Background: objection of abuse under antitrust law in infringement proceedings
A patent for which a patent holder wishes to claim patent infringement against an alleged infringer can represent a standard-essential patent (so-called SEP) for access to the product market based on the factual market implementation of the technology protected by the patent (so-called de facto standard) or due to an industry-wide standardisation agreement (so-called industry standard). A patent holder’s claim against a user of such standard-essential, patent-protected technology can therefore be opposed by an objection under antitrust law.
In order to avoid objections of abuse under antitrust law in infringement proceedings, the SEP holder must thus, in principle, allow each user to use the patent on FRAND (fair, reasonable and non-discriminatory) licencing terms.
In its 2015 decision regarding the legal matter of “HUAWEI Technologies /. ZTE”, C-170/13, the ECJ established specific guidelines on the obligations of the parties concerned to determine FRAND terms.
First, the SEP holder must inform the alleged infringer of the patent infringement (notice of infringement). In response to the notice of infringement, the alleged infringer must express its desire to conclude a licencing agreement according to FRAND terms (licensing request). In response to the licencing request, the patent holder must provide the alleged infringer with a specific written licensing offer according to FRAND terms (FRAND offer). The alleged infringer must react to this FRAND offer promptly to avoid any objective impression of delaying tactics. The alleged infringer can either accept the FRAND offer or make a specific written counter-offer, also according to FRAND terms, within a reasonable time (FRAND counter-offer) and, if the counter-offer is declined, provide adequate security and account for past actions of use in order to calculate the security (rendering of accounts and provision of security).
If the claimed alleged infringer does not meet its obligations in the FRAND licensing negotiations, it cannot object to an infringement action by the patent holder with abuse under antitrust law. If the SEP holder does not meet its obligations in the FRAND licensing negotiations, the requests to cease and desist and for recall on the basis of a misuse under antitrust law will be rejected as currently unfounded. Claims for damages, information and rendering of accounts, however, are not affected by an objection of abuse under antitrust law. These claims have no direct influence on the availability of the product of the alleged infringer on the market. In this respect, an action would thus be upheld in the event of an established infringement.
The Regional Court of Mannheim’s Decision
Following the ECJ’s decision, in particular the Regional Court of Düsseldorf, the Higher Regional Court of Düsseldorf, the Regional Court of Mannheim and the Higher Regional Court of Karlsruhe have further substantiated the exact course of FRAND licensing negotiations in several decisions. However, it remains to be seen whether FRAND obligations of the parties can still be made up for – especially during ongoing proceedings.
The Regional Court of Mannheim has now stated its opinion in this respect – surprisingly detached from the case in an obiter dictum: under certain conditions, it should be possible to rectify the obligations of the SEP holder in FRAND licensing negotiations during ongoing proceedings.
The Regional Court of Mannheim bases its argument on the intention of the FRAND negotiation process, which, in the opinion of the Regional Court of Mannheim, is inherent in the ECJ ruling: The alleged infringer should be able to decide by way of negotiation to take a license according to FRAND terms without the pressure of an injunction already filed. This intention is initially fundamentally contrary to making up for the individual steps of the FRAND negotiation process. However, the Regional Court of Mannheim perceives the means of interruption and suspension in the German Code of Civil Procedure (Sec. 249 ZPO) and the stay of proceedings (Sec. 251 ZPO) as options for carrying out a negotiation without pressure during ongoing proceedings. In the opinion of the Regional Court of Mannheim, the claimed alleged infringer is even obliged to agree to a suspension request or a request to stay the proceedings by the plaintiff/SEP holder for the purpose of subsequent FRAND negotiations. Otherwise, the alleged infringer would demonstrate its unwillingness to license, which would cut off its objections under antitrust law. Furthermore, the Regional Court of Mannheim justifies its opinion by the fact that the conditions for a judgement in the fact and merits of an action must always be available only at the solely decisive time of the conclusion of the last hearing.
The Regional Court of Mannheim’s arguments on the ECJ’s decision intentions appear bold. In particular, the ECJ made it explicitly clear in its “HUAWEI Technologies ./. ZTE” decision in its amending decision for the German version that the SEP holder must initiate the FRAND proceedings before filing the action. The Higher Regional Court of Düsseldorf also made reference to this (Higher Regional Court of Düsseldorf GRUR 2017, 1219 – mobiles Kommunikationssystem, marginal no. 168) when it stated that the FRAND negotiations must in principle be concluded unsuccessfully before an action is filed so that the SEP holder can successfully oppose an objection under antitrust law.
The principle of procedural economy also speaks in favour of the Regional Court of Mannheim’s opinion – and thus for the ability to make up for the FRAND negotiations in pending infringement proceedings. There is an agreement in the literature and case law that acting contrary to antitrust law does not result in a permanent loss of rights (cf. e.g. Block in: GRUR 2017, 121, 127, with additional notes). From this principle it follows that if the SEP holder violates its obligation in the course of the FRAND negotiations (leading to the corresponding partial dismissal of the action), the SEP holder is not prevented from seeking new injunction proceedings after – extrajudicial – rectification of its obligations in FRAND licensing negotiations. Since the claims for damages, information and rendering of accounts are not affected by the objection of abuse under antitrust law, two legal actions would then have to be brought against the same dispute subject matter and the same legal question. However, this would be diametrically contrary to the principle of process economics. The prohibition of making up for FRAND negotiations in the pending proceedings and reference to extrajudicial negotiations appears to be a mere formality.
It remains to be seen, however, whether the opinion of the Regional Court of Mannheim will prevail. An appeal against the ruling is pending before the Higher Regional Court of Karlsruhe.
