Last Thursday (September 25), CADE held the seminar Economy & Competition Defense: “International and National Overview of Standard-Essential Patents”, in which it presented the conclusions of its contributions on the topic of Standard-Essential Patents (SEPs), a study prepared by the Department of Economic Studies and released in July of this year. The event largely functioned as a report on that publication — which had already been analyzed in CADE Publica Relatório Sobre SEPs – DANIEL LAW.

CADE’s discussion on SEPs highlighted that the matter remains unsettled in terms of the need for specific regulation in Brazil, with no consensus on how to reconcile the protection of industrial property with the preservation of competition in standardized markets.

The event brought together CADE’s technical and legal teams, as well as a representative from the Ministry of Development, Industry, Trade and Services. The most forceful remarks came from Commissioner Carlos Augusto — the same commissioner who ordered the opening of an investigation against Ericsson to determine whether there had been abuse of dominant position or price discrimination. He stressed that, because they are essential to a technological standard, SEPs are a true “indispensable input” for market entry and permanence, which justifies CADE’s involvement given the intersection of the issue with competition law.

Carlos Augusto noted that, in cases of anti-competitive behavior, sanctions may take on a structural nature, such as fines calculated on the gross revenue from the affected market and the possibility of compulsory licensing as a remedy in cases of abuse.

Regarding prices under FRAND (fair, reasonable and non-discriminatory) parameters, the commissioner pointed out that the discriminatory aspect is the most relevant to consider, as it is more objectively measurable. In this sense, he advocated for transparency in contract disclosure, signaling that non-discriminatory prices should be public, since confidentiality could suggest attempts to fragment the market and conceal case-specific conditions. He further emphasized that refusal to negotiate is incompatible with the nature of an SEP: the commitment made during standardization creates a legal obligation to negotiate.

That said, it is important to note that the practice of non-discriminatory pricing is not, in principle, incompatible with concrete and individualized negotiation conditions of each company — which often involve complex cross-licensing arrangements. Therefore, requiring unrestricted publicity and broad disclosure of contractual terms may not be appropriate, as it disregards commercial particularities that can impact the prices applied, or even involve trade secrets anticipating new strategies for market access.

In summary, CADE’s meeting reinforced that the challenge lies in designing a legal framework capable of balancing industrial property protection with the promotion of competition in standardized markets. SEPs not only enhance technological interoperability, but can also serve as tools for market concentration, creating the need for further study and debate on whether to build an environment with stronger regulatory oversight and more objective criteria to prevent abuses.

This context underscores the importance of closely monitoring the ongoing administrative proceeding and its developments. Should you have any questions or wish to learn more about the SEP litigation landscape, our patent litigation team is at your disposal.