Monday, November 7, 2016

French Court Rejects Unfair Competition Claim Based on Patentee's Compliance with Huawei v. ZTE

In a judgment dated September 20, 2016, the Tribunal de Commerce de Marseille rejected an unfair competition claim filed by Wiko, which markets mobile phones, products, and telecommunications services, against Sisvel, which the court describes as an intermediary between patent owners and implementers.  (Judgment available here, in French.  Hat tip to Professor Nicolas Petit for bringing it to my attention.)  The claim was based on demand letters that Sisvel allegedy sent to to Wiko customers (the French retailers Carrefour, Casino, and LDLC), asserting that any products made by Wiko and other manufacturers that the recipients were offering for sale and that incorporated LTE technology were covered by the LTE patents included in an accompanying offer to license.  The relevant provision of French law is article 1382 of the Code Civil, which from 1804 until October 1 of this year read "Tout fait quelconque de l'homme, qui cause à autrui un dommage, oblige celui par la faute duquel il est arrivé à le réparer," meaning that anyone who intentionally causes harm to another is obligated to pay damages."  (The plaintiff also cited article 858 of the Civil Procedure Code and article 10 bis of the Paris Convention, as well as two cases--a Judgment of the Versailles Court of Appeals of May 20, 2013 (Philips v. CSI) and a Judgment of the Cour de Cassation of May 27, 2015 (Technicolor v. Vestel), of which the court does not explain the significance.)  

In evaluating the claim for relief, the court cites paragraphs 61 and 63 of the CJEU's July 2015 judgment in Huawei v. ZTE, in which that court sets out the conditions a patent owner seeking injunctive relief against the unauthorized use of a FRAND-committed SEP must satisfy in order to avoid liability under article 102 of the TFEU.  (In English translation, these two paragraphs read as follows:  "Prior to such proceedings, it is thus for the proprietor of the SEP in question, first, to alert the alleged infringer of the infringement complained about by designating that SEP and specifying the way in which it has been infringed. . . .  Secondly, after the alleged infringer has expressed its willingness to conclude a licensing agreement on FRAND terms, it is for the proprietor of the SEP to present to that alleged infringer a specific, written offer for a licence on FRAND terms, in accordance with the undertaking given to the standardisation body, specifying, in particular, the amount of the royalty and the way in which that royalty is to be calculated.")  The court then notes that Sisvel wasn't demanding that the recipients cease sales but rather proposed only that they conclude a license "in accordance with the aforementioned jurisprudence of the CJEU," and that the letters conformed to that jurisprudence.  Thus, the sending of the letters didn't violate French unfair competition law.  Unfortunately, though, the court doesn't say anything about what the actual terms of the proposed license were (other than that it informed the recipients that they reserved the right to challenge the patent's validity), or how it knows that the offer satisfied FRAND.

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