Sisvel ./. Haier – FCJ overrules High Court of Düsseldorf

The Federal Court of Justice (BGH) reversed the decision of the Higher Regional Court (OLG) of Düsseldorf in the case Sisvel v. Haier today and fully find in favour of Sisvel, after the oral hearing in front of the antitrust senate of the BGH (Ref.: KZR 36/17) on 05.05.2020.

As the owner of a standard essential patent, Sisvel sued Haier at the District Court of Düsseldorf. The District Court of Düsseldorf sentenced Haier in accordance with the requests of Sisvel. On appeal, the Higher Regional Court of Düsseldorf confirmed the infringement of the patent, but upheld Haier’s FRAND-objection and therefore dismissed the claim as currently unfounded. According to the Higher Regional Court of Düsseldorf, Sisvel did not make Haier a FRAND-compliant offer. Because Sisvel concluded a license agreement with a Chinese state-owned company, which was by far more cheaper than the offer to Haier. Haier, on the other hand, allegedly behaved in a FRAND compliant manner.

Sisvel’s appeal at the Federal Court of Justice was directed against the judgment of the Higher Regional Court of Düsseldorf regarding the FRAND-objection. However, since the patent in dispute has been maintained only to a limited extent in the meantime by the Federal Patent Court and, in the second instance, by the Federal Court of Justice, Haier filed a subsequent appeal because Haier believed that they did not infringe the patent in dispute in its limited form.

At the oral hearing, the Federal Court of Justice already indicated tendencies which were confirmed by today’s decision:

First of all, the Federal Court of Justice expressed its view at the oral hearing that the factual findings of the Higher Regional Court of Düsseldorf also bear the realization of the newly included feature and therefore an infringement can be assumed.

Furthermore, the Federal Court of Justice indicated that Haier would probably not be able to raise a FRAND-objection. Sisvel has a market dominating position, but does not abuse it.

The Federal Court of Justice emphasized that an abuse occurs in any case if the user of a patent seeking a license provides a FRAND-compliant offer, but the patent holder does not accept it. In the end, however, it is not decisive which party formulates FRAND-compliant conditions, but only that they are formulated. Therefore, it is necessary to communicate the standards on which such an offer can be based in order to make a FRAND-compliant offer. However, this is possible only if both parties are willing to cooperate with each other. The steps mentioned by the European Court of Justice (cf. ECJ decision on Huawei ./. ZTE) should not lead to an excessive formalisation.

Rather, action and reaction should be driven by a recognizable willingness to enter into a FRAND-compliant license. In this respect, the Federal Court of Justice set strict requirements for the declaration of willingness to license. After the patent holder’s notice of infringement the user of a patent has to express his explicit willingness to conclude a licence under FRAND conditions, no matter how painful they may be for the licensee – i.e. completely independent of the content of the conditions. The wording of the Federal Court of Justice was inspired by a decision of the English High Court of Justice in the case of Unwired Planet v. Huawei (“…take the consequences in terms of anti-discrimination rules, whatever they may be”). According to the Federal Court of Justice, Haier has never expressed the explicit willingness to enter into a license agreement under any and all conditions, as long as these conditions are FRAND-compliant.

The licence agreement with the Chinese state-owned company mentioned above does not discriminate against Haier either. The Federal Court of Justice followed Sisvel’s argument that the licence agreement in question was concluded under the influence of the Chinese state and indicated that state pressure – even if it was not a classic “act of state” – may be an entrepreneurial reason which could justify the unequal treatment.

Martin Koszycki

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