The ECJ Huawei–ZTE Decision: En Route to Ending Hold-Out?

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Dina Kallay, Oct 27, 2015

On July 16 2015, the European Court of Justice issued its much-awaited decision in the Huawei-ZTE matter (“Decision”), in reply to questions referred by the German Landgericht Düsseldorf court. The Decision involved a Standard Essential Patent dispute between two telecommunications companies manufacturing smartphones.

The main questions addressed by the Decision focused on: (1) whether, or under what circumstances, an Essential Patent holder who provided a Fair Reasonable and Non-Discriminatory access assurance may abuse a dominant market position, where it enjoys one, if it brings an action for injunction against an infringer who has declared itself willing to negotiate towards a license; (2) what are the particular qualitative and/or time requirements needed to substantiate the infringer’s “willingness to negotiate;” and (3) what are the particular requirements for the Essential Patent holder’s initial offer, if any.

Notably, these questions were raised against the background of the German Orange-Book-Standard decision, which focused only on the willingness of an infringer to conclude a license on FRAND terms in considering whether an “abuse of dominance” defense is available. However, the ECJ chose not to adopt the Orange-Book standard. Instead, the Decision provides a new procedural framework that looks at both the Essential Patent Holder and the infringer…

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