For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

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Wednesday, 22 May 2013

Huawei: the Duesseldorf court presumes to ask

The Court of Justice of the European Union (CJEU) has been asked to consider some questions of vital importance to our understanding of how patent monopolies and standard-essential proprietary technologies fit in with the European Union's omnipowerful rules on competition and antitrust in Case C-170/13 Huawei Technologies. As the UK's Intellectual Property Office (IPO) succinctly summarises the underlying dispute, it concerns "a request for a preliminary ruling in a case concerning the abuse of dominant market position in the field of mobile communications technology". The questions referred for a preliminary ruling are:
1. Does the proprietor of a standard-essential patent who informs a standardisation body that he is willing to grant any third party a licence on fair, reasonable and non-discriminatory terms abuse his dominant market position if he brings an action for an injunction against a patent infringer although the infringer has declared that he is willing to negotiate concerning such a licence? [Says the IPKat, there's a good case for saying that, theoretically, this is a question that can be answered 'always', 'sometimes' or 'never' -- but the reality is, in his opinion, that what constitutes an abuse of a dominant position is a question of fact rather than a question of law. He wonders if the question could have been better drafted]

Or

Is an abuse of the dominant market position to be presumed only where the infringer has submitted to the proprietor of a standard-essential patent an acceptable, unconditional offer to conclude a licensing agreement which the patentee cannot refuse without unfairly impeding the infringer or breaching the prohibition of discrimination, and the infringer fulfils his contractual obligations for acts of use already performed in anticipation of the licence to be granted? [This Kat wonders how helpful such a presumption would be in practice where an injunction is sought, particularly in any field of fast-moving technological advance, since it depends on proof of so many variables. It might provide some measure of comfort where after-the-event relief is sought though]

2. If abuse of a dominant market position is already to be presumed as a consequence of the infringer's willingness to negotiate:

Does Article 102 TFEU [for which see full text below] lay down particular qualitative and/or time requirements in relation to the willingness to negotiate? [No. There's nothing laid down in Article 102 ... ] In particular, can willingness to negotiate be presumed where the patent infringer has merely stated (orally) in a general way that that he is prepared to enter into negotiations, or must the infringer already have entered into negotiations by, for example, submitting specific conditions upon which he is prepared to conclude a licensing agreement? [This Kat wonders why the referring court -- the Dusseldorf Regional Court, Germany -- is so keen to break down the fact-finding tasks into presumptions. It's a dangerous and slippery slope, particularly if, for example, the CJEU considers that such presumptions exist on these facts but it's not clear whether and, if so, to what extent, they might apply in other fields of technology in which essential standards practice is less well established]

3. If the submission of an acceptable, unconditional offer to conclude a licensing agreement is a prerequisite for abuse of a dominant market position:

Does Article 102 TFEU lay down particular qualitative and/or time requirements in relation to that offer? Must the offer contain all the provisions which are normally included in licensing agreements in the field of technology in question? In particular, may the offer be made subject to the condition that the standard-essential patent is actually used and/or is shown to be valid? [What's the betting that the CJEU will not engage this question at the level of detail at which it is asked, and will simply say that this is a matter for the referring court to resolve?]

4. If the fulfilment of the infringer's obligations arising from the licence that is to be granted is a prerequisite for the abuse of a dominant market position:

Does Article 102 TFEU lay down particular requirements with regard to those acts of fulfilment? Is the infringer particularly required to render an account for past acts of use and/or to pay royalties? May an obligation to pay royalties be discharged, if necessary, by depositing a security? [Ditto]

5. Do the conditions under which the abuse of a dominant position by the proprietor of a standard-essential patent is to be presumed apply also to an action on the ground of other claims (for rendering of accounts, recall of products, damages) arising from a patent infringement? [This presumes that there is such a presumption ...]
It's not so long since the IPKat praised the UK IPO for finally managing to give people enough time to enable them to make comments on the questions referred so that they could email Policy at the UK IPO and help the UK government decide whether it wished to make representations in the proceedings before the CJEU.  However, the request for comment on this case was emailed on 21 May (ie yesterday), asking for comments by today.  Fortunately, the IPO has now atoned for this folly and given a fresh deadline of 29 May for the receipt of comments.

How to pronounce Huawei here and here
How to pronounce Haway/Howay here and here

*************************************************
Text of Article 102

(ex Article 82 TEC)

Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.

Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b) limiting production, markets or technical development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

1 comment:

MaxDrei said...

I had thought it was pronounced "Who are we".

I'm not a litigator so I would appreciate comment from one who litigates cases in both London and Duesseldorf. Meanwhile, on the assumption that the OLG D'dorf is something like the Patents Court of the Federal Republic of Germany, D'dorf I suspect needs presumptions, as many as it can gather to itself, because in its day to day work it finds itself handicapped, unable satisfactorily to distinguish:

1. issues of fact from issues of law;

2. evidence of fact from mere attorney argument; and

3. what actually are the facts.

What do other readers say?

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