nitpickergermany
3 July 2020PatentsRory O'Neill

German Supreme Court releases ‘pro-patent owner’ Sisvel/Haier judgment

The German Federal Court of Justice’s judgment in Sisvel v Haier establishes a more pro-patent owner standard for FRAND licensing negotiations than seen in Germany before, argued lawyers for patent pool operator  Sisvel.

But lawyers representing Chinese smartphone maker  Haier said the decision would contribute to the already-existing “overprotection” in Germany and negatively impact consumers.

The court  ruled in favour of Sisvel in May, but its full reasoning for the decision was not handed down to the parties until Wednesday, July 1.

At the heart of the court’s reasoning is the standard an implementer must meet to prove they are a “willing licensee” in negotiations over a fair, reasonable, and non-discriminatory (FRAND) licence.

According to the Federal Court of Justice, the lower Dusseldorf Higher Regional Court wrongly accepted that Haier was a willing licensee based on a 2013 email from its IP director to Sisvel.

In that email, the Haier director “merely expresses the hope” that the two parties could enter into licensing negotiations, and asked about a promised discount if the licence was agreed in a timely fashion.

“From the plaintiff's objective point of view as a recipient, the defendants did not—and certainly not clearly and unambiguously—indicate that they were prepared to conclude a license agreement on FRAND terms,” read a translated version of the judgment, seen by WIPR.

The court endorsed the view of Justice Colin Birss of the English Court of Appeal, who wrote in his 2017 decision in Unwired Planet v Huawei that a “willing licensee must be one willing to take a FRAND licence on whatever terms are in fact FRAND”.

Expanding on that view, the court said: “the infringer, for his part, must clearly and unequivocally declare his willingness to conclude a licence agreement with the patent proprietor on reasonable and non-discriminatory terms and must also subsequently participate in the licence agreement negotiations in a targeted manner.”

The judgment also clarified that patent owners are not obligated under their FRAND commitment to offer “uniform” licensing terms to all interested parties.

Haier had criticised Sisvel throughout the trial for the disparity in the terms offered by Sisvel compared to other companies.

“As in other cases of (possible) abuse of a dominant position, the dominant patentee is not in principle obliged to grant licenses in the manner of a ‘uniform tariff’ which grants equal conditions to all users,” the judgment said.

'Landmark' for FRAND licensing

Lawyers for Sisvel said the judgment strikes a blow against so-called ‘hold-out tactics’ on part of ‘implementers’ looking to use technology covered by standard-essential patents (SEPs).

Throughout the case, Sisvel pointed the finger at Haier for delaying negotiations on a licence for its SEPs.

Cordula Schumacher, partner at  Arnold Ruess and a member of the team representing Sisvel, said the judgment will result in a “big change in how German courts adjudicate fair, reasonable, and non-discrimination (FRAND) issues”.

The standards laid down by the court are “much more pro-patent owner than what the case law used to be,” she added.

“The court stated many times that a willing licensee has to take actively every step necessary to get the licence, this includes to put an actual—fair and reasonable—offer on the table,” said Florian Cordes, Sisvel’s head of European IP litigation.

“This is definitely different from what we’ve seen from the German courts so far,” Cordes added.

He said the guidelines laid down by the court would strengthen patent owners’ hand in negotiations, and make it much more difficult for implementers to engage in hold-out tactics during licensing negotiations.

Speaking to WIPR, Wolfgang Straub, partner at Klaka and a member of Haier’s legal team, agreed the decision was a "landmark" for FRAND licensing, but said the court had failed to strike the right balance between the interests of the patent owner and that of the public.

In Straub’s view, the decision is in line with “the German mainstream, which is already rather pro-patent owner”.

He argued that the Federal Court of Justice’s ruling would add to the “overprotection” in German system, and that this would have an impact on what products were available to consumers.

“This will have a strong impact on the future licensing of SEPs,” Straub said. Commenting on the court’s citing of Birss, he said the facts in this case were “totally different to what Justice Birss had to decide upon”. In Straub’s view, the court “disregarded the differences” between the two cases and that it was “not easy to draw parallels”.

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories sent like this straight to your inbox.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Patents
11 August 2020   Chinese electronics manufacturer Haier has filed a constitutional challenge to a landmark ruling in favour of patent pool operator Sisvel.
Patents
30 September 2020   China has published new guidelines on antitrust issues associated with patent pooling and the licensing of standard-essential patents.
Patents
5 November 2020   Lawyers for Conversant Wireless are claiming a “significant victory” over German automobile manufacturer Daimler in a connected cars patent dispute in Munich.