AIPLA Annual Meeting, Washington DC 23 October Licenses in European Patent Litigation

Transcription

1 AIPLA Annual Meeting, Washington DC 23 October 2014 Licenses in European Patent Litigation Dr Jochen Bühling, Attorney-at-law/Partner, Krieger Mes & Graf v. Groeben Olivier Nicolle, French and European patent attorney/partner, Ipon Global Pat Treacy, Solicitor/Partner, Bristows LLP Koen Bijvank, Dutch and European patent attorney/partner, V.O. Patents & Trademarks

2 2 The Unitary Patent Package Rules that impact licensing

3 3 The Unitary Patent Package EU Regulation No. 1257/2012 of 17 December 2012 (unitary patent) Special agreement in the sense of Art. 142 EPC Enters into force on the 20th day after publication (31 December 2012) Is applicable from 1 January 2014 or once the Agreement on a Unified Patent Court enters into force EU Regulation No. 1260/2012 of 17 December 2012 (translations) Agreement on a Unified Patent Court of 19 February 2013

4 4 Unitary effect Granted European patent Having identical claims for all member states (prior national rights!) Registration at the EPO within one month from grant (publication of mention of grant) Effective from grant

5 5 Unitary effect Uniform protection and same effect in all participating member states Limitation, transfer, revocation, lapse in all participating member states at the same time Licences possible for parts of the territories of participating member states Prior user rights remain an issue under national law Exhaustion in the territory of the participating member states

6 6 Licenses of right The proprietor of a Unitary Patent may file a statement with the EPO that he is prepared to allow any person to use the invention as a licensee in return for appropriate consideration, provided that no exclusive license has been registered Gives rise to a reduction in the annuities Statement can be withdrawn (amount of reduction of annuities has to be paid) Licenses of right are treated as contractual licenses The Unified Patent Court has exclusive competence for actions for compensation for licenses of right

7 7 Register for Unitary Patent Protection Part of the European Patent Register For registering unitary effect and any limitation, license, transfer, revocation or lapse of a Unitary Patent Maintained by the EPO

8 8 Actions before the UPC Exclusive licensee: entitled to bring actions under the same circumstances as the patentee provided the patentee is given prior notice, unless otherwise agreed in the license agreement. Non-exclusive licensee: not entitled to bring actions, unless the patentee is given prior notice and the license agreement permits. Patentee is always entitled to join an action brought by a licensee. Patentee must be a party in case of counterclaim for revocation.

9 General introduction about licensing patents and FRAND 9

10 10 Standard Essential Patents and FRAND Standards: play a vital role in sectors where interoperability is key Standard Setting Organisations: e.g. ETSI, IEEE ETSI: produces globally applicable standards for telecoms to allow for a large unified European market and public access to standardised technology SEPs: Standards often include technology covered by patent(s) = Standard Essential Patents ( SEPs )

11 11 Standard Essential Patents and FRAND (cont d) ETSI, like many other SSOs, requires FRAND licensing licensing on Fair, Reasonable, and Non-Discriminatory terms What does FRAND mean? Germany: Orange Book; Motorola v Apple; IPCom v Nokia Netherlands: SK Kassetten; LG / Sony; Samsung v Apple Commission: Google / MMI merger decision; Samsung & Motorola decisions France: Ericsson / TCT Mobile

12 France: Ericsson / TCT Mobile Ericsson s effort to renew its licensing agreement on GSM and GPRS technology Adaptive Multi-rate (AMR) Codec which was to end on the 8 th March 2014 TCT Mobile agrees with the scope of protection and the technological coverage BUT is considering excessive the royalties asked by Ericsson Infringement proceedings lead by Ericsson in front of French Jurisdiction (TGI Paris) based on 5 SEP patents Injunctive relief asked by Ericsson in this procedure 12

13 13 France: Ericsson / TCT Mobile Interim order by Paris TGI, 29/11/2013 Refuse to deliver the injunctive relief «The injunctive relief is to be proportionate to present interests and named in consideration with the background of this agreement between the parties.» «considering this very particular contextual elements, an eventual injunctive relief would distort the current negociations between the parties, such that one would be obtaining an undue advantage in the frame of contractual negotiations of a licence based on standard essential patents,» «Therefore any demand to forbid the sale of these products in France by Ericsson is disproportionate.»

14 14 Hold-up injunctions, willing licensee (EU) 1. Proceedings before the Member State courts Orange Book, German Federal Supreme Court: seeking an injunction may be an abuse, but only if it is against a willing licensee who has: (i) made an unconditional offer to conclude a licence; and (ii) behaved as a licensee, i.e. deposited royalties 2. Proceedings by the European Commission: decisions (29 April 2014) Samsung Commitments Decision Samsung agreed to refrain from seeking an injunction for its SEPs against any entity which agrees to enter into a particular licensing framework The framework: 12-month negotiation period; arbitration or court adjudication in the event of non-agreement Decision may be a template which, if followed, provides a safe harbour for a patentee who seeks an injunction

15 Hold-up injunctions, willing licensee (EU) (cont d) 2. Proceedings by the European Commission: decisions (29 April 2014) Motorola Infringement Decision Commission found that Motorola had abused a dominant position: i. by seeking an injunction for its FRAND-committed SEPs against a willing licensee ii. by insisting, under threat of enforcement of an injunction, that Apple give up its right to challenge the validity / infringement of Motorola s SEPs BUT: Commission did not fine Motorola 3. Court of Justice of the European Union Huawei v ZTE: CJEU expected to clarify EU position on injunctions ruling expected in early Industry bodies Further clarification expected from ETSI and ITU 15

16 16 Huawei v ZTE: questions referred to CJEU Is it sufficient for a successful FRAND defence if the defendant is willing to negotiate a licence, or does he have to make a binding offer to the SEP holder on terms the SEP holder cannot refuse? Does the defendant additionally have to comply with anticipated licence terms with respect to past acts of infringement? Does Article 102 involve specific qualitative and/or time requirements in relation to the "willingness to negotiate"? 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? Or must the offer contain all the provisions which are normally included in licensing agreements in the field of technology in question?

17 17 Huawei v ZTE: questions referred to CJEU (cont d) Can the binding offer be made subject to the condition that the SEP in dispute be actually infringed and/or valid? If finding an abuse of market dominance should require defendant s fulfilment of obligations arising from the requested licence, are there particular requirements with respect to such fulfilment (e.g. is the infringer particularly required to render an account on past infringement and/or to pay (pre-contractual) royalties, possibly by giving security)? Is the FRAND defence limited to claims for injunctions or does it apply to other remedies for patent infringement as well, e.g. damages, recall or rendering of accounts?

18 18 What is a FRAND rate? Horizontal Guidelines compare the licensing fees...in a competitive environment before the industry has been locked into the standard (ex ante) with those charged after the industry has been locked in (ex post) But no EU jurisprudence on determining a FRAND rate Will the Commission deal with the issue? It struggled in Qualcomm Commission believes courts and arbitrators are well-placed to set FRAND rates in cases of disputes US: Microsoft v Motorola; Innovatio IP Ventures; Ericsson v. D-Link et al. China: Huawei v InterDigital

19 19 Other FRAND issues patent ambush Rambus Inc ( ) Commission was concerned that Rambus had intentionally concealed that it had patents and patent applications which were relevant to technology used in the JEDEC standard, and subsequently claimed excessive royalties for those patents Case was settled by commitments: Rambus promised to lower its memory chip royalty rates Case is frequently cited in national litigation ETSI has taken action: use of IPR declaration forms is now mandatory

20 Other FRAND issues transfer of SEPs IPCom s acquisition of Bosch s SEP portfolio ( ) Bosch was under an obligation to license its SEPs on FRAND terms BUT uncertainty about IPCom s obligations as the new owner of the SEPs Commission investigated IPCom s possible unwillingness to license its SEPs on FRAND terms IPCom made public declaration that it would license its SEPs on FRAND terms welcomed by the Commission ETSI IPR Policy subsequently amended purchaser of SEPs bound by FRAND declaration given by prior owner Microsoft s and Nokia's SEP arrangement with Mosaid (2012 ) Google s complaint to the Commission Microsoft and Nokia were colluding to raise the costs of mobile devices for consumers, creating patent trolls that sidestep promises both companies have made ZTE/Vringo (June 2014) Competition concerns with the impact of patent transfers 20

21 The impact of the UPC System on existing licenses and their role in litigation 21

22 22 Legal framework Licenses mentioned in various places: Art. 2, 3 and 8 Regulation on Unitary Patent Exclusive Competence of the Court: Art. 32 UPC Agreement Competence of the Divisions of the Court: Art. 33 UPC Agreement Standing of the Parties to a Lawsuit: Art. 47 UPC Agreement

23 23 Licensees as plaintiff Art. 47 UPC Agreement is the basic rule (strict requirements) Exclusive licensee in general + (Art. 47 (2) UPC Agreement), unless otherwise agreed in the license agreement; same extent as patentee Non-exclusive licensee generally (Art. 47 (3) UPC Agreement), only in so far as expressly permitted by the license agreement and subject to information of the patentee prior to the lawsuit What means in so far as expressly permitted? What are actions in respect of a patent (Art. 47) and defenses related to infringement (Art. 32)?

24 24 Conclusions for drafting license agreements Existing license agreements must fulfill requirements of Art. 47 UPC Agreement (no transitional provisions) Amendments necessary? Clear and unambiguous wording in the license agreement for non-exclusive and exclusive licensees Supplementary agreements before initiating a lawsuit Venue selection

25 Impact of opting-in/-out on licenses 25

26 26 Opting-in/-out (1) Strict transitional regime in Art. 83 UPC Agreement Right to opt-out/-in limited to the proprietor or applicant, no right for licensee May only be exercised before an action has been brought before the Court ( any action?) Contractual provisions in a license agreement will only have an effect between the parties to the agreement

27 27 Opting-in/-out (2) Contractual provisions of the license agreement must consider the parties interests for all future litigation Distinction between exclusive and non-exclusive licensee Right of the proprietor/applicant to opt-out/-in cannot be limited or excluded Opting-out/-in has to be declared for each patent individually (different patents may be treated differently)

28 Questions?

29 Thank you for your attention! Dr Jochen Bühling Olivier Nicolle Pat Treacy Koen Bijvank