I 'de facto' have set the Industry 
standard for that product and lt will be difficult, If 
not Impossible, for others whose products must 
lnteroperate with his, to avoid working to the standard 
wh I eh he has set. ThIs w I I I be part I cuI ar I y the case 
where lnterworklng or networking Is Involved, as In the 
computer, energy distribution, telecommunications and 
transport Industries. 
2.1.6. Once a certain level of market penetration has been 
achieved, the manufacturer whose product has become a de 
facto standard may accept that de facto standardization 
can be advantageous I y converted Into a forma I standard 
so that the dominance of his technology Is embodied In a 
more permanent form. His objective wl I I then be to 
secure the best terms from the conversion of his de facto 
standard Into a formal standard. 
2.1.7. These terms may Include royalty payments for the use of 
his lntel lectual property and the grant of I lcences on a 
territorial basis for the exploitation of these 
I nte I I ectua I property rIghts. These rIghts I ne I ude the 
rIght to contro I manufacture and the rIght to contro I 
distribution, Including Importation. 
2.1.8. A longer term benefit wl I I probably accrue to the 
manufacturer who vo 1 untar I I y I 1 cences hIs techno I ogy to 
become a standard since his market share wl 1 I eventually 
grow significantly In respect of the rights for which he 
receIves roya I ty payments even If he Is no I onger the 
sole manufacturer of the product Itself, and even If the 
royalty rate which he receives Is less than that which he 
would have obtained from a I lcensee on the open market. 
2.1.9. He will also be able to satisfy a second longer term 
objective which Is to see the technology developed by his 
company estab 1 I shed as a wor I dw I de standard wIth 
resulting beneficial publ lclty. 
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2~1.10. On the other hand, a standard may arise by a process of 
definition and approval by a recognized national or 
International standardization body. 
2.1.11. The underlying objective of formal standardization Is to 
generate the economic benefits for society that wl I I 
result from a more rational organization of .supply and 
demand and greater competition In the market place. 
Standard I zat 1 on tends to reduce costs for the supp I I er 
and purchaser of goods and services and to Increase 
transparency of the market. Once the reQuirements of the 
market are ref I ected In a standard, a I I Interested 
suppl lers are put In a position to meet market needs on a 
competitive basis. At the same time, purchasers are 
given common assurances with respect to the performance 
of the product or servIce agaInst agreed er Iter I a of 
Qua 1 1 ty, 1 nteroperab I I I ty, and so on. The Importance of 
standardIzatIon as 11an Instrument of economIc and 
IndustrIa I IntegratIon wIthIn the European market.. has 
recently been expl lcltly recognized by the Councl I In Its 
Resolution on the role of European Standardization In the 
European Economy of 18 June 1992.(2) 
2.1.12. These economic objectives can, of course, only be 
rea I I zed Insofar as standards are made known and 
ava I I ab I e to the wIdest poss I b I e number of Interested 
partIes on faIr and reasonab I e terms. ConseQuent 1 y, a 
standard Is by defInItIon a pub I I c I y-ava 1 1 ab 1 e 
document(3) and the technical specification which Is 
not aval lable to al I potential users Is not a standard. 
2.1.13. Benefits to purchasers and users accrue from the 
existence of a recognized standard guaranteeing not only 
lnteroperablllty but also a certain level of Quality, 
safety and conformity to certain technical norms. A 
European standard can fInd I tse If 1 n compet 1 t 1 on w 1 th 
standards set by other major tradIng partners such as 
the American or Far Eastern markets. 
2.1.14. The objectives of standardization can only be met If the 
technology chosen Is good, up-to-date and readl ly 
aval lable. The standardization process Is, however, by 
Its consensus-driven nature, a lengthy one, and when 
substantial delays In adopting a standard occur, the 
technology on which the standard Is based may already be 
out of date. On the other hand, the most InnovatIve 
technology may not be the most appropriate for adoption 
as a standard because lt Is not yet stable and 
sufficiently tested In the market place. 
(2) OJ no 173 of 9.7.92, p.1 
( 3) See ISO/IEC 
definitions 
act I v 1 t 1 es ... GuIde 2, 
concerning .. General terms 
standardization and their 
and related 
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2 .. 1. 15 Once chosen as a standard, a part I cuI ar techn I ea I 
solution tends to perpetuate Itself for a period longer 
than that which lt might have enJoyed on the open market 
In a free competitive situation and therefore the process 
of standard 1 zat 1 on may I tse If retard techno I og I ea I 
Innovation In some areas. 
2.1.16 lt Is also the case that too much standardization In a 
given area at a particular moment In time may create 
difficulties as that technology changes. Replacing a 
substantial standardized "platform" such as a main-frame 
computer operatIng system wIth a new and more advanced 
standard I zed "pI at form" may prove more cost I y and more 
difficult than the addition of new layers of system 
software on to existing products. 
2.1.17 A variety of approaches to the Issue of standardization 
are therefore requIred If the most approprIate form of 
standardization for a particular Industry Is to be 
achieved. 
2.2. PRINCIPLES USED IN NATIONAL AND INTERNATIONAL STANDARDS 
BODIES 
2.2.1. The three European standards-making bodies recognized by 
the CommunIty at a European I eve I are CEN, CENELEC and 
ETS I . CEN (European CommIttee for StandardIzatIon) and 
CENELEC (European Committee for Electro-Technlcal 
Standardization) crea~e standards for EC and EFTA 
countries. Their membership Is composed of national 
standards bodies and national electrotechnlcal committees 
respectively. ETSI (European Telecommunications Standards 
InstItute) er ea ted In 1988 fo I I ow 1 ng the recommendat 1 on 
made In the Commission's Green Paper on Standards, groups 
together administrations, network operators, users, 
manufacturers research I nst I tut Ions and prIvate servIce 
provIders and has the task of draftIng European 
Telecommunications Standards. 
2 . 2 . 2 . At the I n t er n at I on a I I eve I , I SO , I E C and CC 1 TT 
(I nternat Iona I Te I egraph and Te I ephone Consu I tat 1 ve 
Committee) are the standard-making organizations. ISO 
(International Organization for Standardization) draws 
Its membership from national standards organizations. 
The IEC (International Electrotechnlcal Commission) has a 
similar but smaller membership In the field of 
electronics and electrical engineering. 
2.2.3.· The principles appl led to lntel lectual property by 
ISO/IEC and by CEN/CENELEC are relatively simple. 
Subparagraphs b) and c) of Annex A of the ISO document 
(Reference to patented Items IEC/ISO Directives- Part 2 
Methodology for the development of 'nternatlonal 
standards) are appl led by al I four bodies. They read as 
fo I I OWS: 
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b) 11lf the proposal Is accepted on technical grounds, 
the originator shall ask any known patent holder 
for a statement that he would be wl I I lng to 
negot 1 ate 1 1 cences under patent and I I ke rIghts 
with appl lcants throughout the world on reasonable 
terms and conditions. A record of the patent 
holder's statement shal I be placed In t~e fl les of 
the 1 so Centra I SecretarIat or the I EC Centra I 
Office, as appropriate, and shal I be referred to 
In the relevant International Standard. If the 
patent holder does not provide such a statement, 
the Technical Committee shal I not proceed with the 
1 ne I us 1 on of the patented Item un I ess the 
respective Councl I gives permission 
c) Should lt be revealed after publication of the 
International Standard that I lcences under a 
patent and I I ke rIghts cannot be obtaIned under 
reasonable terms and conditions, the International 
Standard shal I be referred back to the Technical 
Committee for further consideration." 
2.2.4. CCITT In Its Annex 5 Statement on CCITT patent policy 
elaborated In June 1988 made the fol lowlng observations . 
.. Over the years the CCITT has developed a 11COde of 
practice" regarding patents ... The rules of this "code 
of practice .. are rather simple and straight forward ... 
the detal led arrangements being left to the parties 
Involved, as these arrangements might differ from case to 
case ... 
2.2.5. ETSI has drafted a Pot Icy and Undertaking on lntel lectual 
Property Rights which sets out more detal led procedural 
rules and which starts from two premises which differ 
from those app I I cab I e In I SO/ I EC/CEN or CENELEC. The 
fIrst premIse Is that membershIp of ETS 1 Is cond 1 t 1 ona 1 
on sIgnature of the UndertakIng whereby an I nte I I ectua I 
property r lght (I PR) holder agrees to 1 icence his IPRs 
according to certain limitations as to royalties. The 
second premise Is that ETSI standards are aval table In a 
specific geographical area as a consequence of the 
definition of territory contained within the draft 
Undertaking. Certain conditions are specific to 
signatories of the Undertaking. This Pot Icy and 
Undertaking has not yet been approved by the ETSI 
membership. 
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2~3. THE USE OF STANDARDS BY PUBLIC AUTHORITIES 
2.3.1. Because standards represent a voluntary consensus 
concerning the technical characteristics of goods and 
servIces, they are common I y used by pub I I c authorItIes 
within the framework of regulation. This m~y take the 
form of a direct reference In legislation which makes a 
given standard mandatory or, as Is normal ty the case In 
the Community, of conferring a "presumption of 
conformity" to legislation on any product which compl les 
with the standard. Directives based on reference to 
standards have been adopted In a number of Important 
Industries, Including mechanical engineering, 
construction, medical devices, telecommunications, gas 
appl lances and measuring Instruments. 
2.3.2. Slml larly, publ le authorities often use standards In 
theIr procurement. WIthIn the CommunIty, for Instance, 
the publ le procurement Dlrectlves(4) now al I reQuire 
purchasing entitles to define technical specifications In 
their contract documents by reference to European 
standards where these exIst, In order to ensure that 
national ly-determlned specifications are not used to 
restrict access to procurement markets. 
2.3.3. Whenever publ le authorities Incorporate standards Into 
legislation and thereby confer upon them a more binding 
character than theIr norma I vo I untary status, they must 
satisfy themselves that: 
the standards In Question have been developed In 
accordance with the normal procedures of standardization 
(I .e. that they represent a consensus based on the views 
of at I Interested parties); and 
-the standards In Question are aval table for use by at I 
Interested parties to whom the legislation appt tes. 
International agreements subscribed to within the 
framework of the GATT (I .e. the TBTA and to a lesser 
extent the Agreement on Government procurement) extend 
these rIghts of non-d I scrm I natory treatment to certaIn 
other GATT contracting parties. 
2.3.4. However, providing that the procedures set out below are 
fol towed, even In the exceptional circumstances where a 
standard becomes 'non-voluntary', problems can be 
resolved In relation to lntel lectual property rights. 
(4) Directives 71/305/EEC, 77/62/EEC, 90/531/EEC 
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2~3.5. If the technological solution which Is to be made 
mandatory 1 s based on proprIetary rIghts, these rIghts 
must be the subject of negotiation before the standard Is 
agreed and the technology Is made mandatory. 
If the negotiations fal I to produce an agreement from the 
rlghtholder, the rights cannot subsequently be 
expropriated unless there are over-riding publ.lc Interest 
or publ le safety considerations to be taken Into account 
and no other technical solution could be devised. 
2.3.6. Therefore the question of the use of standards by publ le 
authorities does not hinge on the question of whether any 
lntel lectual property rights which may under I le the 
standard can be Incorporated ex post facto Into a 
mandatory standard, since such rights must In al 1 cases 
be acquired by negotiation and not by legislative 
expropriation. 
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3.0. PRINCIPLES OF INTELLECTUAL PROPERTY PROTECTION 
3.1. GENERAL PRINCIPLES 
3. 1. 1. I nte I I ectua I property rIghts I ne I ude patents, _trademarks, 
copyright, design rights, semi-conductor topography 
rights, trade secrets. Works of the lntel lect are created 
as the resu It of a gIven vo I ume of man-hours of I abour 
and a return on the financial Investment In that labour 
cost wl I I be secured only If the creator of the work can 
control how his work Is to be exploited and where. 
General principles are 
lntel lectual property 
fo I I owIng : app 1 I cab le 
protection. to 
They all forms 
Include of 
the 
3.2. PATENTS others may only use or copy the lntel lectuat 
creation with his permission and, If the right 
holder so wishes, he may be paid for that 
permission; 
In order to ensure a wider distribution and use of 
works of the Intellect In society as a whole, 
I I m Its are set on the scope and duratIon of the 
lntel lectual property protection; 
the abusive exercise of lntel lectual property 
rights by Individuals or companies occupying a 
dominant position Is subject to the appl lcatlon of 
com pet I t I on r u I e s , and I n par t I c u I a r A r t I c I e 8 5 
and 86 of the Treaty. Agreements between companies 
regu I at I ng the exercIse of I nte I I ectua I property 
rights may be subject to the prohibition of 
Article 85 of the Treaty. 
3.2.1. Specific characteristics apply to each type of 
Intellectual property right. So In the case of patent 
rights, the object of the right Is a new creative 
technical solution to a problem. The .. invention .. must 
demonstrate novelty and be capable of an Industrial 
application. 
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3,.2.2. The patent. right will only be granted If application 
formal I ties are completed In which the Inventive step Is 
described In detal 1. There.may be a. period during which a 
patent appl lcatlon Is subject to examination prior to the 
gra-nt of a patent. For thIs I I m I ted perIod of tIme the 
patent appl lcatlon Is not fully disclosed to the publ le, 
although the existence of an appl lcatlon may be known. 
Once a patent has been granted, the d I se I osure to the 
publ le Is compensated for by the temporary monopoly which 
the patent right gives over the exploitation of the 
patented Invention. 
3.2.3. That monopoly right can be exercised exclusively by the 
patent ho 1 der If he chooses to commercIa I I se hIs 
Invention himself. If In certain circumstances he falls 
to work his patent himself or If he chooses to license 
others to do so, he may never the I ess be remunerated by 
others for the right to be a I lcensee of his patent. 
The rIght Is not subJect to any genera I exceptIons In 
respect of use by potentially competing third parties but 
1 s 1 I m I ted In tIme so that socIety may benefIt free I y 
from technical progress once the rlghtholder has had the 
opportunIty to recover hIs or I g I na I Investment In 
research. 
3.2.4. Patents are granted on a territorial basis, that Is to 
say, that they are valid for the country In which they 
are Issued, or In the case of a patent Issued by the EPO 
(European Patent Office) they may be valId for up to 17 
countries, I .e. those of the Community plus Austria, 
Switzerland, Sweden, Monaco and Llchtensteln. Rights 
acquired under patent law exhaust only on expiry of the 
term of protect I on In the terrItory for wh I eh they are 
granted, or, on the non-payment of any renewal fees. 
3.3. COPYRIGHT 
3. 3. 1. CopyrIght, by contrast, protects not nove I ty but 
original lty. This original lty Is assessed In relation to 
the expression used by the creator and protection by 
copyright cannot apply to solutions, principles, Ideas, 
or methods as such. There Is no monopoly In the patent 
sense under copyright protection since any second maker 
Is free to find his own way to express an Idea which he 
has taken from the work of another. Even In techn 1 ea 1 
fIe I ds such as computer programs It Is except Iona I for 
there to be only one possible way to express an Idea. 
3.3.2. 
3.3.3. 
3.3.4. 
3.3.5. 
3.3.6. 
3.4. -11 -
In cases where Idea and expression are Inseparable, there 
Is generally held to be no copyright In that expression. 
The on 1 y monopo 1 y under copyrIght I aw Is therefore the 
right of the author to prohibit the unauthorized 
exploitation of the expression used In a work, for 
examp 1 e to prevent the copyIng of I I nes of text from a 
book or 1 lnes of code of a computer program. 
A work Is protected under copyright law as soon as lt Is 
created. Within the Community and according to 
International copyright conventions there Is no need to 
complete registration or examination formal ltles. 
However, 1 n some countrIes, regIstratIon forma I It I es do 
exist. 
The absence of any reQuirement In the Community to 
register a copyright means that only I ltlgatlon can prove 
conclusively whether a valId copyright exists In relation 
to a part I cuI ar work. The protect I on exIsts regard I ess 
of whether the work has been commercIa I I y exp I o I ted by 
Its creator or not. Copyright Is not therefore a 
compensation to the author for disclosure as with patent 
protect I on, and the essence of the copyrIght cannot be 
reduced to a mere right to remuneration. 
Copyright protection Is relatively long, at least 50 
years fol lowlng the death of the author according to the 
relevant International conventions, and Is a territorial 
r 1 ght. A work created or pub I I shed In the Commun 1 ty, 
can be I I censed for exp I o I tat I on on I y wIthIn the 
Community, the right to exploit the work In, for 
example, the us, being the object of a separate 
negotiation by the rlghtholder. 
A I lmlted number of exceptions to the exclusive copyright 
rights are provided for In the legislation of the Member 
States and by the relevant International conventions so 
that certain acts may be legitimately performed by users. 
SEMI -CONDUCTOR PRODUCTS AND OTHER INTELLECTUAL PROPERTY 
RIGHTS 
3.4.1. The protection given In the Community to the topographies 
of semi-conductor products ("chips") should also be 
mentIoned< 5 > . ThIs protect I on Is a suI generIs reg 1 me, 
I lmlted to chips produced within the Community, although 
protection can be extended, on the basis of reciprocity, 
to chips produced In third countries. 
(5) Directive 81/54/EC 
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The protection Is I lmlted In time (10 years) and Is 
restricted In scope by exceptions permitting reproduction 
of a topography for the purpose of private study and the 
developing of other topographies, I .e. a form of 'reverse 
engineering' exception. 
3.4.2. Design rights have not yet been harmonized thrQughout the 
Community and a variety of regimes protecting both 
functional and non-functional designs exist. Some regimes 
foresee a registration system. 
3.4.3. Other forms of lntel lectual property such as trademarks, 
trade secrets, unfaIr competItIon do not appear at the 
present time to cause any specific problems In relation 
to the Issue of standards and are therefore excluded from 
the scope of this Communication. 
3.5. EFFECTS OF AN INTELLECTUAL PROPERTY RIGHT 
3.5.1. Some clarification Is necessary as to what acts are 
permItted or prohIbIted, In respect of I nte I I ectua I 
property rIghts. In the case of a product or process 
Incorporating a patented Invention, the part of the 
product or process so protected cannot be copied without 
authorization, even by observing the Ideas and principles 
on which lt Is based, nor can Instructions In written 
form, such as a specification or patent description, be 
used for the purpose of producing a slml lar or Identical 
result. 
3.5.2. In the case of a product covered by copyright, the part 
of the product so protected may not be cop 1 ed w 1 thout 
authorization but If lt Is accessible to the human 
senses, as In the case of a three-dimensional obJect or 
other works In a human I y perce I vab I e form, 1 t may be 
studied, and the Ideas and principles derived from that 
study may be used to create a slml lar or Identical 
functional lty, providing that the expression of the 
copyrighted work Is not reproduced. 
3.5.3. A special exception to the normal rules of copyright and 
which Is of relevance ·In the telecommunications standards 
area has been Introduced In Directive 91/250 EC on the 
legal protection of computer programs to enable 
lnteroperable programs to be created by means of deriving 
and re-using lnf.ormatton from existing programs. A study 
of a computer program In machine-readable form may not 
yield at I the Information reQuired In order to create an 
lnteroperable program. 
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Acts which would constitute technical violations of 
copyright rights such as reproducing or translating the 
program may need to be carried out. The Directive does 
not exclude the posslbl I lty that payment may be made to 
the rlghtholder for such Information as a conseQuence of 
negotiation between the rlghtholder and the person 
reQuiring Information. The exception does not al tow for 
the copying of protectable expression. 
3.5.4. As regards the specification for a standard which Is 
produced In text form, copyright rules wt I I apply to the 
express I on of the specIfIcatIon. ThIs does not prevent 
users of the specIfIcatIon from I np I ement I ng the 
specification. No part of the product or process which 
Is subject to lntel lectual property rights should be 
descrIbed In the specIfIcatIon, un I ess the r I ghtho I der 
has agreed to the use of his lntel tectual property rights 
In that standard. 
3. 5. 5. Once authorIzatIon has been gIven by the owner of an 
I nte I I ectua I property rIght for the product or process 
covered by the right to be used as the basis of a 
standard, authorIzatIon to descrIbe the standard In a 
technical specification must also have been given, either 
expl lcltly or lmpl lcltly. 
3 . 5 . 6 . Owner s h I p of the copy r I g h t , I f any , I n the w r I t ten form 
of the specIfIcatIon w I I I depend on whether the 
specification has been provided by the owner of rights In 
a de facto standard, or has been provided by a standards 
body fol towing agreement between the parties concerned as 
to the ownership of the authors' rights In the text. 
3.5.7. If the specification of the standard Is drawn up with 
sufficient accuracy, lt should contain al 1 the 
Information necessary to ensure a satisfactory 
Implementation of the standard. lt should not therefore 
norma I I y be necessary to I ook beyond the specIfIcatIon 
for additional Information unless this can be done 
without violating the lntel lectual property rights In the 
product or process so described. 
-14 -
4.0. THE STANDARD-MAKING PROCESS 
4.1. STANDARDS INCORPORATING NO PROTECTED MATERIAL 
4.1.1. lt Is the case In most standardization work that either 
no lntel lectual property rights exist or are created, or 
that there Is express consent to free use of the 
lntel lectual property or waiver of any rights arising or 
acqu 1 red. 1 t Is a I so poss I b I e that I nte I I ectua I property 
rights arise but are owned and exercised Jointly by al I 
members of the grouping, or according to contractual 
arrangements between the parties. 
4.1.2. In these Instances the question of the existence, 
ownership and exercise of lntel lectual property rights Is 
normally resolved ab Initio, and no further problems 
should arise. lt should be stressed that, wherever 
possible, standards should be devised which avoid taking 
over proprIetary techno I ogy on wh I eh I nte I I ectua I 
property rights already exist. 
4.2. 'DE FACTO' STANDARDS 
4.2.1. The opposite situation exists where the product or 
process developed by one manufacturer becomes, by virtue 
of Its success on the market, the de facto standard. For 
examp I e, In the vIdeo cassette/recorder fIe Id, the 
overwhelming success of the VHS .. standard .. Is a well­
known case. In these situations the products or process 
w I I I a I most certaIn I y embody I nte I I ectua I property 
rights. 
4.2.2. These rights may have been known to others In the 
Industry If patents are Involved since patent 
app I teat Ions are a matter of public record once the 18 
months period from first fl ling date Is up, at least as 
far as the CommunIty Is concerned, and It Is un I I ke I y 
that a de facto standardIzatIon can have occurred In a 
period less than 18 monthsi 
The manufacturer may even have cone I uded I I cences w 1 th 
third parties In respect of those rights to permit 
manufacture In certain markets. 
4.2.3. If copyright Is Involved the situation Is more ambiguous, 
as far as those countries are concerned which Impose no 
registration formal I ties on the copyright holder, as Is 
the case In al I the Member States. In these 
circumstances copyright may exist and expire at the end 
of Its due term without Its val ldlty ever being tested. 
-15 -
4. 2. 4. Never the 1 ess 1 t shou Id a I ways be poss f·b I e for the 
potent 1 a 1 owner of a copyrIght to IdentIfy the subject 
. matter over w h 1 c h he I n ten ciis. to c I a I m a p r I or · r 1-g ht . A 
-~resumption of ownership wl I I thus be created which will 
be rebuttable If he Is found not to be the owner or If 
the subject matter Is held not to be protectable. 
4.2.5. If the owner of the lntel lectual property right Is made 
aware that a standard~maklng body wl·shes to base a 
standard on his technology, he Is put on notice that a 
violation of his lntel lectual property rights might 
occur. 
4.2.6. lt Is therefore of relevance to any subseQuent 
negotiations or I ltlgatlon to establIsh by what means the 
rlghtholder could be expected to know that a violation of 
his rights might be proposed. 
In the ev.ent that the rlghtholder participates himself In 
the standard making body lt may be assumed that he 
receives constructive notice by the announcement that a 
standard Is due to be establ lshed using the technology In 
question. In other words, an announcement by the 
standards body must create a presumption that the 
r 1 ghtho I der has been put on notIce as to the potent I a I 
use of his rights. 
4.2.7. However where the de facto standard concerns a technology 
created by a manufacturer not belonging to the standards 
body, the manufacturer cannot be said to be presumptively 
put on notIce. ThIs sItuatIon w I I I be dea It wIth In 
paragraph 4.6 below. 
4.2.8. Adoption of official standards based on de facto standard 
solutions has many advantages. De facto standards are by 
their nature wel 1-trled and tested solutions, stable and 
technically satisfactory. They have market acceptance 
and are probably wel 1-documented. 
4.2.9. Therefore In spite of the difficulties which the 
existence of proprietary lntel lectual property rights 
could potentially create, lt Is unavoidable that de facto 
standards w I I I present themse Ives In many Instances as 
natural candidates for adaptation Into recognized 
standards. 
No cases have been drawn to the attention of the 
Commission as yet where the owner of lntel lectual 
property rIghts In a techno I ogy refused to I I cence hIs 
rights to enable an already agreed standard to be 
subsequently Implemented. 
-16 -
4.2.10. Particular attention has to be paid however to the 
procedures by which this process occurs In order to 
ensure that the Interests of rlghtholders and standards 
users are respected. These procedures are dealt with In 
the fol towing sections. 
4.3. STANDARDS CREATED TO INCLUDE AN IPR 
REFUSAL TO LICENCE. AGREEMENT AND 
4.3.1. If there are proprietary lntel lectual property rights 
under 1 y 1 ng the techno I ogy on wh I eh a standard Is to be 
based and that fact Is known to the standard makers, then 
the agreement of the r I ghtho I der must be sought If the 
work on the standard Is to continue. lt Is obvious that 
such an agreement should be sought at the earl lest 
possible opportunity so that, In the event of a refusal 
to I I cence, a I ternat I ve so I ut Ions may be exp I ored. A 
tlme-1 lmlt within which permission must be given or 
refused can a I so assIst In speedIng up the standard­
making process. 
4. 3. 2. Once the I I m It has passed and no agreement has been 
reached between the parties as to the use of an 
lntel lectual property right, work on that solution must 
be ha I ted and an a I ternat I ve techno I ogy cons 1 dered. 1 t 
would be Inadvisable for a standard-making body to 
contInue work on a standard If perm I ss I on has not been 
sought or has not been granted In respect of lntel tectuat 
property rights. 
4.3.3. If agreement Is reached between the rlghtholder and the 
standard-making body, the terms for I lcences must be 
faIr, reasonab I e and non-dIscrImInatory. 1 t Is not 
feasible or appropriate to be more specific as to what 
constitutes "fairness" or "reasonableness" since these 
are subjectIve factors determIned by the circumstances 
surrounding the negotiation. If the rlghtholder Is to be 
satisfied that his Investment In research and development 
can be adequately recovered, he would expect the royalty 
rate to relate In some way to the normal freely­
negotiated commercial rate, at towing for the greatly 
Increased market for his technology which standardization 
w I I I brIng. 
4.3.4. The terms which the rlghtholder offers for the use of his 
rights should be flexible enough to Include the 
posslbl I lty, If the parties so agree, of cross-1 lcenslng 
arrangements. Cases of disputes arising In relation to 
the terms and conditions offered by the rlghtholder could 
be resolved If necessary by arbitration. 
-17 -
In the event of an appeal against an arbitration decision 
both parties may have recourse to the use of Article 86 
EC. 
4.3.5. The freedom of the rlghtholder to refuse to I lcence Is, 
at the present time, absolute, since his exclusive 
Intellectual property rights cannot be $Ubject to 
expropriation or compulsory I lcenslng except In 
exceptional circumstances such as reasons of national 
security or over-riding publ le Interest. 
4.3.6. However a refusal to I lcence by the rlghtholder lmpl les 
as a consequence that an alternative technical solution 
w 1 1 1 probab I y be adopted and w I I I then cha I I enge the 
rlghtholder's potential or de facto dominance In the 
market. 1 t Is norma I I y therefore not In the 
rlghtholder's Interest to decl lne to I lcence his patent 
or his copyright unless the terms offered by the 
potential users fal 1 wel I short of his commercial 
expectations. 
4.3.7. This factor has to be borne In mind In relationship to 
the 11 fa 1 r ne ss 11 or 11 reasonab I eness" of the remuneratIon 
which the rlghtholder seeks to obtain and balanced 
against the enhanced market opportunities which 
standardization on his technology might bring. 
4.4. LATE OR NON-DISCLOSURE OF RIGHTS 
4.4.1. A potential source of difficulties can be Identified 
where proprietary rights are not disclosed at al I or are 
d I se I osed I ate In the standard-makIng process. 1 n 
theory, an I PR ho I der {havIng been put on notIce by a 
standard-making body that his rights were potentially to 
be used In the creation of a standard,) would be acting 
In bad faith If he claimed those rights only once the 
standard had been adopted, thereby forcing competitors to 
agree to I lcence royalties higher than those which might 
have been offered at an earlier stage, or blocking the 
Implementation of the standard completely. 
4.4.2. As has been Indicated In paragraph 4.2.9. above, no such 
event has yet been notified to the Commission. However, 
bad fa 1 th cou 1 d eas 1 I y be demonstrated where a 
presumption of knowledge on the part of the rlghtholder 
can be establ lshed. 
-18 -
lt Is therefore for standards-making bodies to establIsh 
procedures whereby late disclosure or non-disclosure of 
rights Is penal lzed once actual or presumed knowledge can 
be establIshed. The degree to which late disclosure 
Inconveniences the standard-making body can be regulated 
by means of the ttme-tlmtt Imposed on rtghtholders to 
declare an Interest once a standard has been a~nounced. 
4.4.3. If there are del lberate acts of bad faith on the part of 
the rlghtholder a court might take these Into 
consideration In evaluating the extent of any damages for 
copyright or patent violation under civil or criminal 
law. 
4.5. LIABILITY FOR NON-DISCLOSURE 
4.5.1. The question arises as to the extent to which the 
rlghtholder can and should be held I table for a fal lure 
to d I se I ose an Interest. If pub I I cat I on of future 
standard-makIng actIvItIes takes pI ace In an effIcIent 
manner, the responsab I I I ty for conductIng a search of 
patents and copyrights held by a manufacturer taking part 
In the standard-making process must rest with that 
manufacturer. The rlghtholder may be unaware of the fact 
that he Is In possession of a patent In a given area, or 
that the subject matter In question might be covered by a 
copyrIght. The task of IdentIfyIng re I evant rIghts w I I I 
of course be more onerous for manufacturers with 
substantial IPR portfolIos and this factor should be 
taken Into consideration by the standard-making body, 
perhaps by allocating a longer tlme-1 lmlt for the 
Identification of rights by manufacturers who can 
demonstrate the magnitude of the search procedure to be 
carried out In their particular case. 
4. 5. 2. If on the other hand, the standard-makIng body accepts 
the responsab I I I ty for conductIng a search of poss 1 b 1 e 
patents In a gIven area, then the I I ab 1 1 1 ty for 
disclosure must no longer rest with the Individual 
r I ghtho I der, a I one. He can no I onger be automat I ea I I y 
presumed to have acted In bad faith by fal 1 lng to 
disclose his rights. 
-19 -
4.6. IDENTIFICATION OF RIGHT HOLDERS 
4.6.1. If a standard-making body bases Its work on a technical 
solution which Is not the property of any of those 
participating In Its work, and makes no effort to 
1 dent 1 fy and obtaIn authorIzatIon from the proprIetary 
rights holder, then the normal appl lcatlon of 
lntel lectual property law lmpl les that an Infringement of 
rights has occurred If no reasonable effort has been made 
to trace the rlghtholder. Seeking authorization ex post 
facto will not legitimize the Infringement of rights. 
Therefore the standard-making body has to ensure that al I 
reasonable efforts have been made to Identify rights and 
to negotiate with the rlghtholder before the subject 
matter of the rIghts Is Incorporated Into the standard 
even If this means that searches have to be carried out 
as to the existence of patents. 
4. 6. 2. Cuts 1 de the standard-makIng envIronment, a manufacturer 
wishing to launch a new product should ensure that In so 
doing he wl I I not violate existing patents or copyrights. 
The standard making body has a duty to take al I 
reasonable precautions to the same end. 
4.7. AVAILABILITY OF LICENCES 
4.7.1. A further question which standard-making bodies must 
address Is the extent to which proprietary rights should 
be I lcensed for use. The normal practice Is for standard­
makIng bodIes to make standards ava I I ab I e to a 1 I users 
regard I ess of whether they take part In the standard­
making process. Terms and conditions appl led to 
participants and non-participants should not 
significantly discriminate against the latter. A fortiori 
where the standard-makIng body acts In an off 1 c 1 a 1 or 
quasi-official standard-making capacity and where Its 
standards are recognIzed and even made compu 1 sory by 
virtue of legislation, access to the standard must be 
aval lable to al I without a pre-condition of membership of 
any organization. Slml larly, any treatment of non-members 
wh I eh wou Id Impose f I nanc I a I or other burdens on them 
which act as a direct Incentive to become a member of a 
standard-making organization should be avoided. Different 
conditions might be appl led to different users In 
re I at I on to theIr contrIbutIons to the standard-mak 1 ng 
process and the benefits and disadvantages which the 
parties can demonstrate with regard to their particular 
circumstances. 
4.7.2. The rlghtholder must In all cases retain the Initial 
right to grant or refuse I lcences on whatever exclusivity 
or territorial basis he wishes, subJect to the 
appl lcatlon of Articles 30-36, 59, 66 and 85, 86 of the 
Treaty. 
-20 -
If membership of an Industrial grouping or of a standard­
making body Is conditional upon agreement to a 
recIprocIty arrangement between members and non-members 
lt Is for the rlghtholder to decide whether those 
arrangements are accept ab I e to hI m beforp, JoInIng the 
grouping or standards body. 
4.7.3. lt should be borne In mind by Industry groupings and 
standards bodIes that I nte I I ectua I property rIghts are 
exclusive rights which are usually exercised 
territorial ly. A rlghtholder can choose whom he I lcences 
to reproduce, publIsh, manufacture or distribute copies 
of hIs work and may grant exc I us I ve I I cences for one 
specific market, the Member States of the Community being 
understood, of course, for such purposes as one sIng I e 
market. The Community has taken, within the GATT Uruguay 
Round negotiations, a strong I I ne against the 
International exhaustion of lntel lectual property rights. 
lt has to be recognized at the same time that the 
standard-making process ental Is an acceptance by the 
rlghtholder of the fact that he Is no longer acting In a 
totally free and geographically limited market once he 
has agreed to gIve I I cences as of rIght on faIr and 
reasonab I e condItIons to a I I users of a standar-d. The 
International obl lgatlons of the Community In this 
respect are dealt with In section 5.0 below. 
4.8. INDUSTRY SPECIFIC SOLUTIONS 
4. 8. 1. It may be the case that In certaIn I ndustr 1 es the use of 
techn I ea I standards Is more deve 1 oped than 1 n others. 
The reasons may be historic, for example the Initial 
overwhe I m I ng success wor I dw I de of a part 1 cu 1 ar product, 
makIng It attractIve for other manufacturers to adopt 
slml lar solutions. The reasons may also be purely 
techn I ea I , for examp I e the need to ensure compat 1 b 1 1 1 ty 
of International air traffic control and landing guidance 
systems. They may also be commercial, for example 
pressure from consumers for hl-fl products of different 
manufacturers to be combined Into "sound systems". 
4.8.2. As a general rule, the more mature a market, the greater 
the I lkel lhood that non-proprietary standard solutions 
will be adopted, at least as far as Interfaces between 
products of different manufacturers are concerned. 
Mature markets may I ead to a correspond 1 ng decrease 1 n 
the market dominance of the de facto standard since the 
ear I y market I ead of a sIng I e manufacturer may we 1 1 be 
overtaken by competItors of fer I ng sI m I 1 ar but Improved 
product ranges. 
-21 -
1 t 1 s a 1 so often the case that manufacturers of 
establIshed product types prefer to concentrate on 
Improvements to qual lty or refinements of style or 
performance, leaving the standardized aspects of the 
product unchanged. 
4.8.3. The so-called 'black box' standardization described In 
2.1.2. above, (which Is I lmlted to ensuring compatlbl I lty 
at the po 1 nts of connect I on) and wh I eh can be observed 
for example In the case of consumer electronics, has many 
benefIts to consumers and manufacturers. It mu It I pI I es 
choices aval table on the market but makes few demands on 
the 1 nte 1 1 ectua 1 property rIghts of these manufacturers 
already occupying a place In the market. 
4. 8. 4. 1 n the other areas of standardIzatIon, the process Is 
driven not by reasons of lnteroperabl I lty or market 
acceptance, but by reasons of qual lty, safety or 
conformity to certain technical norms. In these 
Instances a result to be achieved has to be determined, 
but a variety of technical means to achieve that result 
may stl I I be aval table. 
4. 8. 5. 1 nte 1 1 ectua I property rIghts may therefore be I ess In 
confl let with the obJectives of standardization In these 
circumstances , since the standard Is I lkely to be based 
on results rather than methods. As a general principle, 
and for the reasons set out above, standardization based 
on results to be achieved rather than on a specific 
design or process technology, Is to be preferred. 
4.8.6. In the telecommunications area an argument has been made 
by some that the advances In technology are so rapid and 
the degree of Involvement of lntel lectual property rights 
so great that existing ISO/IEC rules are Inadequate. 
This Is felt to be especially the case In 
telecommunications where exact specifications must be 
respected If publ le networks are to function In an 
lnteroperable and efficient manner. 
4.8.7. lt Is not possible to say that In any specific Industry, 
be lt pressure vessels, mechanical engineering, aerospace 
engIneerIng, or te I ecommun I catIons, standardIzation and 
lntel lectual property rights co-exist with greater or 
lesser difficulty. Examples may be found, within one and 
the same Industry, of standardization carried out for a 
variety of historic, technical, commercial and safety 
reasons. As a market for a particular product or process 
evo Ives, the motIves wh I eh I ead to standardIzatIon may 
also evolve. 
-22 -
4.8.8. The Importance of the role of governments In determining 
the precise rules which affect the running of standards­
making bodies should be noted. Governments have a 
number of roles to play In this area In that they are the 
procuring entity and the user of standards, the authority 
responsible for setting the boundaries for standard­
making activities and at the same time encouraging 
research and development In both the private and publ le 
secto~s, and the regulator of competition polIcy. 
·Therefore the Involvement of the legislator In the 
standard-making process and In the mandating of standards 
In specific areas becomes a tool of Industry polIcy. 
4.8.9. If a standard to which reference Is made In a legally 
binding Instrument, such as a Community Directive, Is not 
specific but Is rather a general reference to unspecified 
standards In a given field such as those referred to In 
Article 13 of Directive 90/531/EEc<S>, then Questions 
may arise as to the role of the private standard making 
bodies. If this Is the case, a fortiori, lt strengthens 
the need for uniform rules to apply to standard-making In 
those areas where legally binding Instruments are I lkely 
to make reference to such standards or In areas where the 
use of certain standards made by such Quasi-private or 
private bodies wl I 1 be mandatory. 
4.8.10. lt also re-Inforces the underlying principle that the 
r I ghtho I der must remaIn, at a I I stages of the process, 
free to contract with the user of his lntel lectual 
property rights, since a standard-making body which 
assumed the role of administrator of such rights on 
behalf of Its membership In an area where use of 
standards became mandatory through I eg 1 s 1 at 1 ve act 1 on, 
wou Id de facto acQuIre a monopo I y power In re 1 at 1 on to 
those manufacturers and users who remaIned outs 1 de the 
standard-making body. 
4.8.11. In the view of the Commission, no particular Industries 
should be singled out as reQuiring specific solutions. 
Such a polIcy, even If effective In the short term, could 
not guarantee an appropriate solution In the 'ong term 
when the Imperatives which drive the move~ towards 
standardization In that particular Industry ~ay have 
changed. 
(6) Article 13 (2) : The technical specifications shall be 
defIned by reference to European spec If 1 cat 1 ons where 
these exist. 
Article 13 (3) In the absence of European 
specifications, the technical specifications should as 
far as possible be defined by references to other 
standards having currency within the Community. 
-23 -
4 . a . 1 2 . 1 f spec 1 a 1 r u I es for the eo-ex I s t e nee of I n t e I I ec tu a I 
property rights and standardization were developed on an 
Industry specific basis, any resulting lessening of 
1 nte 1 I ectua I property rIghts cou Id I ead to a shIft 1 n 
production by manufacturers away from that Industry, and 
could disadvantage, rather than stimulate, European 
production. 
-24 -
5.0. OTHER POLICY CONSIDERATIONS 
5.1. COMPETITION 
5. 1. 1. An Important consIderatIon In the successfu I management 
of standardization Involving lntel lectual property rights 
must also be the appl lcatlon of the competition rules of 
the Treaty and spec If I ea I I y the app I I cat I on of Art I c I es 
85 and 86. The Issues which arise may be divided Into two 
categories those which relate to the constitution and 
operatIon of the standard-makIng body under Art I c I e 86 
and those which relate to a refusal to grant I lcences to 
use an I PR or to the of fer of terms and condItIons for 
such 1 lcences under Article 86. 
5.1.2. Standards-making bodies must be mindful of the 
reQuIrements of Art I c I e 85 regardIng In part I cuI ar the 
f 1 xI ng of roya I ty rates or other tradIng condItIons In 
respect of standards which they make avat lable, and, 
add It Iona I I y must avoId creatIng opportunItIes for 
exchange of competItIve I y sensItIve InformatIon or for 
restrictive practices relating to Quantities, prices, 
customer and territory sharing. 
5.1.3. Restrictive agreements falling under Article 85(1) may 
nevertheless be exempted by the Commission under Article 
85(3) where their benefits significantly outwefgh the 
antlcompetltlve detrlments. Standard-making bodies may 
therefore seek to notIfy the CommIssIon of agreements 
which fal I within the ambit of Article 85 with a view to 
negative clearance or an Individual exemption under 
Article 85(3). Benefits derived from an exempted 
agreement must not fa I I on I y on the partIes themse 1 ves 
but must also be shared by other market participants and 
consumers. 
5.1 .4. The exercise of an 
within Article 85(7) I n t e I I ec t ua I 
If such Is 
conseQuence of an agreement" property right fal Is 
the "obJect, means or 
5.1.5. Article 86 Is also of relevance, whether to the standard­
makIng body I tse If together w 1 th 1 ts m"mbers as 
undertakings I lkely to be In a col lectlve dominant 
position within the common market or In a dominant 
position In their national markets or to the Individual 
undertaking, member or non member, holding an 
lntel lectual property right. 
( 7) (Art. 
cases 
1183). 222 
15 case 24/67 Parke 
+ 16/74 Centrafarm Davls [1968] E.C.R. 
55 [1774] E.C.R. 55; 
1147, 
-25 -
5. 1. 6. Abuse of a domInant posIt I on by a standard-makIng body 
and Its members could manifest Itself by the activities 
of Imposing unfair purchasing prices (I .e. royalty rates 
to rlghtholders) or sel I lng prices, (rates Including 
royalties for the use of standards) or other unfair 
trading conditions. Paragraphs (b)(c) and (d) of Article 
86 m 1 ght a I so cover abuse of a domInant pos_l t I on by a 
standard-making body. 
5.1.7. The same test wl I I apply to the Individual undertaking, 
owner of an lntel lectual property right which the 
standard-makIng body wIshes to use as the bas 1 s for a 
standard. However, whereas the definition of product 
market and the establ lshment of dominance In the relevant 
market are factors on which a considerable Jurisprudence 
now exists at Community level, there have been as yet no 
decision of the appl lcatlon of Article 86 In the 
standards field. 
The fIndIng of domInance depends heav I I y on the 
defInItIon of the re I evant product market. Obv 1 ous I y, 
the narrower the relevant product market Is the greater 
the I lkel I hood of dominance being establ lshed. The 
concept of the relevant product market Imp I les that there 
can be effective competition between the products which 
form part of It and thIs presupposes that there 1 s a 
suff lclent degree of Interchangeability between all 
products formIng part of the same market In so far as 
specific use of such products Is concerned. This must be 
assessed Inter a I I a In the I I ght of the structure of 
demand and supply for each product and can lead to 
holding an undertaking dominant In the market for Its own products.(8) 
5.1 .8. The question Is the extent to which a refusal by a 
rlghtholder to allow his technology to become the basis 
for a standard wou Id be ant I compet 1 t 1 ve. 1 n order to 
demonstrate abuse of a domInant posIt I on 1 t wou 1 d be 
necessary to establIsh that the relevant market was the 
technological solution In question and that the owner of 
rights In that technology occupied a position of 
dominance In relation to that market. 
(8) Hugln/Commlsslon Judgment of 31 May 1979 In Case 22/78 
(1979) ECR 1869; BBC/Commlsslon (Magi 1 I) Judgment of 10 
July 1991 In Case T-70/89 of the Court of First 
Instance; HI lti/Commlsslon Judgment of 12 December 1991 
In Case T-30/89 of the Court of First Instance. 
5. 1. 9 -26 -
If the criteria for establ ishlng relevant market and 
dominance were met the next step would be to evaluate the 
be ha v 1 our of the r I g h t h o I de r I n re f us I n g to a I I ow h I s 
technology to become the basis for a standard. 
5 . 1 . 1 o . u n t 1 1 r~ ow , the eo u r t of Just I c e has a I ways maIntaIned 
IPR, absent other 
not be act I onab I e that a mere refusa I to I I cence an 
1 nstances of abusIve behavIour, w I I I 
under Article as(9). 
1 nte I I ectua I property rIghts are by theIr nature 
exclusive property rights, and except In very I lmlted and 
specific circumstances, as laid down In national 
legislation or International conventions, do not have to 
be made aval lable to others by means of compulsory 
1 lcences unless lt can be demonstrated that the exercise 
of the right Involves certain abusive conduct. 
5.1.11. Therefore Article 86 cannot permit the expropriation of 
rights for the purposes of using the technology as the 
basis of a standard where no other circumstances 
establIsh abuse of a dominant position, and taking Into 
account particularly whether there are other viable 
technologies aval table. 
The problem should therefore be addressed before the 
technology on which to base the standard has been 
defInItIve I y se I ected. If the standard In Quest I on had 
been adopted, Implemented, and made mandatory by a 
CommunIty Instrument, refusa I to I I cence the techno 1 ogy 
necessary to use the standard would, a fortiori, create 
d I f f I cu I t I es . 
5.1.12. A main objective of Article 86 Is to ensure that dominant 
companIes do not create condItIons of trad 1 ng 1 n wh 1 eh 
they are able to stifle or el lmlnate competition. 
If no standard exists, the IPR holder cannot be dominant 
In respect of the standard. If competition exists on the 
market for the product whose techno I ogy the standard­
makers seek to use, the standard-maker Is mere 1 y 
prevented from exercising a particular choice as regards 
the solution which he wishes to adopt to a specific 
problem. 
(9) Volvo: Veng [1988] ECR Ground 8 
-27 -
5.1.13. The situation where the standard-maker Is not able to 
choose an alternative technology must be examined. The 
circumstances In which this Is the case wl I I be unusual. 
Nevertheless, for technical or for financial reasons the 
standard-maker could attempt to demonstrate the absolute 
necess 1 ty of 1 1 cences beIng ava I I ab I e for the use of a 
particular technology. lt could also be cl~lmed that 
alternative technologies produced Inferior results. In 
the case of technical necessity, objective evaluation of 
the scope of the patent In question should reveal whether 
the patent Is so broad as to render al I other substitute 
technologies not viable. lt Is relatively rare for a 
patent to cover such a broad Innovative area that 
a 1 ternat 1 ve means to achIeve the same resu It cannot be 
found. 
5.1.14. As to financial necessity, excessive pricing of Its 
technology by the dominant company could be Indicative 
of abusive behaviour but this factor Is not of relevance 
In a case of mere refusal to I lcence. lt should be noted 
however that excessIve prIces a~ked for by a domInant 
company could amount to a de facto refusal to I lcense. 
5. 1. 15. 1 f 1 t were demonstrab I e that no other vI ab I e techno I ogy 
existed, lt would fal I to be resolved whether the 
standard-making body, or potential users of the standard, 
would be placed at a competitive disadvantage vls-6-vls 
the owner of the lntel lectual property right by the fact 
that no standard could be made In that area, or that the 
standard adopted was less efficient than the proprietary 
techno 1 ogy. A I though It cou Id be argued that consumers 
would benefit In the short term If lntel lectual property 
rights were compulsively I lcensed to serve as the basis 
of standards, In the I ong-term, Investment In research 
and deve I opment In the standard I zed IndustrIa I sectors 
would dry up within the Community. Non-Community entitles 
with extensive research activities would be encouraged to 
keep theIr techno I ogy out of CommunIty markets, wh I I e 
low-cost manufacturing centres outside the Community 
would benefit from cheap I lcences to use Community 
technology. 
5.1.16. Therefore, any appl lcatlon of Article 86 In the field of 
publ le standardization must be balanced against the 
polIcy objective of maintaining the Community's strength 
In research and development. 
5.2. -28 -
EXTERNAL RELATIONS ASPECTS 
AVAILABILITY OF LICENCES 
COUNTRIES FOR PRODUCTS FROM THIRD 
5.2.1. From a polIcy point of view the Community Is committed to 
the widest possible geographical aval labl I lty.and use of 
standards In the Interest of economies of scale and 
enhanced International trade. 
5.2.2. Under the Agreement on Technical Barriers to Trade (TBTA) 
concluded under the auspices of the General Agreement on 
Tariffs and Trade (~ATT) In 1979 th~ Community has 
accepted several obl lgatlons vis a vis the other parties 
to the TBTA (practically al I Industrial lsed countries and 
a number of developing countries) In relation to the 
preparatIon, adopt I on and app I I cat I on of techn I ea I 
regulations and standards. 
The level of compulsion varies according to whether the 
standard or technical regulation Is prepared, ado~ted or 
appl led by a central government body (Art. 2 TBTA) or a 
non-government body (Art. 4 TBTA). 
5.2.3. Under Art.2 TBTA the Community has to ensure that 
standards are not prepared, adopted or app I I ed wIth a 
vIew to er eatIng obstac I es to I nternat Iona I trade and 
that products Imported from the territory of any party to 
the TBTA shal I be accorded treatment no less favourable 
than that accorded to like products of natlor"'al origin 
and to I lke products originating In any other country. 
Under Art.4 TBTA the Community, as regards st~~dards by 
non-governmenta I bodIes, has to take such , -·asonab I e 
measures as may be ava I I ab I e to achIeve the ot) ject 1 ves 
pointed out In Art.2 TBTA. 
5.2.4. Standards which are given a mandatory status by Community 
legislation by requiring that contracting authorities In 
publ le procurement Dlrectlves<10) refer to European 
standards must be aval lable to entitles In the Community 
at fair, reasonable and non-discriminatory terms. 
5. 2. 5. Standards wh I eh provIde a presumptIon of conformIty to 
the essent I a I requIrements of CommunIty I New Approach I 
Dlrectlves<11) must be aval lable to entitles In the 
Community at fair, reasonable and non-discriminatory 
terms. 
(10) Directives 71/305/EEC [OJ N° L185 16.8.1979, p.5], 
77/62/EEC [OJ N° L13, 15.1.1977], 90/531/EEC [OJ N°L 
297, 29. 10. 1 990, p. 1 ] 
(11) Directives 87/404/EEC [OJ N° L 220, 08.08.1987,p.48], 
88/378/EEC [OJ N° L 187, 16.07.1988, p.1], 
89/106/EEC [OJ N° L 40, 11.02.1989, p. 12], 89/336/EEC 
[OJ N° L 139, 23.05.1989, p.19], 
89/392/EEC [OJ N° L 183, 29.06.1989, p. 29], 89/689/EEC 
[OJ N° L 399, 30.12.1989, p.18], 
90/384/EEC [OJ N° L 189, 20.07. 1990, p. 1], 90/385/EEC 
[OJ No L 189, 20.07.1990, p. 17], 
90/396/EEC [OJ N° L 196, 26.07.1990, p.15], 91/263/EEC 
[OJ N° L 128, 23.05.1991, p.1] 
-29 -
5.2.6. For the standards described In 5.2.4. and 5.2.5. above, 
national treatment (Art.2} requires that products 
originating In a Party to the TBTA be treated In the same 
manner. If these standards contain lntel lectual property 
r 1 ghts, th 1 s means that the CommunIty must ensure that 
the Importer from a country party to the TBTA can obtain 
1 lcences from the IPR holder for lmportatlon,.marketlng, 
sa 1 e and use 1 n the CommunIty on faIr, reasonab I e and 
non-discriminatory terms. For other standards the level 
of compulsion to reach this result Is limited to the 
adoption of reasonable measures. 
From a polIcy point of view lt would be desirable to make 
sure If I I cences for I PRs wh I eh are requIred for 
manufacture for export to the Community are aval lable on 
fair, reasonable and non-discriminatory terms In order 
not to create obstacles to International trade. 
5.2.7. This Issue does not raise any confl let with lntel lectual 
property rights Incorporated Into a standard provided 
that the holder of such rights has consented to their 
Inclusion. lt would become of direct relevance If the 
r I ghtho I der subsequent I y refused to grant I I cences for 
the manufacture of products In the Commun 1 ty or 
Importation of products originating In a TBTA signatory 
country or If the existence of the rlghtholder was only 
revealed once the standard had been made mandatory. 
5.2.8. In both the above situations, a number of solutions 
exist. The standard could be withdrawn or modified. 
Alternatively In exceptional circumstances the Community 
Instrument Itself might have to be modified and the 
standard made non-mandatory. However, It Is essent I a 1 
for standard-making bodies to recognize the need to 
Identify any lntel lectual property rights before adopting 
a techn I ea I so I ut I on and for the r 1 ghtho 1 der to 
understand and accept the terms and conditions under 
which his rights wl I I subsequently be I lcensed, both In 
respect of manufacturing and Importation 1 lcences. 
-30 -
6.0. CONCLUSIONS 
6.1. CODES OF PRACTICE I GUIDELINES I "UNDERTAKINGS" 
6.1.1. If, In spite of the apparent lack of evidence of 
system at I c d I f f I c u I t I e s a r I s I n g at present I n the 
maJor 1 ty of standard-makIng bodIes, there are concerns 
that further codification of procedures for the 
treatment of I nte I I ectua I property rIghts In the 
standards field Is required, then consideration should be 
given to the nature of such codified procedures. 
6.1.2. As stated In paragraph 5.2.5. above, the posslbl I lty that 
a European standard may be made mandatory or gIven a 
particular status through Community legal Instruments 
p 1 aces a burden of responsab I I I ty on the CommunIty and 
the standard-makIng body to ensure that democratIc and 
pro-competitive processes exist for the drafting of 
standard. 
6.1.3. Therefore, the standard-making process should remain 
voluntary and should respect existing national and 
Community legislation, and International obl lgatlons. If 
changes to Community legislation or obl lgatlons are 
required In order to achieve the legitimate obJectives of 
standardIzatIon, such changes shou Id be effected by a I I 
relevant means Including proposals to the Councl I by the 
Commission for legislative action. If existing 
provisions of the Treaty, or of Community legislation are 
to be given effect In the standard making area In ways 
wh I eh are dIfferent from the ef feet norma 1 I y g 1 ven 1 n 
other areas, such extensIons or InterpretatIons shou 1 d 
conveyed with the Industries concerned In a fully 
transparent manner. 
6.1.4. As Indicated In paragraph 1.1.4, If standard-making 
bodIes choose to e I aborate codes of practIce or 
undertakIngs for sIgnature by partIcIpants In the 
standard making process, care should be taken to 
distinguish those private procedural obl lgatlons arising 
from membership of a standard-making body and the 
obl Jgatlons under publ le law which the body or Its 
members may Incur. 
6. 1 • 5. The CommIssIon has examIned a number of the codes or 
guldel lnes appl led by International and national 
standards-makIng bodIes. GIven the vo I untary nature of 
the standard-makIng process, the common character 1st 1 cs 
of most such codes or guldel lnes are that they are non -
bIndIng and remaIn genera I In theIr approach. However, 
at least one standard-making body has attempted to create 
a bIndIng and deta I I ed UndertakIng wh i eh sets out the 
mechanisms for regulating the making of standards. 
-31 -
6.1.6. lt can be argued that the complexity of the relationship 
between standard-making and exclusive lntel lectual 
property r 1 ghts reQuIres a set of ru I es wh I eh foresees 
al 1 possible eventual ltles. lt can eQually be argued that 
w 1 thout constra 1 nts on the membershIp of the standard­
mak 1 ng body, the potent I a I I y conf I I et I ng Interests of 
those taking part In the process cannot be rec9ncl led. 
6.1.7. On the other hand, proponents of the general and 
voluntary approach favoured untl I now by most 
International standardization bodies argue that 
unnecessary detal I In such guldel lnes renders the process 
more complex than lt need be, and argue that no evidence 
of a need to depart from the voluntary approach has been 
produced. 
6.1.8. lt Is not for the Commission to favour one approach 
rather than another, providing the reQuirements set out 
In paragraph 6.2.1. below are met. 
To the extent that standards-makIng bodIes are prIvate 
and voluntary organisations, they are free, within the 
limits Imposed by Articles 85 and 86 of the Treaty, to 
organize their actlvltes In the way which seems to them 
to be most appropriate. However, In Imposing constraints 
on members, standards bodies should take Into 
consideration the need to encourage the voluntary 
contribution by Industry of Its best technology toward 
the standard-making process. The Commission has 
therefore a preference for a system based on trIed and 
proven pr I ne I pIes, but wh I eh ba I ances In a transparent 
and eQuitable way the Interests of those concerned. 
-32 -
6.2. GENERAL PRINCIPLES 
6.2.1. The Commission suggests that rights and obl lgatlons arise 
for both standards makers and lntel lectual property 
right holders. The principles on which standardization 
takes p 1 ace shou Id therefore recognIze that partnershIp 
as fo 1 I ows : 
European standard-making bodies should ensure that: 
1. al 1 persons wishing to use European standards must 
be given access to those standards; 
2. standards are ava I I ab I e for use on faIr, 
reasonable and non-discriminatory terms, 
regardless of whether the users participate In the 
work of the standard-making body or not, but 
taking Into account the circumstances of the use; 
3. users are able to use the above standards to 
manufacture In conformIty wIth the standards 1 n 
the CommunIty, and to Import Into the CommunIty 
goods legitimately manufactured In third countries 
In conformity with the standards; 
4. best efforts are made to Identify holders of any 
lntel lectual property rights -by conducting searches -by publ lcatlon of adequate Information and where 
appropriate by holding publ le enquiries, 
before adoptIng a standard, work on a part 1 cu 1 ar 
solution only continuing If al I known lntel lectual 
property rIghts can be I I censed for use 1 n the 
standard; 
5. faIr condItIons are provIded to the ho I ders of 
lntel lectual property rights, especially with 
regard to the time I lmlts for Identifying IPRs and 
agreeIng to theIr use, and 1 n respect of 
arbitration mechanisms as to royalty rates; 
lntel lectual property right holders should: 
6. use best efforts to Identify In a timely manner 
any IPR which they hold which Is relevant to a 
standard wh I eh Is beIng deve I oped and to conf 1 rm 
or refuse permission for Its Incorporation In that 
standard promptly; 
-33 -
7. offer fair, reasonable and non-discriminatory 
monetary or non-monetary terms for the I lcence to 
use any IPR; 
a. regard agreement to the Incorporation of an IPR In 
a standard as Irrevocable unless the exceptional 
circumstances Justify withdrawal of I l~ences once 
the standard Is adopted. 
6.3. COMMUNITY ACTION 
6.3.1. The Commission may find Itself obl lged to consider 
whether Articles 30-36, 59, 66, 85 and 86 of the Treaty 
are appl lcable In certain cases. Arbitration procedures 
set up by standard bod 1 es, wh I I st usefu I In reso 1 vI ng 
dIsputes In certaIn areas, cannot be regarded as f I na I 
and binding upon all parties If questions arise which 
fall to be decided by application of provisions of the 
Treaty. 
6.3.2. As Indicated earl ler In this Communication, the 
Commission must ensure that where compl lance with a 
standard or part of a standard Is referred to In 
Community legislation, either as a mandatory requirement 
or as one which confers a particular status under 
CommunIty I aw, the contents of that standard are made 
aval lable to al I Interested parties on a fair, reasonable 
and non-discriminatory basis. This obl lgatlon derives 
from both Community and International law. 
6.3.3. Where the Commission has reason to bel leve that a 
standard or part of It Is not beIng made ava 1 I ab 1 e on 
these terms lt wl I I have to take steps to withhold or to 
withdraw recognition under Community law of the standard. 
This could be done In respect of Individual standards on 
an ad hoc basIs, for Instance, by the pub I I cat I on of 
notices In the Official Journal. 
However, If a European standardIzatIon body consIstent I y 
fa I I ed to ensure non-dIscrImInatory access to 1 ts 
standards, the status of the standardization body Itself 
under Community law would have to be reviewed.