In a judgment dated 31 March 2016 the Düsseldorf Regional
Court (docket number 4a O 73/14), granted Saint Lawrence
Communications ("SLC") an injunction
against Vodafone to restrain the offering/selling of smartphones.
European Patent EP 1 125 276 was found to be a SEP for the Adaptive
Multi-Rate-Wideband Standard (AMR-WB-Standard). Five further
parallel decisions were rendered the same day (docket numbers 4a O
126/14, 4a O 127/14, 4a O 128/14, 4a O 129/14 and 4a O 130/14).
HTC, because of its delivery of smartphones to Vodafone, was third
party intervener participating in the proceedings. The court
considered SLC's initial offer to be FRAND and dismissed
Vodafone and HTC's FRAND defence.
The court stated that the paragraph 61 requirement of Huawei
v ZTE requiring notification of the defendant prior to lodging
the action can in principle either be satisfied by notification
prior to lodging or, alternatively, by lodging the action and
subsequently delaying the advance payment of court fees (which is
required under German law for the service of the action) in order
to render the notification in the meantime. In this case, neither
had been done. However, since the action was started in 2014, prior
the CJEU judgment in Huawei v ZTE, the court considered,
in such "transitional cases", notification can be made
good by way of service of the complaint
The court held the claimant's offer to be FRAND, being in
line with established licensing practice.
The claimant had presented to the court the (anonymised)
licensing agreements of six mobile telecommunication companies with
a comparable royalty. In the Court's view, there was no
sufficient indication that the royalty sought was not in line with
the commercial practice in the mobile communication sector. Also a
comparison with the (per patent) royalty of the SIPRO-pool also
offering SEPs to the AMR-WB-standard did not convince the court
that the claimed royalty was not FRAND.
The court further held that offering of a worldwide portfolio
licence is in principle appropriate. Licensing agreements are
usually concluded on a worldwide basis, cover whole portfolios of
patents and are concluded between groups of companies.
In terms of the specifying the way the royalty is calculated, as
required under Huawei v ZTE (para. 63), the court held
that this requirement should not be interpreted too strictly. In
particular, the SEP-proprietor does not have to present a
mathematical calculation of the royalty rate. It is, therefore, in
principle sufficient to disclose the basic considerations that led
to the amount of the claimed royalty. SLC was held to have
fulfilled this obligation by referring to a standard licensing
royalty and its acceptance in the market.
Vodafone itself neither presented a counter-offer nor provided
security. As SLC's initial licensing offer was held to be
FRAND, the Court left open the question as to whether the defendant
also has to respond with a counter-offer, if it cannot be
determined that the SEP-proprietor's initial offer was actually
FRAND (see below for discussion of the earlier decisions of the
Mannheim Regional Court on this subject).
The Court then dealt with the counter-offer provided by the
intervening third party HTC. The Court held the SEP-proprietor is
not required to send a notification prior to bringing the action.
However, the SEP-proprietor has to make a licensing offer if a
request is made by a supplier, which was done here. Further, the
court held SLC's initial licensing offer to HTC to be FRAND and
pointed out that the offer did provide that the royalty could be
made subject to a separate court's review after conclusion of
the licensing agreement. If such a stipulation was present, it is
unlikely that the initial offer would be considered not to be
The Court found HTC's three counter-offers in several
respects not to be FRAND, the first two on the ground of lack of
substance and geographical limitation to Germany. The third
counter-offer was late and was also again criticized on the ground
of geographical limitation to Germany. In addition, the court
criticised HTC's security as being both late and too low, since
it covered only Germany. As SLC could seek a worldwide licence, it
was said that the security had to match this geographical
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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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