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Saint Lawrence v Vodafone, Higher Regional Court (Oberlandesgericht) of Düsseldorf

9 May 2016 - Case No. I-15 U 36/16

  1. Facts
    The proceedings concerned the subsequent application of Defendant in Case No. 4a O 73/14 seeking to suspend the execution of the district court’s decision until the appellate court has decided on the merits of an appeal brought by Defendant. As to the facts of the case, it can be referred to the summary above.
    Due to the specific nature of the proceedings, the standard of review was limited to a summary examination of the decision rendered by the court of first instance. The court of appeal can suspend execution only if it comes to the conclusion that the challenged decision will probably not be upheld in second instance because it appears manifestly erroneous.
  2. Court’s reasoning
    1. Notice of infringement and declaration of willingness to license
      Firstly, the court of appeal focused on the Huawei requirement to submit an infringement notification prior to the initiation of proceedings. Although the court voiced some doubts over whether a distinction between transitional and non-transitional cases is permitted and whether, in transitional cases, reliance of a SEP proprietor on the Orange Book standard of conduct is worthy of protection, it did not consider the result reached by the lower court as manifestly erroneous. Since the SEP proprietor has the option to withdraw its action, to perform its Huawei obligations and to re-file the claim afterwards, it seems overly formalistic to deny the option to perform the Huawei obligations within the ongoing trial. Among a number of further reasons For details, cf. OLG Düsseldorf, 9 May 2016 - Case No. I-15 U 36/16, para. 2, b, aa for its position the court stressed that the ECJ intended the Huawei framework to be fact-sensitive. [2]
      Secondly, the court confirmed the lower court’s view that Defendant did not comply with its Huawei obligation to express its willingness to conclude a licensing agreement because it reacted belatedly (more than five months after the infringement notification) and in an evasive manner. The fact that proceedings have been initiated by Claimant does not alter the Huawei requirements and Defendant will particularly not be granted more time to comply with its respective obligations. [3]
    2. The SEP owner’s licensing offer / The standard implementer’s reaction
      The court left it undecided whether the lower court erred in focusing on a licensing offer which Claimant presented solely to the Intervener but not to Defendant. According to the court the conduct of the parties required by Huawei constitutes a mechanism of alternating, consecutive steps in which no subsequent conduct requirement is triggered unless the other party performed the previous “step”. In consequence, Claimant was, in the present case, not obliged to submit a FRAND licensing offer at all since Defendant had failed to signal willingness to license. [4]
      The lower court’s finding that Claimant’s licensing offer was FRAND while the Intervener’s counter-offer failed to meet this threshold was accepted. Hence, the court considered it as irrelevant under the present circumstances—and as a completely open question in general—whether a SEP proprietor is obliged, before bringing an action for prohibitory injunction against the supplier of a standard-implementing device, to (cumulatively) submit a FRAND licensing offer not only to the supplier but also to the producer of said device. [5]
  3. Other important issues
    The remarks of the lower court rejecting, in the present case, a patent ambush-argument were not deemed manifestly erroneous, mainly because the lower court had reasonably argued that such an abusive practice would only result in the SEP proprietor’s obligation to grant licenses on FRAND terms. [6]
    Licensing negotiations (allegedly) undertaken by Defendant after the decision of the lower court provided no reason to suspense execution since it was not evident to the court that Defendant had thereby fulfilled its Huawei obligations. [7]
  • [1] For details, cf. OLG Düsseldorf, 9 May 2016 - Case No. I-15 U 36/16, para. 2, b, aa
  • [2] Ibid, para. 2, b, aa
  • [3] Ibid, para. 2, b, bb
  • [4] Ibid, para. 2, b, cc
  • [5] Ibid, para. 2, b, ff
  • [6] Ibid, para. 2, b, ee
  • [7] Ibid, para. 2, b, dd