The FRAND defense – CJEU to decide
Published on: 18 July 2013
by Dr. Christian Köster, Patent Attorney at Dennemeyer & Associates, Munich
In infringement proceedings before the District Court of Düsseldorf in Germany, Huawei Technologies Co. Ltd is suing ZTE Corp. and its German subsidiary for patent infringement. ZTE Corp. has however previously declared its willingness to negotiate a license agreement on the basis of fair, reasonable and non-discriminatory terms (i.e. FRAND terms). This is used by ZTE Corp. as a defense against the infringement claim, arguing that by still pursuing the infringement lawsuit, the claimant would be abusing his dominant market position.
The District Court of Düsseldorf has decided to make a request for a preliminary ruling from the Court of Justice of the European Union (CJEU), and the referred questions have now been made available on the CJEU’s website. In English translation, the referred fundamental questions read as follows:
“Does the proprietor of a standard-essential patent who informs a standardisation body that he is willing to grant any third party a license on fair, reasonable and non-discriminatory terms abuse his dominant market position if he brings an action for an injunction against a patent infringer although the infringer has declared that he is willing to negotiate concerning such a license?
is an abuse of the dominant market position to be presumed only where the infringer has submitted to the proprietor of a standard-essential patent an acceptable, unconditional offer to conclude a licensing agreement which the patentee cannot refuse without unfairly impeding the infringer or breaching the prohibition of discrimination, and the infringer fulfils his contractual obligations for acts of use already performed in anticipation of the license to be granted?”
There are a couple of follow-up questions for the case that the first question is to be answered in the affirmative. However, it cannot be ruled out that the CJEU will redraft the referred questions anyway. In any event, it will be interesting to see which position the CJEU will take up and which consequences the CJEU’s decision will have for licensing negotiations and for infringement actions brought before courts of the European Union.
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