Germany's Federal Court of Justice (FCJ) has ruled that a company holding essential patents for a technology standard can be considered dominant, but that refusing to license its patents does not of itself constitute an abuse. The FCJ issued its ruling on 6 May 2009, upholding the decision of the higher district court in Karlsruhe. It found that an unnamed company had used patented technology belonging to Philips without having a license to the standard, and argued that Philips was abusing its dominance by refusing it access to the technology for free. The FCJ found that although it is possible to use a ‘compulsory licence defence' in patent infringement cases, the company would have needed to make an unsuccessful fair and reasonable offer for the licence in order to claim it was the victim of an abuse.
A German court can itself decide what constitutes a fair and reasonable offer for the licence based on submissions of the parties but can also commission independent expert advice. However, in this case, the FCJ did not have to decide what constituted a fair and reasonable offer as the defendant had not put forward any offer at all. Consequently the ground for defence was dismissed and the FCJ ruled that the defendant had to cease using the patents and destroy the relevant products, as well as pay damages for the infringement (the value of which has not been disclosed).