Just before the publication of the FRAND Defense II judgment of the Federal Court of Justice, the Higher Regional Court of Karlsruhe published its appeal decision in the dispute between Sisvel and Wiko concerning LTE-compatible mobile phones (decision of December 9, 2020, 6 U 103/19). The judgment confirms the first instance decision which rejected Wiko’s FRAND defense. Again, the defendant was viewed as a reluctant licensee.
For a convenient translation of the relevant passages into English, click here.
I. Voluntary licensee: strict criterion
The Superior Regional Court (the “Court”) upholds the position of the Federal Court of Justice on the “voluntary licensee” requirement for SEP performers.
1. The infringer must be a “consenting licensee” at all times
As part of the “Huawei / ZTE” criteria set out by the Court of Justice of the European Union, an infringer must declare his willingness to take out a FRAND license in order to successfully raise the FRAND defense against a holder of SEP bringing an action in counterfeit. The German Federal Court of Justice considers that this means that the future licensee must at all times demonstrate sufficiently voluntary behavior and work in a targeted manner towards the conclusion of a license agreement.
2. Counter-offer required once the initial offer is not “obviously not FRAND”
The Higher Regional Court in Karlsruhe ruled that Wiko could not be considered a willing licensee because it allegedly pursued delaying tactics and provided “obviously not FRAND” counter-offers to Sisvel. By this finding, the General Court has explicitly distanced itself from the approach of the Higher Regional Court of Düsseldorf, which requires a fully FRAND compliant offer from the holder of the SEP before the counter-offer of the counterfeiters becomes relevant (Higher Regional Court of Düsseldorf , decision of 17 November 2016, I-15 U 66/15, Sisvel v. Haier).
According to Karlsruhe, if the offer of the holder of the SEP is not “clearly non-FRAND” and the holder of the SEP has provided sufficient information about his license program, the infringer is in principle obliged to issue his own counter -offer. Otherwise, the infringer is not considered a consenting licensee. Even if the infringer is not yet in a position to issue his own counter-offer, for example because this would require information not yet provided by the holder of the SEP, the infringer should still actively pursue the license negotiations in a constructive manner. in order to be considered a consenting licensee.
II. No suspension until the CJEU decision in “Nokia / Daimler”
In November 2020, the Düsseldorf Regional Court referred several FRAND-related questions that arose in Nokia vs. 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 in Karlsruhe to stay the proceedings until the CJEU delivered its decision.
The Court did not find that a stay was necessary. In particular, the Court explained that it did not think it was likely that the CJEU would stipulate criteria for abusive behavior on the part of the holder of the SEP that would alter the outcome of cases like this one, in which the counterfeiter uses delaying tactics.
The decision provides a more in-depth interpretation of the Federal Court of Justice’s strict “voluntary licensee” test, with particular emphasis on the performer side. In addition, the decision supports complainants who oppose the suspension of the proceedings simply because of the pending referral to the CJEU in Nokia vs. Daimler. Particularly in the SEP dispute before the Mannheim Regional Court, for which Karlsruhe has jurisdiction on appeal, a stay has become much less likely.