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.

May selling a patent be discriminative?

In a recent post, we had seen that a patentee dominating the market may have to grant a compulsory license to a standard-relevant patent.

It is generally agreed upon that this license has to be granted unter "Fair, Reasonable and Non-Discriminative" (FRAND) conditions.

The Karlsrule Upper District Court (OLG Karlsruhe) had to decide on an action filed against a former patent owner requesing a refund of the damages incurred by the selling of the patent. The plaintiff is a defendant in various co-pending high-stake infringement procedures filed by a non-manufacturing legal entity having bought the patent portfolio including standard-relevant patents.

One of the arguments was that the act of sellig the patents was an abuse of the position dominating the market because the buyer was not bound to the FRAND conditions according to the ETSI standard. The patents were sold while negotiations on licenses were pending such that the legal position of the plaintiff was deteriorated due to the transfer of the patent.

However, the OLG decided clearly that even a position dominating the market may not prevent the party from selling the patent. As a consequence, the indication of plans to sell the patent during the license negotiations may not be considered an abusive menace of the market dominator.