KluwerCompetitionLaw
Document information
Publication
Common Market Law
Review
Jurisdiction
European Union
Court
European Court of Justice
(ECJ)
Case date
16 July 2015
Case number
Case C-170/13
Parties
Claimant, Huawei
Technologies Co. Ltd
Defendant, ZTE Corp. and
ZTE Deutschland GmbH
Topics
Antitrust
Bibliographic
reference
Torsten Körber, 'Abuse of a
Dominant Position by Legal
Actions of Owners of
Standard-Essential
Patents: Huawei
Technologies Co. Ltd v. ZTE
Corp. - Case C-170/13,
Huawei Technologies Co.
Ltd v. ZTE Corp. and ZTE
Deutschland GmbH,
Judgment of the Court of
Justice (Fifth Chamber) of
16 July 2015, EU:C:2015:477',
Common Market Law
Review, (© Kluwer Law
International; Kluwer Law
International 2016, Volume
53 Issue 4) pp. 1107 - 1120
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
Abuse of a Dominant Position by Legal Actions of Owners
of Standard-Essential Patents: Huawei Technologies Co.
Ltd v. ZTE Corp. - Case C-170/13, Huawei Technologies Co.
Ltd v. ZTE Corp. and ZTE Deutschland GmbH, Judgment of
the Court of Justice (Fifth Chamber) of 16 July 2015,
EU:C:2015:477
Torsten Körber
1. Introduction
The ECJ's judgment in Huawei v. ZTE marked the outcome of an important battle in the so-
called “patent wars” between the makers of smart phones and other telecommunications
equipment. In its judgment, the ECJ balanced the bargaining powers between owners of
so-called “standard-essential patents” (“SEP owners”) and makers of smart phones and
other telecommunications devices relying upon these patents (“makers”). At the same
time, the ECJ resolved a conflict between the Orange Book-Standard decision of the
German Federal Supreme Court (“BGH”) (1) and the European Commission's application of
Article 102 TFEU against abusive actions for infringement by Samsung and Motorola. (2)
The present annotation includes a special focus on German case law, not only because
the Huawei judgment deals with a particular line of reasoning of the German BGH, but
also because Germany has become one of the most important places for patent litigation
within the EU due the fact that German patent law and German patent courts are
generally patent holder-friendly.
2. General background
SEP are patents which are essential to a standard developed by a standard-setting
organization such as ETSI (the European Telecommunications Standards Institute). After
such a standard has been set, it is no longer technically possible to make devices which
P 1108 comply with this standard without infringing the respective SEPs. Therefore, ETSI's
Intellectual Property Right Policy strives to ensure access to its standards and to avoid
the abuse of SEPs as a means of foreclosing competition in downstream product markets
by requesting “the owner to give an irrevocable undertaking in writing that it is prepared
to grant irrevocable licences on fair, reasonable and non-discriminatory (FRAND) terms
and conditions under such IPR”. (3)
In theory, this solves the problem. The makers ask all SEP owners for a licence before they
sell their devices, and the SEP owners grant the makers all necessary licences on FRAND
terms. In practice, however, this procedure often does not work.
First, the markets for smartphones and other telecommunication equipment are fast
moving. Major makers release a new generation of smartphones at least once a year.
Therefore, there often is not much time to negotiate before marketing a product.
Second, the patent situation is extremely complex. Smartphones need to be compatible
with several (older and newer) standards such as GSM, GRPS, 2G, 3G (UMTS), 4G (LTE) and
Wifi, and each of these standards incorporates thousands of SEPs. For example, the LTE
standard is composed of more than 4700 patents that have been notified to ETSI. (4)
Third, as the Commission has explained in its Motorola decision,
“[it] is not within ETSI's mandate to check the validity of declared SEPs or their
relevance to an ETSI standard. Only a court can decide on the validity and the
issue of whether a standard-compliant product infringes a patent that has
been declared essential to a standard and therefore whether the patent is
essential as declared. Thus, until such time as a court decides otherwise, a
SEP, like any other patent, is presumed valid and essential to the standard as
declared by its owner to the [standard-setting organization]”. (5)
Therefore, it is not certain that a maker is aware of using the teaching of an SEP that is
both valid and essential to a standard when it starts selling its devices.
Fourth, even if SEP owners and makers agree on a licensing obligation in general, they
often disagree on what is “FRAND” because ETSI's Intellectual Property Right Policy does
P 1109 not further clarify this term. ETSI rather leaves it to the parties to negotiate for “fair,
reasonable and non-discriminatory” licensing conditions.
Against this backdrop, makers often sell their products before having finished (or before
even having initiated) licensing negotiations. They might act in bad faith or in good faith
(i.e. because they are not aware of the SEP, or because they have offered to take a licence
1
 on FRAND terms and then relied on the general obligation of the SEP owners to grant such
a licence).
If SEP owners could not bring actions for infringement of their SEPs in such a case at all
(or if the makers could unduly delay such actions), bad faith makers might be in a
privileged bargaining position that would enable them basically to disregard the SEPs or
to enforce disproportionally low royalties (“reverse hold-up” situation). On the other
hand, if SEP owners could bring such an action without further requirements even against
good faith makers, this would make it possible for SEP owners to obtain excessively high
royalties that do not only reflect the value of their own inventions, but also the value of
the standard as such (“hold-up” situation). Moreover, an SEP owner might abuse a legal
action to foreclose competitors from the downstream product market and thereby
significantly impede or even eliminate competition.
This situation raises two questions which are actually two sides of the same coin: under
what conditions does the SEP owner abuse its dominant market position if it brings an
action for infringement against the maker? Further, under what conditions can the maker
object to such a claim by referring to the so-called “compulsory licence defence” (6)
under competition law?
In its Orange Book-Standard decision, the German BGH held that
“where the proprietor of a patent seeks a prohibitory injunction against a
defendant which has a claim to a licence for that patent, the proprietor of the
patent abuses its dominant position only in certain circumstances. First, the
defendant must have made the applicant an unconditional offer to conclude a
licensing agreement not limited exclusively to cases of infringement, it being
understood that the defendant must consider itself bound by that offer and
that the applicant is obliged to accept it where its refusal would unfairly
P 1110 impede the defendant or infringe the principle of non-discrimination.
Second, where the defendant uses the teachings of the patent before the
applicant accepts such an offer, it must comply with the obligations that will
be incumbent on it, for use of the patent, under the future licensing
agreement, namely to account for acts of use and to pay the sums resulting
therefrom”. (7)
The BGH decision Orange Book-Standard dealt with a case which – according to the BGH –
was different from the SEP situation at hand in Huawei v. ZTE with regard to four key
issues. First, the BGH's decision concerned a de facto industrial standard rather than a
standard-setting organization standard. Second, the patent holder had not provided a
FRAND commitment. Third, the validity of the (“non-SEP”) patent was not contested.
Fourth, a standard licence agreement had been published, but the maker requested
special licensing conditions. (8)
Nevertheless, the lower German courts applied the BGH's strict and quite IPR owner
friendly Orange Book-Standard test to SEP cases as well. (9)
While the German case law (particularly the regional patent courts) favoured the SEP
owner's interests, the European Commission took a more balanced view and underscored
the competitive aspects of such cases. In its Motorola decision, the Commission held: “By
seeking and enforcing an injunction, an SEP holder may be able to exclude even the most
innovative standard-compliant products from the market as, by definition, the patented
technology cannot be worked around. In turn, the elimination of competing products from
the market may limit consumer choice and partially eliminate downstream competition”.
(10) The Commission argued that the “mere holding of IP rights cannot constitute an
objective justification for the seeking and enforcement of an injunction by an SEP holder
against a potential licensee that is not unwilling to enter into a licence on FRAND terms
and conditions”. (11) The Commission concluded “that in the exceptional circumstances of
P 1111 this case and in the absence of an objective justification, Motorola abused its
dominant position by seeking and enforcing an injunction”. (12)
In sum, the Commission held it necessary for an SEP owner to negotiate in good faith with
a willing licensee (maker) before taking legal action. (13)
Divergent decisions of courts in other EU Member States underlined the legal uncertainty.
In its 2010 Philips v. SK Kassetten decision, the Hague Patent Court of First Instance
expressly opposed the German BGH's Orange Book-Standard test. The Hague court
denied the alleged infringer any right to raise a compulsory licence defence in patent
litigation under Dutch law. (14) In March 2012 the same court, while formally upholding its
former decision, revised this position in substance in its Samsung v. Apple judgment. The
court now held that bringing an action for an injunction, or threatening with such an
action in the course of ongoing licensing negotiations, might constitute an abuse of a
dominant position or a breach of pre-contractual good faith, because it placed the
licence seeker under undue pressure even if the alleged infringer had already started to
sell the patent-practising product. (15) Ultimately, the court dismissed the patent
owner's actions for an injunction and for a recall. (16) The English High Court of Justice
(Chancery Division) decided along the same lines in the case of Nokia v. IPCom in May
2012. It held that an injunction under patent law was inappropriate if a FRAND
commitment had been made and if the dispute only concerned the specific terms of the

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 licence. (17)
In line with the Commission's opinion in the cases of Samsung and Motorola, both courts
held it to be sufficient that the alleged infringer was willing to negotiate for a licence on
FRAND terms in good faith. Contrary to the German BGH, they did not impose additional,
more stringent requirements on alleged infringers with regard to a compulsory licence
defence.
P 1112

3. Facts of the case and questions of the referring court

Huawei and ZTE are undertakings that are active in the telecommunications sector.
Huawei owns a patent, which it has notified as standard-essential for the 4G (LTE) mobile
communications standard with ETSI. In line with No. 6.1 ETSI IPR Policy, Huawei undertook
to grant licences to third parties on FRAND terms. The parties agreed that Huawei has to
grant, and that ZTE has to take, a licence on FRAND terms. They could not reach an
agreement on the actual licensing terms. Nevertheless, ZTE already sold products based
upon the LTE standard and therefore, inter alia, on Huawei's SEP. After six month of
negotiation, Huawei brought an action for infringement against ZTE before the
Landgericht (Regional Court) Düsseldorf seeking an injunction prohibiting the
infringement, the rendering of accounts, the recall of products, and an award of damages.
ZTE, in response, objected to Huawei's claims by invoking the compulsory licence
defence. (18)
With regard to the circumstances described above, in particular with regard to the
controversy between the case law of the German courts and the European Commission,
the Landgericht decided to stay the proceedings and to refer several questions to the ECJ
for a preliminary ruling. In short, the Landgericht wanted to know: (1) Whether a dominant
SEP holder abuses its dominant market position if it brings an action for an injunction
against a willing licensee, or whether an abuse is to be presumed only if the alleged
patent infringer fulfils the German BGH's Orange Book-Standard-test. (2) In the first case,
whether Article 102 TFEU lays down particular qualitative and/or time requirements in
relation to the willingness to negotiate. (3) In the second case, whether Article 102 TFEU
lays down particular qualitative and/or time requirements in relation to the alleged
patent infringer's offer, in particular, whether the offer may be made subject to the
condition that the SEP is actually used and/or is shown to be valid, and (4) whether
Article 102 TFEU lays down particular requirements with regard to the acts of fulfilment of
the alleged patent infringer (e.g. depositing of a security). (5) Finally, whether the
conditions under which the abuse of a dominant position by the SEP owner is to be
presumed also apply to an action on the ground of other claims (for rendering of
accounts, recall of products, damages) arising from a patent infringement. (19)
P 1113

4. Opinion of the Advocate General

Advocate General Wathelet delivered his Opinion on 20 November 2014. After describing
the factual and legal background, he underscored that the BGH's Orange Book-Standard-
test cannot be transposed by analogy to the present case because of the significant
factual difference. At the same time, the mere willingness of the alleged infringer to take
a licence seemed insufficient to limit the SEP owners' right to bring action. In this
context, the Advocate General set out to find a middle path. (20)
The Advocate General noted in an obiter dictum that the Landgericht Düsseldorf had
referred questions to the ECJ based on the assumption that the SEP owner held a
dominant position. Even though the ECJ is bound to the facts put before it by the national
court, the Advocate General expressed the view that owning an SEP could give rise only to
a rebuttable presumption of a dominant position. (21)
Consequently, the Advocate General turned to the question of abuse. He pointed out that
it was necessary to strike a balance between the SEP owner's right to intellectual
property and the right of access to the courts, on the one hand, and the maker's freedom
to conduct business as well as the freedom of competition, on the other hand. In line with
the ECJ's Magill decision, the Advocate General made it clear that IPRs are not absolute
rights, but must be reconciled with Articles 101 and 102 TFEU. (22) Based on these general
observations, the Advocate General further pointed out that the conduct of both the SEP
owner as well as the alleged infringer must be examined. (23)
With regard to the case at hand, the Advocate General emphasized that the unlicensed
use of a patent, in principle, infringes this patent. Therefore, the owner is entitled to
bring an action. However, in an SEP case (like the case at hand) the alleged infringer
might not be aware of the infringement. In such a case it therefore did not seem
unreasonable to negotiate and conclude a licensing agreement ex post, i.e. after the use
of the patent's teaching had begun.
In such a case, the Advocate General held the SEP owner responsible to for notifying the
maker of the infringement, unless it is established that the maker is fully aware of the
infringement. Further, the SEP owner is obliged to present a written offer for a licence on

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© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 P 1114 FRAND terms. (24) Then the alleged infringer must respond to this offer in a diligent and
serious manner and promptly submit a counter-offer if the original offer is not
accepted. If the parties cannot reach an agreement, both should be entitled to ask for
the terms to be fixed by a court or an arbitration panel. (25) The Advocate General also
stressed that – contrary to the case law of the German patent courts – the maker should
be entitled to challenge the validity as well as the infringement of the SEP. (26) Finally,
the Advocate General opposed the view of the German BGH according to which the maker
must fulfil the anticipated licensing agreement even before its conclusion. However, he
underlined that the maker must be objectively ready, willing and able to conclude a
licensing agreement, which includes payments or securities for past and future use of the
patent. (27)
According to the Advocate General, these procedural requirements only apply to actions
for a prohibitory injunction or for a recall of products, but not to actions for the rendering
of accounts or for an award of damages, because the latter actions cannot be used to
foreclose a maker from a market. (28)

5. Judgment of the ECJ

The ECJ broadly followed the Advocate General's Opinion in its judgment.
The ECJ emphasized that the exercise of an intellectual property right may constitute an
abuse of a dominant position under Article 102 TFEU only in exceptional circumstances.
With regard to the question whether the facts of the Huawei v. ZTE case indicate such
“exceptional circumstances”, the ECJ, first, pointed out that the use of an SEP is
indispensable to all competitors who want to enter the downstream product market. This
fact distinguishes SEPs from other patents which only embody a technical teaching that
can be substituted by another teaching. Second, the ECJ noted that the patent at issue
obtained SEP status only in return for the owner's irrevocable FRAND commitment given
to ETSI. This commitment created legitimate expectations on the part of the makers that
the SEP owner would grant them licences on FRAND terms. Therefore, in the opinion of the
ECJ, refusing such a licence may, in principle, constitute an abuse and the maker may, in
principle, raise a compulsory licence defence. (29)
Based on this reasoning, the ECJ came to the conclusion that the SEP owner does not –
neither based on its licensing obligation under Article 102 TFEU nor based on its licensing
P 1115 obligation under the FRAND commitment – lose its right to have recourse to legal
proceedings. However, the SEP owner cannot, without infringing Article 102 TFEU, bring
action without notice or prior consultation with the alleged infringer, even if the SEP has
already been used. (30)
With regard to the procedure that must be observed before bringing action, the ECJ, in
principle, followed the Advocate General's counsel. First, the SEP owner must alert the
alleged infringer of the infringement complained about by designating that SEP and
specifying the way in which it has been infringed. Second, after the alleged infringer has
expressed its willingness to conclude a licence, the SEP owner must present to him a
“specific, written offer for a licence on FRAND terms”. The ECJ thereby contradicted the
opinion of the German case law, which held the alleged infringer responsible for making
an initial, specific and unconditional offer. (31) Third, the alleged infringer has to respond
to this offer diligently, without delay and in good faith, and, if the offer is not accepted,
make a specific counter-offer promptly and in writing. Fourth, the alleged infringer has to
provide appropriate security for the use of the SEPs teachings “in accordance with
recognized commercial practices in the field, for example by providing a bank
guarantee” and “from the point at which its counter-offer is rejected”. In addition, he
must be able to render account in respect of these acts of use. (32) Fifth, “where no
agreement is reached on the details of the FRAND terms following the counter-offer by
the alleged infringer, the parties may, by common agreement, request that the amount of
the royalty be determined by an independent third party, by decision without delay”.
(33)
In accordance with the Advocate General's Opinion (and again in contrast to the German
case law), the ECJ further held that the alleged infringer should be entitled to challenge
the validity as well as the infringement of the SEP. The ECJ stressed that the alleged
infringer cannot be criticized for challenging, in parallel to the licensing negotiations, the
validity, the essentiality or the infringement of the SEP, because it is (as much as the SEP
owner) entitled to effective judicial protection guaranteed by Article 47 of the EU Charter
of Fundamental Rights. (34)
P 1116
Finally, the ECJ also followed the Advocate General's Opinion with regard to actions for
the rendering of accounts or for an award of damages, which can be brought instantly
without observing the special procedure described above, even in an SEP case. (35)

6. Comment
The ECJ's judgment deserves full approval. Even though some issues remain unresolved,
the decision addresses the main problems and comes to well-balanced results that take
into consideration the interest of the SEP owners as well as those of the makers, and that

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© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 ensure the functioning of intellectual property law as well as the freedom of competition.
The ECJ ruling is much closer to the reality of patent litigation and more practical than
the German BGH's Orange Book-Standard decision.
Some steps of the ECJ's reasoning merit particular attention. First, and most importantly,
the judgment clarifies that, contrary to some lower court decisions, the BGH's Orange
Book-Standard-test does not apply to SEP cases. Furthermore, the judgment broadly
supports the Commission's views in the cases of Samsung and Motorola. This is
particularly noteworthy because the Commission made it clear in its the Motorola
decision that the only reason it did not fine Motorola was because there was no EU
decisional practice or case law on this question and because national courts had reached
diverging conclusions on it. (36) In the future, SEP owners who bring abusive actions
against good faith licensees cannot count on such leniency because the ECJ has clarified
their obligations under Article 102 TFEU in the present judgment.
Second, the ECJ was right when (contrary to the German BGH) it obliged the patent owner
to notify the maker of the infringement, and make the initial offer for an agreement on
FRAND terms. It is rather customary business practice, in particular in SEP situations, that
the patent owner contacts the patent user and not vice versa. (37) Moreover, if there is no
published licensing agreement, it is virtually impossible for the user to define FRAND
terms, because the user, unlike the SEP owner, does not know the confidential conditions
offered to other licensees.
P 1117
However, it seems questionable, that the ECJ requests a common agreement for the terms
to be fixed by a third party if the parties cannot reach an agreement. In this regard, the
Opinion of the Advocate General who had held that each party (separately) could ask for
the terms to be fixed by a third party seems to be more practical as well as more
reasonable.
Third, the ECJ clarified how the user can provide appropriate security for the use of an
SEP. Two points are of particular practical importance: on the one hand, the ECJ has
permitted any security in accordance with recognized commercial practices, including
bank guarantees – while the German BGH had only mentioned the possibility of cash
deposits according to § 372 BGB, which was not very practical. On the other hand, the
amount of such security must (only) be FRAND. This is important, not least because the
German Landgericht Mannheim had erroneously obliged the user to offer securities that
were “just not excessive” within the meaning of Article 102 TFEU, even if the SEP owner
had given a FRAND commitment. (38)
Fourth, the ECJ was correct in pointing out that the alleged infringer should be entitled to
challenge the validity as well as the infringement of the SEP before the negotiations, in
parallel to these negotiations, or even after the licensing agreement has been concluded.
Some German courts had denied this right to makers who sought a licence and even
forced the makers to include non-challenge clauses in the licensing agreements. (39) As a
licence to the SEP is indispensable for lawful participation in the product market, this
made it practically impossible for the makers to challenge invalid or non-essential SEPs.
(40) In Huawei v. ZTE, the ECJ clarified that such clauses are anticompetitive and
forbidden with regard to SEPs. This ruling is in line with Article 5(1)(b) of the new EU block
exemption Regulation 336/2014 on technology transfers, which underscores that such
non-challenge clauses are, in principle, anti-competitive even in a non-SEP situation. (41)
Fifth, the ECJ is right when it distinguished actions for a prohibitory injunction or for a
recall of products from actions for the mere rendering of accounts or for an award of
damages. Actions for tendering of accounts or for damages cannot be used to foreclose
P 1118 competitors from a downstream product market and, therefore, they also cannot be
used as a lever to enforce excessive royalty fees (a patent hold-up). Therefore, bringing
such actions cannot, in principle, violate Article 102 TFEU. (42)
Some other aspects were not addressed by the ECJ. First, the ECJ did not answer the
question whether SEP owners enjoy a dominant position per se. The Advocate General had
questioned a per se assumption. Technically, the Advocate General is right. However, in
practice SEP owners are almost always dominant. According to the ECJ's case law since
Magill, IPR owners are dominant if holding an IPR enables them to foreclose (potential)
competitors from a downstream product market. With regard to patents that are part of a
standard, IPR owners, therefore, are dominant if two conditions are fulfilled. First, the use
of the patent is indispensable for compliance with the standard. SEPs are indispensable
by definition. Second, producers must comply with the standard in order to compete on
the downstream market, i.e. use of the standard is indispensable as well. While there
might be markets with competing standards (43) the situation is different with regard to
the LTE standard. A producer who wants to compete in the smartphone market or in the
markets for infrastructure equipment must, by definition, comply with this ETSI standard
in order to distribute such products lawfully. The industry is locked in to this standard.
Owners of patents that are essential to ETSI mobile telecommunications standards such
as UMTS or LTE are therefore always dominant. (44)
Second, the ECJ based the licensing obligation of the SEP owner (as well as the
compulsory licensing defence of the alleged infringer) on both Article 102 TFEU and the

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 FRAND commitment. This leaves room for the question whether the Huawei v. ZTE decision
also applies to cases in which the SEP owner is not bound by a FRAND commitment. (45)
The answer to this question is clearly affirmative. If the Magill requirements (46) are
fulfilled, IPR holders are under a statutory obligation to grant licences on FRAND terms to
good faith licensees. This duty results directly from Article 102 TFEU. It is not subject to
the conclusion of an additional contractual FRAND commitment, because dominant
undertakings must always – even in the absence of a contractual FRAND commitment –
comply with Article 102 TFEU. (47)
P 1119
Third, the ECJ did not clarify the meaning of “FRAND”. Like ETSI and the Commission, the
Court left this task to the parties which may request the help of a court or an arbitration
panel. This seems correct in principle, because general rules for the very diverse and
dynamic telecommunications sector are hard to find. If a standard-setting organization
such as ETSI were to determine the exact amount of the FRAND royalty this might be
considered price fixing under Article 101 TFEU. However, it would be helpful if ETSI at
least defined some parameters. (48) For example, No. 6.1 of the IEEE-SA Standards Board
Bylaws of March 2015 defines such parameters with regard to the Wifi standard (e.g. the
“smallest saleable Compliant Implementation” as royalty base).
Fourth, the ECJ distinguished the facts of the Huawei v. ZTE case (a SEP situation) from
those of the German Orange Book-Standard case (non-SEP). This leaves the question of
whether the BGH's test can still be applied to non-SEP cases. Making use of the teachings
of a de facto standard (like in the German case) can be as indispensable for market
access as making use of an SEP (like in the case at hand). If the requirements of the Magill
decision are fulfilled, the owner of an indispensable IPR (be it an SEP or a non-essential
patent) is under a licensing obligation due to Article 102 TFEU. Hence, in principle, the
same rules (i.e. the Huawei v. ZTE test) should apply. In particular, it is beyond question
that the BGH's “unconditional offer” requirement must not be understood as forbidding
the alleged infringer to challenge the validity, the essentiality or the use of the patent.
Several lower court decisions that denied alleged infringers this right have effectively
become obsolete. However, there might be room for the Orange Book-Standard test in
non-SEP cases if the alleged infringer did not act in good faith and if the facts of the case
can, therefore, be distinguished from a typical SEP situation.
Finally, it should be mentioned that some lower German patent courts have passed first
judgments in the aftermath of the ECJ's Huawei v. ZTE decision. Even though they are
bound by the ECJ's interpretation of Article 102 TFEU, these courts still seem to be
somewhat reluctant to to rethink their traditional (IPR-holder friendly) lines of reasoning.
For example, the Landgericht Düsseldorf held that the Orange Book-Standard test (and
not the Huawei v. ZTE test) should apply to SEP cases in which the SEP owner had brought
an action before the ECJ's Huawei v. ZTE judgment was given. (49) This is clearly erroneous,
P 1120 because the ECJ did not set a new rule of law. It merely clarified the requirements set
by the directly applicable provisions of Article 102 TFEU, which has been in force since 1
January 1958.
In a similar vein, the Landgericht Düsseldorf as well as the Landgericht Mannheim both
held that the alleged infringer is obliged to make a specific counter-offer on FRAND
terms, even if the initial offer by the SEP owner did not fulfil the FRAND requirement. (50)
This seems very questionable in the light of the ECJ's reasoning, according to which the
SEP owner must make the original offer because the SEP owner (who knows all licensing
agreements with other makers) is much better placed to check whether its offer complies
with the FRAND requirement than the alleged infringer. (51) To impose the duty to make
the first FRAND compliant offer on the alleged infringer, as the Landgerichte did, turns
this reasoning on its head. The Huawei v. ZTE judgment created a carefully balanced
system of reciprocal rights and duties which the national courts have to respect.
According to the ECJ's test, the SEP owner must make the first “specific, written offer for a
licence on FRAND terms”. Only after such a FRAND compliant offer has been made is it “for
the alleged infringer diligently to respond to that offer”. (52) In a very recent decision on
appeal, the OLG Düsseldorf, shared this view and set aside the decision of the
Landgericht Düsseldorf. (53) This gives grounds for optimism.
Torsten Körber (*)
P 1120

References
1) BGH, judgment of 6 May 2009, Case KZR 39/06, BGHZ 180, 312 – Orange Book-Standard.
2) Commission Decision of 29 April 2014, Case AT.39939, Samsung, C(2014)2891 final;
Commission Decision of 29 April 2014, Case AT.39985, Motorola, C(2014)2892 final.
3) No. 6.1 ETSI Rules of Procedure, Version 34 of 19 Nov. 2014.
4) For further information see <www.etsi.org>.
5) Commission, Case AT.39985, Motorola, para. 61.

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 6) According to settled case law since Magill, undertakings can request a compulsory
licence (only) under exceptional circumstances, i.e. if (i) the licensing is
indispensable for access to the downstream market, (ii) the refusal to grant a licence
excludes any effective competition in this market, (iii) the refusal to grant a licence
prevents the appearance of a “new product” in this market, and (iv) the refusal to
grant a licence is not objectively justified; see Joined Cases C-241 & 242/91, RTE and
ITP v. Commission (“Magill”), EU:C:1995:98, para. 48 et seq. If these requirements are
met, refusal of a licence on FRAND terms by a dominant patent owner violates Art.
102 TFEU. If such a patent owner sues an alleged infringer, the defendant can
therefore make use of the “compulsory licence defence”.
7) Judgment, paras. 30 et seq., quoting (and translating) BGH, Case KZR 39/06, Orange
Book-Standard. For a more detailed account, see Körber, Standard Essential Patents,
FRAND Commitments and Competition Law: An Analysis under Particular Consideration
of the German “Orange Book-Standard”-Decisions (Kartell- und Regulierungsrecht)
(Nomos, 2013), pp. 254 et seq.
8) See BGH, Case KZR 39/06, Orange Book-Standard; Karlsruhe Court of Appeals
(Oberlandesgericht (“OLG”) = Higher Regional Court), 13 Dec. 2006, Case 6 U 174/02,
2007, at 177 et seq. – Orange Book-Standard.
9) E.g. Landgericht (“LG”) Mannheim, judgment of 18 Feb. 2011, Case 7 O 100/10 No. 176,
UMTS-fähiges Mobiltelefon II; LG Düsseldorf, judgment of 24 April 2012, Case 4b 273 &
274/10, BeckRS 2012, 09682 & 09736, UMTS-Mobilstation.
10) Commission, Case AT.39985, Motorola, para. 312.
11) Ibid., para. 423.
12) Ibid., para. 496.
13) See also Commission, Case AT.39939, Samsung, commitment paras. 97 et seq.
14) The Hague Patent Court of First Instance, judgment of 17 March 2010, Joined Cases
316533/HA ZA 08-2522 and 316535/HA ZA 08-2524, Koninklijke Philips Electronics N.V. v.
SK Kassetten GMBH & CO. KG.
15) The Hague Patent Court of First Instance, judgment of 14 March 2012, Cases 400367/HA
ZA 11-2212, 400376/HA ZA 11-2213 and 400385/HA ZA 11-2215, Samsung v. Apple, paras.
4.31 et seq.
16) Ibid., para. 4.50.
17) High Court of Justice, judgment of 18 May 2012, 2012 EWHC 1446 (Ch), Case HC10
C01233, Nokia v. IPCom, paras. 5 et seq.
18) Judgment, paras. 21 et seq.
19) Ibid., para. 39.
20) Opinion of A.G. Wathelet in Case C-170/13, Huawei Technologies, EU:C:2014:2391, paras.
49 et seq.
21) Ibid., paras. 53 et seq.
22) Ibid., paras. 59 et seq.
23) Ibid., para. 75.
24) Ibid., paras. 77 et seq.
25) Ibid., paras. 88 et seq.
26) Ibid., paras. 93 et seq.
27) Ibid., para. 98.
28) Ibid., paras. 99 et seq.
29) Judgment, paras. 46 et seq.
30) Ibid., paras. 58 et seq.
31) Ibid., paras. 61 et seq.
32) Ibid., paras. 65 et seq. By comparison: the A.G. had deemed it sufficient that the
maker must be objectively ready, willing and able to conclude a licensing agreement
which includes payments or securities (Opinion, para. 98).
33) Ibid., para. 68. By comparison: the A.G. had held that each party (separately) could
ask for the terms to be fixed by a third party (Opinion, paras. 93–94).
34) Ibid., paras. 69 et seq. This right had been wrongfully denied to the alleged infringers
by the OLG Karlsruhe, judgment of 23 Jan. 2012, Case 6 U 136/11, GPRS-Zwangslizenz,
paras. 28 et seq., as well as by the LG Mannheim, judgment of 18 Feb. 2011, Case 7 O
100/10, UMTS-fähiges Mobiltelefon II, para. 176.
35) Judgment, paras. 72 et seq.
36) Commission, Case AT.39985, Motorola, para. 561.
37) See Körber, op. cit. supra note 7, pp. 204 and 257.
38) E.g. LG Mannheim, judgment of 2 May 2012, Cases 2 O 240/11 & 2 O 376/11, BeckRS
2012, 11804 and 11805, Dekodierverfahren.
39) OLG Karlsruhe, judgment of 27 Feb. 2012, Case 6 U 136/11, Lizenzvertragsangebot, para.
34; see also LG Mannheim, judgment of 9 Dec. 2011, Case 7 O 122/11, GPRS-
Zwangslizenz, paras. 91 et seq.
40) See also Körber, op. cit. supra note 7, at pp. 283 et seq.
41) Commission Regulation (EU) 316/2014 on the application of Art. 101(3) TFEU to
categories of technology transfer agreements, O.J. 2014, L 93/17; see also Commission
Communication on guidelines on the application of Art. 101 TFEU to technology
transfer agreements, O.J. 2014, C 89/3, paras. 133 et seq.

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 42) This also means that the German BGH's “Standard Spundfass” decision (13 July 2004,
Case KZR 40/02, BGHZ 160, 67), in which the BGH accepted the compulsory licensing
defence with regard to claims for damages, is not affected by the Huawei v. ZTE
judgment.
43) E.g. the former competition between VHS and Betamax video standards.
44) Cf. Körber, op. cit. supra note 7, pp. 181 et seq.
45) E.g. because it has acquired the SEP from the original owner without submitting to
the FRAND commitment.
46) See supra note 6.
47) See also Körber, op. cit. supra note 7, at pp. 196 et seq. and 216 et seq.
48) For more detailed suggestions, ibid., pp. 230 et seq.
49) LG Düsseldorf, judgment of 3 Nov. 2015, Case 4a O 144/14, NZKart 2015,
Kommunikationsvorrichtung, at 545–546.
50) Ibid., at 547; LG Mannheim, judgment of 27 Nov. 2015, Case 2 O 106/14, GRUR-RS 2015,
20077, para. 155.
51) Judgment, paras 64.
52) Ibid., paras. 63 and 65.
53) OLG Düsseldorf, judgment of 13 Jan. 2016, Case I-15 U 66/15, NZKart 2016,
Lizenzierungspflicht zur FRAND-Bedingungen, at 139.
*) Dean and Professor at the Faculty of Law of the Georg-August-Universität Göttingen,
Director of the Institute for Business Law, Member of the Scientific Advisory Board of
the Bundesnetzagentur and Editor of Immenga/Mestmäcker, Wettbewerbsrecht and
Neue Zeitschrift für Kartellrecht (Beck Publishers).

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