German Competition Authority Files Amicus Brief in SEP Litigation

By on July 1, 2020
Posted In Patents

In 2019, Nokia filed a series of patent infringement complaints against Daimler before several German courts. Nokia alleged that connected cars made by Daimler infringed Nokia’s patents. Nokia considered the relevant patents as essential for certain wireless communication standards. Nokia v. Daimler, Case No. 2 O 34/19 (Mannheim District Court). On 18 June 2020, the litigation took a surprising turn: The German competition authority, the Federal Cartel Office (FCO), filed an amicus curiae brief with the relevant patent infringement courts (FCO docket no. P-66/20).

The FCO’s amicus curiae brief addressed a specific question in dispute between Nokia and Daimler: Can Nokia lawfully enforce standard-essential patents (SEPs) against Daimler while refusing to grant licenses under the relevant patents to suppliers of Daimler?

This question is not limited to the dispute between Nokia and Daimler. Whether an SEP holder is obliged to “license to all,” i.e., to any wiling licensee, is a key question of SEP licensing and SEP enforcement that awaits clarification throughout Europe and the United States. Are SEP holders obligated to grant licenses to upstream component suppliers? Or is it sufficient for SEP holders to license end products only, i.e., to grant licenses to downstream makers of end products, such as automotive original equipment manufacturers? The possible consequences of a “license to all” obligation are multifaceted: If an SEP holder infringes the obligation, the SEP holder may breach any fair, reasonable and non-discriminatory (FRAND) undertaking. Not only that, but the SEP holder also may violate European competition law or abuse a dominant market position according to Article 102 of the Treaty on the Functioning of the European Union (TFEU).

In its amicus curiae brief, the FCO carefully examined questions around the issue of “license to all.” The FCO discussed implications for the interests of both SEP holders and willing licensees, and the potential impact on competition in the relevant markets. The FCO ultimately invited German courts to stay SEP infringement proceedings, and to refer specific questions relating to “licensing to all” to the Court of Justice of the European Union (CJEU). The CJEU has the final word on the interpretation of European competition law, including Article 102 TFEU. The FCO took the position that only a CJEU judgment will avoid divergent court decisions on whether SEP holders are under a “license to all” obligation, and that referring relevant cases to the CJEU will minimize the economic risk for the parties involved in patent litigation.

The FCO’s amicus curiae brief carries considerable weight. It comes from a neutral agency in charge of applying competition law. Still, by its nature, it is an amicus curiae brief only, i.e., a suggestion to the relevant courts to stay and refer cases to the CJEU. It will be up to the courts to either deliver their own decision on “licensing to all” and the related issues, or refer their cases to the CJEU.

Parties involved in SEP licensing negotiations or SEP infringement litigation in Germany should be aware of the FCO’s amicus curiae brief and should consider its implications on licensing negotiations and pending litigation.

Dr. Henrik Holzapfel
Dr. Henrik Holzapfel advises on all aspects of intellectual property law. He focuses on litigating patents, including the enforcement of patents essential to industry standards and FRAND defenses. Henrik also has extensive experience in litigating trade secret matters. Other areas of his practice include advising on IP licensing agreements, including advice on European competition law, drafting R&D agreements and advising on employees’ inventions. Henrik’s clients represent a wide variety of industries such as IT, pharmaceutical, biotech, medical devices, chemicals, automotive and engineering. Read Dr. Henrik Holzapfel's full bio.