BGH concretises FRAND case law

If a patent of a patent proprietor is "standard essential", a market participant taking into account an industry standard would infringe this patent, which would give the proprietor an unfair advantage. To compensate for this, the holder of a standard essential patent (SEP) is obliged to grant licences to interested market participants under "fair, reasonable and non-discriminatory" (FRAND) conditions.

Besides the question of which conditions are actually fair, reasonable and non-discriminatory, problems repeatedly arise in practice when concluding the licence contract. The new BGH judgement dealt with the obligations and rights of the two possible contracting parties when concluding the contract.

In doing so, the BGH adds some important aspects to ist FRAND-Einwand II Objection I decision in its FRAND Objection II decision of 24 November 2020 (KZR 35/17). In doing so, the decision "ZTE vs. Huawei" (C-170/13) of the ECJ was taken into account, in which the ECJ had interpreted Art. 102 TFEU and determined which conditions must be fulfilled for a dominant company to assert rights arising from an SEP by way of an infringement action without abusing its market position.

In the case before the BGH, the owner of an SEP as plaintiff and the defendant, which infringed the SEP, could not agree on a FRAND licence agreement. In essence, the BGH confirmed the principles of the ECJ judgment and added further points. The BGH explicitly states that the owner of the SEP does not abuse its market power if the infringer, who has been made aware of the infringement and the willingness to license, has not unequivocally indicated that it will seek a licence FRAND terms.

With regard to the ECJ judgment, it was stated that the principles established there can serve as conditions for the SEP holder to rule out abusing its market power. However, the BGH specifies circumstances under which stricter or less strict behavioural obligations of the SEP holder are justified.

Overall, the ruling provides both parties with guidelines under which contractual negotiations can take place and at the same time brings the BGH's case law in line with that of the ECJ.

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