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.

Compulsory licenses and abusive behavior

The upper district court in Düsseldorf has published an interesting decision (I2 U 92/10) in preliminary injunction procedure. The defendant had argued that the patentee abused his position dominating the market such that a compulsory licence to the patent would have to be granted - with the consequence that the cease and desist claim of the patentee would not be enforcible by referring to the "Microsoft" judgement of the European Court.

However the Upper District Court holds that the "exceptional circumstances" required in EuGH, GRUR 2004, 524 Rdnr. 38 – IMS/Health.

The cummulative preconditions for a claim for compulsory license are

(1) the desired use of the patent is unavoidable in the sense that even major efforts do not lead to a real or realistic potential substitute for the invention,
(2) the party seeking for the license plans to offer new products or services not being offered by the owner of the protective right and which will potentially be requested by the customers,
(3) the refusal of the license is not justified by substantial reasons, and
(4) the refusal leads to an exclusion of any competition on a derived (neighboring) market.

As far as I know, nobody has ever been successful in turning the "Orange Book" caselaw into a succesful defense in a patent infringement procedure.