COMMUNICATION FROM THE COMMISSION - INTELLECTUAL PROPERTY RIGHTS AND STANDARDIZATION
Date: 1992-10-27
Institutions: DG III – Industry, European Commission
Subjects: European standard, European standardisation body, competition, copyright, harmonisation of standards, industrial property, standard

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. 

2. 

Introduction 

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 
and 

agreement 

I nte 1 1 ectua 1 
to 
refusal 

right: 

property 
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 
of  protected  tntel lectual  property  rights 

rIght  ho I ders  -

I ne I us I on 

(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 
entitles  -

trade  polIcy  aspects 

I lcences 

to 

third  country 

6. 

Conclusions 

(6.1)  codes  of  practtce/guldel lnes/undertaklngs 
(8.2)  general  principles 
(6.3)  Community  action 

/ 

- 1  -

1 ,.  0 . 

I NTRODUCT I ON 

1. 1. 1.  Standard 1 zat 1 on 

of 

and 

the 

same 

secure 

1 ndustr 1 a I 

commercIa I 

the  protect I on 

1 nterest,  wh  I I e 
private 

I nte I I ectua I 
property  serve  different  obJectives  but  have  to  co~exlst 
envIronment.· 
1 n 
and 
StandardIzatIon  alms  at  dIffusIng 
l·n 
.>the 
I nte I I ectua I  property  rIghts  a I m 
pub 1 1 c 
to 
The 
standardlzatlon  process  cannot  take  place  effectively  If 
no  clear  solutions  exist  to  resolve  potential  confl lets 
between 
the 
I nte I 1 ectua I  property  rIghts.  At  the  same 
pr 1 ne 1 p 1 es  of 
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. 

the  obJectives  of 

standardization 

protection. 

techno I ogy 

property 

and 

1.1.2. 

clear 

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 
the  deve I opment  by  standard~ 
Comm 1 ss 1 on  wou Id  we 1 come 
for 
bodies  of 
Inclusion.·  of 
In  standards,  based  on 
lntel lectual  property 
standardlzat,lon 
In 
practice 
lt  was  further  Indicated  that  "In  view  of 
organizations. 
the 
the 
for 
of 
Issue 
lntel lectual 
standardization, 
competition  and  trade  pol  lcles",  the  Commission  Intended 
to  produce  a  separate  communication  on  the  subJect. 

conditions 
rights 

International 

complexity 

Importance 

property 

rights, 

the 

the 

and 

1.1.3.  Given 

Is  not  seeking 

standard-making, 

the  voluntary  nature  of 

the 
Commission 
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 
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. 

rIghts  cou Id  brIng. 

t;.hem. 

1. 1. 4.  Therefore  In  thIs  CommunI cat I on  the  CommIssIon  sets  ovt  a .. 
lt  believes  should  form  th6 

I nterna I  ru I es  wh  I eh  standards  bodIes  may.-. 

to  elaborate.  Standards  bodies 

number  of  principles  which 
basIs  of  any 
free 
to 
wish 
Internal 
structure 
organ I zat 1 ona I  procedures  as  they  wIsh.  The  resu Its  of 
their 
the 
standardization  needs  of  the  Community  and  must  be  made 
Its 
I aws  of 
In  conform 1 ty  wIth 
International  obl  lgatlons. 

the  Comml:Jn  t ty  and 

their  membership 

activity,  must, 

remain 
their 

correspond 

rules  and 

however 

the 

to 

-

2  -

2,.0. 

PRINCIPLES  AND  OBJECTIVES  OF  STANDARDIZATION 

2.1. 

TYPES  OF  STANDARDS 

2 . 1 . 1 .  A  standard 

I s  a 

to  a 
t ec h n I c a I  spec I f  I cat I on  re I at I n g 
product  or  an  operatIon  wh  I eh  Is  recognIzed  by  a 
I arge 
number  of  manufacturers  and  users.  Councl  I  Directive 
83/189(1) 
Its 
technical 
Article 
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". 

fol  lowlng  definition 

the 
"standard 

shall  mean 

lays  down 

(2) 

In 

a 

the  result  of  a 

lt  may  be 
formal  consensus-bul ldlng 
procedure  managed  by  a  recognized  standardization  body  In 
large  number  of  manufacturers  to  adopt 
order  to  permit  a 
the  standard  may 
Identical 
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). 

solutions.  Alternatively, 

2.1.2.  Standards  may 

and 

ranging 

testing 

services.  They  may 

for 
terminology 

be  developed 
from 

a  wide  variety  of 
purposes, 
to 
detal  led  technical  specifications  for  products,  processes 
and 
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 
the  Community 
In  general 
a I ong  wIth  other  PartIes  to  the  Agreement  on  Techn 1 ea 1 
Is  committed  to 
Barriers  to  Trade  of  the  GATT 
specifying  technical  regulations  and  standards 
In  terms 
of 
descr 1 pt 1 ve 
per forma nee 
characteristics. 

themselves. 

desIgn  or 

("TBTA") 

I lmlted 

rather 

terms, 

than 

to 

be 

OBJECTIVES  OF  STANDARDIZATION 

2 . 1 . 3 . 

I n dust r  I e s , 

the  m a J or I t y  of 

I n 
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 
to  be  compet It 1 ve  1 n 
I eve Is  of  market  penetratIon  and 
those  markets  In  relation  to  other  manufacturers. 

the  ob J ec t  I ve  of 

certain 

Industries,  where 

In 
of 
standardization  Is  taking  place,  manufacturers  must  now, 
however,  be  aware  of  the  posslbl I lty  that  some  of  their 
new 
the  basis  of  an 
Industry  standard. 

technology  may  eventually 

degree 

high 

form 

a 

( 1)  83/ 189/EEC:  Counc I I  DIrectIve  of  28  March  1983 

down  a  procedure  for  the  provision  of 
the  field  of  technical  standards  and  re~ulatlons. 
OJ  N°  L  109,  26/04/83  p.  08 

Information 

I ay I ng 
In 

-

3 

-

2 ~  1. 4. 

those 

exercIse 

lead  and  his  profitability 

I nte I I ectua I 
1 f  a  new  product  has  e I ements  protected  by 
I lkely  to  be  the  case, 
property  legislation,  as  Is  most 
the  manufacturer  w I I I 
I nte I I ectua I 
property  r  1 ghts  v 1 gorous I y,  as  a  means  of  securIng  and 
In  a  given 
maintaining  his 
the 
terr 1 tory. 
highest 
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 
such  a 
value  of 
In 
product  wl  11 
price  calculations  and  figures  prominently  as  a  company 
asset. 

therefore  constitute  an  Important  factor 

lntel lectual  property  rights 

IndustrIes, 
research 

techno I ogy 
In 

hIgh 
Incurred 

1 n  many 
are 

costs 

the 

the 

In 

2.1.5.  Once  a  certain 

for 

has 

product 
'de 

level  of  penetration  of 

the  relevant 
the 
market 
his 
Industry 
manufacturer  wl  I I 
If 
standard  for  that  product  and  lt  will  be  difficult, 
not 
products  must 
lnteroperate  with  his,  to  avoid  working  to  the  standard 
the  case 
wh  I eh  he  has  set.  ThIs  w I I I  be  part I cuI ar I y 
where 
In  the 
computer, 
telecommunications  and 
transport 

lnterworklng  or  networking  Is  Involved,  as 

energy  distribution, 
Industries. 

been 
have  set 

others  whose 

Impossible, 

achieved, 

facto' 

the 

for 

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 
to 
secure  the  best  terms  from  the  conversion  of  his  de  facto 
standard  Into  a  formal  standard. 

form.  His  objective  wl  I I 

then  be 

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 
these 
exploitation 
the 
for 
territorial 
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. 

basis 

of 

2.1.8.  A 

longer 

term  benefit  wl  I I  probably  accrue 

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 
I onger  the 
receIves  roya I ty  payments  even 
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. 

If  he 

Is  no 

to 

2.1.9.  He  will  also  be  able  to  satisfy  a  second 

term 
objective  which  Is  to  see  the  technology  developed  by  his 
company 
standard  wIth 
estab 1 I shed 
resulting  beneficial  publ  lclty. 

a  wor I dw I de 

longer 

as 

- 4  -

2~1.10.  On  the  other  hand,  a  standard  may  arise  by  a  process  of 
recognized  national  or 

definition  and  approval 
International  standardization  body. 

by 

a 

In 

for  society 

the  economic  benefits 

2.1.11.  The  underlying  objective  of  formal  standardization  Is  to 
generate 
that  wl  I I 
result  from  a  more  rational  organization  of  .supply  and 
the  market  place. 
demand  and  greater  competition 
the  supp I I er 
Standard I zat 1 on  tends  to  reduce  costs  for 
and  purchaser  of  goods  and  services  and 
Increase 
to 
transparency  of  the  market.  Once  the  reQuirements  of  the 
Interested 
a 
market  are 
suppl  lers  are  put  In  a  position  to  meet  market  needs  on  a 
competitive  basis.  At 
time,  purchasers  are 
the  same 
given  common  assurances  with  respect  to  the  performance 
the  product  or  servIce  agaInst  agreed  er Iter I a  of 
of 
Qua 1 1 ty,  1 nteroperab I I I ty,  and  so  on.  The  Importance  of 
standardIzatIon  as 
and 
Instrument  of 
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) 

ref I ected 

standard, 

economIc 

a I I 

11 an 

In 

2.1.12.  These 

as 

Insofar 
to  the  wIdest  poss I b I e  number  of 

economic  objectives  can,  of  course,  only  be 
and 
known 
Interested 
terms.  ConseQuent 1 y,  a 
pub I I c  I y-ava 1 1 ab 1 e 
Is 

rea I I zed 
ava I I ab I e 
partIes  on  faIr  and  reasonab I e 
standard 
defInItIon 
document(3) 
not  aval  lable  to  al I  potential  users  Is  not  a  standard. 

technical  specification  which 

standards  are  made 

the 

and 

by 

Is 

a 

2.1.13.  Benefits 

to  purchasers 

and  users  accrue 

the 
existence  of  a  recognized  standard  guaranteeing  not  only 
level  of  Quality, 
lnteroperablllty  but  also  a  certain 
technical  norms.  A 
safety  and  conformity 
European  standard  can  fInd 
1 n  compet 1 t  1 on  w 1 th 
tradIng  partners  such  as 
standards  set  by  other  major 
the  American  or  Far  Eastern  markets. 

to  certain 
I tse If 

from 

Is 

good, 

chosen 

2.1.14.  The  objectives  of  standardization  can  only  be  met  If  the 
readl  ly 
technology 
by 
aval  lable.  The  standardization  process  Is,  however, 
lengthy  one,  and  when 
Its  consensus-driven  nature,  a 
substantial  delays 
the 
technology  on  which  the  standard  Is  based  may  already  be 
InnovatIve 
out  of  date.  On 
technology  may  not  be  the  most  appropriate  for  adoption 
as 
and 
lt 
sufficiently  tested  In  the  market  place. 

In  adopting  a  standard  occur, 

standard  because 

the  other  hand, 

Is  not  yet 

up-to-date 

the  most 

stable 

and 

a 

(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 

and 

their 
related 

- 5  -

2 ..  1. 15  Once  chosen  as 

a 

standard, 

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 
techno I og I ea I 
standard 1 zat 1 on  may 
Innovation  In  some  areas. 

a  part I cuI ar 

retard 

I tse If 

2.1.16 

lt  Is  also  the  case  that  too  much  standardization  In  a 
given  area  at  a  particular  moment 
time  may  create 
difficulties  as 
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 
layers  of  system 
software  on  to  existing  products. 

the  addition  of  new 

that 

than 

In 

2.1.17  A  variety  of  approaches  to  the  Issue  of  standardization 
are  therefore  requIred  If  the  most  approprIate  form  of 
standardization 
to  be 
a  particular 
achieved. 

Industry 

for 

Is 

2.2. 

PRINCIPLES  USED 
BODIES 

IN  NATIONAL  AND 

INTERNATIONAL  STANDARDS 

(European 

Committee 
crea~e  standards 

2.2.1.  The  three  European  standards-making  bodies  recognized  by 
I eve I  are  CEN,  CENELEC  and 
the  CommunIty  at  a  European 
(European  CommIttee  for  StandardIzatIon)  and 
ETS I .  CEN 
Electro-Technlcal 
CENELEC 
EFTA 
and 
EC 
Standardization) 
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 
users, 
I nst I tut Ions  and  prIvate  servIce 
manufacturers  research 
provIders 
task  of  draftIng  European 
Telecommunications  Standards. 

network  operators, 

administrations, 

the 

and 

has 

for 

for 

2 . 2 . 2 .  At 

the 

I eve I , 
and 

I n t er n at I on a  I 

Te I egraph 
the  standard-making  organizations. 

CC 1 TT 
Te I ephone  Consu I tat 1 ve 
(I nternat Iona I 
ISO 
Committee)  are 
for  Standardization)  draws 
(International  Organization 
from  national  standards  organizations. 
Its  membership 
The  IEC  (International  Electrotechnlcal  Commission)  has  a 
similar 
of 
In 
electronics  and  electrical  engineering. 

smaller  membership 

field 

I SO , 

the 

and 

but 

I E C 

2.2.3.·  The  principles  appl  led 

to 

and 

by 
simple. 
ISO/IEC 
by  CEN/CENELEC 
Subparagraphs  b)  and  c)  of  Annex  A  of  the 
ISO  document 
(Reference  to  patented  Items  IEC/ISO  Directives- Part  2 
'nternatlonal 
Methodology 
standards)  are  appl  led  by  al  I  four  bodies.  They  read  as 
fo I I OWS: 

lntel lectual  property 
relatively 

development 

are 

the 

for 

of 

-

6 

-

b) 

c) 

a 

statement 

that  he  would  be  wl  I I lng 

11 lf  the  proposal  Is  accepted  on  technical  grounds, 
the  originator  shall  ask  any  known  patent  holder 
to 
for 
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 
I EC  Centra I 
Office,  as  appropriate,  and  shal  I  be  referred  to 
In 
the 
patent  holder  does  not  provide  such  a  statement, 
the  Technical  Committee  shal  I  not  proceed  with  the 
1 ne I us 1 on 
the 
respective  Councl  I  gives  permission 

International  Standard. 

the  patented 

the  relevant 

un I ess 

Item 

the 

of 

If 

lt  be  revealed  after  publication  of 
that 

the 
Should 
a 
International  Standard 
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." 

I lcences  under 

2.2.4.  CCITT 

the  years 

In  Its  Annex  5  Statement  on  CCITT  patent  policy 
elaborated  In  June  1988  made  the  fol  lowlng  observations . 
11 COde  of 
.. Over 
practice"  regarding  patents ...  The  rules  of  this  "code 
of  practice ..  are  rather  simple  and  straight  forward ... 
the  detal led  arrangements  being 
the  parties 
Involved,  as  these  arrangements  might  differ  from  case  to 
case ... 

the  CCITT  has  developed  a 

left 

to 

In 

2.2.5.  ETSI  has  drafted  a  Pot  Icy  and  Undertaking  on  lntel lectual 
Property  Rights  which  sets  out  more  detal led  procedural 
two  premises  which  differ 
rules  and  which  starts  from 
from 
I SO/ I EC/CEN  or  CENELEC.  The 
those  app I I cab I e 
fIrst  premIse  Is  that  membershIp  of  ETS 1  Is  cond 1 t  1 ona 1 
I nte I I ectua I 
on  sIgnature  of  the  UndertakIng  whereby  an 
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 
the 
specific  geographical  area  as 
the  draft 
definition  of 
Undertaking.  Certain 
to 
and 
signatories 
the  ETSI 
Undertaking  has  not  yet  been  approved  by 
membership. 

territory  contained  within 
conditions 
the  Undertaking. 

specific 
Pot  Icy 

consequence  of 

are 
This 

of 

a 

- 7  -

2~3. 

THE  USE  OF  STANDARDS  BY  PUBLIC  AUTHORITIES 

2.3.1.  Because 

a 

the 

represent 

voluntary 

standards 

consensus 
technical  characteristics  of  goods  and 
concerning 
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 
conformity"  to  legislation  on  any  product  which  compl  les 
with 
to 
Important 
standards  have  been  adopted 
Industries, 
engineering, 
construction,  medical  devices, 
telecommunications,  gas 
appl  lances  and  measuring  Instruments. 

the  standard.  Directives  based  on 

In  a  number  of 

"presumption 

mechanical 

reference 

Including 

of 

a 

2.3.2.  Slml  larly,  publ  le  authorities  often  use  standards 

In 
Instance, 
theIr  procurement.  WIthIn 
the  publ  le  procurement  Dlrectlves(4)  now  al I 
reQuire 
purchasing  entitles  to  define  technical  specifications  In 
to  European 
their  contract 
to  ensure  that 
standards  where 
national ly-determlned  specifications  are  not  used 
to 
restrict  access  to  procurement  markets. 

documents 
these  exIst, 

the  CommunIty, 

reference 

In  order 

for 

by 

2.3.3.  Whenever  publ  le  authorities 

Into 
legislation  and  thereby  confer  upon 
them  a  more  binding 
character  than  theIr  norma I  vo I untary  status,  they  must 
satisfy  themselves  that: 

Incorporate  standards 

the  standards 

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 

In  Question  have  been  developed 

the  standards  In  Question  are  aval  table  for  use  by  at  I 

-
Interested  parties  to  whom  the  legislation  appt  tes. 

International 

agreements  subscribed 

the 
framework  of 
lesser 
extent  the  Agreement  on  Government  procurement)  extend 
these  rIghts  of  non-d I scrm I natory  treatment  to  certaIn 
other  GATT  contracting  parties. 

to  within 
to  a 

the  TBTA  and 

the  GATT 

(I .e. 

2.3.4.  However,  providing  that  the  procedures  set  out  below  are 
In  the  exceptional  circumstances  where  a 
be 

fol  towed,  even 
standard 
can 
resolved  In  relation  to  lntel lectual  property  rights. 

'non-voluntary', 

problems 

becomes 

(4)  Directives  71/305/EEC,  77/62/EEC,  90/531/EEC 

-

8  -

2~3.5.  If 

the 

technological 

solution  which 

to  be  made 
Is 
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, 
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. 

subsequently 

cannot 

rights 

the 

2.3.6.  Therefore  the  question  of  the  use  of  standards  by  publ  le 
authorities  does  not  hinge  on  the  question  of  whether  any 
the 
lntel lectual  property 
standard  can  be 
a 
In  al 1  cases 
mandatory  standard,  since  such  rights  must 
legislative 
by 
by  negotiation 
be  acquired 
expropriation. 

rights  which  may  under I le 

Incorporated  ex  post 

and  not 

facto 

Into 

- 9  -

3.0. 

PRINCIPLES  OF 

INTELLECTUAL  PROPERTY  PROTECTION 

3.1. 

GENERAL  PRINCIPLES 

3. 1. 1. 

design 

I nte I I ectua I  property  rIghts  I ne I ude  patents,  _trademarks, 
topography 
copyright, 
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 
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. 

semi-conductor 

Investment 

rights, 

General  principles  are 
lntel lectual 
fo I I owIng  : 

property 

app 1 I cab le 
protection. 

to 
They 

all 

forms 

Include 

of 
the 

the 

he  may 

so  wishes, 

the  Intellect 

If 
be  paid 

lntel lectuat 
the  right 
that 
for 

others  may  only  use  or  copy 
creation  with  his  permission  and, 
holder 
permission; 
In  order  to  ensure  a  wider  distribution  and  use  of 
works  of 
In  society  as  a  whole, 
I I m Its  are  set  on  the  scope  and  duratIon  of  the 
lntel lectual  property  protection; 
lntel lectual  property 
the  abusive  exercise  of 
rights  by 
Individuals  or  companies  occupying  a 
dominant  position  Is  subject  to  the  appl  lcatlon  of 
I n  par t  I c u I a r  A r t  I c  I e  8 5 
com pet I t  I on 
and  86  of  the  Treaty.  Agreements  between  companies 
I nte I I ectua I  property 
regu I at I ng 
rights  may  be  subject 
the  prohibition  of 
Article  85  of  the  Treaty. 

the  exercIse  of 

r u I e s  ,  and 

to 

3.2. 

PATENTS 

3.2.1.  Specific 

characteristics 

apply 

Intellectual  property  right.  So 
rights, 
the  object  of 
technical  solution  to  a  problem.  The 
demonstrate  novelty  and  be  capable  of  an 
application. 

In 
the  right 

to 

type 

each 

of 
the  case  of  patent 
new  creative 
Is  a 
..  invention ..  must 
Industrial 

- 10  -

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 
patented  Invention. 

the  exploitation  of 

3.2.3.  That  monopoly  right  can  be  exercised  exclusively  by  the 
commercIa I I se  hIs 
patent 
If 
Invention  himself. 
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. 

chooses 

ho 1 der 

he 
If 

to 

Is  not  subJect  to  any  genera I  exceptIons 

In 
The  rIght 
respect  of  use  by  potentially  competing  third  parties  but 
1 s  1 I m I ted 
tIme  so  that  socIety  may  benefIt  free I y 
from  technical  progress  once  the  rlghtholder  has  had  the 
In 
recover  hIs  or I g I na I 
opportunIty 
research. 

Investment 

to 

In 

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, 
the  Community  plus  Austria, 
Switzerland,  Sweden,  Monaco  and  Llchtensteln.  Rights 
law  exhaust  only  on  expiry  of  the 
acquired  under  patent 
term  of  protect I on 
In  the  terrItory  for  wh  I eh  they  are 
granted,  or,  on  the  non-payment  of  any  renewal  fees. 

those  of 

I .e. 

3.3. 

COPYRIGHT 

3. 3. 1.  CopyrIght, 

by 

not 

protects 

contrast, 

but 
original lty.  This  original lty  Is  assessed  In  relation  to 
the  creator  and  protection  by 
the  expression  used  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 
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. 

from  the  work  of  another.  Even 

nove I ty 

taken 

In 

-

11  -

3.3.2. 

3.3.3. 

3.3.4. 

3.3.5. 

In  cases  where  Idea  and  expression  are  Inseparable,  there 
Is  generally  held  to  be  no  copyright  In  that  expression. 
Is  therefore  the 
The  on 1 y  monopo 1 y  under  copyrIght 
the  unauthorized 
the  author 
right  of 
exploitation  of 
for 
a  work, 
examp 1 e 
I I nes  of  text  from  a 
to  prevent  the  copyIng  of 
book  or  1 lnes  of  code  of  a  computer  program. 

the  expression  used 

to  prohibit 

I aw 

In 

A  work  Is  protected  under  copyright  law  as  soon  as  lt  Is 
created.  Within 
to 
International  copyright  conventions  there  Is  no  need  to 
complete 
formal  ltles. 
1 n  some  countrIes,  regIstratIon  forma I It I es  do 
However, 
exist. 

the  Community 

registration 

examination 

according 

and 

or 

In 

The  absence  of  any 
to 
reQuirement 
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 
a 
Its  creator  or  not.  Copyright 
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. 

the  Community 

therefore 

Is  not 

Is  relatively 

least  50 
Copyright  protection 
years  fol  lowlng  the  death  of  the  author  according  to  the 
relevant  International  conventions,  and  Is  a  territorial 
the  Commun 1 ty, 
r  1 ght.  A  work  created  or  pub I I shed 
In 
the 
exp I o I tat I on 
can 
on I y  wIthIn 
In, 
Community, 
for 
to  exploit 
example, 
separate 
negotiation  by  the  rlghtholder. 

I I censed 
the 
the  us, 

the  work 
a 

the  object  of 

for 
right 

long,  at 

being 

be 

3.3.6. 

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. 

3.4. 

SEMI -CONDUCTOR  PRODUCTS  AND  OTHER 
RIGHTS 

INTELLECTUAL  PROPERTY 

semi-conductor  products 

3.4.1.  The  protection  given  In  the  Community  to  the  topographies 
should  also  be 
of 
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. 

("chips") 

(5)  Directive  81/54/EC 

- 12  -

Is 

The  protection 
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. 

(10  years)  and 

I lmlted 

time 

In 

3.4.2.  Design  rights  have  not  yet  been  harmonized  thrQughout  the 
Community 
regimes  protecting  both 
functional  and  non-functional  designs  exist.  Some  regimes 
foresee  a  registration  system. 

a  variety  of 

and 

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 

In 

respect  of 

Is  necessary  as 
In 

to  what  acts  are 
I nte I I ectua I 
permItted  or  prohIbIted, 
the  case  of  a  product  or  process 
property  rIghts. 
Incorporating  a  patented 
the 
product  or  process  so  protected  cannot  be  copied  without 
authorization,  even  by  observing  the  Ideas  and  principles 
on  which 
In  written 
form,  such  as  a  specification  or  patent  description,  be 
used  for  the  purpose  of  producing  a  slml  lar  or  Identical 
result. 

lt  Is  based,  nor  can  Instructions 

the  part  of 

Invention, 

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 
the  human 
three-dimensional  obJect  or 
senses,  as  In  the  case  of  a 
1 t  may  be 
form, 
other  works 
studied,  and  the  Ideas  and  principles  derived  from  that 
Identical 
study  may  be  used 
functional  lty,  providing 
the 
copyrighted  work  Is  not  reproduced. 

In  a  human I y  perce I vab I e 

the  expression  of 

Is  accessible 

to  create  a 

slml  lar  or 

that 

to 

lt 

If 

3.5.3.  A  special  exception  to  the  normal  rules  of  copyright  and 
which  Is  of  relevance  ·In  the  telecommunications  standards 
In  Directive  91/250  EC  on  the 
area  has  been  Introduced 
enable 
computer 
protection 
legal 
lnteroperable  programs  to  be  created  by  means  of  deriving 
and  re-using  lnf.ormatton  from  existing  programs.  A  study 
of  a 
In  machine-readable  form  may  not 
yield  at  I  the  Information  reQuired  In  order  to  create  an 
lnteroperable  program. 

computer  program 

programs 

to 

of 

-

13  -

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  person 
reQuiring  Information.  The  exception  does  not  al tow  for 
the  copying  of  protectable  expression. 

rlghtholder 

the 

and 

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.  No  part  of  the  product  or  process  which 
lntel lectual  property  rights  should  be 
Is  subject 
descrIbed 
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. 

specIfIcatIon 

I np I ement I ng 

from 

the 

to 

In 

3. 5. 5.  Once  authorIzatIon  has  been  gIven  by 

the  owner  of  an 
the  product  or  process 
I nte I I ectua I  property  rIght  for 
the  basis  of  a 
covered  by 
standard,  authorIzatIon  to  descrIbe  the  standard 
In  a 
technical  specification  must  also  have  been  given,  either 
expl  lcltly  or  lmpl  lcltly. 

to  be  used  as 

the  right 

3 . 5 . 6 .  Owner s h I p  of  the  copy r  I g h t  , 

the 

specIfIcatIon  w I I I 

I n  the  w r  I t ten  form 
of 
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. 

on  whether 

I f  any , 

depend 

3.5.7. 

accuracy, 

necessary 

If  the  specification  of  the  standard  Is  drawn  up  with 
sufficient 
the 
Information 
satisfactory 
lt  should  not  therefore 
Implementation  of  the  standard. 
I ook  beyond  the  specIfIcatIon 
norma I I y  be  necessary  to 
for  additional 
this  can  be  done 
without  violating  the  lntel lectual  property  rights  In  the 
product  or  process  so  described. 

Information  unless 

contain 
a 

ensure 

should 

al 1 

to 

lt 

- 14  -

4.0. 

THE  STANDARD-MAKING  PROCESS 

4.1. 

STANDARDS 

INCORPORATING  NO  PROTECTED  MATERIAL 

4.1.1. 

4.1.2. 

there 

Is  express  consent 

lt  Is  the  case  In  most  standardization  work  that  either 
no  lntel lectual  property  rights  exist  or  are  created,  or 
that 
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 
to  contractual 
arrangements  between  the  parties. 

the  grouping,  or  according 

free  use  of 

to 

these 

Instances 

the  question  of 

In 
the  existence, 
ownership  and  exercise  of  lntel lectual  property  rights  Is 
normally 
Initio,  and  no  further  problems 
that,  wherever 
lt  should  be  stressed 
should  arise. 
possible,  standards  should  be  devised  which  avoid  taking 
over 
I nte I I ectua I 
techno I ogy 
property  rights  already  exist. 

resolved  ab 

proprIetary 

on  wh  I eh 

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 
fIe Id, 
the  vIdeo  cassette/recorder 
examp I e, 
the 
In 
Is  a  well 
.. standard .. 
the  VHS 
overwhelming  success  of 
In  these  situations  the  products  or  process 
known  case. 
w I I I 
property 
rights. 

I nte I I ectua I 

certaIn I y 

a I most 

embody 

4.2.2.  These 

If 

are 

patents 

Involved 

to  others 
since 

rights  may  have  been  known 

In 
the 
Industry 
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 
Is  concerned,  and  It  Is  un I I ke I y 
far  as  the  CommunIty 
that  a  de  facto  standardIzatIon  can  have  occurred 
In  a 
period  less  than  18  monthsi 
The  manufacturer  may  even  have  cone I uded 
respect  of 
third  parties 
manufacture  In  certain  markets. 

I I cences  w 1 th 
to  permit 

those  rights 

In 

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 
these 
the  Member 
circumstances  copyright  may  exist  and  expire  at  the  end 
of  Its  due  term  without  Its  val  ldlty  ever  being  tested. 

States. 

case 

al  I 

In 

In 

- 15  -

4. 2. 4.  Never the 1 ess 

1 t 

shou Id 

the 
a  I ways 
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. 

be  poss f·b I e 

for 

4.2.5. 

4.2.6. 

that  a  standard~maklng  body  wl·shes 

If  the  owner  of  the  lntel lectual  property  right  Is  made 
aware 
to  base  a 
standard  on  his  technology,  he  Is  put  on  notice  that  a 
violation  of  his 
rights  might 
occur. 

lntel lectual  property 

Is 

therefore  of 

lt 
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. 

relevance 

any 

to 

In  the  ev.ent  that  the  rlghtholder  participates  himself  In 
the  standard  making  body 
that  he 
receives  constructive  notice  by  the  announcement  that  a 
standard  Is  due  to  be  establ lshed  using  the  technology  In 
the 
question. 
standards  body  must  create 
the 
r  1 ghtho I der  has  been  put  on  notIce  as  to  the  potent I a I 
use  of  his  rights. 

announcement 
presumption 

lt  may  be  assumed 

In  other  words, 

by 
that 

an 
a 

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 

spite  of 

the  difficulties  which 
the 
In 
existence  of  proprietary 
lntel lectual  property  rights 
could  potentially  create,  lt  Is  unavoidable  that  de  facto 
Instances  as 
themse Ives 
standards  w I I I  present 
natural 
recognized 
standards. 

candidates 

adaptation 

In  many 

Into 

for 

No  cases  have  been  drawn 
Commission  as  yet  where 
property  rIghts 
rights 
subsequently  Implemented. 

In  a 

to 

the  attention  of 

the  owner  of 

techno I ogy  refused  to 

the 
lntel lectual 
I I cence  hIs 
to  be 

to  enable  an  already  agreed  standard 

-

16  -

4.2.10.  Particular  attention  has 

the 
procedures  by  which 
to 
ensure  that  the  Interests  of  rlghtholders  and  standards 
users  are  respected.  These  procedures  are  dealt  with  In 
the  fol  towing  sections. 

this  process  occurs 

to  be  paid  however 

In  order 

to 

4.3. 

STANDARDS  CREATED  TO 
REFUSAL  TO  LICENCE. 

INCLUDE  AN 

IPR 

AGREEMENT  AND 

4.3.1. 

there  are  proprietary 

If 
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 
lt  Is  obvious  that 
work  on  the  standard  Is  to  continue. 
such  an  agreement  should  be  sought  at 
the  earl lest 
possible  opportunity  so  that, 
In  the  event  of  a  refusal 
I I cence,  a  I ternat I ve  so I ut Ions  may  be  exp I ored.  A 
to 
tlme-1  lmlt  within  which  permission  must  be  given  or 
refused  can  a I so  assIst 
the  standard 
making  process. 

In  speedIng  up 

4. 3. 2.  Once 

the 

the  parties  as 

I I m It  has  passed  and  no  agreement  has  been 
reached  between 
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 
to 
standard-making  body 
would  be 
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. 

the  use  of 

Inadvisable 

for 

to 

a 

4.3.3. 

for 

the 

terms 
and  non-dIscrImInatory. 

If  agreement  Is  reached  between  the  rlghtholder  and  the 
I lcences  must  be 
standard-making  body, 
faIr, 
Is  not 
reasonab I e 
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 
negotiated  commercial 
the  greatly 
Increased  market  for  his  technology  which  standardization 
w I I I  brIng. 

the  normal 
for 

rate,  at towing 

some  way 

relate 

freely 

to 

to 

In 

1 t 

4.3.4.  The  terms  which  the  rlghtholder  offers  for  the  use  of  his 
rights 
the 
flexible 
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. 

Include 

should 

enough 

to 

be 

- 17  -

In  the  event  of  an  appeal  against  an  arbitration  decision 
both  parties  may  have  recourse  to  the  use  of  Article  86 
EC. 

the  present 

4.3.5.  The  freedom  of  the  rlghtholder  to  refuse  to  I lcence  Is, 
at 
since  his  exclusive 
Intellectual 
to 
be  $Ubject 
In 
expropriation 
except 
exceptional  circumstances  such  as  reasons  of  national 
security  or  over-riding  publ  le  Interest. 

rights 
compulsory 

time,  absolute, 

I lcenslng 

property 

cannot 

or 

4.3.6.  However  a  refusal  to  I lcence  by  the  rlghtholder 

lmpl  les 
as  a  consequence  that  an  alternative  technical  solution 
the 
w 1 1 1  probab I y  be  adopted  and  w I I I 
the 
rlghtholder's  potential  or  de 
the 
Is 
market. 
rlghtholder's  Interest  to  decl  lne  to  I lcence  his  patent 
or  his  copyright  unless 
the 
potential  users 
short  of  his  commercial 
expectations. 

then  cha I I enge 
In 

terms  offered  by 

facto  dominance 

fal  1  wel  I 

therefore 

norma I I y 

the 

not 

In 

1 t 

4.3.7.  This  factor  has  to  be  borne 

11  fa 1 r ne ss 11  or 

the 
which 
against 
standardization  on  his  technology  might  bring. 

11  reasonab I eness"  of 

enhanced  market 

rlghtholder 

seeks 

the 

the 

In  mind 

In  relationship  to 
the  remuneratIon 
to  obtain  and  balanced 
opportunities  which 

4.4. 

LATE  OR  NON-DISCLOSURE  OF  RIGHTS 

4.4.1.  A  potential  source  of  difficulties  can  be 

In 

the 

standard-makIng  process. 

Identified 
where  proprietary  rights  are  not  disclosed  at  al I  or  are 
1 n 
I ate 
d I se I osed 
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 
a 
presumption  of  knowledge  on  the  part  of  the  rlghtholder 
can  be  establ lshed. 

demonstrated  where 

eas 1 I y 

fa 1 th 

cou 1 d 

be 

-

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 
late  disclosure 
Inconveniences  the  standard-making  body  can  be  regulated 
by  means  of 
Imposed  on  rtghtholders  to 
declare  an  Interest  once  a  standard  has  been  a~nounced. 

the  ttme-tlmtt 

to  which 

4.4.3. 

rlghtholder 

If  there  are  del  lberate  acts  of  bad  faith  on  the  part  of 
the 
Into 
court  might 
consideration  In  evaluating  the  extent  of  any  damages  for 
copyright  or  patent  violation  under  civil  or  criminal 
law. 

these 

take 

a 

4.5. 

LIABILITY  FOR  NON-DISCLOSURE 

4.5.1.  The  question  arises  as 

If 

an 

to 

Interest. 

to  which 

the  extent 

pub I I cat I on  of 

the  standard-making  process  must 

the 
I table  for  a  fal  lure 
rlghtholder  can  and  should  be  held 
future 
to  d I se I ose 
In  an  effIcIent 
standard-makIng  actIvItIes  takes  pI ace 
manner, 
the  responsab I I I ty  for  conductIng  a  search  of 
patents  and  copyrights  held  by  a  manufacturer  taking  part 
In 
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 
for  manufacturers  with 
of 
substantial 
this  factor  should  be 
the  standard-making  body, 
taken 
the 
perhaps 
Identification  of 
can 
demonstrate  the  magnitude  of  the  search  procedure  to  be 
carried  out  In  their  particular  case. 

for 
longer 
by  manufacturers  who 

course  be  more  onerous 

Into  consideration  by 

IPR  portfolIos  and 

by  allocating 

a 
rights 

rest  with 

tlme-1  lmlt 

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 
for 
disclosure  must 
Individual 
I onger  be  automat I ea I I y 
r  I ghtho I der,  a I one.  He  can  no 
presumed 
to 
disclose  his  rights. 

the 
rest  with 

to  have  acted 

gIven  area, 

I I ab 1 1 1 ty 

faith  by 

fal  1 lng 

In  bad 

longer 

then 

the 

no 

In 

a 

-

19  -

4.6. 

IDENTIFICATION  OF  RIGHT  HOLDERS 

4.6.1. 

In 

from 

then 

Is  not 

Its  work, 

and  makes  no  effort 

the  property  of  any  of 

If  a  standard-making  body  bases  Its  work  on  a  technical 
those 
solution  which 
participating 
to 
the  proprIetary 
1 dent 1 fy  and  obtaIn  authorIzatIon 
of 
the 
appl  lcatlon 
holder, 
rights 
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 
Infringement  of  rights. 
facto  will  not 
Therefore  the  standard-making  body  has  to  ensure  that  al I 
reasonable  efforts  have  been  made  to  Identify  rights  and 
to  negotiate  with 
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. 

the  rlghtholder  before 

legitimize  the 

normal 

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 
take  al  I 
body  has 
reasonable  precautions  to  the  same  end. 

standard  making 

a  duty 

to 

4.7. 

AVAILABILITY  OF  LICENCES 

and 

and 

they 

Terms 

appl  led 

process. 

take  part 

conditions 

non-participants 

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 
to  a  1 I  users 
makIng  bodIes  to  make  standards  ava I I ab I e 
the  standard 
regard I ess  of  whether 
In 
making 
to 
participants 
not 
significantly  discriminate  against  the  latter.  A  fortiori 
In  an  off 1 c  1 a  1  or 
where  the  standard-makIng  body  acts 
standard-making  capacity  and  where 
quasi-official 
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 
them 
which  act  as  a  direct  Incentive  to  become  a  member  of  a 
standard-making  organization  should  be  avoided.  Different 
conditions  might 
In 
to  theIr  contrIbutIons  to  the  standard-mak 1 ng 
re I at I on 
process  and 
the 
the  benefits  and  disadvantages  which 
parties  can  demonstrate  with  regard  to  their  particular 
circumstances. 

f  I nanc I a  I  or  other  burdens  on 

to  different  users 

appl  led 

should 

Impose 

be 

4.7.2.  The  rlghtholder  must 

the  Initial 
right  to  grant  or  refuse  I lcences  on  whatever  exclusivity 
the 
or 
appl  lcatlon  of  Articles  30- 36,  59,  66  and  85,  86  of  the 
Treaty. 

In  all  cases  retain 

he  wishes, 

territorial 

subJect 

basis 

to 

- 20  -

body 

If  membership  of  an  Industrial  grouping  or  of  a  standard 
making 
a 
recIprocIty  arrangement  between  members  and  non-members 
those 
lt 
the 
arrangements  are  accept ab I e 
the 
grouping  or  standards  body. 

to  decide  whether 
to  hI m  beforp,  JoInIng 

rlghtholder 

conditional 

agreement 

upon 

for 

to 

Is 

Is 

4.7.3. 

which 

rights 

In  mind  by 

Industry  groupings  and 
lt  should  be  borne 
I nte I I ectua I  property  rIghts  are 
standards  bodIes  that 
exclusive 
exercised 
usually 
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 
the 
International  exhaustion  of  lntel lectual  property  rights. 

negotiations, 

against 

strong 

I I ne 

are 

a 

to  be 

the  same 

recognized  at 

the 
that 
lt  has 
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 
I I cences  as  of  rIght  on  faIr  and 
to  gIve 
reasonab I e  condItIons  to  a I I  users  of  a  standar-d.  The 
International 
this 
obl  lgatlons  of 
respect  are  dealt  with  In  section  5.0  below. 

the  Community 

time 

In 

4.8. 

INDUSTRY  SPECIFIC  SOLUTIONS 

4. 8. 1. 

Is  more  deve 1 oped 

It  may  be  the  case  that  In  certaIn  I ndustr 1 es  the  use  of 
1 n  others. 
techn I ea I  standards 
The  reasons  may  be  historic, 
the  Initial 
overwhe I m I ng  success  wor I dw I de  of  a  part 1 cu 1 ar  product, 
It  attractIve  for  other  manufacturers  to  adopt 
makIng 
slml  lar 
reasons  may  also  be  purely 
techn I ea I , 
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, 
example 
pressure  from  consumers  for  hl-fl  products  of  different 
manufacturers  to  be  combined  Into  "sound  systems". 

solutions.  The 
for  examp I e 

for  example 

than 

for 

4.8.2.  As  a  general  rule,  the  more  mature  a  market,  the  greater 
that  non-proprietary  standard  solutions 
I lkel  lhood 
the 
least  as  far  as  Interfaces  between 
will  be  adopted,  at 
concerned. 
products  of  different  manufacturers 
Mature  markets  may 
I ead  to  a  correspond 1 ng  decrease  1 n 
the  market  dominance  of  the  de  facto  standard  since  the 
I ead  of  a  sIng I e  manufacturer  may  we 1 1  be 
ear I y  market 
overtaken  by  competItors  of fer I ng  sI m I 1 ar  but 
Improved 
product  ranges. 

are 

- 21  -

1 s 

1 t 
a 1 so  often 
establIshed  product 
Improvements 
performance, 
product  unchanged. 

the  case 
types  prefer 

that  manufacturers  of 
to  concentrate  on 
refinements  of  style  or 
the 

the  standardized  aspects  of 

to  qual  lty  or 
leaving 

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 
It  mu  It I pI  I es 
benefIts  to  consumers  and  manufacturers. 
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. 

4. 8. 5. 

4.8.6. 

4.8.7. 

reasons  of 

Is 
1 n  the  other  areas  of  standardIzatIon, 
lnteroperabl I lty  or  market 
driven  not  by 
safety  or 
acceptance, 
conformity 
these 
In 
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. 

qual  lty, 
norms. 

the  process 

reasons  of 

technical 

certain 

but 
to 

by 

In 
1 nte 1 1 ectua I  property  rIghts  may 
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 
than  on  a  specific 
to  be  achieved  rather 
design  or  process  technology,  Is  to  be  preferred. 

therefore  be 

I ess 

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 
Inadequate. 
so  great 
This 
In 
Is 
telecommunications  where  exact  specifications  must  be 
respected 
In  an 
lnteroperable  and  efficient  manner. 

ISO/IEC  rules  are 
the 

If  publ  le  networks  are 

that  existing 

especially 

function 

case 

felt 

to 

to 

be 

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, 
I ead  to  standardIzatIon  may 
also  evolve. 

the  motIves  wh  I eh 

- 22  -

should  be  noted.  Governments 

4.8.8.  The  Importance  of  the  role  of  governments  In  determining 
the  precise  rules  which  affect  the  running  of  standards 
a 
making  bodies 
number  of  roles  to  play  In  this  area  In  that  they  are  the 
procuring  entity  and  the  user  of  standards,  the  authority 
responsible 
standard 
time  encouraging 
making  activities  and  at 
In  both  the  private  and  publ  le 
research  and  development 
competition  polIcy. 
secto~s,  and 
·Therefore 
the 
the 
standard-making  process  and  In  the  mandating  of  standards 
In  specific  areas  becomes  a  tool  of  Industry  polIcy. 

the 
Involvement  of 

the  boundaries 

regulator  of 

for  setting 

legislator 

same 

have 

the 

the 

for 

In 

4.8.9. 

In  a 

If  a  standard  to  which  reference  Is  made 
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 
If  this  Is  the  case,  a  fortiori,  lt  strengthens 
bodies. 
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. 

to  contract  with 

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, 
lntel lectual 
free 
property 
standard-making  body  which 
the  role  of  administrator  of  such  rights  on 
assumed 
an  area  where  use  of 
behalf  of 
Its  membership 
I eg 1 s  1 at 1 ve  act 1 on, 
standards  became  mandatory 
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. 

the  user  of  his 

In 
through 

since  a 

rights, 

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 
'ong  term 
the  move~  towards 
the 
when 
standardization 
Industry  ~ay  have 
changed. 

Imperatives  which  drive 
that  particular 

In  the 

In 

(6)  Article  13  (2) 

:  The  technical  specifications  shall  be 
defIned  by  reference  to  European  spec If 1 cat 1 ons  where 
these  exist. 
absence  of  European 
13 
Article 
specifications,  the  technical  specifications  should  as 
far  as  possible  be  defined  by 
to  other 
standards  having  currency  within  the  Community. 

references 

the 

(3) 

In 

- 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, 
lessening  of 
I ead  to  a  shIft  1 n 
1 nte 1 I ectua I  property  rIghts  cou Id 
production  by  manufacturers  away  from  that  Industry,  and 
could  disadvantage, 
stimulate,  European 
production. 

resulting 

rather 

than 

any 

- 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 
the  standard-makIng  body  under  Art I c  I e  86 
operatIon  of 
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 

the 
In  part I cuI ar  the 
reQuIrements  of  Art I c  I e  85 
In 
f  1 xI ng  of  roya I ty  rates  or  other  tradIng  condItIons 
they  make  avat  lable,  and, 
respect  of  standards  which 
add It Iona I I y  must 
for 
exchange  of  competItIve I y  sensItIve  InformatIon  or  for 
restrictive  practices  relating 
to  Quantities,  prices, 
customer  and  territory  sharing. 

creatIng  opportunItIes 

be  mindful 

regardIng 

avoId 

of 

their  benefits  significantly  outwefgh 

5.1.3.  Restrictive  agreements  falling  under  Article  85(1)  may 
nevertheless  be  exempted  by  the  Commission  under  Article 
85(3)  where 
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 
exemption  under 
negative  clearance  or 
exempted 
Article  85(3).  Benefits  derived 
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. 

Individual 

from 

an 

an 

5.1 .4.  The  exercise  of  an 
within  Article  85(7) 
conseQuence  of  an  agreement" 

I n t e  I  I ec t ua I 
Is 
If  such 

property  right 

fal  Is 
the  "obJect,  means  or 

5.1.5.  Article  86  Is  also  of  relevance,  whether  to  the  standard 
as 
1 ts  m"mbers 
col lectlve  dominant 
a  dominant 
In  their  national  markets  or  to  the  Individual 
an 

makIng 
body 
undertakings 
position  within 
position 
undertaking, 
lntel lectual  property  right. 

together  w 1 th 
In 

the  common  market  or 

I tse If 
I lkely 

non  member, 

holding 

to  be 

member 

or 

In 

a 

(  7) 

(Art. 
cases 
1183). 

222 
15 

case  24/67  Parke 
+  16/74  Centrafarm 

Davls 
55 

[1968]  E.C.R. 

[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 
Including 
to  rlghtholders)  or  sel I lng  prices, 
royalties 
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. 

(rates 

for 

an 

lntel lectual  property 

5.1.7.  The  same  test  wl  I I  apply  to  the  Individual  undertaking, 
the 
owner  of 
for  a 
standard-makIng  body  wIshes  to  use  as  the  bas 1 s 
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 
standards  field. 

the  appl  lcatlon  of  Article  86 

right  which 

In 

on 

heav I I y 

fIndIng 

depends 

domInance 

I lkel  I hood  of 

The 
of 
the 
the  re I evant  product  market.  Obv 1 ous I y, 
defInItIon  of 
the  narrower  the  relevant  product  market  Is  the  greater 
the 
dominance  being  establ lshed.  The 
concept  of  the  relevant  product  market  Imp I les  that  there 
can  be  effective  competition  between  the  products  which 
It  and  thIs  presupposes  that  there  1 s  a 
form  part  of 
Interchangeability  between  all 
suff lclent  degree  of 
products  formIng  part  of  the  same  market 
In  so  far  as 
specific  use  of  such  products  Is  concerned.  This  must  be 
the  structure  of 
assessed  Inter  a  I I a 
demand  and  supply 
to 
holding  an  undertaking  dominant  In  the  market  for  Its  own 
products.(8) 

I I ght  of 
for  each  product  and  can 

lead 

the 

In 

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. 
to 
1 n  order 
1 t  wou 1 d  be 
demonstrate  abuse  of  a  domInant  posIt I on 
necessary  to  establIsh  that  the  relevant  market  was  the 
technological  solution  In  question  and  that  the  owner  of 
rights 
a  position  of 
technology  occupied 
dominance  In  relation  to  that  market. 

that 

In 

(8)  Hugln/Commlsslon  Judgment  of  31  May  1979  In  Case  22/78 
(1979)  ECR  1869;  BBC/Commlsslon  (Magi  1 I)  Judgment  of  10 
the  Court  of  First 
July  1991 
Instance;  HI  lti/Commlsslon  Judgment  of  12  December  1991 
In  Case  T-30/89  of  the  Court  of  First  Instance. 

In  Case  T-70/89  of 

- 26  -

5. 1. 9 

If 
the  criteria  for  establ ishlng  relevant  market  and 
dominance  were  met  the  next  step  would  be  to  evaluate  the 
to  a I I ow  h I s 
be ha v 1 our  of 
technology  to  become  the  basis  for  a  standard. 

the  r  I g h t h o I de r 

I n  re f us I n g 

5  .  1 . 1 o .  u n t  1 1 

r~ ow , 

that  a  mere  refusa I 
I I cence  an 
1 nstances  of  abusIve  behavIour,  w I I I 
under  Article  as(9). 

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 

to 

property 

1 nte I I ectua I 
nature 
rIghts 
exclusive  property  rights,  and  except  In  very  I lmlted  and 
specific 
national 
as 
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. 

circumstances, 

theIr 

down 

laid 

are 

by 

In 

5.1.11.  Therefore  Article  86  cannot  permit  the  expropriation  of 
rights  for  the  purposes  of  using  the  technology  as  the 
circumstances 
basis  of 
establIsh  abuse  of  a  dominant  position,  and  taking  Into 
account  particularly  whether 
there  are  other  viable 
technologies  aval  table. 

standard  where 

no  other 

a 

therefore  be  addressed  before 

the 
The  problem  should 
the  standard  has  been 
technology  on  which 
In  Quest I on  had 
defInItIve I y  se I ected. 
a 
been  adopted, 
CommunIty  Instrument,  refusa I 
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 . 

and  made  mandatory  by 

the  standard 

Implemented, 

to  base 

to 

If 

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 
the  standard 
market  for 
makers 
Is  mere 1 y 
prevented  from  exercising  a  particular  choice  as  regards 
the  solution  which  he  wishes 
to  a  specific 
problem. 

techno I ogy 
standard-maker 

the  product  whose 

to  adopt 

to  use, 

seek 

the 

(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 
lt  could  also  be  cl~lmed  that 
particular 
technology. 
alternative  technologies  produced 
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 
Is  relatively  rare  for  a 
technologies  not  viable. 
lt 
that 
Innovative  area 
a  broad 
to  cover 
patent 
a 1 ternat 1 ve  means  to  achIeve  the  same  resu It  cannot  be 
found. 

Inferior  results. 

such 

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 

fal  I 

to  be 

lt  would 

resolved  whether 

1 t  were  demonstrab I e  that  no  other  vI ab I e 

techno I ogy 
existed, 
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 
to  serve  as  the  basis 
rights  were  compulsively  I lcensed 
of  standards, 
In  research 
In 
IndustrIa I  sectors 
the  standard I zed 
and  deve I opment 
would  dry  up  within  the  Community.  Non-Community  entitles 
with  extensive  research  activities  would  be  encouraged  to 
techno I ogy  out  of  CommunIty  markets,  wh I I e 
keep 
the  Community 
low-cost  manufacturing  centres  outside 
would  benefit 
to  use  Community 
from  cheap 
technology. 

Investment 

I ong-term, 

I lcences 

theIr 

the 

In 

5.1.16.  Therefore,  any  appl  lcatlon  of  Article  86  In  the  field  of 
the 
publ  le  standardization  must  be  balanced  against 
polIcy  objective  of  maintaining  the  Community's  strength 
In  research  and  development. 

- 28  -

5.2. 

EXTERNAL  RELATIONS  ASPECTS 
AVAILABILITY  OF 
COUNTRIES 

LICENCES 

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 
Interest  of  economies  of  scale  and 
enhanced  International  trade. 

the 

In 

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 
In  relation  to  the 
a  number  of  developing  countries) 
preparatIon, 
techn I ea I 
adopt I on 
regulations  and  standards. 

app I I cat I on  of 

and 

level  of  compulsion  varies  according  to  whether  the 
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  er eatIng  obstac I es  to 

that 
standards  are  not  prepared,  adopted  or  app I I ed  wIth  a 
vIew 
trade  and 
that  products  Imported  from  the  territory  of  any  party  to 
less  favourable 
the  TBTA  shal  I  be  accorded  treatment  no 
than  that  accorded  to  like  products  of  natlor"'al  origin 
and  to  I lke  products  originating  In  any  other  country. 

I nternat Iona I 

to  ensure 

Under  Art.4  TBTA  the  Community,  as  regards  st~~dards  by 
to 
non-governmenta I  bodIes,  has 
, -·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. 

take  such 

5.2.4.  Standards  which  are  given  a  mandatory  status  by  Community 
legislation  by  requiring  that  contracting  authorities  In 
publ  le  procurement  Dlrectlves<10) 
to  European 
standards  must  be  aval  lable  to  entitles  In  the  Community 
at  fair,  reasonable  and  non-discriminatory  terms. 

refer 

5. 2. 5.  Standards  wh I eh  provIde  a  presumptIon  of  conformIty  to 

the  essent I a  I 
Dlrectlves<11)  must  be  aval  lable 
Community  at 
fair, 
terms. 

requIrements  of  CommunIty 

the 
reasonable  and  non-discriminatory 

to  entitles 

In 

I  New  Approach I 

(10)  Directives  71/305/EEC 

[OJ  N°  L13,  15.1.1977],  90/531/EEC 

[OJ  N°  L185  16.8.1979,  p.5], 
[OJ  N°L 

77/62/EEC 
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 

(Art.2} 

requires 

treatment 

In  5.2.4.  and  5.2.5.  above, 
national 
products 
originating  In  a  Party  to  the  TBTA  be  treated  In  the  same 
If  these  standards  contain  lntel lectual  property 
manner. 
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, 
reasonab I e  and 
sa 1 e  and  use  1 n 
non-discriminatory  terms.  For  other  standards  the  level 
of  compulsion 
limited  to  the 
adoption  of  reasonable  measures. 

the  CommunIty  on  faIr, 

to  reach  this  result 

that 

Is 

If 

From  a  polIcy  point  of  view  lt  would  be  desirable  to  make 
sure 
for 
manufacture  for  export  to  the  Community  are  aval  lable  on 
In  order 
terms 
reasonable  and  non-discriminatory 
fair, 
not  to  create  obstacles  to  International  trade. 

I PRs  wh  I eh  are 

requIred 

I I cences 

for 

Incorporated 

5.2.7.  This  Issue  does  not  raise  any  confl let  with  lntel lectual 
property  rights 
Into  a  standard  provided 
that  the  holder  of  such  rights  has  consented  to  their 
lt  would  become  of  direct  relevance  If  the 
Inclusion. 
r  I ghtho I der  subsequent I y  refused  to  grant 
I I cences  for 
the  manufacture  of 
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. 

products 

In 

5.2.8. 

Itself  might  have 

the  above  situations,  a  number  of  solutions 
In  both 
exist.  The  standard  could  be  withdrawn  or  modified. 
Alternatively  In  exceptional  circumstances  the  Community 
Instrument 
the 
Is  essent I a 1 
standard  made  non-mandatory.  However, 
to 
the  need 
for 
Identify  any  lntel lectual  property  rights  before  adopting 
a 
to 
so I ut I on 
terms  and  conditions  under 
understand  and  accept 
I lcensed,  both  In 
which  his  rights  wl  I I  subsequently  be 
respect  of  manufacturing  and  Importation  1 lcences. 

to  be  modified  and 
It 
recognize 

standard-making  bodies 

r  1 ghtho 1 der 

techn I ea I 

the 

the 

and 

for 

to 

- 30  -

6.0. 

CONCLUSIONS 

6.1. 

CODES  OF  PRACTICE 

I  GUIDELINES 

I  "UNDERTAKINGS" 

6.1.1. 

In  spite  of 

the  apparent 

lack  of  evidence  of 
If, 
the 
system at I c 
d I f f  I c u I t  I e s 
there  are  concerns 
maJor 1 ty  of  standard-makIng  bodIes, 
the 
further  codification 
that 
treatment 
the 
I nte I I ectua I 
standards  field  Is  required,  then  consideration  should  be 
given  to  the  nature  of  such  codified  procedures. 

a r  I s  I n g  at  present 

of 
property 

procedures 

for 
In 

rIghts 

of 

I n 

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 
Instruments 
through  Community 
p 1 aces  a  burden  of  responsab I I I ty  on  the  CommunIty  and 
the  standard-makIng  body  to  ensure  that  democratIc  and 
the  drafting  of 
pro-competitive  processes  exist 
standard. 

legal 

for 

and 

should 

should 

to  Community 

respect  existing  national 

the  standard-making  process 

remain 
6.1.3.  Therefore, 
and 
voluntary 
If 
Community  legislation,  and  International  obl  lgatlons. 
changes 
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 
existing 
provisions  of  the  Treaty,  or  of  Community  legislation  are 
to  be  given  effect  In  the  standard  making  area 
In  ways 
the  ef feet  norma 1 I y  g 1 ven  1 n 
from 
wh  I eh  are  dIfferent 
other  areas,  such  extensIons  or  InterpretatIons  shou 1 d 
conveyed  with 
fully 
the 
transparent  manner. 

Industries  concerned 

legislative 

action. 

for 

In 

If 

a 

6.1.4.  As 

to 

choose 

Indicated 

In  paragraph  1.1.4, 
e I aborate 

standard-making 
codes  of  practIce  or 
bodIes 
the 
undertakIngs 
standard  making  process, 
to 
distinguish  those  private  procedural  obl  lgatlons  arising 
the 
from  membership  of 
obl  Jgatlons  under  publ  le 
Its 
members  may  Incur. 

and 
the  body  or 

standard-making  body 

by  partIcIpants 

In 
taken 

law  which 

sIgnature 

should 

care 

for 

be 

If 

a 

6. 1 • 5.  The  CommIssIon  has  examIned  a  number  of 

by 

appl  led 

International 

the  codes  or 
guldel  lnes 
national 
and 
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. 

standard-making 

lt  can  be  argued  that  the  complexity  of  the  relationship 
between 
lntel lectual 
and 
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 
the  membershIp  of  the  standard 
w 1 thout  constra 1 nts  on 
mak 1 ng  body, 
Interests  of 
those  taking  part  In  the  process  cannot  be  rec9ncl led. 

the  potent I a  I I y  conf I I et I ng 

exclusive 

6.1.7.  On 

approach 

the  other  hand, 

proponents  of 
favoured 
standardization 

and 
by  most 
voluntary 
International 
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. 

the  general 

bodies 

argue 

untl  I 

now 

6.1.8. 

for 

Is  not 

the  Commission 

lt 
to  favour  one  approach 
rather  than  another,  providing  the  reQuirements  set  out 
In  paragraph  6.2.1.  below  are  met. 
the  extent  that  standards-makIng  bodIes  are  prIvate 
To 
they  are  free,  within  the 
and  voluntary  organisations, 
limits 
Imposed  by  Articles  85  and  86  of  the  Treaty,  to 
organize  their  actlvltes  In  the  way  which  seems  to  them 
In  Imposing  constraints 
to  be  most  appropriate.  However, 
Into 
on  members, 
the  voluntary 
consideration 
toward 
contribution  by 
the 
has 
therefore  a  preference  for  a  system  based  on  trIed  and 
proven  pr I ne I pIes,  but  wh  I eh  ba I ances 
transparent 
and  eQuitable  way  the  Interests  of  those  concerned. 

Industry  of  Its  best  technology 

standards 
need 
the 

standard-making 

process.  The 

Commission 

encourage 

should 

bodies 

take 

In  a 

to 

- 32  -

6.2. 

GENERAL  PRINCIPLES 

6.2.1.  The  Commission  suggests  that  rights  and  obl  lgatlons  arise 
for  both 
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 

standards  makers  and 

: 

European  standard-making  bodies  should  ensure  that: 

1. 

2. 

3. 

4. 

5. 

al  1  persons  wishing  to  use  European  standards  must 
be  given  access  to  those  standards; 

are 

ava I I ab I e 

standards 
faIr, 
terms, 
reasonable 
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; 

for 
non-discriminatory 

use 

and 

on 

to  use 

to 
users  are  able 
In  conformIty  wIth  the  standards  1 n 
manufacture 
the  CommunIty,  and  to  Import 
Into  the  CommunIty 
goods  legitimately  manufactured  In  third  countries 
In  conformity  with  the  standards; 

the  above  standards 

best  efforts  are  made 
lntel lectual  property  rights 
-by  conducting  searches 
-by  publ  lcatlon  of  adequate  Information  and  where 

to  Identify  holders  of  any 

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 
the 
standard; 

I I censed  for  use  1 n 

to  the  ho I ders  of 
faIr  condItIons  are  provIded 
lntel lectual  property 
especially  with 
regard  to  the  time  I lmlts  for  Identifying  IPRs  and 
agreeIng 
respect  of 
use, 
arbitration  mechanisms  as  to  royalty  rates; 

rights, 

theIr 

and 

to 

1 n 

lntel lectual  property  right  holders  should: 

6. 

IPR  which 

timely  manner 
use  best  efforts  to  Identify 
Is  relevant  to  a 
any 
standard  wh  I eh  Is  beIng  deve I oped  and  to  conf 1 rm 
or  refuse  permission  for  Its  Incorporation  In  that 
standard  promptly; 

they  hold  which 

In  a 

- 33  -

7. 

a. 

fair, 

offer 
and  non-discriminatory 
monetary  or  non-monetary  terms  for  the  I lcence  to 
use  any  IPR; 

reasonable 

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 
In  reso 1 vI ng 
set  up  by  standard  bod 1 es,  wh  I I st  usefu I 
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 

In 
the 
this  Communication, 
earl ler 
that  where  compl  lance  with  a 
Commission  must  ensure 
standard  or  part  of 
In 
Community  legislation,  either  as  a  mandatory  requirement 
or  as  one  which  confers 
a  particular  status  under 
CommunIty 
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 

standard 

referred 

law. 

I aw, 

to 

Is 

a 

6.3.3.  Where 

reason 

the  Commission  has 

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, 
the  pub I I cat I on  of 
notices  In  the  Official  Journal. 

Instance,  by 

to  bel  leve 

that 

for 

If  a  European  standardIzatIon  body  consIstent I y 
However, 
fa I I ed 
1 ts 
to  ensure  non-dIscrImInatory  access 
standards,  the  status  of  the  standardization  body  Itself 
under  Community 

law  would  have  to  be  reviewed. 

to