Just before the Federal Court of Justice’s “FRAND Defence II”[BR1] decision was published, the Higher Regional Court Karlsruhe published its appellate decision in the dispute between Sisvel and Wiko surrounding LTE-compliant mobile phones (decision of 9 December 2020, 6 U 103/19). The judgment confirms the first instance decision, which had dismissed Wiko’s FRAND defence. Once again, the defendant was considered an unwilling licensee.
For a convenience translation of the relevant passages into English, click here.
I.Willing licensee: strict test
The Higher Regional Court (the “Court”) confirms the Federal Court of Justice’s position on the “willing licensee” requirement for SEP implementers.
1.Infringer must be “willing licensee” at all times
As part of the “Huawei/ZTE” criteria laid out by the Court of Justice of the European Union, an infringer must declare its willingness to take a FRAND licence in order to successfully raise the FRAND defence against an SEP holder suing for infringement. Germany’s Federal Court of Justice takes this to mean that the prospective licensee must show sufficiently willing behaviour at all times and work purposefully towards concluding a licence agreement.
2.Counteroffer required once initial offer not “evidently un-FRAND”
The Higher Regional Court Karlsruhe decided that Wiko could not be considered a willing licensee, as it supposedly had pursued delaying tactics and provided “evidently un-FRAND” counteroffers to Sisvel. By this finding, the Court explicitly distanced itself from the Higher Regional Court Düsseldorf’s approach, which requires a fully FRAND-compliant offer by the SEP holder before the infringers’ counteroffer becomes relevant (Higher Regional Court Düsseldorf, decision dated 17 November 2016, I-15 U 66/15, Sisvel v. Haier).
In Karlsruhe’s view, if the SEP holder’s offer is not “evidently un-FRAND” and the SEP holder has provided enough information on its licensing programme, then the infringer is in principle required to issue its own counteroffer. Otherwise the infringer is not considered a willing licensee. Even if the infringer is not yet in a position to issue its own counteroffer, e.g. because this would require information not yet provided by the SEP holder, the infringer must still actively pursue licensing negotiations in a constructive manner in order to be considered a willing licensee.
II.No stay until CJEU’s decision in “Nokia/Daimler”
In November 2020, the Regional Court Düsseldorf referred several FRAND-related questions which arose in Nokia v. Daimler to the Court of Justice of the European Union (CJEU) for a preliminary opinion (for more information, click here). In the present case, Wiko asked the Higher Regional Court Karlsruhe to stay the proceedings until the CJEU had rendered its decision.
The Court did not consider a stay necessary. In particular, the Court explained that it did not think it likely that the CJEU would stipulate criteria for abusive behaviour by the SEP holder which would change the outcome of cases like the present one, in which the infringer is found to pursue delaying tactics.
The decision provides further interpretation of the Federal Court of Justice’s strict “willing licensee” test, particularly focusing on the implementer’s side. Furthermore, the decision supports plaintiffs who object to a stay of the proceedings simply because of the pending CJEU referral in Nokia v. Daimler. Particularly in SEP litigation before the Regional Court Mannheim, for which Karlsruhe has appellate jurisdiction, a stay has become much less likely.