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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.

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Unified Patent Court – Status Update


Time to Read: 1 minutes Practices: Intellectual Property

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Status – “No earlier than late 2015”

As reported earlier the new UPC will go live after 13 member states in the EU, including the UK, France and Germany, ratify the agreement.

As of October 1, 2014, Austria, Belgium, Denmark, France and Sweden have all fully ratified the Agreement. Many other EU countries are planning to establish a division. Ratification appears to be a mere formality, at this point. Aside from the Spanish Challenge (see below), the primary steps to going live appear to be logistical, including the IT structure and funding allocations and cost determinations. We expect more details on these issues soon.

The latest news from the Preparatory Committee is that the new system will come on line “no sooner than late 2015”  – roughly a year from now.

Selection of judges

Over 1300 candidates have applied to become judges in the UPC. The Preparatory Committee approved its initial list of candidates in July 2014. Of the candidates, 170 were identified as legally qualified and eligible, with 340 additional technically qualified judges. We’re hearing that the eligible candidates are very strong, which should bode well for the new court.

The judge Training Centre was opened in Budapest on March 13, 2014. The EPO will have an active role in training the judges.  

Spanish challenge at the CJEU

On July 1, 2014 the Court of Justice of the European Union (CJEU) heard the second legal action brought by Spain, challenging the legality of the new UPC. The CJEU Advocate General is expected to give his opinion on October 21, 2014, with the Court expected to render its final decision towards the end of the year. The first action was denied in April 2013. Preparations for the court are being made in Europe as if this second challenge will also be denied; but we won’t know with certainty until the decision is handed down. 

Draft Rules of Procedure of the UPC

The 17th draft Rules of Procedure are expected to be published before the end of 2014 with a public hearing to be held in November or December. The same “hot topics” at issue in the prior drafts are still alive -- opt-out, language requirements, bifurcation, injunctions, and appeals. Watch for more information from R&G about these issues!

Click here to learn more about the UPC and its implications for U.S. companies.

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