FRAND defence put on trial before European Court of Justice

The landmark decision ‘Orange-Book Standard’ of the German Federal Court of Justice (FCJ) confirms that a defendant sued for the infringement of a standard essential patent (SEP) (patents protecting industry-standard technologies) can rely on an anti-trust defence (FRAND defence) against claims for injunctive relief, if the plaintiff refuses to grant a licence under FRAND terms (fair, reasonable and non-discriminatory).

This decision was initially seen as a breakthrough for defendants. However, since then hardly any FRAND defences raised in later cases have actually succeeded, due to the extraordinarily high practical requirements defined by the FCJ. Because the European Commission recently suggested that the requirements for a successful FRAND defence in Germany might be too strict, the Düsseldorf District Court has stayed a current case between China’s largest telecommunications manufacturers Huawei and ZTE and referred five questions to the European Court of Justice (CJEU).

With this referral on 21 March 2013, the Düsseldorf District Court seeks clarification on important details of the FRAND defence, which are absolutely decisive for the relevance of the FRAND defence in future German infringement cases…

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