Federal Supreme Court's decision in Sisvel v Haier moves Germany closer to the UK?
Written By
Richard Vary
Partner
UK
I specialise in patent disputes in the technology and communications industry.
The Federal Supreme Court's Cartel Senate has given its written reasons in the Sisvel v Haier case. In two areas, it seems that Germany has moved closer to the opinion of the Court of Appeal in Unwired Planet. The Senate found that discrimination is not hard-edged: an offer to a licensee at a higher rate than the rate paid by another licensee need not necessarily be discriminatory. It also adopted a comment made by Mr Justice Birss: that a willing licensee is one who is willing to accept a license on FRAND terms, whatever FRAND may be.
The decision is also likely to have immediate relevance in the automotive cases before the lower German courts, where it is argued that royalty rates paid for handsets should act as a cap for royalty rates paid in the automotive sector. The Senate has confined the effect of the "non-discrimination" limb of FRAND to offers which would place the licensee at a competitive disadvantage, within TFEU Art. 102 para. 2, and Sec. 19 para. 2 No. 3 of the German Competition Act.
The case arose after Sisvel asserted patent EP 852 885, a patent disclosing the setup of data connections using different data carriers and carrier services. It was filed in 1996 by Nokia, who informed ETSI that it may be essential to GSM. Nokia sold the patent to Sisvel in 2012. Sisvel gave a FRAND licensing declaration to ETSI in 2013. Sisvel approached Haier and offered a global portfolio licence. The parties could not agree, and in 2014 Sisvel sued Haier at the Regional Court Düsseldorf. In November 2015, Sisvel won at first instance. The court found the patent valid and infringed, and dismissed Haier’s FRAND defence because it found that Haier had delayed the negotiations. In January 2016, the Higher Regional Court Düsseldorf stayed the enforcement of the first instance judgment, finding that the first instance court did not first evaluate whether Sisvel had made a FRAND offer. In the appeal judgment from March 2017, the Higher Regional Court Düsseldorf found the patents valid and infringed, but did not grant the injunction since it considered Sisvel’s offer was not FRAND.
The infringement case was appealed to the Federal Supreme Court. Whilst the matter was under appeal, the Tenth Senate of the Supreme Court confirmed validity of the patent. The matter came before the Supreme Court's Cartel Senate on 5 May 2020 with Prof. Peter Meier-Beck as presiding judge. Sisvel was represented by Prof. Christian Rohnke and Cordula Schumacher, assisted by Eisenführ patent attorneys, and Florian Cordes (in-house). Haier was represented by Peter Baukelmann, Wolfgang Straub and Gulde, patent attorneys. Unusually, the Federal Cartel Office also intervened on the question of dominance and the effect of the PRC's actions. The Federal Supreme Court allowed the appeal. It found that Sisvel's offer to Haier was at a higher rate than a licence granted to another Haier competitor. Sisvel argued that this other licensee was a state owned Chinese phone maker, and was granted a below-FRAND royalty rate after pressure by the PRC government.
The case arose after Sisvel asserted patent EP 852 885, a patent disclosing the setup of data connections using different data carriers and carrier services. It was filed in 1996 by Nokia, who informed ETSI that it may be essential to GSM. Nokia sold the patent to Sisvel in 2012. Sisvel gave a FRAND licensing declaration to ETSI in 2013. Sisvel approached Haier and offered a global portfolio licence. The parties could not agree, and in 2014 Sisvel sued Haier at the Regional Court Düsseldorf. In November 2015, Sisvel won at first instance. The court found the patent valid and infringed, and dismissed Haier’s FRAND defence because it found that Haier had delayed the negotiations. In January 2016, the Higher Regional Court Düsseldorf stayed the enforcement of the first instance judgment, finding that the first instance court did not first evaluate whether Sisvel had made a FRAND offer. In the appeal judgment from March 2017, the Higher Regional Court Düsseldorf found the patents valid and infringed, but did not grant the injunction since it considered Sisvel’s offer was not FRAND.
The infringement case was appealed to the Federal Supreme Court. Whilst the matter was under appeal, the Tenth Senate of the Supreme Court confirmed validity of the patent. The matter came before the Supreme Court's Cartel Senate on 5 May 2020 with Prof. Peter Meier-Beck as presiding judge. Sisvel was represented by Prof. Christian Rohnke and Cordula Schumacher, assisted by Eisenführ patent attorneys, and Florian Cordes (in-house). Haier was represented by Peter Baukelmann, Wolfgang Straub and Gulde, patent attorneys. Unusually, the Federal Cartel Office also intervened on the question of dominance and the effect of the PRC's actions. The Federal Supreme Court allowed the appeal. It found that Sisvel's offer to Haier was at a higher rate than a licence granted to another Haier competitor. Sisvel argued that this other licensee was a state owned Chinese phone maker, and was granted a below-FRAND royalty rate after pressure by the PRC government.
