Must Patent Hold-Up be regulated?

The CJEU decision in the matter Huawei ./. ZTE (see e.g. here)  sheds new light on the interface between standard essential patents, antitrust law and competition law.  It is time to come together and have a look onto the fractal legal landscape in this fascinating field!  The Liège Competition and Innovation Institute (LCII) is so kind to organize such a come together.

Readers who do not yet know how to spend the extra day of the present leap year should consider attending to the event:

REGULATING PATENT “HOLD-UP”? AN ASSESSMENT IN LIGHT OF RECENT ACADEMIC, POLICY AND LEGAL EVOLUTIONS

Abstract: The patent hold-up theory has nurtured many policy developments in the past ten years. On the one hand, Standard Setting Organizations (SSOs) have been exploring changes to their licensing policies, in particular in relation to the commercial implications of FRAND pledges given by holder of Standard Essential Patents (“SEPs”). On the other hand, antitrust agencies and patent courts across the globe have been confronted with several waves of cases Those proceedings have generated a thick, diverse and somewhat inconsistent body of case-law on a wide array of topics, including the availability of injunctive relief, patent valuation, portfolio licensing, practicing and non-practicing entities, etc. This conference seeks to provide a 360° state of play on patent hold-up in contemporary antitrust and patent policy.

This Half-Day conference will take place in Brussels, on February 29th, 2016. The full Conference programme is available here, Registration here.

Speakers include the most prominent scholars, judges and advocate generals in the field such that the event will surely be beneficial to all those who attend.

News on Enforcement of Standard Essential Patents under FRAND

The Advocate General Melchior Wathelet  has now issued his opinion on the case ZTE-Huawei (Case C 170/13) on the requirements on enforcement of a Standard Essential Patent (SEP).

Among other things, the Advocate General proposes to stipulate that:
the SEP holder must, in any event, present the alleged infringer with a written offer of a licence on FRAND terms and that offer must contain all the terms normally included in a licence in the sector in question, including the precise amount of the royalty and the way in which that amount is calculated.

The most surprising part in my view is the proposal that the infringer’s conduct cannot
be regarded as dilatory or as not serious during negotiations for a licence on FRAND terms if it reserves the right, after entering into an agreement for such a licence, to challenge before a court or arbitration tribunal the validity, use and essential nature of that patent.

This is likely to create conflicts with the existing German case-law unambiguously accepting the right of the patentee to terminate a license agreement for good cause if the licensee files a nullity action against the patent. In the case of a co-pending nullity suit, the principle of dolo agit, qui petit, quod statim redditurus est (foreclosure to claim something the claimant would have to return immediately because the corresponding counterclaim exists) therefore forecloses the licensee from forcing the patentee into an agreement which could then be terminated by the patentee immediately.
A comment by Colm Ahern can be found here.

The full text of the opinion can be found here.

The Orange Book Standard is discussed e.g. here.

Button in the Ear has no Distinctive Character

Sometimes, the world is unfair. One of the most distinctive trademarks this blogger knows from his childhood is the "Button in the Ear" with the Steiff ear tag for Teddy bears and other cuddly animals.

The Steiff Company has therefore been well advised to apply for a community trademark registration for this trademark. The trademark was labelled as a "position trademark" accompanied with the illustration on the left hand side.

However, the members of the boards of appeal of the OHIM and judges of the European Court of Justice apparently do not share this blogger's experiences and have rejected the application  due to a lack of distinctive character.

According to the court, buttons and little tags bearing information such as a brand, price or cleaning instructions are usual design features of cuddly animals and the Steiff ear tag does not differ from the design usual in this field to a sufficient degree.

It appears that Steiff will have to provide evidence that the sign acquired distinctive character through the use which has been made of it.