A preliminary stay of enforcement of a judgment (Sections 719, 707 German Civil Procedural Code) is not as such justified on the basis of a potential upcoming change of the case law, in particular not in view of a possible change of the requirements for successfully raising the compulsory license objection under antitrust law (as established by the German Federal Supreme Court in the decision “Orange-Book-Standard”) due to a respective referral procedure with the Court of Justice of the European Union (CJEU).
If and to what extent the CJEU will further develop and/or modify the requirements for successfully raising the compulsory license objection is not clear. Even if these requirements were changed, the Karlsruhe Appeal Court assumes that at least a license offer and winding up of past infringement will still be held necessary.
In the case at hand, plaintiff had filed a complaint against defendants based on alleged indirect infringement of the patent-in-suit, which it considered to be a standard essential patent (SEP) under the UMTS standard and for which it felt bound by a respective FRAND declaration. Defendants had argued that the patent-in-suit was neither infringed nor valid. However, in the alternative, defendants declared to be generally willing to take a license under FRAND conditions and thus raised the compulsory license objection based on antitrust law.
The Mannheim District Court found for patent infringement. Further, it rejected a requested stay of the proceedings even in view of the prior referral of another case by the Dusseldorf District Court to the CJEU regarding the consistency of the requirements for raising the compulsory license objection according to the decision “Orange-Book-Standard” and according to following decisions by the Appeal Courts with European antitrust law. The Mannheim District Court found that the present proceedings were different since the defendants had not even made an offer of taking a license (like in the Dusseldorf proceedings) but only declared their general willingness to take a license under the patent-in-suit without showing a serious willingness to negotiate. Because a general willingness to take a license upon judicially confirmed infringement and validity of the patent-in-suit is a mere matter of course, the Mannheim District Court did not hold likely that this behaviour would be held sufficient by the CJEU for successfully raising the compulsory license objection. Furthermore, other than in the Dusseldorf case, it was not in any event clear whether the industry standard at hand did require the attacked actions of defendants.
Subsequently, with respect to the enforcement of the Mannheim District Court’s first instance judgment, the Karlsruhe Appeal Court further rejected defendants’ request for a preliminary stay of the enforcement of the first instance judgment. According to the case law, a preliminary stay of enforcement measures according to Sections 719, 707 German Civil Procedural Code can only be reached if it is evident that the decision will be lifted on appeal. The Karlsruhe Appeal Court negated this requirement also in view of the above mentioned pending referral with the CJEU. According to the Karlsruhe Appeal Court, the requirements of “Orange-Book-Standard” decision still apply, and these requirements, i.e. (i) an unconditional, legally binding offer for concluding a license agreement (which cannot be rejected due to antitrust considerations) and (ii) winding up of past infringing acts in particular by payment of license fees for the past or providing a respective security, were uncontestably not met in the case at hand. Further, with respect to the uncertainty if and how the CJEU will modify these requirements, the Karlsruhe Appeal Court assumed that in any event at least a license offer and winding up of past infringement will still be held necessary. Both requirements were not met by defendants.
The present decision shows that, despite the pending referral to the CJEU regarding the requirements for successfully raising the compulsory license objection, German instance courts are still reluctant to use a less strict standard than in the “Orange-Book” decision – at least until a final decision is rendered by the CJEU. Thereby, the application of very strict requirements for a preliminary stay of enforcement measures complies with the practice of the instance courts, in this respect.
Following this approach, on the one hand, owners of SEPs presently may expect to be able to preliminary enforce a first instance judgment based on that SEP. On the other hand – in particular in view of the latest decision of the European Commission regarding Motorola Mobility’s violation of antitrust law by forcing Apple to sign an unfavourable license agreement by means of posing a threat of enforcing an injunction against Apple on the basis of a SEP – patent holders might need to consider risks of liability based on such enforcement in case the CJEU will significantly ease the requirements for raising the compulsory license objection.