- Case law home
- CJEU decisions
- German court decisions
- Federal Court of Justice - BGH –
- OLG Düsseldorf –
- OLG Düsseldorf – I-2 U 23/17
- Sisvel v Haier – I-15 U 66/15
- Sisvel v Haier – 15 U 65/15
- Canon v Carsten Weser – I-15 U 49/15
- Sisvel v Haier – I-15 U 66/15
- Canon v Sieg/Kmp Printtechnik/Part Depot – I-15 U 47/15
- Saint Lawrence v Vodafone – I-15 U 36/16
- Saint Lawrence v Vodafone – I-15 U 35/16
- OLG Düsseldorf – I-2 U 31/16
- OLG Düsseldorf – I-2 W 8/18
- Unwired Planet v Huawei – I-2 U 31/16
- OLG Karlsruhe –
- LG Düsseldorf –
- Sisvel v Haier – 4a O 93/14
- Sisvel v Haier – 4a O 144/14
- Saint Lawrence v Vodafone – 4a O 73/14
- Unwired Planet v Samsung – 4b O 120/14
- Saint Lawrence v Vodafone – 4a O 126/14
- France Brevets v HTC – 4b O 140/13
- District Court, LG Düsseldorf – 4c O 81/17
- Fraunhofer-Gesellschaft (MPEG-LA) v ZTE – 4a O 15/17
- Tagivan (MPEG-LA) v Huawei – 4a O 17/17
- HEVC (Dolby) v MAS Elektronik – 4c O 44/18
- LG Mannheim –
- LG Munich –
- OLG Munich –
- Dutch court decisions
- Archos v. Philips, Rechtbank Den Haag – C/09/505587 / HA ZA 16-206 (ECLI:NL:RBDHA:2017:1025)
- Koninklijke Philips N.V. v Asustek Computers INC., Court of Appeal of The Hague – 200.221.250/01
- Philips v Wiko, Court of Appeal of The Hague – C/09/511922/HA ZA 16-623
- Sisvel v Xiaomi, Court of The Hague – C/09/573969/ KG ZA 19-462
- Sisvel v Sun Cupid, District Court of The Hague – C/09/582418 HA ZA 19-1123
- Sisvel v Xiaomi, Court of Appeal of The Hague – C/09/573969/ KG ZA 19-462
- English court decisions
- TQ Delta LLC v Zyxel Communications and Ors., EWHC – HP-2017-000045,  EWHC 1515 (Ch)
- Apple v Qualcomm,  EWHC 1188 (Pat) – HP-2017-000015
- TQ Delta LLC v Zyxel Communications,  EWHC 3305 (Pat) – HP-2017-000045
- Unwired Planet v Huawei,  EWHC 711 (Pat) – HP-2014-000005
- Unwired Planet v Huawei,  EWHC 1304 (Pat) – HP-2014-000005
- Unwired Planet v Huawei, EWHC – HP-2014-000005
- VRINGO Infrastructure v ZTE,  EWHC 214 (Pat) – HC 2012 000076, HC 2012 000022
- Unwired Planet v Huawei,  EWHC 711 (Pat) – HP-2014-000005
- Conversant v Huawei and ZTE,  EWHC 808 (Pat) – HP-2017-000048
- Unwired Planet v Huawei, UK Court of Appeal – A3/2017/1784,  EWCA Civ 2344
- TQ Delta LLC v Zyxel Communications UK Ltd. and Ors., UK High Court of Justice – HP-2017-000045,  EWHC 2577 (Pat)
- TQ Delta v Zyxel Communications, UK High Court of Justice – HP-2017-000045 -  EWHC 745 (Pat)
- Unwired Planet v Huawei & Conversant v Huawei and ZTE, UK Supreme Court
–  UKSC 37
- French court decisions
- Irish court decisions
- Italian court decisions
- Romanian court decisions
- National Courts Guidance
- Authors & contributors
HEVC (Dolby) v MAS Elektronik
7 May 2020 - Case No. 4c O 44/18
The claimant, Dolby, operates in the field of audio and video innovation and is the owner of a portfolio of related patents, including a European Patent concerning the encoding and decoding as well as the sequence of digital images. This patent reads on the HEVC standard (Standard Essential Patent, or SEP). Dolby has contributed the patent in question to a pool administered by HEVC Advance, which offers licences to standards users for a significant portfolio of related SEPs of several patent holders.
The Defendant, MAS Elektronik AG (MAS), operates in the home entertainment field and sells articles such as television sets and receivers (set-up boxes, or STBs). These devices are compatible with the DVB-T/T2 standard that, in turn, makes use of the encoding method according to the HEVC standard.
In 2017, HEVC Advance sent a notification informing MAS about the infringement of SEPs included in the pool. On 7 November 2017, HEVC Advanced offered a licence to MAS on basis of its standard licensing agreement.
Since no agreement was reached, Dolby filed a lawsuit against MAS before the District Court of Düsseldorf (Court). Dolby initially moved for a declaratory judgement confirming MAS' liability for damages on the merits and also asserted relevant claims for information. The action was later extended. Additionally, Dolby requested injunctive relief as well as recall and destruction of infringing products.
On 11 July 2018, after the action was filed, Dolby directly approached MAS as well. It shared a list of patents included in its SEP portfolio as well as 'claim charts', mapping a number of patents to the relevant parts of the standard. Dolby also submitted an offer for a bilateral portfolio licence to MAS which the latter did not accept.
In January 2019, MAS presented a counteroffer to HEVC Advance, which included an amount for settlement the past uses. However, MAS did not render accounts for past uses nor provided security.
On 7 May 2020, the Court rendered a decision in favour of Dolby and ordered MAS to (i) refrain from offering or supplying devices and/or means that infringe Dolby's patent in Germany, under penalty up to EUR 250,000 for each case of infringement; (ii) render accounts and information regarding infringing products; (iii) surrender for destruction any infringing product in its possession and (iv) recall infringing products from the market. The Court also recognised MAS' liability to pay for past and future damages.
B. Court's reasoning
The Court found that Dolby was entitled to assert claims arising from the patent-in-suit. The respective patent application was transferred before grant and Dolby was registered as owner in the Patent Register at the moment the patent was granted. MAS did not present any reason to question the validity of the transfer of the patent application to Dolby. 
Furthermore, the Court held that the patent-in-suit is essential (and not only optional) to the improvement process of encoding and decoding of images under the HEVC standard and, therefore, infringed by the devices manufactured and sold by MAS. 
Abuse of dominant market position
Having said that, the Court explained that by asserting claims for injunctive relief as well as recall and destruction of infringing products before court, Dolby had not abused its dominant market position in violation of Article 102 of the Treaty on the Functioning of the EU (TFEU)  .
In the eyes of the Court, Dolby holds a dominant position  . The Court highlighted that owning a patent, even a standard-essential patent, does not constitute per se a condition for market dominance  . That must be assessed case by case. A dominant position will be, as a rule, given if the use of a SEP is considered a pre-requisite to enter a downstream market. This is true also when the SEP is needed for offering competitive products in the downstream market.  In the present case, the implementation of the HEVC was required to make a competitive offering in the STB market  .
Notwithstanding the above, the Court found that Dolby had not abused its dominant market position, considering that it had fulfilled the obligations set forth by the Court of Justice the EU (CJEU) in the matter Huawei v ZTE (Huawei judgment or framework)  .
Notification of infringement
The required notification of the infringement by the patent holder was properly done. The Court understood that HEVC Advance, as the pool administrator, was entitled to do such notification on behalf of the patent holders that contributed patents to the pool. There is nothing in the Huawei judgment that suggests otherwise. 
The Court explained that the notification must, at least, include the publication number of the patent-in-suit and also indicate the infringing products and the infringing act(s) of use.  The notification does not need to contain a detailed (technical or legal) analysis, with reference to standards or claim features, but only present sufficient information that enables the other party to assess the infringement accusation made against it. 
In this case, the notification initially sent by HEVC Advance to MAS was sufficient in terms of content, since it specified the infringing products, and referred to HEVC Advance's patent portfolio and its website containing additional information. The fact that no patent numbers were mentioned was not considered harmful, since this information is publicly available in the pool's website.  Moreover, the Court highlighted that the notification can be a mere formality, if knowledge of the infringement by the implementer can be assumed. In such case, arguing that the notification was flawed, can be considered abusive, as it was the case here. 
Besides the notification made by HEVC Advance, the Court found that Dolby had also made a sufficient notification itself by the letter sent to MAS on 11 July 2018.  The letter fulfilled all requirements in terms of content. The fact that it was sent only after the action was filed was not harmful, since MAS had been already adequately informed by HEVC Advance before.Ibid, para. 759.
Willingness to obtain a licence
Looking at the conduct of MAS after receipt of the notifications of infringement, the Court reached the conclusion that MAS had sufficiently declared willingness to enter into a pool licence with HEVC Advance.  On the contrary, the Court took the view that MAS had not acted as a willing licensee with respect to Dolby's subsequent offer for a bilateral licence. 
The Court explained that, in its licensing request towards the SEP holder, the standards implementer must express its 'serious' willingness to conclude a licensing agreement on FRAND terms  . For this, no strict requirements apply, in terms of content or form; moreover, also an 'implicit behaviour' can suffice  . The implementer is, however, required to react in due course.  Furthermore, 'willingness' must still exist when the patent holder makes his licensing offer  .
The Court held that MAS had expressed willingness to take a pool license from HEVC Advance –although no express request was made–, since "immediately" after receipt of the notification of infringement, MAS started a correspondence with HEVC Advance with the goal to initiate negotiations. 
On the other hand, MAS had not been willing to obtain a bilateral licence from Dolby.  The Court emphasized that the whole conduct of the implementer must be assessed; a 'genuine' willingness to obtain a license must be demonstrated.  This is not given, when -as it had been the case here- the implementer only poses repetitive questions that do not present any constructive remarks and, therefore, do not lead to any progress in the negotiation.  In addition to that, it could be expected that a licensee willing to sign a bilateral agreement with an individual pool member, will have an interest to also engage in discussions with further pool members, especially for assessing the total 'economic burden' for its products, in comparison with a pool licensing agreement.  MAS refrained from doing that. What is more, it made clear in the proceedings that it was only interested in a pool licence.Ibid, para. 765.
SEP holder's offer
Since the Court held that MAS had adequately expressed willingness to sign a pool licence with HEVC Advance, it moved on to examine, whether HEVC Advance's licensing offer to MAS based on its standard licensing agreement was in line with the Huawei framework. Since the Court reached the conclusion that MAS had not been willing to enter into a bilateral licence with Dolby, it refrained from examining the compliance of Dolby's offer with the Huawei judgment in detail.
The Court found that the offer made by HEVC Advance met the Huawei requirements. In terms of form, the fact that the standard agreement sent to MAS had not been signed did not cause any concerns.  In the Court's view, the CJEU requires that the SEP holder's offer contains all usual terms of a licensing agreement, however, no binding offer that could lead to the conclusion of a licence through sole acceptance by the implementer is needed. 
Furthermore, HEVC Advance had sufficiently explained the royalty calculation, in line with the Huawei judgment.  If the patent holder has previously granted licenses to third parties, it has to give more or less substantiated reasons, depending on the circumstances of the individual case, why the royalty it envisages is Fair, Reasonable and Non-Discriminatory (FRAND).  In case that the SEP holder offers licences exclusively based on a standard licensing agreement, it will, as a rule, suffice to establish the adoption of the licensing programme in practice and to show that the specific offer corresponds to the standard licensing agreement.  The more standard licensing agreements signed are shared by the patent holder, the stronger the assumption is, that the offered rates are FRAND. 
The Court emphasized that is not necessary to present the full content of all the licensing agreements already concluded, but only the relevant ones, considering clearly delineated product categories.  Existing licences with cross-licensing-elements, are not relevant in this context, especially, when the implementer does not have any patents himself, as it was the case here.  Accordingly, the Court found that the forty third party agreements disclosed by Dolby in the proceedings were enough in the present case. 
Fair and reasonable terms
Looking at the content, the Court found that the terms of the standard licensing agreement offered by HEVC Advance are fair and reasonable.  As fair and reasonable can be considered terms offered to a willing party, without exploiting a dominant position.  Apart from the royalties, the offer must also prove reasonable with regard to the other terms as well (scope, territory etc.). 
Having said that, the Court held that the royalties charged by HEVC Advance's standard licensing agreement are fair and reasonable.  An indication of that is the fact, that up to January 2020, more than forty licensees selling products in the same category as MAS had taken a license on the same terms, modified sometimes by 'blended rates'.  On the other hand, the fact that lower royalties are charged by a competing patent pool (MPEG LA) does not make the HEVC Advance's rate unreasonable, as FRAND is considered rather to be a range than a specific amount. 
Furthermore, the Court took the view that the limitation of the offered licence to 'practised claims' only (that is those claims of the licenced patents that are essential to the practice of the HEVC standard), is not unreasonable.  This limitation does not present any adverse effect on MAS' business, since the royalty payments correspond to the claims that are actually used by the licensee (and, vice versa, no obligation to pay for claims not used is established). 
Also, in the eyes of the Court, MAS was not able to prove that the lack of an adjustment clause is unreasonable  . MAS failed to establish that respective clauses are common in industry practice; on the contrary, the fact that at least forty parties had signed a licence with HEVC Advance without such clause indicated the opposite.  What is more, the royalty clause is constant. That means that the rate charged will not change if licenced patents expire, but also will remain the same in the case of addition of new patents to the pool that will be automatically covered by the agreement. Insofar, an economic risk for both parties exists. 
Regarding the choice of forum clause contained in the standard licensing agreement, establishing the jurisdiction of courts in New York as well as granting HEVC Advance the right to also choose other venues at its discretion, the Court was not able to conclude any unfair disadvantage for MAS.  The same clause was agreed in many other licensing agreements signed by HEVC Advance with third parties.  In fact, MAS agreed to a similar one in its license agreement with the MPEG LA pool. 
Besides that, the Court was unable to establish any discrimination against MAS through the licence offered by HEVC Advance.  The obligation of equal treatment applies only to aspects that are comparable; even a market dominant undertaking must be allowed to respond differently to different market conditions.  An unequal treatment is to be assessed based on the specific circumstances of each individual case under the goals of competition and can be accepted as lawful, if objectively justified.  Therefore, not every difference in the terms and conditions of a licence can be seen as abusive.  According to the Court, the same principle also applies to the licensing of SEPs. 
Against this background, the Court found that the fact that the pool administered by HEVC Advance updated its terms in a way that an 'uniform licensing regime' no longer exists, since for certain licensees the previous version of the agreement still applies, does not mean that the new standard licensing agreement offered to MAS was discriminatory.  Although, according to the case-law of the Higher District Court of Düsseldorf, a patent holder (and its assignees) is bound to the 'licensing concept' underlying the first ever licence granted, it is allowed to deviate from such 'concept', if this does not lead to a discrimination of either past nor future licensees.  In the Court's view, this was not the case here: The old licensees were offered the possibility to shift to the new terms, and there is no evidence that MAS would be treated worse by the terms of the new standard licensing agreement.  On the contrary, the new royalty calculation leads to a lower licensing burden. 
The Court also took the view, that there is also no discrimination in the way the patent-in-suit is enforced.  MAS argued that it was discriminated, because its competitors or large companies were not sued by members of the HEVC Advance pool for patent infringement. The Court highlighted that refraining from enforcement does not necessarily mean discrimination: the phase of adoption of the relevant standard, the costs and procedural risks involved, the knowledge of the holder regarding the infringement and its extent are factors to be considered.  In the case of HEVC Advance, the initial phase of its existence and limitation of resources are relevant for this assessment. 
Moreover, no discrimination with respect to the amount of the royalty rate or the scope offered was found.  The Court pointed out that the fact that some of the existing licensees have agreed on rates higher than those offered to MAS, could not be used in favour of the latter: as a rule, only those who are treated less favourably can invoke discrimination. 
The Court further held that the 'blended rates' agreed with certain other licensees, did not render the offer made to MAS by HEVC Advance discriminatory either.  These rates mirrored variations due to the difference in products and implementer's profiles and were either offered to MAS or not applicable to his business model. 
Furthermore, the Court found that the 'incentive programme' offered by the HEVC Advance pool, which under specific conditions (especially the signing of a licence at an early point in time) results in discounted rates, is lawful and non-discriminatory.  The same is true with respect to discounts offered for past uses prior to the signing a licence, as it is the case for HEVC Advance  .
Finally, a 10% discount offered by HEVC Advance when a licensee also takes a trademark licence, allowing for the labelling of products with the HEVC trademark, was equally offered to the MAS, so that the Court could not see a discrimination of MAS by such provision in the standard licensing agreement. 
The Court found that MAS' counteroffer was not FRAND.  The offer made by MAS failed to present sufficiently an explanation of why its terms would be FRAND, in view of the terms offered by HEVC Advance. MAS presented only a royalty rate, without making any reference to the rest of the clauses contained in the offer previously made by HEVC Advance, which it alleged to be discriminatory or unreasonable. 
Having found that MAS' counteroffer had not been FRAND, the Court explained that the fact that MAS neither rendered accounts nor provided security did not play any role for its decision. 
C. Other issues
By the facts of the case, the Court concluded that MAS acted culpably, or at least negligently, and, therefore, owes compensation for past and future damages caused by its actions. Moreover, damages should not be limited to a FRAND royalty.  The quantification of the damages will be possible with the rendering of accounts by MAS. 
The lawsuit for revocation of the patent, arguing lack of inventive step, that had not been decided yet, had no likelihood of success, according to the Court's analysis. Therefore, the request for staying the proceedings until a decision on the validity is delivered by the Federal Patent Court was denied. 
-  HEVC (Dolby) v MAS Elektronik, District Court (Landgericht) of Düsseldorf, 7 May 2020, Case No. 4c O 44/18 (cited by www.nrwe.de), paras. 75 et seqq.
-  Ibid, paras. 157-184.
-  Ibid, paras. 186 et seqq.
-  Ibid, paras. 189 et seqq.
-  Ibid, paras. 194 et seqq.
-  Ibid, para. 197.
-  Huawei v ZTE, Court of Justice of the EU, judgment dated 16 July 2015, Case No. C-170/13.
-  HEVC (Dolby) v MAS Elektronik, District Court (Landgericht) of Düsseldorf, 7 May 2020, Case No. 4c O 44/18, paras. 213 et seqq and paras. 221 et seqq.
-  Ibid, para. 210.
-  Ibid, paras. 229 et seqq.
-  Ibid, para. 233.
-  Ibid, para. 759.
-  Ibid, paras. 236 et seqq.
-  Ibid, paras. 760 et seqq.
-  Ibid, para. 237.
-  Ibid, para. 237 and para. 761.
-  Ibid, para. 760.
-  Ibid, para. 238.
-  Ibid, para. 763.
-  Ibid, para. 764.
-  Ibid, para. 765.
-  Ibid, paras. 241 et seqq.
-  Ibid, para. 242.
-  Ibid, paras. 244 et seqq.
-  Ibid, para. 245.
-  Ibid, para. 248.
-  Ibid, para. 255.
-  Ibid, para. 250.
-  Ibid, para. 253.
-  Ibid, para. 249.
-  Ibid, paras. 257 and 258.
-  Ibid, para. 260.
-  Ibid, paras. 264 et seqq.
-  Ibid, para. 268.
-  Ibid, paras. 271 et seqq.
-  Ibid, paras. 280 et seqq.
-  Ibid, para. 284.
-  Ibid, paras. 286 et seqq.
-  Ibid, para. 295.
-  Ibid, para. 298.
-  Ibid, paras. 301 et seqq.
-  Ibid, para. 304.
-  Ibid, paras. 306 et seqq. and paras. 314 et seqq.
-  Ibid, para. 308.
-  Ibid, paras. 308 et seq.
-  Ibid, para. 310.
-  Ibid, para. 311.
-  Ibid, paras. 314 et seqq.
-  Ibid, para. 318.
-  Ibid, para. 321.
-  Ibid, para. 322.
-  Ibid, para. 323.
-  Ibid, paras. 325 et seqq. as well as paras. 443 et seqq.
-  Ibid, para. 326.
-  Ibid, paras. 328 et seqq.
-  Ibid, paras. 329 et seqq.
-  Ibid, paras. 334 et seqq.
-  Ibid, paras. 526 et seqq.
-  Ibid, paras. 665 et seqq.
-  Ibid, paras. 751 et seqq.
-  Ibid, paras. 754.
-  Ibid, para. 756.
-  Ibid, para. 773.
-  Ibid, para. 774.
-  Ibid, paras. 781 et seqq.