Context: A potential crisis regarding the use of Standard Essential Patents (SEPs) by certain technology companies against India's telecom manufacturing sector has emerged, highlighting the complexities of policy regulation in this area.

Importance of Standard Essential Patents (SEPs)

• Role of SEPs in Industry Standards: SEPs cover technologies adopted as industry standards, ensuring interoperability among different brands of cellular phones.

• Privatized Standard Setting Organizations (SSOs): Standard setting processes, largely controlled by private technology companies, limit India's influence in setting standards and licensing SEPs.

• Patent Holdup Problem: SEP owners can demand excessive royalties, leading to anti-competitive practices and hindering market competition, despite the expectation of fair, reasonable, and non-discriminatory (FRAND) licensing.

Effect of Judicial Lethargy and Activism

• Judicial Delay in Competition Law Issues: Indian judiciary's delayed response to investigating potentially abusive licensing practices of SEP owners, leading to prolonged litigation and absence of regulatory oversight.

• Interim Remedies by Delhi High Court: The Delhi High Court's granting of interim orders, such as requiring manufacturers to deposit money during trials, creates financial burdens and undermines defendants' rights.

• Negative Impact on Manufacturing Sector: Judicial activism and delays adversely affect government initiatives to attract investment in the manufacturing sector, hindering India's progress towards becoming a manufacturing hub.

Case of Europe and Need for Regulation

• European Parliament's Regulation: The European Parliament has enacted measures to regulate SEPs, setting a precedent for addressing similar issues.

• India's Strong Case for Regulation: India, lacking influence in SEP selection but obligated to enforce patents of foreign technology companies, needs regulatory measures to safeguard its manufacturing sector's interests.

Road Ahead

• Need for Government Intervention: There is a pressing need for the Indian government to intervene and implement measures to regulate SEPs. The current judicial delays and uncertainties surrounding SEPs are hindering India’s manufacturing aspirations.

• Ensuring Fairness and Equity: Regulatory measures would aim to ensure fairness and equity in the licensing of SEPs, preventing monopolistic practices and extortionate royalties that could hinder competition and innovation.