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Pioneer v Acer, Higher Regional Court (Oberlandesgericht) of Karlsruhe

31 May 2016 - Case No. 6 U 55/16

  1. Facts
    The proceedings concerned the subsequent application of Defendant in Case No. 7 O 96/14 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. The facts underlying the two decisions are therefore the same: Claimant owns the patent EP 1 267348, allegedly essential to the DVD standard and administered with regard to its licensing by the patent pool “A”. Early in 2013 “A” and the Defendant’s group parent were in contact regarding “A” ’s DVD licensing activity, but no concrete notice of infringement was made and no licensing negotiations ensued. After having been sued for patent infringement Defendant submitted, on 6 October 2014, an offer to license the patent-in-suit for Germany at FRAND conditions, with the exact royalty rate to be determined by Claimant pursuant to § 315 German Civil Code. Furthermore, Defendant declared to be willing to negotiate a portfolio license for all German patents of Claimant and, in case the negotiations were to fail, to have the licensing conditions determined by a state court or arbitration tribunal. In order to indicate what Defendant considered to be a FRAND royalty rate Defendant submitted an expert opinion. As of 28 November 2014, Claimant proposed to modify the conditions to the effect that Defendant’s group parent was supposed to take a worldwide portfolio license comprising all Claimant’s portfolio patents administered by “A”. Claimant made a (perhaps: additional) FRAND declaration with regard to the patent and informed Defendant thereof in December 2014. After Defendant had rejected this offer, Claimant offered, on 13 March and 13 April 2015, a worldwide portfolio license to Defendant’s group parent company. To the offer were added claim charts for two pool patents, as well as information on how Claimant deduced the royalty from the overall royalty rates of the “A”-patent pool. On 5 May 2015, Defendant’s group parent requested claim charts regarding all patents to be licensed as well as further information on royalty calculation. Claimant sent, on 7 August 2015, claim charts for five additional patents declaring its willingness to provide further information as soon as constructive technical discussions would be taken up. In a filing to the court as of 20 November 2015, Claimant explained its royalty calculation in greater detail and submitted an expert opinion on the issue.
    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. Applicability of Huawei to transitory cases
      The court tentatively confirms that, in transitory cases, it is sufficient if the SEP proprietor fulfills its Huawei duties by way of the statement of claims or even after the lawsuit was initiated. [337] As to the reasons for this finding, the court is not convinced by the considerations of the lower court (cf. above LG Mannheim, 8 January 2016 - 7 O 96/14), in particular because the ECJ has not stated that actions for infringement brought prior to the Huawei decision had to comply only with the Orange Book rules of conduct and not the Huawei rules. [338] However, according to the Court, the Huawei decision deals only with the abusive bringing of an action for SEP infringement, not with the question whether such action remains abusive even after the SEP proprietor has fulfilled its conduct obligations under Huawei. [339] It appears possible that, at least in transitory cases, the continuation of an infringement action is no longer abusive where the statement of claims provided sufficient notice of the infringement, where the SEP proprietor made a Huawei-compliant licensing offer during the ongoing litigation, and where the standard implementer failed to appropriately react to this offer. Hence, the lower court’s finding on that issue was not considered manifestly erroneous.
    2. Standard of review for licensing offers
      The court did, however, find the lower court’s ruling to be manifestly erroneous with regard to the standard of review it had postulated for the SEP proprietor’s licensing offer: [340] As stated clearly by the ECJ, the SEP proprietor has to make a licensing offer that qualifies as FRAND—not, for instance, slightly above FRAND—and it is for the respective court to assess the FRAND quality of the offer. A reduced standard of review, consisting merely in a summary assessment of whether the offer is evidently non-FRAND, has no basis in Huawei. Even if the SEP proprietor were to be granted much leeway in determining the licensing conditions—a question which the court reserves for its decision on the merits of the appeal—the conditions would still have to remain within the FRAND range. Since the lower court’s conclusion that Claimant had complied with the Huawei rules of conduct while Defendant had violated them was reached by applying the reduced standard of review the court decided to partly The reasons why the Court limited the suspension to the recall and destruction of infringing products are of no interest here, cf. OLG Karlsruhe, 31 May 2016 – Ibid, para. 37 et seq. suspend the enforcement of the first instance-ruling.
  • [337] Case No. 6 U 55/16, para. 24-28
  • [338] Ibid, para. 26
  • [339] Ibid, para. 27
  • [340] Ibid, para. 29-36
  • [341] The reasons why the Court limited the suspension to the recall and destruction of infringing products are of no interest here, cf. OLG Karlsruhe, 31 May 2016 – Ibid, para. 37 et seq.