Tuesday, December 19, 2017

The Düsseldorf Court of Appeals' Decision in SISVEL v. Haier

Christopher Weber published a post on the IPKat blog last month discussing a judgment of the Düsseldorf Oberlandesgericht (decided in March, but only recently published) addressing the procedure SEP owners and implementers should follow in the wake of the CJEU's decision in Huawei v. ZTEHere is a link to the full text of the decision, in German; I have not yet read all of it myself, so I may have more to say about it in due time.  For now, I'll mostly just note a couple of important points made by Mr. Weber:

1.  According to Mr. Weber, the court held that the patent owner's claim for damages is limited to a FRAND royalty, a conclusion he describes as "an important part of the decision."  Whether this is a change from previous German law, however, is not so clear to me.  As noted here, a previous decision had held only that the amount of damages would be constrained by the FRAND amount if the patentee had not made a good-faith FRAND offer.  I think that's what the Düsseldorf court is getting at too in paragraphs 350 and 351 of the decision, and I'm not sure this means that FRAND constrains the amount of damages if the implementer is the one in default of its obligations under Huawei (but it would be interesting to hear more about this issue).  More generally, the question of whether a FRAND royalty is less than a reasonable royalty (or whatever other monetary remedy would be forthcoming, were the patent in suit not FRAND-committed) is an important one.
 
2.  Mr. Weber also provides an interesting discussion of the court's understanding of the parties' respective burdens of proof:
. . . the Court found that the Claimant did not submit an offer in conformity with the FRAND-requirements. None of the offers submitted to the Defendant was non-discriminatory in comparison to license agreements between the Claimant and other licenses on the same patent. FRAND would not mean that each offer has to be similar, but the difference has to be justified in an objective way. If the patent holder did not offer a FRAND-conform license to the infringer, the infringer is not obliged to show his willingness with a counter offer in conformity with the FRAND-principles. The duties established by the ECJ are not independent from each other. This highlights a certain difference to case-law from other jurisdiction: Quite obviously German courts think that the letters "ND" are points that need to be discussed separately from "FR". An offer may be fair and reasonable but still be discriminatory.
In principle, the patent infringer bears the burden of proof for the fact that the license offer was not in conformity with the FRAND principles not only under German procedural rules but also under European Competition law. However, the patentee bears the subsidiary burden of proof ("sekundäre Darlegungslast") about the details of the FRAND-license agreements with third licensees. . . .
The Court then held that the offer of the Claimant to conclude a FRAND-license agreement discriminates the Defendant in comparison to the relevant license agreements with third parties. The fees are exorbitantly higher. . . .
According to Mr. Weber, the matter is now on appeal before Germany's Federal Supreme Court. 

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