STANDARD-ESSENTIAL PATENTS
East meetsWest
The IP world is awaiting a potentially landmark decision from the CJEU in Huawei v ZTE, which centres on the debate around SEPs and the terms for their issuance. WIPR reports.
I
t is a case of ‘East meets West’. Huawei and ZTE, two of China’s major smart phone players, are in engaged in a patent dispute
at Europe’s highest court that arose from both parties’ eff orts to market their phones in the Western world. With the arguments heard, it is now a waiting
game until a fi nal judgment is released. As patent practitioners in Europe go about their daily business, half an eye will now surely be on Luxembourg as the Court of Justice of the European Union (CJEU) prepares to rule on what could be a potentially landmark decision. T e case, Huawei v ZTE, centres on standard-
essential patents (SEPs) and fair, reasonable and non-discriminatory (FRAND) terms. All SEPs, which protect technology essential to an implementing an industry standard, are required to be licensed on FRAND terms— although what exactly constitutes FRAND is not clear. T e dispute started in 2011 when Huawei,
one of the world’s largest telecoms companies, sued Shenzhen-based ZTE at the Düsseldorf Landgericht (District Court of Düsseldorf). Huawei sought an injunction for ZTE’s alleged
infringement of a SEP covering technology used to implement the 4G LTE standard. ZTE claimed the action was an abuse of
Huawei’s dominant market position and that, because ZTE was willing to negotiate a licensing agreement to use the patent, no injunction should be issued against it. In its defence, ZTE cited article 102
of European directive T e Treaty on the Functioning of the European Union. T e article says that an applied-for injunction based on the alleged infringement of a SEP where the accused company was “willing and able” to sign a licensing agreement would be an abuse of dominance. T e Düsseldorf court attempted to clarify
what standard of a licensee’s “willingness” is suffi cient in order to judge that an SEP owner abused a dominant position by seeking an injunction. T e CJEU will also need to decide whether the rules governing FRAND terms need further clarifi cation.
Willing and able Advocate General (AG) Melchior Wathelet has handed down a preliminary opinion on the
40 World Intellectual Property Review May/June 2015
www.worldipreview.com
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