In three Düsseldorf Regional Court decisions in Unwired
Planet v. Samsung dated 19 January 2016 (docket number 4b O
120/14, 4b O 122/14 and 4b O 123/14) the Court found that the
German parts of Unwired Planet's European patents EP 1 230 818,
EP 2 485 514 and EP 2 119 287 (the Patents) were essential for GSM
and LTE standards and were infringed by Samsung. The Court ordered
Samsung to provide information and to render an account of past
sales in Germany.
The judgments are of particular interest, as they address
"portfolio splitting" in the context of SEPs and a FRAND
determination. Portfolio splitting refers to the assignment of some
of the patents in a portfolio, so that they are held by different
licensors who can negotiate licensing agreements separately. This
point arises as the Patents, which were SEPs, had been assigned to
Unwired Planet and were only some of the portfolio of SEPs of the
assignor (who joined the proceedings as a third party
The agreements governing the assignment of the Patents to
Unwired Planet set out that the assignor's FRAND obligations
had to be adopted by the new proprietor. Unwired Planet, therefore,
issued a separate FRAND declaration to ETSI. Samsung argued that
the assignments were in breach of European competition law Articles
101 and 102 of the Treaty on the Functioning of the European Union
("TFEU") which relate to agreements between undertakings
and abuse of dominant position, respectively. Moreover, Samsung
argued that splitting ownership of the SEPs and licensing the
portfolios separately was to increase the total royalties recovered
under the SEPs and that this would be in breach of FRAND
obligations. The Court rejected Samsung's arguments and held
that the assignment to Unwired Planet was not invalid under Art 101
or 102 TFEU. The Court in particular rejected that the object of
the assignment was to establish excessive pricing in the market, in
particular pricing that exceeds the FRAND benchmark. The Court also
rejected that it was illegitimate for a SEP proprietor to seek to
acquire a better position in the negotiation process by splitting
up its SEP portfolio. Although assignment of some SEPs to a
non-practising entity (such as Unwired Planet) eliminates
cross-licensing negotiations on those SEPs, the Court rejected the
argument that this lead to an imbalance of the FRAND negotiation
Moreover, the SEP proprietor is not obliged to continue a
certain licensing practice that the former SEP proprietor had
implemented prior to the assignment. Therefore, as long as the
overall royalty rate payable for the use of the standard(s) is fair
and reasonable, the splitting of a SEP portfolio is legitimate,
even if licensees of the new SEP proprietor have to pay higher
royalties than licensees of the previous SEP proprietor.
With this recent decision, the Düsseldorf Regional Court
has rejected arguments that "portfolio splitting" is, by
its nature, anticompetitive. It has also rejected arguments that
assignment of only some SEPs in a portfolio is in breach of FRAND
obligations, even if the assignment is made in order to acquire a
better negotiating position and generate an increased royalty rate,
so long as there is no clear indication that the claimed overall
royalties exceed what is FRAND.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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On 8 September 2016 (C-160/15), the CJEU ruled that the posting of a hyperlink to copyright-protected works located on another website does not constitute copyright infringement when the link poster does not seek financial gain.
The chapter on the UK summarises the IP court and litigation system in the UK, recent developments in relation to IP law and practice, the forms and availability of IP protection and trends and outlook in the IP sphere.
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