Europe’s dominance in new network technology development is at risk

Essential patents are meant to protect technology that is deemed essential for the implementation of a standard set by a standardization organization. These standards are crucial for the functioning of digital infrastructure and technologies like 5G and 6G. Products must incorporate technology protected by essential patents to comply with the standard. Patent holders are required to license their patents in a fair, reasonable, and non-discriminatory manner to maintain a balance.

In 2023, the European Commission proposed a regulation on essential patents, claiming it would benefit European companies. However, an impartial study suggests that non-EU patent holders, like Chinese company Huawei, would actually benefit the most from the system. This would disadvantage countries like Finland and Sweden while favoring larger EU member countries such as Germany and France. Some argue that such a regulation should not originate from the EU.

Global power politics play a significant role in the development of technology according to standards. Superpowers seek to be at the forefront of technological advancements and have their inventions meet global standards. While Chinese companies own a large share of essential patents worldwide, European companies like Nokia and Ericsson also hold a substantial number.

Companies invest a significant portion of their income into research and development, with Nokia and Ericsson alone investing billions of euros in Europe. The proposed system’s benefits are estimated to be relatively low compared to company investments. Any decrease in patent royalty income could hinder investments in technology like 5G and 6G, impacting employment and development opportunities in Europe.

Maintaining a leading position in 5G and 6G technology is crucial for Finland and Europe’s overall strategic autonomy and global competitiveness. Reassessing the proposal and limiting protection to European SMEs could be a potential solution. This was initially intended to facilitate SMEs’ access to technology protected by essential patents, and restricting protection to European SMEs may help achieve this goal.