On May 5, 2020, the German Federal Court of Justice (BGH) ruled in the case Sisvel ./. Haier and sentenced the defendant for unwillingness to license (see article in our newsletter in July 2020). The case is apparently not yet closed, as a constitutional appeal against the decision of the BGH is still pending.
It is remarkable, however, how quickly this BGH decision was received and applied in court practice. The particular constellation where an implementer is unwilling to license has since then become a conspicuously frequent content of subsequent decisions. The peculiarity lies in the fact that after the patent infringement notice of the patent owner (which can also be seen in the infringement suit itself) the declaration of the willingness to license represents the second step of the step model of the ECJ (Huawei./. ZTE).
The ECJ decision only stipulates that the implementer has to declare quickly after the infringement notice whether he wants to take a license. So far, this point has never been disputed or specifically discussed by the courts.
The courts were therefore confronted with the 3rd step, whereafter it then had to be examined with slightly different depth of focus whether the offer of the SEP holder met FRAND criteria or not.
The decision of the BGH however seems to offer a way for many regional courts not to have to enter this examination stage. For instance, different chambers of the regional courts (in this order) Munich I, Mannheim and also Düsseldorf have granted injunctions on basis of a SEP because the implementer was not willing to license and therefore the question of a proper FRAND-offer was not relevant.
The special feature of these decisions lies in the fact that they all concerned cases in which the implementer had initially affirmed his willingness to license. The SEP holder had then made a license offer and after that, both had entered into negotiations. Eventually, at some point, the implementer had also made a counteroffer.
The decisions then stated, with similar justifications, that although the implementer had initially expressed his willingness to license, he then proved that he was not willing to license after all. The decisions were partly based on a number of factors from the negotiations. One decision merely states that the counter offer was far too low and that the licensees were therefore not (or no longer) willing to license. In other decisions, additional factors from the course of the negotiations were taken into account to determine the licensee’s unwillingness to license.
Appeals against these decisions are pending and the first indications from the Higher Regional Courts can be expected before the end of this year as to whether the Regional Courts’ approach will be supported.
In contradiction to this rapidly developing case law, another chamber (4c) of the Düsseldorf Regional Court may be considering to refer one of the pending SEP proceedings to the ECJ. As in other proceedings, the German Federal Cartel Office had suggested that the legal dispute (Nokia ./. Daimler) should be suspended and the proceedings should be referred to the ECJ with a total of four questions. The first (proposed) question is directed at whether, for example, an automobile manufacturer can rely on the FRAND objection of its supplier if the supplier’s intermediate product allegedly infringes the patent and the supplier had applied for a FRAND license. The second question essentially asks whether the SEP holder may attack any party in a production chain or whether it is subject to restrictions. The third question is whether the SEP holder may refuse to license willing market participants, in particular whether it may exclude certain market stages of a production chain from licensing. The final question is whether the SEP holder is free under antitrust law to choose whether and to which stage of a production chain it grants a license on his own.
The submission to the ECJ in the first instance is considered by the German Federal Cartel Office to be reasonable to ensure a quick clarification process and to avoid diverging decisions at national and European level. A relatively early submission to the ECJ should also avoid the risk that, for example, “situation-related compromises” would be forced by the pas-sage of time and the large number of proceedings and that the resulting license agreements could then be cited later by third parties as being customary in the industry.
If the Düsseldorf Regional Court agrees in principle, a referral decision to the ECJ can be expected in mid-November, which should clarify fundamental questions that are particularly important for the 5G and IoT sector.