FRAND conditions not bound to SEPs in all cases

Düsseldorf, March 26, 2015 – The District Court of Düsseldorf has granted injunctive relief based on a Standard Essential Patent (SEP) – regardless of whether the patent holder provided a license on so-called FRAND terms. The proceedings between the investment fund France Brevets and the mobile phone company HTC concern a patent for a technical standard in the area of Near Field Communication (NFC). The court ruled that a market-dominating position by the patent holder, as required for an SEP, could not be justified in a sufficiently credible way. Thus the proceedings were ready for judgement and no longer pending the decision of the Court of Justice of the European Union on Huawei versus ZTE.

SEPs are property rights relating to essential technologies without which other companies would not have access to the market. Holders of SEPs with a market dominating position are committed to licensing these for fair, reasonable and non-discriminatory fees (so-called FRAND terms).

The ruling of the District Court of Düsseldorf shows that it must be ascertained in each individual case whether a dominant position exists. Only if such a position is established through an SEP are limitations of the claims by the patent holder justified: It is therefore also possible that the patent holder can be obligated to offer the license according to FRAND terms. This ruling states for the first time that SEPs must not automatically entail the need for FRAND licensing terms.

The defendant can appeal against the decision by the District Court at the Higher Regional Court of Düsseldorf within one month. Action for annulment by the defendants is pending against the patent in question at the Federal Patent Court.

Representatives of France Brevets (plaintiff):
Krieger Mes (Düsseldorf): Axel Verhauwen
Cohausz & Florack (Düsseldorf): Gottfried Schüll

Representatives of HTC (defendant):
Hogan Lovells (Düsseldorf): Dr. Martin Chakraborty
Maikowski Ninnemann (Berlin): Dr. Gunnar Baumgärtel