Brussels, 15/12/2005 (Agence Europe) - The European Commission has closed its investigation of the European Telecommunications Standardisation Institute (ETSI) following ETSI's recent change to its standard-setting rules. This change strengthens the requirement for early disclosure of those intellectual property rights (IPRs) which are essential for the implementation of a standard in order to minimise the risk of so-called 'patent ambush' (where a company hides the fact that it owns IPRs essential for a standard). A spokesperson for competition at the European Commission, Jonathan Todd, said companies would now have to reveal whether or not they hold IPRs before a standard is set, which will help new technology to be developed without companies paying for technology they use and not knowing what they have to pay for.
The Commission's investigation of ETSI's rules had been prompted by concerns that these rules did not sufficiently protect against the risk of 'patent ambush' during ETSI standard-setting procedures. An example of a patent ambush is where, during the development of a standard, a company intentionally conceals that it has essential IPR for that standard, and then declares and identifies these IPR after the standard has been agreed. In this way, the company can gain control over the standard and erect a potentially unjustified barrier to entry. Even if the essential IPR claim is in itself valid, the company's actions mean that the possibility of considering alternative technologies has been artificially removed, and that the competitive process has been distorted, argues the Commission. At its General Assembly of 22 November 2005, ETSI unanimously approved changes to its standard-setting rules which the Commission had put forward, and established a group to examine possible further changes to ETSI's standard-setting rules, in particular on the issue of ex ante licensing (i.e. where royalties are set or discussed before a standard is agreed).