Source: EURLEX
Language: en
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28 . 3 . 95 | EN Official Journal of the European Communities No C 76 / 5

Notice pursuant to Article 19 ( 3 ) of Council Regulation No 17 (') concerning case No
IV / 35.006 — ETSI interim IPR policy

( 95 / C 76 / 05 )

( Text with EEA relevance )

I. Introduction of terminal equipment pursuant to Directive
91 / 263 / EEC on the mututal recognition of terminal
equipment ( 4 ), and ( ii ) in relation to public procurement
1 . On 22 February 1994, the European Telecommuni ­ by telecommunications operators ( 5 ).
cations Standards Institute (' ETSI ') submitted to the
Commission of the European Communities for negative
clearance and or exemption pursuant to Article 85 of the 4 . According to ETSI 's Statutes, membership of ETSI
EC Treaty and Article 53 of the EEA Agreement, the is open to entities falling within five defined categories,
ETSI interim intellectual property rights (' IPR ') policy namely ( i ) Administrations, administrative bodies and
(' the policy ') and the ETSI intellectual property rights national standards organizations, ( ii ) Public network
undertaking (' the undertaking ') as approved by the 15th operators, ( iii ) manufacturers, ( iv ) Users and ( v ) Private
ETSI General Assembly of 18 March 1993 . services research bodies

2 . Following a vote by mail ballot decided on by
ETSI 's 20th General Assembly on 22 July 1994, the
required majority of ETSI 's members voted in favour of
abandoning the undertaking ; subsequently, ETSI
amended the notification so as to exclude any
consideration of the undertaking . As far as the interim
policy is concerned, a new version was approved by
ETSI 's members at ETSI 's 21st General Assembly on 22
and 23 November 1994 ; this revised version, which went
into effect on 23 November 1994, takes into account and
reflects the abandonment of the Undertaking . The
present notice thus relates only to the interim IPR policy
as revised .

II . The Parties

4 . According to ETSI 's Statutes, membership of ETSI
is open to entities falling within five defined categories,
namely ( i ) Administrations, administrative bodies and
national standards organizations, ( ii ) Public network
operators, ( iii ) manufacturers, ( iv ) Users and ( v ) Private
services providers, research bodies, consultancy
companies and others . All members must be established
on the territory of a country falling within the
geographical area of the European Conference of Posts
and Telecommunications Administrations ( CEPT ). At
present, ETSI has approximately 365 members ; legal or
natural persons entitled to full membership may alter ­
natively become an observer, which carries with it the
right to attend and participate in the meetings of ETSI
Assemblies ( General and Technical ), but not the right to

vote .

3 . The creation of a European standardization body
for the telecommunications sector was recommended by
the Commission in its 1987 Green Paper on the devel ­
opment of the common market for telecommunications
services and equipment ( Towards a dynamic European
economy ) ( 2 ). Such a body was established in 1988 in
Sophia - Antipolis ( France ) as the European Telecom ­
munications Standards Institute (' ETSI '), a non-profit
association under French law . ETSI was formally
recognized as a European Standards Institute by the
Community in 1992 ( 3 ).

5 . ETSI 's sovereign body is the General Assembly,
which meets twice a year and on an extraordinary basis

at the convocation of the chairman ; the General
Assembly adopts the definitive standards and decides on
more general issues such as the IPR policy . ETSI 's
Technical Assembly approves the work programmes on

draft standards, which are prepared by ETSI 's Technical
Committees . Voting both within the General Assembly
and the Technical Assembly takes place on a weighted
basis connected to the annual turnover in telecommuni ­
cations of the entity in question, or in the case of admin ­
istrations, the national GDP .

III . The background to the present interim IPR policy

recognized as a European Standards Institute by the 6 . The development and ultimate application of a
Community in 1992 ( 3 ). given standard can be held up or even made impossible if

the standard incorporates proprietary technology and the
owner of that technology is not willing to make it
ETSI 's task is to establish common European standards
in the telecommunications sector ; ETSI standards in
many instances play a specific role under Community ( 4 ) Council Directive 91 / 263 / EEC of 29 April 1991 on the
law ; in particular, they must be used inter alia ( i ) in approximation of the laws of the Member States concerning
connection with the mutual recognition for type approval telecommunications terminal equipment, including the

( 4 ) Council Directive 91 / 263 / EEC of 29 April 1991 on the

approximation of the laws of the Member States concerning
telecommunications terminal equipment, including the
mutual recognition of their conformity, OJ No L 128, 23 . 5 .

(') OJ No 13, 21 . 12 . 1962, p . 204 / 62 .
O COM(87 ) 290, 30 . 6 . 1987 .
( 5 ) Commission Decision 92 / 400 / EEC of 15 July 1992,
amending Directive 83 / 189 / EEC OJ No L 221, 6 . 8 . 1992 .

1991 .

( 5 ) Council Directive 93 / 38 / EEC of 14 June 1993 coordinating

the procurement procedures of entities operating in the
water, energy, transport and telecommunications sectors, OJ
No L 199, 9 . 8 . 1993 ; Article 18 ( 2 ) specifies that ' technical
specifications shall be defined by reference to European
specifications where these exist '.

# No C 76 / 6 riNl Official Journal of the European Communities 28 . 3 . 95

available for third parties wishing to manufacture
products complying with the standard . This problem has
been addressed in a general context, i.e. not relating
exclusively to the telecommunications field, in the
Commission 's communication on intellectual property
rights and standardization ('), which sets out a number
of relevant policy considerations .

7 . In order to reduce the risk of investment in the
preparation, adoption and application of standards being
wasted because of the unavailability of an IPR and with

a view to finding the Appropriate balance between the
needs of standardization for public use in the field of
telecommunications on the one hand and the legitimate
interest of the owners of intellectual property rights in
deciding whether or not their technology will be
available for others or not on the other hand, ETSI soon
after its creation set up an intellectual property rights
Committee in order to propose solutions .

8 . The culmination of the discussions within ETSI on
these IPR issues was the adoption by ETSI 's General
Assembly on 18 March 1993 of an interim IPR policy
and an IPR undertaking . In very broad lines, the IPR
arrangements adopted at that time foresaw a system in
which members would agree in advance to allow their

IPRs deemed ' essential ' ( i.e. equipment complying with
the standard could not be made without infringing that
IPR ) for an ETSI standard, to be included in that
standard, unless the IPR-owner had identified any IPR it
wished to withhold within a certain period ( six months )
as of the date on which the Technical Committee had

decided to include the draft standard in the ETSI work
programme . Aside from establishing what has been
referred to as the ' licensing-by-default ' obligation, which
differs ( as did a number of other aspects of the under ­
taking ) from the practice in other standard-making
bodies where IPR holders must explicitly agree to have
their technology included in a standard, the ETSI IPR
undertaking set forth certain obligations regarding the
terms of the licence to be granted to other members,

inter alia ( i ) that the licence be for monetary
consideration, unless agreed otherwise by both licensee
and licensor, ( ii ) the obligation for the IPR holder to
notify to the Director of ETSI the maximum royalty rate
it would apply and ( iii ) the obligation to grant
non-exclusive licences covering the area of the CEPT, as
well as of the Associate Members ( e.g. Australia, New
Zealand and Israel ; other countries would be included
on a standard-by-standard basis, depending on whether
an officially recognized national standardization body
had formally adopted the standard and implemented it,
or whether a major telecommunications network
operator had or was about to procure on a substantial
scale equipment to a specification compliant with that
standard ).

9 . The arrangements described briefly in point 8
above gave rise to a complaint lodged on 22 June 1993
by the Computer and Business Equipment Manufacturers
Association ( CBEMA ), most of whose members are also
members of ETSI, alleging infringements of both Articles
85 and 86 resulting from ETSI 's IPR arrangements, i.e.
the obligation on members to sign the undertaking which
in CBEMA 's view amounted to a compulsory licensing
scheme, and the other licensing conditions mentioned
above under point 8 .

The issues raised by this complaint were never decided
on formally by the Commission, in view of the fact that
the undertaking and any references thereto in the policy
were abandoned by ETSI 's General Assembly of 22 and
23 November 1994 in order to achieve greater consensus
amongst ETSI members, and the complaint subsequently
withdrawn .

IV . The relevant market

10 . Article 2 of ETSI 's Statutes states that ETSI 's

objective is to produce the technical standards which are
necessary to achieve a large unified European telecom ­
munications market ; according to Article 3, ETSI 's
activities shall be technical pre-standardization and stan ­
dardization at the European level in the telecommuni ­
cations and related areas . On this basis, two directly
affected markets can be identified, namely the market
for telecommunications standards and the downstream

markets which use those standards, i.e. the telecommuni ­
cations equipment and services markets . For the purpose
of an assessment under the competition rules of the EC
Treaty and the EEA Agreement, the geographic scope of
the IPR arrangements can be deemed to be at least the
entire EEA, although ETSI standards may in fact be
adopted and applied also outside the EEA .

V. ETSI'S interim IPR policy

11 . The interim IPR policy adopted by ETSI 's 21st General Assembly on 22 and 23 November 1994 contains
the following provisions which may be relevant for an
assessment pursuant to Article 85 of the EC Treaty and
Article 53 of the EEA Agreement :

Provisions relating to ETSI members

, ( i ) Each member shall use its reasonable endeavours
or whether a major telecommunications network to inform ETSI in a timely manner of essential IPRs it
operator had or was about to procure on a substantial becomes aware of ; in particular, a member submitting a
scale equipment to a specification compliant with that technical proposal for a standard shall on a bona fide
standard ). basis draw ETSI 's attention to any of its IPRs which

might be essential if that proposal is adopted . These obli ­
gations do not however imply any obligation on
members to conduct IPR searches ( clauses 4.1 and 4.2 of
0 ) COM(92 ) 445 final, 27 . 10 . 1992 . the policy ).

28.3.95 | EN Official Journal of the European Communities No C 76 / 7

( ii ) Where a member notifies ETSI that it is not
prepared to license an IPR in respect of a standard, the
Technical Assembly shall review the requirement for that
standard and satisfy itself that a viable alternative tech ­
nology is available for the standard which is not blocked
by that IPR and satisfies ETSI 's requirements ; where in
the opinion of the Technical Assembly no such viable
alternative technology exists, work on the standard shall
cease, and the Director of ETSI shall request that
member to reconsider its position . If it does not, it shall
inform the Director of ETSI of its decision and provide
a written explanation of its reasons for refusing to license
that IPR ; the Director shall send the member 's expla ­
nation to the ETSI Counsellors ( this includes the
European Commission ) for their consideration ( clause
8.1.1 and 8.1.2 ).

( iii ) Any violation of the policy by a member shall be
deemed to be a breach by that member of its obligations
to ETSI . The ETSI General Assembly shall have the
authority to decide the action to be taken, if any, against
the member in breach in accordance with ETSFs Statutes

( clause 14 ).

Provisions relating to members and non-members

( i ) IPR holders whether members of ETSI or third
parties, should be adequately and fairly rewarded for the
use of their IPRs in the implementation of standards
( clause 3.2 ).

( ii ) When an essential IPR relating to a particular
standard is brought to the attention of ETSI, ETSI 's
Director shall request the owner to give within three
months an undertaking in writing that it is prepared to
grant irrevocable licenses on fair, reasonable and
non-discriminatory terms and conditions to manufacture,
sell lease or otherwise dispose of equipment so manu ­
factured ( clause 6.1 ).

( iii ) Where ETSI becomes aware that licences in
respect of a standard are not available from a third
party, the standard shall be referred to the Director of
ETSI for further consideration in accordance with a
procedure described in clause 8.2, which includes
discussion in the Technical and General Assemblies and
consultation with ETSI 's Counsellors, and may
culminate in a request to the European Commission by
the General Assembly to see what further action may be
appropriate, including non-recognition of the standard in
question .

Provisions relating to ETSI and general issues

( i ) ETSI shall take reasonable measures to ensure that
its activities which relate to the preparation, adoption
and application of standards, enable standards to be
available to potential users in accordance with the
general principles of standardization ( clause 3.3 ).

( ii ) At the request of the European Commission
and / or the EFTA-Secretariat and subject to the latter
two organizations meeting all reasonable expenses, ETSI
shall arrange to have carried out an investigation
including an IPR search, with the objective of ascer ­
taining whether IPRs exist or are likely to exist which
may be or may become essential to a proposed standard
and the possible terms and conditions of licences for
such IPRs ( clause 6.2 ).

( iii ) Any published standard shall include information
pertaining to essential IPRs which are brought to the
attention of ETSI prior to such publication ; ETSI shall
establish appropriate procedures to allow access to
information at any time with respect to essential IPRs
which have been brought to its attention ( clause 7 ).

( iv ) The proceedings of ETSI committees shall be
regarded as non-confidential and information submitted
to a committee shall be available for public inspection,
unless the information is in written or other tangible
form, it is identified as being confidential when it is
submitted and it is first submitted to and accepted by the
chairman of the committee as being confidential ( clause

10 ).

( v ) ETSI and its members will endeavour to formulate
a definitive IPR policy, which will include an evaluation
of the application of the interim policy by the General
Assembly not later than four years from the date of

adoption of the interim policy ; the interim policy came
into effect on 23 November 1994 for a minimum
duration of two years and will remain in effect thereafter
unless terminated by a 71 % majority of a weighted indi ­
vidual member vote confirmed by a 71 % majority of the
weighted national vote .

Conclusion

12 . The Commission intends to take a favourable view
pursuant to Article 85 of the EC Agreement and Article
53 of the EEA Agreement towards the ETSI interim IPR
policy ; before doing so, it invites all interested third
parties to submit their observations within 30 days of the
publication of this notice to the following address
quoting the reference IV / 35.006 — ETSI interim IPR
policy :

Commission of the European Communities,
Directorate-General for Competition ( DG IV ),
Directorate for restrictive practices, abuse of dominant
positions and other distortions of competition I,
200 Rue de la Loi / Wetstraat 200,
B-1049 Brussels .