Sisvel v Haier: a win for SEP owners
On May 5, 2020, the German Federal Court of Justice (BGH) issued a fundamental and highly anticipated decision on the particularities of enforcing standard essential patents (SEPs) in Germany. It was the first time that the BGH had the opportunity to comment on important practical issues that arose from the Court of Justice of the European Union’s (CJEU) landmark 2015 decision in Huawei v ZTE.
Background
IP asset manager Sisvel sued Haier in 2012, a Chinese manufacturer of mobile devices, for infringing one of its SEPs (EP 852 885). Sisvel sought an injunction to block mobile phones and tablets, sold by Haier, that were implementing the General Packet Radio Service (GPRS) mobile data standard. The patent in suit covered a procedure for the setup of data connections in a mobile communications system that was essential for the GPRS standard.
In December 2012, Sisvel informed Haier of the infringement and offered a portfolio licence for all patents that are essential for the GPRS standard. The licence fee offered by Sisvel was higher than a fee it had previously accepted from Chinese electronics manufacturer Hisense, with the patent pool operator claiming it was pressured by the Chinese authorities into agreeing to a reduced royalty rate.
It took Haier about one year to reply to Sisvel, indicating that it would hope to enter into formal negotiations. The parties did, however, not reach a licence agreement.
In 2014 Sisvel initiated an infringement action before the Regional Court of Düsseldorf, seeking the usual remedies, including an injunction. The court granted all claims and found that Haier had not complied with the requirements of Huawei in order to be able to raise the fair, reasonable and non-discriminatory (FRAND) objection.
Haier successfully appealed the decision, convincing the Higher Regional Court of Düsseldorf to reject most of Sisvel’s claims. Unlike the lower court , the Higher Regional Court found that Haier had complied with its Huawei obligations and could successfully raise the FRAND defence.
According to the court, Haier had sufficiently declared its willingness to take a licence. The court also found that the licence fees that Sisvel offered to Haier were not FRAND because Sisvel had previously agreed to lower rates in separate agreements. As Sisvel had not offered FRAND terms, Haier was not required to accept the licence, the court reasoned.
Reasoning of the BGH
The BGH did not follow the reasoning of the Higher Regional Court of Düsseldorf and reinstated the first instance decision in Sisvel’s favour. The BGH found that the rates to which Sisvel agreed under pressure from the Chinese authorities were not relevant for determining FRAND standards.
The decision is not limited to this aspect. Rather, the BGH used the opportunity to address some other practical issues that are important for SEP enforcement.
Abuse of a dominant position
The BGH found that Sisvel as the owner of an SEP had a dominant position in the market. In case of an SEP infringement, enforcing the usual remedies amounts to an abuse of a dominant position according to the BGH, if:
