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German High Court Ruling Sets Standard for FRAND Negotiations
In the written decision in Sisvel International S.A. v. Haier Deutschland GmbH, Germany’s highest court—the Cartel Senate of the German Federal Court of Justice (“FCJ”)—held that, during pre-suit negotiations, before a patent expires, implementers of standard-essential patents (SEPs) must clearly and unequivocally declare their willingness to conclude a license agreement on fair, reasonable, and non-discriminatory (“FRAND”) terms. If they do not, the FCJ held, those implementers may not be able to hold an SEP-holder liable in Europe for anticompetitive behavior. The Court also provided guidance on the obligations of an SEP holder to avoid abuse of dominance charges, including in the context of making a demand for a worldwide SEP portfolio license. Ultimately, this decision provides important guidance to both patentees and putative infringers about the steps necessary to avoid abuse of dominance allegations and invoke rights to a FRAND license in Germany.