TY - JOUR
AU1 - Waldheim Bird,, Stephan
AU2 - LLP,, Bird
AB - Very few judgements from the EU level have reshaped daily court practice like Huawei vs. ZTE1 did for standard-essential patent (‘SEP’) litigation2. Five years after, the national courts have had ample opportunity to adjust and to advance their view on how to transpose the Court of Justice of the European Union’s (‘CJEU’) landmark decision. Questions dealt with include most notably: Does every SEP necessarily confer dominance to its holder? How detailed does an infringement notice need to be, particularly if a portfolio license is sought after? When can the patent owner safely conclude that the user is an unwilling licensee and the seeking of an injunction thus justified? And, most importantly, how to determine a fair, reasonable, and non-discriminatory (‘FRAND’) license offer. This paper gives an overview of the current state of play and of the questions that (appear to) remain open todate. Key Points The national patent court’s approach to Huawei/ZTE is both flexible and workable. While a holistic view is taken on whether the seeking of a prohibitory injunction is abusive in the individual case at hand, in the absence of investigative powers, (more) operational criteria are being applied to assess whether the SEP confers dominance to its holder. In principle, there is little to criticise about this practice. However, when push comes to shove the national patent courts (still) tend to decide in favour of plaintiffs, i.e. patent holders. Take their dealings with patent pools, for example, or the fact that a case where two opposing offers have both been accepted as FRAND is yet to beseen. Whether this is in line with the CJEU’s impetus of striking a fair balance between the opposing interests of patent owners and users may be reasonably doubted. I. Dominance in the SEP licensing and litigation context Huawei/ZTE was about the so-called compulsory license or FRAND defence. The compulsory license defence is a competition law defence; it is based on the idea that when businesses rely on standardisation to develop and sell interoperable (‘standard-compliant’) devices, the holder of an SEP may be an unavoidable or, in competition law terms, dominant licensor and thus subject to the EU competition law rules on abuse of dominance3. Huawei/ZTE did not deal with the question of dominance because the referring court did not ask for it. However, in its previous case law the CJEU has held that dominance is ‘a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition […] by giving it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers’4. In the SEP context, two separate markets need to be distinguished: The upstream market for the licensing of the technology on which the patent in suit reads (‘license market’) and the downstream market for the manufacture and supply of standard-compatible devices5. Dominance must be established on the former, the licensing market, on which the SEP owner acts as a supplier (of a license to the patented technology) and the user as a buyer. However, while any SEP, by definition, is a necessary (‘essential’) input for operating the standard, it is not necessarily so for operating the market. License seekers may have alternative standards to choose from; design-arounds may be available to them; or the patent may read on an optional feature within the standard that users can turn off in their devices or omit entirely without sacrificing the product’s standard-compatibility (but with the effect that the patent at issue is no longer infringed). In all of these cases, the patent owner is not, or may not be, an unavoidable—dominant—licensor. Dominance will exist only if on the downstream product market, a commercially viable product offer cannot be made without having access to the upstream technology on which the SEP reads and for which the SEP owner thus is an indispensable supplier. Recent case law and practice in Germany suggests that this can be safely assumed if more than 70 per cent of the products sold in the relevant market make use of the patented technology6. Only once (and if) dominance is established will the Huawei/ZTE framework step in and the SEP holder therefore be bound to alert the user about the alleged infringement (below II) and to provide an offer for a license on FRAND terms (below IV) prior to seeking a prohibitory injunction. The alleged infringer, in return, will then need to demonstrate its willingness to license (below III) and may provide a FRAND counter-offer (below V) if it does not accept the offer made to it by the patent owner. II. Infringement notice A. Content The infringement notice ideally includes claim charts which map each of the claim(s) of the patent(s) in suit to the standard7. However, particularly in case of larger portfolios comprising of, as the case may be, hundreds or even thousands of patents, this may be difficult to achieve (and contrary to customary licensing practice). As a result, there has been debate about whether sending exemplary patent lists (the so-called proud) would not do aswell. The CJEU itself is indifferent in this regard, stating merely that it is for the proprietor of an SEP to specify ‘that SEP’ and ‘the way in which it has been infringed’8. With this in mind, the national courts have pointed to the purpose of the infringement notice which is to allow the alleged infringer to assess on its own whether the claims brought against it are legitimate9. Accordingly, proud lists including the patent(s) in suit10 or even general information in the Internet (e.g. in case of a well-established pool licensing programme11) have been accepted. More recent decisions have indicated that an infringement notice may remain undone even entirely if the alleged infringer has sufficient knowledge of its own about the patented technology and the attacked acts of use12. (Potential) plaintiffs should be cautious though to rely on this case law. While the infringement notice clearly is not an end in itself (and a claim dismissed on the basis of a failure to inform about infringement is yet to be seen), the courts will always take into account all circumstances of the individual case at hand. To err on side of caution, claimants are therefore well-advised to include the following minimum information when informing of infringement: The publication number(s) of the (exemplary) patent(s) in suit and the standard(s) concerned13 The attacked embodiment(s)14 The alleged act(s) of use15 On the other hand, detailed technical and/or legal analysis (e.g. on the interpretation of the patented claim(s) or the grounds for liability) do not have to be provided at this stage, according to current case practice in Germany16. B. Addressee The correct addressee of the infringement notice is the alleged infringer, i.e. the legal entity which makes, sells, offers for sale, or imports a product that makes use of the subject matter of the patent in suit in the territory where such patent is registered17. However, sending the notice to the ultimate parent company (which will often be the patent owner’s negotiation partner anyway, at least if a worldwide license is sought after) is sufficient. It is then assumed that the parent company will inform its subsidiaries in the different countries in which the SEP is (allegedly) used and in force18. C. Timing The CJEU judgement in Huawei/ZTE stipulates that an infringement notice must be given prior to the filing of the complaint19. In Germany, this means prior to paying the court fee retainer20. It may thus be an option to file the complaint and deliver it to the opponent side, but not pay the court fee retainer, in an attempt to facilitate the conclusion of a license. The necessary infringement notice may then be seen in the complaint itself21. This is true at least for the patent(s) in suit. Insofar, obviously, the complaint will include all information that is necessary to proof the infringement. The Düsseldorf courts tend to allow even for a rectification of the necessary infringement notice (as well as all other pre-trial obligations such as in particular the provision of a FRAND offer, see below IV and V) in pending proceedings22. The only condition is that the opponent side is given enough time to consider and react; otherwise it may be dismissed as being delayed23. III. Willingness to license In response to the infringement notice, the alleged infringer must react without undue delay. There is no specific deadline to do so—the more complex the patented technology and the less detailed the infringement notice (see above II), the more time the infringer may take to react. However, more than 2–4 months are generally too long24. The alleged infringer must not apply delaying tactics. On the other hand, the requirements regarding form and content are low. Any informal or even implied declaration of willingness to license will suffice25. This can be, e.g. an email requesting further information or suggesting technical discussions26. Specific comments on the terms of the license to be concluded are not necessary27. In fact, such comments may even turn against the potential license later on in the process if interpreted by the court as an indicator of unwillingness to license or to license only under certain predefined terms and conditions28. IV. FRAND offer Once the alleged infringer has shown itself willing to take a license, it is up to the SEP owner to provide an initial offer for a FRAND license. Providing a FRAND offer is regularly at the heart of SEP-related disputes and spreads between the plaintiff’s demand and the defendant’s (counter-) offer of a 100 per cent and more are anything but unusual. All the more so is it important to note that typically29 the national courts will not set a FRAND rate of their own accord, having to decide between two rival offersonly. While plaintiffs may find some comfort in the fact that it will not be for a judge to put a ‘price tag’ on their technology, still the question remains how to determine whether a particular offer will likely be considered FRAND and court action thus legitimate. A. How to determine FRAND terms According to the CJEU, the patent proprietor must present to the alleged infringer a written offer for a license, ‘specifying the amount of the royalty and the way in which that royalty is to be calculated’30. The burden of proof is with the patent owner and claimant31. It must prove that its offer is ‘FRAND’, i.e. neither discriminatory nor exploitative. 1. Non-discrimination Typically, this is done by way of comparable licenses: The patentee is under an obligation to disclose all relevant (active) license agreements. ‘Relevant’ means those concluded by the plaintiff on the same technology (see below B. on confidentiality)32. In case of a transfer of rights, the Higher Regional Court Düsseldorf has most recently held that the patentee is also required to disclose the license agreements concluded by its legal predecessor to avoid the potential licensee being discriminated against33. The more license agreements have been concluded on comparable terms and conditions, the stronger the presumption that offering the very same terms to the alleged infringer is FRAND34. Fairness and reasonableness, the other two elements of ‘FRAND’, will then play only an ancillary role, coming into play only if there are indications that the existing—consistent—license practice is in itself based on abuse. However, save the standard licensing programmes offered by some larger patent pools, in practice only very few patentees will have a completely uniform licensing practice to refer to. So does this question the non-discrimination side of FRAND? Not necessarily. ‘Non-discriminatory’ does not mean uniform, but consistent. So if a plaintiff can give good commercial reasons for treating one licensee differently from the other, such reasons can and will be considered by the courts. Differentiators that have been accepted by the German courts include35: Cross-licenses Exhaustion First or early mover rebate Reference (‘anchor’) licensee Lump sum payments Enforcement risk in different countries 2. Fairness and reasonableness Conversely, the less comparables exist, the more will the patentee have to demonstrate to the infringer (and, more importantly, the court) the ‘way in which the royalty is to be calculated’36 and why such royalty is FRAND. This requires substantive statements not only on the royalty base (e.g. per-unit royalty) and the license rate applied hereto; the patentee will also have to show why it believes the proposed terms and conditions conform to FRAND. In the absence of any clear guidance by the courts, typically this is done by reference to (one or more of) the following economic models and assumptions: (i) Total cumulative royalty burden (‘royalty stacking’ hypothesis) The royalty stacking hypothesis is based on the idea that the royalties individually set by each SEP holder may add up to prohibitively high levels37. In theory, the total cumulative royalty burden thus requires a cap to avoid negative margins on standard-compatible devices. In practice, however, the difficulty is to set that cap. Some legal scholars advocate figures of up to 30 per cent, depending on the industry38. However, in most cases total cumulative royalties in the (low) single digit area will be more realistic39. (ii) Top-down analysis Whatever the total size of this entire ‘license pie’, once defined plaintiffs can proceed with securing their ‘slice’, i.e. the numerical share of the licensable portfolio in the estimated overall amount of patent rights subject to license. Although clearly such a mere patent counting says nothing about the intrinsic value of the technologies concerned—one core patent can be as valuable as hundreds of patents relating to remote side aspects of the standard—still it is a good starting point and potentially powerful means of demonstrating significance (as a plaintiff) or insignificance (as a defendant) and thus value to the court. (iii) Stand-alone economic value Finally, and most importantly, plaintiffs may want to demonstrate the economic value of the licensable portfolio stand-alone. As the European Commission notes, the relevant perspective to take is ex ante, i.e. before the adoption of the standard40. This is to exclude the value that stems from the industry being locked into the standard (and the patentee thus being able to extort excessive, supra-FRAND royalties ex post)41. Various methods are available to make this analysis including, but not limited to, expert opinions. Either way, (potential) plaintiffs may want to consider the following aspects in determining the economic value of their (portfolio of) patents: The relative importance of the patented technology within the standard (core or side aspect?) The relative importance of the patented technology compared to the technologies/portfolios of other licensors active in the field The rates requested by other licensors for comparable portfolios and/or standards The competitive edge of the patented technology over the priorart The commercial value of implementing the patented technology (not the standard) when selling standard-compliant devices (commercial ‘must have’?). By contrast, cost-based approaches are generally not well adapted to this context because of the difficulty in assessing the costs attributable to the development of a particular patent or groups of patents42. However, this does not, in my view, exclude that certain cost elements can be considered, if attributable, such as e.g. the price paid by the patentee for the purchase of the licensable portfolio in a previous market transaction. 3. Regional scope Besides the mere rate, also the regional scope of the proposed license will be subject to FRAND scrutiny. Plaintiffs are free to limit their offer to (alleged) acts of use in certain territories, but defendants cannot object to a worldwide license if this is customary industry practice and their business run on a global scale43. This is true at least to the extent parallel IP rights are in force in all major jurisdictions for which a license is requested44. In this case the patentee has a legitimate interest in covering all acts of use by the entire group of companies in a single license45. It must not, however, force the infringer into a license to patents which the infringer does not make use of or does not need, in particular by bundling SEPs and non-SEPs. 4. Individual vs. portfolio licenses Whether all of these (parallel) rights subject to a single portfolio license are infringed is a different question but will be assumed for reasons of practicality, particularly if the customary industry practice is to license entire portfolios on a worldwide basis (see above)46. As a result, and different from the former Orange Book doctrine47, under the new Huawei/ZTE framework, defendants will typically no longer be heard with a patent-specific counter-offer just for the patent insuit. 5. Validity Obviously, defendants are not obliged to take a license for invalid patents, and an offer including (a significant share of) invalid patents will therefore not be considered FRAND48. One option to address the fact that some patent claims may expire over time or may be revoked is to include an adjustment clause in the proposed license agreement49. However, this must not incentivise defendants playing for time; so equal terms should be included for past (unlicensed) acts of use, and a caveat may be included that adjustment will be made only if (and to the extent that) this has a significant impact on the overall value of the (portfolio of) licensed patent claims. B. Confidentiality Given that existing license agreements must be disclosed (to the extent they concern the same technology, above A.I.), claimants are often in a dilemma: If they refrain from disclosing, they may lose on FRAND; and if they disclose, they may violate an existing non-disclosure agreement (‘NDA’) with third-party licensees. The release clauses that are typically agreed on in such third-party license agreements often cannot be invoked for lack of a binding court order (at least in Germany50), and disclosure for attorneys’ eyes only is mostly unsuited both for procedural and practical reasons51. If other licensees then do not agree to have their agreements disclosed, plaintiffs are left in a bind because—at least in Germany—the courts have proven reluctant in the past to accept third-party NDAs as an excuse for lack of evidence52. Two options are on offer: One is to anonymise the identity and other confidential information of third-party licensees (save the relevant technology and the royalty paid) the downside being that this as well may be in breach of the NDA, as the case may be, or the identity of a (major or ‘anchor’) licensee itself may be under dispute. The other is to conclude an additional NDA, restricting the use of confidential information to the pending litigation and to have the public excluded from the oral hearing53. C. Form The patentee must provide a concrete, ready-to-sign license offer. Letters of intent (‘LoI’), term sheets, or the like will not suffice (although they may, of course, be used during negotiations). The offer must be in writing and contain all provisions as are customary industry practice54. D. Timing and addressee See above II. B. and C. V. FRAND counter-offer The same principles apply to any potential FRAND counter-offer made by the defendant. A. Orange Book vs. Huawei/ZTE One major difference though compared to the old Orange Book logic is that only once (and if) the plaintiff has provided an initial FRAND offer, the defendant is under an obligation to react55. This is diametrically opposed to the Orange Book which saw the obligation to make the first move on the side of the alleged infringer. Orange Book had based the abuse on refusal to deal56. Huawei/ZTE, by contrast, is based on the concept of abusive litigation, in breach of an existing FRAND licensing commitment. The difference between the two legal concepts yields yet another important change: Refusal to deal required that there be only one set of FRAND terms, the refusal of which triggered the abuse. The concept of abusive litigation, by contrast, opens the door for two opposing offers—one by the claimant and one by the defendant—both of which can be FRAND57. FRAND is therefore no longer a single set of rules, but rather a range of terms and conditions. And the alleged infringer has a legitimate interest in making use of that range58. For (potential) claimants, this change in perspective has two major consequences: First, the question of whether their license offer conforms to FRAND terms cannot be left open, arguing that in any case there was no FRAND counter-offer by the defendant59. Second, and as a result, claimants are well-advised to seek legal advice well before filing an action, possibly even before making a first offer, to avoid their claim being dismissed for lack of a FRAND offer60. B. Third-party determination Defendants, on the other hand, are no longer given the opportunity to make an unspecified offer, the details of which are left for an independent third party to decide. While this was a valid (and commonly chosen) approach under the old Orange Book logic, it is no longer so following Huawei/ZTE. The reason is that under the Orange Book, as mentioned, the offer had to be so high that the patentee could not legally refuse it without being charged with abuse (above A). Because defendants—obviously—struggled with meeting this absolute threshold, the FSC, in Orange Book, offered the possibility of third-party determination61. Under Huawei/ZTE, by contrast, it is now for the patentee to make a first offer; and even if this offer is FRAND, the alleged infringer’s counter-offer may be as well. Since FRAND is therefore no longer an absolute but a relative term, technically there is no need for third-party determination. This does not exclude, of course, that the parties agree on third-party determination following the exchange of two or more contradicting offers62. Practically, it may even be advisable to do so for in a legal stalemate—if the court comes to the conclusion that both offers are FRAND-the party rejecting third-party determination without objective reasoning will likely be considered unwilling to license63. C. Pool licenses Peculiar problems can arise if the plaintiff has made an initial offer for a pool license but the defendant wishes to take only individual licenses from selected pool members (e.g. for the benefit of a cross-license which would factor in its own patent rights). Can such an individual counter-offer outside the pool be FRAND? Art. 101 TFEU requires inter alia that the pooled technologies are licensed into the pool on a non-exclusive basis64. With this in mind, the Düsseldorf Court has held in a more recent case65 that individual licenses must be available, at least if the standard pool license agreement—to comply with Art. 101 TFEU—provides for this option as an alternative to taking a pool license. You would think that if a user makes use of this option, a corresponding counter-offer will be considered FRAND. But far from it, the Düsseldorf Court went on to argue that this will be the case only if there is no established pool licensing practice or the user has signalled very early in the process that it intends to deviate from such practice and make use of its right to an individual license instead. In addition, the user must provide compelling reasons as to why this is the case, e.g. because it does not make use of any other patent included in the pool66. In the absence of any such objective reasoning, the Düsseldorf Court finds it un-FRAND to provide one or more counter-offer(s) for an individual license outside thepool. For defendants the consequences can be quite dramatic: They cannot start negotiating over a pool license—notably upon receiving notice of infringement from the pool—and then turn to requesting individual licenses, notably because they have come to believe over time that a significant share of the pool patents is actually non-essential. Whether this is ‘fair and reasonable’ may reasonably be doubted. VI. Provision of security Last but not least, ‘from the point at which its counter-offer is rejected’, the defendant is under an obligation to provide appropriate security67. Typically, this is done by providing an irrevocable bank guarantee for the benefit of the patentee, but any other security in accordance with customary industry practice will do as well. In any event, defendants are well-advised to include a safety margin, firstly because their offer may be considered too low and secondly because this will reduce the burden of having to renew the bank guarantee over and over again in view of ongoing acts ofuse. Here again Huawei/ZTE differs from Orange Book in that the latter required court deposit of the amount due (including a safety margin)68, whereas the former will accept a simple bank security which, obviously, is much more practical. VII. Conclusion and outlook The CJEU’s landmark decision in Huawei/ZTE has reconciled the opposing interests of patent owners and users in a standard context or, more broadly speaking, the interests of patent and competition law in general. Patent owners are guaranteed a fair return on investments made into R&D to avoid that users may freeride on their inventions (patent ‘hold-out’). And users, in return, can exploit the benefits of standardisation69 without having to fear its drawbacks that once the company is locked into the standard, the SEP owner misuses the bargaining power that results from this fact by extracting a larger (non-FRAND) royalty than it could have obtained in an arm’s length transaction ex ante, i.e. prior to the patent becoming standard-essential (patent ‘hold-up’). In a world increasingly driven by technology and innovation, this is good news. Both patent owners and users are provided the legal certainty they need to innovate. However, while the broad lines have been set out 5 years down the road of Huawei/ZTE, the edges remain blurry. Patent pools are one example, and determining a FRAND license is another. And the more devices rely on standardisation to connect with each other—take the Internet of things (‘IoT’) or autonomous driving, for example—the more businesses will be affected in the years ahead70. It will be interesting to see how the courts will deal with these issues and whether there will be (further) momentum coming from the EU level, maybe. Stephan Waldheim is a Counsel at Bird & Bird LLP. Bird & Bird acted, and continues to act, on the side of Huawei in the Huawei/ZTE case before the CJEU, as well as in various national court proceedings following Huawei/ZTE. The views expressed in this article are the author’s personal views and do not necessarily represent Huawei’s position. Footnotes 1 Judgement of 16 July 2015 in Case C-170/13—Huawei vs. ZTE. 2 For further case background on Huawei/ZTE, see Herrmann, in JECLAP 2018, p. 582 etseqq. 3 See Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’). 4 CJEU decision of 14 February 1978, Case 27/76 at para. 65–United Brands. 5 European Commission decision of 13 February 2012, COMP/M.6381—Google/Motorola Mobility; Higher Regional Court Düsseldorf decision of 30 March 2017, Case I-15 U 66/15 at 177, 181—Sisvel vs. Haier. 6 Regional Court Düsseldorf decision of 26 March 2015, 4b O 140/13—France Brevets vs. HTC by reference to Federal Supreme Court decision of 3 March 2009, KZR 82/07—Reisestellenkarte; see also Higher Regional Court Düsseldorf, loc. cit.—Sisvel vs. Haier. 7 Regional Court Mannheim decision of 29 January 2016, Case 7 O 66/15 at 57—DoCoMo vs. HTC decision of 1 July 2016, Case 7 O 209/15—Philips/Archos; decision of 29 January 2016, Case 7 O 66/15—France Brevets. 8 CJEU, loc. cit. at 61—Huawei vs. ZTE. 9 Higher Regional Court Düsseldorf, loc. cit. at 209—Sisvel vs. Haier. 10 Regional Court Düsseldorf decision of 13 July 2017, Case 4a O 154/15 at 174—Mobilstation. 11 Düsseldorf Regional Court decision of 21 December 2018, Case 4c O 3/17 at 60—IP Bridge vs. Huawei. 12 Düsseldorf Regional Court, loc. cit.—IP Bridge vs. Huawei. 13 Higher Regional Court Düsseldorf, loc. cit. at 209—Sisvel vs. Haier; Mannheim Regional Court, loc. cit. at 57—Docomo vs. HTC. 14 Higher Regional Court Düsseldorf, loc. cit. at 209—Sisvel vs. Haier. 15 Higher Regional Court Düsseldorf, loc. cit. at 209—Sisvel vs. Haier. 16 Higher Regional Court Düsseldorf, loc. cit. at 209—Sisvel vs. Haier. 17 For Germany see e.g. Sections 9–13 of the German PatentAct. 18 Higher Regional Court Düsseldorf order of 17 November 2016, I-15 U 66/15 at 8—Sisvel vs. Haier. 19 CJEU, loc. cit. at 61—Huawei vs. ZTE. 20 Regional Court Düsseldorf decision of 31 March 2016, 4a O 73/14 at 45—SLC vs. Vodafone. 21 Regional Court Düsseldorf decision of 31 March 2016, 4a O 73/14 at 45—SLC vs. Vodafone. 22 Regional Court Düsseldorf decision of 13 July 2017, 4a O 154/15 at 196 et seqq.—Sisvel vs. ZTE decision of 31 March 2016, 4a O 73/14 at 45—SLC vs. Vodafone; Higher Regional Court Düsseldorf decision of 30 March 2017, Case I-15 U 66/15 at 204—Sisvel vs. Haier. 23 Kühnen, handbook on patent infringement, 10th ed. 2018, at E.336 et seqq.; delay accepted e.g. in Regional Court Mannheim decision of 28 September 2018, 7 O 165/16—IP Bridge vs. HTC. 24 Higher Regional Court Düsseldorf decision of 30 March 2017, Case I-15 U 66/15 at 222—Sisvel vs. Haier. 25 Higher Regional Court Düsseldorf order of 17 November 2016, I-15 U 66/15 at 12—Sisvel vs. Haier; Higher Regional Court Karlsruhe decision of 30 October 2019, 6 U 183/16, GRUR 2020, 166 ff. 26 Düsseldorf Regional Court decision of 21 December 2018, Case 4c O 3/17 at 61—IP Bridge vs. Huawei. 27 Higher Regional Court Düsseldorf order of 17 November 2016, I-15 U 66/15 at 12—Sisvel vs. Haier. 28 Kühnen, loc. cit., at E.333. 29 With the exception of the UK, see UK High Court of Justice decision of 5 April 2017, Case HP-2014-000005—Unwired Planet. 30 CJEU, loc. cit. at 63—Huawei vs. ZTE. 31 Higher Regional Court Düsseldorf decision of 30 March 2017, Case I-15 U 66/15 at 244, 256.—Sisvel vs. Haier (“secondary burden of proof”); Higher Regional Court Karlsruhe decision of 8 September 2016, 6 U 58/16 at 49. 32 Regional Court Düsseldorf decision of 13 July 2017, 4a O 154/15 at 230—Sisvel vs. ZTE; Kühnen, loc. cit. at para. E.433, 434. 33 Higher Regional Court Düsseldorf decision of 22 March 2019, 2 U 31/16—Unwired Plant vs. Huawei, appeal pending. 34 Regional Court Düsseldorf, loc.cit.—Sisvel vs. ZTE; Düsseldorf Regional Court decision of 21 December 2018, Case 4c O 3/17 at 66—IP Bridge vs. Huawei. 35 See higher Regional court Düsseldorf decision of 30 March 2017, Case I-15 U 66/15—Sisvel vs. Haier; order of 17 November 2016, I-15 U 66/15 at 45—Sisvel vs. Haier; Regional Court Mannheim decision of 24 January 2017, 2 O 131/16. 36 CJEU, loc. cit. at 63—Huawei vs. ZTE. 37 See, e.g. Galetovic/Gupta, Royalty Stacking and Standard Essential Patents: Theory and Evidence from the World Mobile Wireless Industry, 2016 http://www.law.northwestern.edu/research-facuty/searlecenter/events/innovation/documents/Galetovic_Royalty_stacking_060416_GG.pdf. 38 Kühnen, loc. cit. at para. 449. 39 See, e.g. https://www.iam-media.com/frand-royalty-and-mobile-telecoms-seps-analysis-recent-court-cases for the mobile telecommunications industry. 40 European Commission, Communication Setting out the EU approach to Standard Essential Patents, Brussels, 29 November, 2017, COM(2017) 712 final, p. 6 etseqq. 41 European Commission, loc. cit., p. 6 et seqq.; see also Horizontal Guidelines, OJ 2011, C 11/1 at para. 289. 42 European Commission, Horizontal Guidelines, loc. cit., at para. 289. 43 Regional Court Düsseldorf decision of 31 March 2016, 4a O 73/14 at 54—SLC vs. Vodafone; see also European Commission, Communication Setting out the EU approach to Standard Essential Patents, Brussels, 29 November, 2017, COM(2017) 712 final, at 7. 44 Kühnen, loc. cit. at para. 411. 45 See above footnote 43. 46 Higher Regional Court Düsseldorf order of 17 November 2016, I-15 U 65/15—Sisvel/Haier; Kühnen, loc. cit. at para. E.420. 47 Federal Supreme Court decision of 6 May 2009, KZR 39/06—Orange Book, see below 5 for details. 48 For non-challenge clauses, see CJEU, loc. cit. at para. 69—Huawei vs. ZTE; European Commission, Technology Transfer Guidelines, OJ 2014, C 89/3 at para. 242. 49 Kühnen, loc. cit. at para. E.419; this is irrespective of the fact that—outside of FRAND and different from most other EU jurisdictions including most notably the UK, France, Italy, and the Netherlands—the German infringement courts do not have the competency to decide on validity, which is one of the reasons why Germany is particularly attractive to claimant-sided litigation (the others being technically skilled judges and comparatively low cost, particularly if compared to theUK). 50 See, however, the latest (February 2020) Guidelines On The Handling Of The FRAND Defense by the Munich court (https://www.justiz.bayern.de/media/images/behoerden-und-gerichte/landgerichte/muenchen1/guidelines_on_handling_of_the_frand_defence__february_2020_.pdf) which now seems prepared to grant a formal disclosure order upon request. 51 Legally, this is because excluding the defendant from the information is considered in breach of the right to a fair hearing, at least in Germany. Practically, and more importantly, assessing the commercial details of any given license agreement will typically be the task of the client, not its lawyer(s). 52 Higher Regional Court Düsseldorf, loc. cit.—Sisvel vs. Haier; Kühnen, loc. cit. at para. E.434. 53 To the extent permissible under national procedural law, see, e.g. for Germany Sec. 172, 173 Judicature Act (‘GVG’). 54 Higher Regional Court Düsseldorf decision of 30 March 2017, Case I-15 U 66/15 at 248—Sisvel vs. Haier. 55 Higher Regional Court Düsseldorf decision of 30 March 2017, Case I-15 U 66/15 at 249—Sisvel vs. Haier. 56 See decision of 6 May 2009, KZR 39/06—Orange Book Standard. 57 See CJEU, loc. cit. at para. 68—Huawei/ZTE: “…where no agreement is reached on the details of the FRAND terms following the counter-offer by the alleged infringer…”. 58 Kühnen, handbook on patent infringement, 10th ed. 2018, at E.340. 59 See Regional Court Mannheim decision of 29 January 2016, 7 O 66/15 at 55—DoCoMo vs. HTC; repealed by Higher Regional Court Karlsruhe decision of 8 September 2016, 6 U 68/16 at 51. 60 The courts may (and should) give appropriate guidance on how to determine FRAND terms, but they do not have to; and so improving the original offer during the proceedings may come too late, see Kühnen handbook on patent infringement, 10th ed. 2018, at E.342, 344. 61 FSC, loc. cit. at para. 39—Orange Book. 62 CJEU, loc. cit. at para. 68—Huawei vs. ZTE. 63 Kühnen, loc. cit. at para. E.349; there is however no case law on the issueyet. 64 European Commission, Guidelines on technology transfer, OJ 2014, C 89/3 at para. 261. 65 Düsseldorf Regional Court decision of 21 December 2018, Case 4c O 3/17 at 95—IP Bridge vs. Huawei. 66 Regional Court Düsseldorf, loc. cit.—IP Bridge vs. Huawei. 67 CJEU, loc. cit. at 67—Huawei vs. ZTE. 68 FSC, loc. cit. at para. 36—Orange Book. 69 Including, namely, easier market access and increased product choice and interoperability of competing products. 70 See, e.g. Case 7 O 174/17—Broadcom vs. VW. © The Author(s) 2020. Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model)
TI - Huawei v ZTE Five Years After—Luxembourg Locuta Causa Finita?
JF - Journal of European Competition Law & Practice
DO - 10.1093/jeclap/lpaa014
DA - 2019-10-01
UR - https://www.deepdyve.com/lp/oxford-university-press/huawei-v-zte-five-years-after-luxembourg-locuta-causa-finita-rBOjMFAgwt
SP - 1
VL - Advance Article
IS - 
DP - DeepDyve
ER -