If a patent infringer who is held liable makes a concrete license offer to the patent owner under non-discriminatory and non-hindering conditions and the patent owner rejects this offer by taking advantage of his market-dominating position, the antitrust objection of misuse (FRAND objection = fair, reasonable and non-discriminatory) comes into consideration. These conditions of misuse are currently to be clarified by the European Court of Justice.
There is currently a great legal uncertainty regarding both what is to be understood by discriminatory and hindering license conditions as well as how an offer for a license agreement by a patent infringer should precisely look like. So far, general regulations such as the requirements of an “unconditional” offer by the patent infringer as well as the regulations of the amount of the license fee according to a judicially reviewable assessment by the patent owner are based on the “Orange Book Standard” decision by the German Federal Court (BGH, GRUR 2009, 694) which helped the FRAND objection to become generally admissible. Factors of insecurity for the patent infringer, which must not be neglected, such as the lack of judicial clarification regarding real patent infringement as well as the legal validity of the patent mainly remain unconsidered.
In order to help establish prevailing criteria for this legal matter, that is significant in view of the number of pending infringement actions, the Regional Court based in Düsseldorf suspended an infringement proceeding in the sector LTE (mobile communications) standards, which concerned the granting of FRAND licenses, and presented general questions regarding the requirements for misuse of a market-dominating position in the frame of enforcing claims to cease and desist to the European Court of Justice for assessment.
The individual questions which are now to be clarified by the European Court of Justice in the sense of a generally applicable solution are in short:
Question 1 deals on how “concrete” the intention of the patent infringer must be with regard to the conclusion of a license agreement with fair, reasonable and non-discriminatory conditions. Under this aspect, the European Court of Justice has to decide whether it is sufficient to signal a willingness to negotiate a corresponding license or whether an acceptable, unconditional offer to conclude a license agreement with precisely specified conditions is further necessary in the sense of the German Federal Court.
Question 2 concerns possible conditions of special qualitative and/or time requirements regarding the willingness to negotiate according to article 102 TFEU to the extent that this willingness should already be considered sufficient for the misuse of a market-dominating position.
Question 3, on the other hand, deals with the assumption that an acceptable, unconditional license agreement offer is already necessary for the misuse of a market-dominating position and treats the question whether special qualitative and/or time requirements to this offer should be set. Accordingly, the European Court of Justice has to clarify whether the offer must comprise all regulations that usually occur in license agreements in the questionable technical sector, or whether the offer can be made dependent on the condition that the present standard patent is effectively used and proves to be legally valid.
Question 4 concerns the decision whether the duties of the license to be granted must be fulfilled already when submitting a respective offer, such as in particular information and accounting as well as payment of license fees or respective guarantees by the patent infringer.
Finally, the subject of question 5 is whether the conditions to be fulfilled for the objection of misuse of a market-dominating position are also applicable for further claims to accounting, withdrawal or damages resulting from a patent infringement.
Due to the fact that the European Court of Justice deals with the FRAND problem, a certain guide on how to proceed in judicial practice can surely be achieved which leads to a bit of legal certainty in this sector. Nevertheless, the assessment of fair, reasonable and non-discriminatory license conditions will always remain the result of a case-by-case evaluation.
Regional Court Düsseldorf, March 21, 2013, file no.: 4b O 104/12
Author: Janina Lorenz (Attorney-at-Law), Update 2/2013
Patent Attorneys and Lawyers Bockhorni & Kollegen
Munich/ Germany
www.patguard.de
