IEEE Consumer Electronics Magazine - July 2016 - 115

IP Corner

Litigating Standard-Essential
Patents in Germany
By Thomas Gniadek and Sebastian Zwick

s a result of the landmark decision of the Court of Justice of
the European Union (CJEU) in
Huawei versus ZTE (judgment
of 16 July 2015-Case C-170/13), there
have been concerns that litigating
standard-essential patents (SEPs) in
Europe was not meaningful anymore. In
particular, there have been rumors that,
following the CJEU ruling, an injunction against the infringer based on an
SEP is virtually not available. In this
article, we will show that these concerns
are unfounded. Instead, the German patent infringement courts are currently
interpreting the CJEU ruling in a very
paten tee-friendly way. In particular,
before German courts, the holder of an
SEP may still obtain an injunction
against the infringer if he or she complies with certain minimum requirements regarding its fair, reasonable, and
nondiscriminatory (FRAND) license
offer to be provided to the infringer.
Regularly, there is no possibility to
design around an SEP, because, due to
the respective standard, the product of
the competitor needs to be standard
compliant and the SEP covers said
standard. Thus, the holder of an SEP is
able to prevent competitors from entering a certain product market and,
therefore, has a market-dominant position according to European antitrust
law. As a result, there is no market
access without a license to use the
SEP. According to European antitrust

Digital Object Identifier 10.1109/MCE.2016.2556779
Date of publication: 10 August 2016

law, the holder of an SEP would abuse
this dominant market position if he or
she is not willing to grant a license on
FRAND conditions. This is even more
true if the holder of the SEP commits
to the standard-setting organization to
license its SEP on such conditions
(FRAND declaration).
Thus, in patent infringement proceedings, seeking injunctive relief may
constitute an abuse of a dominant

According to European
antitrust law, the holder
of an SEP would abuse
this dominant market
position if he or she is not
willing to grant a license
on FRAND conditions.
market position contrary to European
antitrust law if the defendant is willing
to accept a license on FRAND conditions. However, for many years, the
burden was on the defendant to show
that he is such a willing licensee. That
means, during ongoing patent infringement proceedings, the defendant could
only invoke his or her claim for a compulsory FRAND license as an objection
against the plaintiff seeking injunctive
relief (a compulsory license defense) if
the defendant had made a binding and
unconditional offer to enter into a
FRAND license agreement and if the
defendant fulfilled his or her obliga-

tions under the future FRAND license
agreement in advance and, in particular,
rendered accounts regularly and deposited a FRAND license fee.
This legal situation was considered
to be too burdensome for the defendant. Against this background, the
CJEU rendered its judgment on the
requirements for invoking the antitrust
compulsory license defense in patent
infringement proceedings (judgment of
16 July 2015-Case C-170/13). In a
landmark decision, the CJEU basically
shifted the burden on the plaintiff.
Now, the plaintiff needs to show that
he or she is willing to license the SEP
on FRAND conditions. In its decision,
the CJEU established a ping-pong
between the holder of the SEP and the
party willing to obtain a license, which
is of vital importance for the litigation
of SEP in Europe.
In particular, the CJEU held that the
holder of an SEP who committed to
grant licenses on FRAND conditions
may obtain injunctive relief provided
that the patentee complies with a certain procedure (ping-pong): First, the
patentee has to inform the infringing
party about the potential infringement
by specifically pointing out the patent
at issue and the act of infringement. If
the potential infringer signals his willingness to sign a license agreement at
FRAND conditions, the patentee has to
make a specific FRAND license offer
in this regard. This offer must contain
a proposal on FRAND license fees and
their calculation basis. Upon the
receipt of this offer, it is the potential
JUly 2016

IEEE Consumer Electronics Magazine

115

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