On 29 January 2016 the Mannheim Regional Court granted an injunction against HTC Germany for infringement of NTT DoCoMo’s European patent EP 1 914 945, which was found to be essential for UMTS. The decision is of particular interest because it is the second published decision in which the Mannheim Regional Court applied the guidance given by the European Court of Justice (“ECJ”) in its landmark case Huawei vs.ZTE (C-170/13) regarding the requirements for a FRAND defence (for the first decision see Mannheim Regional Court rejects FRAND defence in its first ruling on the issue following the ECJ ruling Huawei vs. ZTE).
With reference to the decision of the Duesseldorf Regional Court in the Sisvel vs. Haier case of 3 November 2015 (see Duesseldorf Regional Court discusses requirements for FRAND defence and grants injunction based on SEP in Sisvel vs. Haier [case 4a 144/14]) the Mannheim Regional Court did not review whether NTT DoCoMo’s initial license offer was actually FRAND. In the court’s view it is sufficient if the initial license offer is not evidently in breach of FRAND requirements. Since NTT DoCoMo passed this threshold, it was up to HTC to make a prompt counter-coffer and provide a security. However, in the court’s view HTC failed to fulfil these obligations and, like in its first decision on this issue, dismissed the FRAND defence and granted the injunction.
This may be a deviation from the view of the Higher Regional Court of Duesseldorf, which had recently suspended enforcement of the judgment in the Sisvel vs. Haier case, because the SEP-holder’s initial license offer had not been reviewed for compliance with FRAND requirements by the Duesseldorf Regional Court (decision of 13 January 2016, case 15 U 65/15 – Sisvel vs. Haier).
Obligations of the SEP-holder
According to the requirements set by the ECJ in the case Huawei vs. ZTE the Mannheim Regional Court first assessed whether NTT DoCoMo put HTC on notice prior to bringing the action. The Court held that to fulfil this obligation the SEP-holder has to specify the patent on which the claim is based and declare that this patent is declared essential to the relevant standard. Furthermore, the alleged infringer must be put in a position to understand why the SEP-holder assumes that the alleged infringer makes use of the teaching of the patent in dispute. In the Court’s view the SEP-holder can fulfil this obligation by providing claim charts. Here, the court takes the position that the SEP-holder is under no obligation to provide claim charts for all standard essential patents that are included in the offered license. In the court’s view it is sufficient, if the SEP-holder provides claim charts for only some exemplary patents.
The court then turned to the question whether the license offer made by NTT DoCoMo was FRAND. Here, the court expressed its opinion that under the ECJ decision Huawei vs. ZTE the national courts are not obliged to assess in detail whether the SEP-holder’s initial license offer was in fact FRAND. According to Mannheim it is sufficient if – on the basis of a summary examination – the license offer is not evidently in breach ofFRAND requirements. The court held that the SEP-holder merely has to specify the adequate royalty rate and the basis for the calculation of the royalty rate in a way that the alleged infringer is put in a position to understand – on the basis of objective criteria – why the SEP-holder is convinced that his offer is FRAND.
In the case at hand, NTT DoCoMo’s license offer covered patents that were part of the WCDMA “Sipro” license pool as well as the LTE “Via” license pool. In its license offer as well as during subsequent discussions with HTC, NTT DoCoMo had specified the share of its patents in the aforementioned patent pools, calculated the royalty rate for using NTT DoCoMo’s UMTS and LTE patents based on the royalty rates for licensing all patents in the pools and specified the overall royalty rates for licensing SEP’s for the WCDMA and LTE standards. By doing so, NTT DoCoMo had made a license offer that was in the court’s view at least not evidently in breach of FRAND requirements.
Obligations of the alleged infringer
Since NTT DoCoMo’s initial offer was sufficient under the standards established in Huawei vs. ZTE, it was now up to HTC to accept the offer or make a counter-offer which is FRAND. In the case at hand, HTC had made a counter-offer 1 ½ years after the initial license offer by NTT DoCoMo and half a year after NTT DoCoMo filed its lawsuit in Mannheim. In the court’s view, this was too late. The court clarified that an alleged infringer can only raise the FRAND defence if the counter-offer is made without delay taking into account the circumstances of the respective case.
Moreover, HTC did not provide any security after rejecting NTT DoCoMo’s license offer, which was another reason for the court to dismiss the FRAND defence and grant the injunction.
With this recent decision, the Mannheim Regional Court provided further clarification on the requirements of a FRAND defence in Germany. With this guidance, it appears advisable for defendants to present a counter-offer as soon as possible in all cases, where the SEP-holder’s initial license offer is not obviously in breach of FRAND requirements.