In the context of the patent infringement lawsuit filed by Huawei against ZTE, the Düsseldorf Regional Court has made a reference for a preliminary ruling to the Court of Justice of the EuropeanUnion (CJEU) in Luxembourg.
In this reference, the Düsseldorf court raises five questions, which relate to the applicability of Article 102 TFEU to injunctions sought in a patent court of an EU Member State in infringement actions for breaches of standard-essential patents (SEPs).
This is an extremely important development, which will have consequences going far beyond the patent infringement action launched by Huawei against ZTE in the Düsseldorf court and the parallel proceedings in the Manheim Court. The CJEU is indeed the highest jurisdiction in the EU legal order and its interpretation of EU law, including Article 102 TFEU, is binding on all EU institutions, including DG Competition, but also on the national courts and national competition authorities of the EU Member States. In other words, the answers given by the CJEU to the questions raised by the Düsseldorf court will have far reaching implications for the investigations launched the European Commission, including the Samsung and Google investigations, but also for the numerous patent infringement cases in different Member State jurisdictions where injunctions are at stake.
The questions (translation by courtesy of Florian Mueller) read as follows:
1. Does an SEP owner who declared himself willing, vis-à-vis a standard-setting organization, to grant a license to all comers on FRAND terms, abuse his dominant market position if he seeks injunctive relief from a court of law against a patent infringer despite the infringer having declared himself willing to negotiate such a license
is it a requirement for the presumption of abusive conduct that the infringer has made a binding offer to the SEP owner on terms that the SEP owner cannot refuse without treating the infringer unfairly or discriminatorily and [furthermore require that] the infringer, in anticipation of the license he is seeking already complies with his contractual obligations with respect to past acts of infringement?
2. In the event that a presumption of abuse of a dominant market position may already result from the infringer's willingness to negotiate:
Does Art. 102 TFEU involve specific requirements for said willingness to negotiate in substantive and/or chronological terms? Can such a presumption be based merely on the infringer's (oral) declaration in broad and general terms of his willingness to enter into negotiations or does such a presumption require that the infringer has indeed entered into negotiations, such as by, for example, communicating terms and conditions under which he is prepared to conclude a license agreement?
3. In the event that the [infringer's] submission of a binding offer to conclude a license agreement is a requirement for an abuse of a dominant market position:
Does Art. 102 TFEU involve specific substantive and/or chronological requirements with respect to such an offer? Does the offer have to set forth all of the commercial terms that in accordance with relevant industry practice are usually set forth in such license agreements? Can the offer be conditioned upon actual use and/or validity of the SEP-in-suit?
4. In the event that the infringer's [precontractual] fulfillment of obligations arising from the requested license is a requirement for an abuse of a dominant market position:
Does Art. 102 TFEU involve particular requirements with respect to such acts of fulfillment? Is the infringer required, in particular, to make disclosures relating to past acts of infringement and/or to pay [precontractual] royalties? Can an obligation to pay [precontractual] royalties also be fulfilled by giving security?
5. Do the requirements for the presumption of abuse of a dominant market position by an SEP holder also apply to other remedies for patent infringement (disclosures relating to past infringement, recall [of infringing products from distribution channels], damages)?
These questions cover the key issues that have been at stake in the disputes opposing Apple/Microsoft and Google, and Apple and Samsung, and are thus likely to impact the investigations currently carried out by the Commission.
While nothing should in principle prevent the Commission to continue its investigations (a hearing will for instance take place in the Samsung case in the beginning of May), it seems highly unlikely that the Commission would adopt a decision in this case before the ruling of the Court of Justice of the EU.
As such rulings take on average 16 months to delivered (sometimes more when cases raise complex issues like this one), the Commission will not be in a position to adopt a decision in the Samsung case before the end of Commissioner Almunia's mandate. A settlement would also seem odd in the current context.