The Commission has filed an amicus curiae submission in SEP infringement proceedings before the Higher Regional Court of Munich (VoiceAge EVS ./. HMD Global) and clarified its understanding of the ECJ decision Huawei ./. ZTE. Such submissions, which are submitted to the court by a third party not involved in the proceedings, are a little-known instrument in German law. However, there are certainly cases in which, for example, the FCO submits its opinion to the court and intervenes in proceedings (see e.g. LG Munich I, judgment of 30.10.2020 – 21 O 11384/19; LG Mannheim, judgment of 18.08.2020 – 2 O 34/19 -, juris). Here, the Commission took the floor as antitrust authority.
The Commission’s understanding of the ECJ’s decision in the Huawei case differs in key aspects. The Commission states that the stages of the ECJ ruling must be carried out sequentially, namely (in terms of time) before an action for an injunction. It is no longer possible to catch up on the first two stages in particular after the action for an injunction. The individual steps must be examined and affirmed one by one. The next step could only be examined after the previous step had been carried out. Later conduct could not be used to examine a previous step. It is also not possible to catch up (cure) at a later date, as otherwise the entire framework would become obsolete. Otherwise, the SEP holder would have an incentive to file an action for injunctive relief and the user would complain about the abuse without having conducted negotiations.
The notice of infringement must be served before the action for an injunction (but not before any actions for information or damages). It must notify the infringement, identify the patents by number and specify the nature and manner of the infringement. Even if it does not have to contain detailed legal or technical explanations, for the purposes of clarity it must contain the information that enables the patent user to assess his legal position. The user would then have to declare his willingness to license on FRAND terms, but would not lose his right to challenge the essentiality of the patent and its validity. He is not unwilling to license if he expresses the intention to challenge the patents in question as ineffective or non-essential or reserves this right.
Since the ECJ does not stipulate any further requirements for the declaration of willingness to license, the SEP holder must then submit a concrete written offer for a license on FRAND terms; this is then the starting point for negotiations for an SEP license on FRAND terms. Later conduct of the user in the license negotiations could not be taken into account for the declaration of willingness to license in the second stage, as this was only a formal step as a prelude to negotiations. After this formal step, the patent proprietor must submit its license offer on FRAND terms in step 3 and the user must then respond properly in step 4 if it wishes to avoid an injunction. This also applies if the SEP holder’s offer does not comply with FRAND conditions. The second step can also no longer be repeated after an action for an injunction. Negotiations could also not be made up for after the action for an injunction, as the ECJ wanted to create an opportunity for negotiation outside of such a pressure situation. The various stages must be examined in their respective order and the next step can only be examined if the previous one has been properly completed. Mixing them up is not permissible.
Finally, the Commission “encourages” the Senate to refer the proceedings to the ECJ if “uncertainties persist”.
The Commission considers the declaration of willingness to license (second stage) to be merely a formal element. The ECJ has not imposed any further requirements on this declaration. However, German case law to date has focused precisely on this second stage of the so-called willingness (or unwillingness) to license and there are now hardly any decisions that deal with one of the later stages. In German case law, the central consideration of the circumstances of the case is made at this stage and, as a rule, decisions are also made at this stage. According to the Commission’s view, this weighing of the circumstances does not take place at this stage and the courts would have to take up the substantive examination of whether the offer submitted by the patent proprietor is FRAND.
It also follows from the amicus curiae submission that the content of the counter-offer must also be examined. If this is also FRAND and there is also a security deposit, the claim for injunctive relief is excluded in any case.
Should the ECJ confirm the Commission’s opinion, the discussion of the willingness to license, which has been strongly focused on in German case law to date, would presumably be largely obsolete and the focus would have to shift to whether the SEP holder’s license offer is actually FRAND.
This would have the great advantage that the courts could and would then also have to deal with the content of the respective license offer and the counter-offer and the proceedings would not be limited solely to the procedural issues in the negotiation process.
