2020年3月11日
On February 4, the Munich Regional Court published two new guidelines for patent litigation concerning SEPs falling under the Huawei v. ZTE rules and for patent litigation involving confidential information and evidence. These guidelines compliment the long established general guidelines of the Munich Regional Court for patent infringement proceedings. However, while the general guidelines merely explain how the framework for patent infringement cases are handled in Munich, the guidelines on patent litigation concerning SEPs particularly contain important statements on how the Munich Regional Court intends to deal with the applicable aspects of competition law.
The guidelines on SEP litigation are explicitly applicable only in cases of a FRAND encumbered patent, which is essential to a declared standard. This corresponds to the scope of the CJEU decision Huawei v. ZTE. The Munich Regional Court reiterates the principles established under Huawei v. ZTE in general and will of course observe the order of the steps the parties usually have to take in pre-trial negotiations.
One interesting aspect is that the Munich Regional Court explicitly acknowledges the plaintiff’s option to bring an infringement action without a prior license offer, if the initial complaint does not include motions for an injunction, recall or destruction. The motions for an injunction, recall and destruction can then be amended during the ongoing proceedings after the plaintiff makes an initial license offer. This option might shorten the defendant’s time to react to the license offer before the main trial in which the Court will decide over the injunction. However, the guidelines contain a paragraph which allows that the Court adjusts the time between the inclusion of the additional motions and the second oral hearing.
While the Düsseldorf and Mannheim Regional Courts have treated the steps to be taken by the plaintiff and defendant in a consecutive order and do not require defendants to make a counter-offer, if the plaintiff’s initial offer was not FRAND, the Munich Regional Court will follow a slightly different procedure, which resembles the procedure followed in the UK High Court. The Munich Regional Court will review the plaintiff’s initial license offer only on a high level and in case the plaintiff’s initial offer is not obviously unreasonable, the defendant shall always be required to make a counter-offer. The counter-offer is also reviewed on a high level for obvious non-compliance with FRAND principles. If the defendant makes a reasonable counter-offer, the Court will engage in a full FRAND review of the plaintiff’s offer. The defendant’s counter-offer therefore serves as an “entry ticket” to the full FRAND review of the plaintiff’s offer and ultimately a FRAND defense.
Should the plaintiff reject the defendant’s counter-offer, the defendant will have to provide accounting for past use in accordance with the counter-offer and provide financial security for past royalties to the plaintiff. In this regard, even though it is not explicitly spelled out in the new guidelines, it can be expected that in Munich, like in all other German courts so far, global offers for entire SEP portfolios are the norm and can therefore legitimately be requested by plaintiffs. Thus, it can also be expected that counter-offers for single patents or countries will usually not be accepted. The defendant’s counter-offer therefore usually also has to be a global license offer to the plaintiffs portfolio of SEP’s for the same standard and accounting for past use has to be provided on this basis. Regarding the financial security, the Munich Regional Court’s view is more favorable for the defendant. Even if the plaintiff’s initial offer and the defendant’s counter-offer are based on a global license, the financial security only has to cover the past use of the plaintiff’s SEP portfolio in Germany. This is consistent with the purpose of the security, which shall compensate the plaintiff for the denial of an injunction. If the plaintiff asserts its patent rights only in Germany, there is no need to provide security to the plaintiff for sales in other countries where the plaintiff has not taken any legal action. According to Munich, the security should cover an amount of 110 % of the accrued reasonable royalties for sales in Germany. This reduces the amounts, which defendants have to submit as security in FRAND cases considerably and makes it easier to maintain a FRAND defense in case the plaintiff rejects a counteroffer.
While the requirements on the financial security are rather favourable for the defendant, other aspects the Munich Regional Court will likely appeal to plaintiffs:
Simultaneously with the new guidelines on litigation involving SEPs under Huawei v. ZTE, the Court also published its guidelines for the protection of the parties' confidential information in patent litigation. This is particularly relevant in SEP litigation, where the plaintiff has to disclose prior licenses with third parties, but also helpful (and explicitly applicable!) in other patent infringement proceedings, e.g. if the plaintiff wants to introduce evidence from foreign proceedings, which is subject to a protective order (e.g. in Sec. 1782 proceedings in the US).
In the FRAND context, the Court makes it very clear that it expects the full disclosure of the plaintiff’s third party licenses and that it is not possible to hide behind confidentiality clauses in these third party licenses. In case the disclosure of a third party license is not permitted under respective confidentiality clauses, the Court will upon request of a party order the disclosure of the license with the expectation that such a court order prevails over the contractual confidentiality obligation in the NDA.
Otherwise, the guidelines on the treatment of confidential information will likely become largely obsolete as soon as the currently discussed reform of the German Patent Act enters into force. The reformed Patent Act will include the detailed rules on the protection of confidential information in the new German Trade Secrets Act into the new German Patent Act by reference.
The Munich guidelines on the FRAND defense contain a number of new and interesting proposals how to deal with issues in SEP litigation, which are fiercely debated around the globe and for which there are no generally accepted solutions so far. How this plays out in practice and how it will impact the balance between SEP holders and implementers in the global FRAND battle, remains to be seen when the first decisions on the basis of the guidelines are published. However, the guidelines already provide useful information for potential plaintiffs when selecting a forum for SEP litigation and for potential defendants having to assess litigation risks and build a FRAND defense.