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Sisvel v Haier: SEP Case Law from Germany

The SEP negotiation framework is a multi-faceted one since it involves Patent Law, Competition Law and Contract Law considerations. India does not have a SEP negotiation framework like the one laid down by the CJEU in Huawei v ZTE. [The Delhi High Court, in Ericsson v CCI, has made a reference to the CJEU judgment in Huawei v ZTE].

It is not that the CJEU judgment has removed all the ambiguities in the SEP negotiation framework. On the other hand, the CJEU judgment has set out a framework which is subject to the interpretation of the national courts of EU. The Federal Court of Justice of Germany (BGH) has delivered a judgment interpreting the Huawei v. ZTE framework. The judgment is quite significant considering the catena of SEP-related cases decided by various German courts. This is the first judgment of BGH on a FRAND dispute post – Huawei v. ZTE. A detailed summary is available here. This post is only meant to highlight some key aspects.

Sisvel v Haier, KZR 36/17

On 05 May 2020, the German Federal Court of Justice delivered a landmark judgment that interpreted the FRAND negotiation framework laid down by the CJEU in Huawei v. ZTE.

Key Highlights

The BGH clarified that a patent right will not ipso facto create a dominant position.[1]

The BGH cautioned that the conduct of infringer should reflect genuineness and seriousness as far as FRAND licensing negotiations are concerned.[2] For e.g, conditional declaration of willingness can indicate absence of seriousness on the part of the infringer. [3]

The infringer must be presented with sufficient (and not detailed) information which will enable the infringer to assess the allegation of infringement.[4]

The patent holder is required to provide information on computation of royalty only after the expression of willingness by the infringer. [5]

FRAND royalty rate is not an objective number; it can be a range. [6]

Portfolio licensing does not by itself indicate abuse of dominant position. It can amount to abuse of dominant position if certain conditions are met. [7]

On computation of damages, FRAND royalty can be the basis only when the infringer was a willing licensee [8]

[1] Paragraphs 56, 57, 58

[2] Paragraph 83

[3] Paragraph 96

[4] Paragraph 98

[5] Paragraph 99

[6]  Paragraph 81

[7] Paragraph 78

[8] Paragraph111

Mathews P. George

Mathews is a graduate of National University of Juridical Sciences, Kolkata. His interest in intellectual property was kindled when he bagged the second position in his second year of Law School (in the prestigious Nani Palkhiwala Essay Competition on Intellectual Property). His stint as a student of Prof. Shamnad Basheer further accentuated his interest in intellectual property. Winner of almost a dozen essay competitions in his Law School days, he was involved in various research and policy initiatives relating to intellectual property. Mathews is, currently, based out of Munich, Germany. He had earlier done his LLM in 'IP and Competition Law' from Munich Intellectual Property Law Centre (jointly run by Max Plank Institute for Innovation and Competition, University of Augsburg, Technical University of Munich and George Washington University, Washington).

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