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Kyriakos Fountoukakos, Nick Root, Oct 27, 2015
The issue of declared standard-essential patents and competition law has been a hot topic that has pitted holders of SEPs and users of SEPs against one another in a patent war game with Article 102 TFEU as ammunition. The long awaited judgment of the Court of Justice of the EU in Huawei Technologiesattempts to put an end to the war by striking a careful balance between protection for SEP holders on the one hand and undue delay for implementers in bringing their products to the market on the other.
The judgment builds on the previous decisions of the European Commission in relation to previous cases involving Samsung and Motorola but provides more detailed guidance and welcome clarity to both SEP holders and implementers as to what steps each must take in order to retain either the right to request, or the right to object to a claim for, an injunction preventing use of an SEP. Significantly, it reaffirms that an alleged infringer cannot be criticized for challenging, or insisting on reserving the right to challenge, in any negotiations the essentiality or validity of the SEP(s) in question.
The judgment holds that an owner of SEPs who has given a fair, reasonable, and non-discriminatory undertaking may be abusing its dominant position by seeking an injunction against an alleged infringer, unless the SEP holder alerts the alleged infringer and provides a specific written offer for a license on FRAND terms. However, if the SEP holder follows these steps, it may seek an injunction if the other party continues to use the SEPs in question and fails to respond “diligently” to the SEP holder’s offer “in accordance with recognised commercial practices in the field” and “in good faith.” If the alleged infringer adopts “delaying tactics,” then it will lose the right to object to a claim for injunctive relief as an abuse of a dominant position.
Furthermore, the alleged infringer may only allege that an action for a prohibitory injunction is an abuse of a dominant position once it has “promptly” submitted in writing a “specific counter-offer that corresponds to FRAND terms.”
Despite providing welcome clarifications, the Huawei Technologies judgment leaves a number of questions unanswered, however. Moreover, national courts (and eventually the Unified Patent Court) will be required to apply the Huawei Technologies framework to the specific facts of each particular application for an injunction by a SEP holder. The possibility of further references to the CJEU therefore remains.