Case C‑170/13

Huawei Technologies Co. Ltd

v

ZTE Corp.

and

ZTE Deutschland GmbH

(Request for a preliminary ruling

from the Landgericht Düsseldorf)

(Competition — Article 102 TFEU — Undertaking holding a patent essential to a standard which has given a commitment, to the standardisation body, to grant third parties a licence for that patent on fair, reasonable and non-discriminatory terms (‘FRAND terms’) — Abuse of a dominant position — Actions for infringement — Action seeking a prohibitory injunction — Action seeking the recall of products — Action seeking the rendering of accounts — Action for damages — Obligations of the proprietor of a patent which is essential to a standard)

Summary — Judgment of the Court (Fifth Chamber), 16 July 2015

1.        Dominant position — Abuse — Concept — Exercise of intellectual property rights — Conditions

(Art. 102 TFEU)

2.        Dominant position — Abuse — Action for infringement of a patent in respect of which an irrevocable undertaking was given by its proprietor to a standardisation body to grant third parties a licence on FRAND terms and seeking an injunction prohibiting the infringement of that patent or the recall of products concerned by the patent

(Art. 102 TFEU; Charter of Fundamental Rights of the European Union, Arts 17(2) and 47)

3.        Dominant position — Abuse — Action for infringement of a patent in respect of which an irrevocable undertaking was given by its proprietor to a standardisation body to grant third parties a licence on FRAND terms and seeking the rendering of accounts or an award of damages — No effect on products complying with the standard appearing or remaining on the market — No abuse

(Art. 102 TFEU)

1.        See the text of the decision.

(see paras 45-47)

2.        Article 102 TFEU must be interpreted as meaning that the proprietor of a patent essential to a standard (SEP) established by a standardisation body, which has given an irrevocable undertaking to that body to grant a licence to third parties on fair, reasonable and non-discriminatory (FRAND) terms, does not abuse its dominant position, within the meaning of that article, by bringing an action for infringement seeking an injunction prohibiting the infringement of its patent or seeking the recall of products for the manufacture of which that patent has been used, as long as:

-      prior to bringing that action, the proprietor has, first, alerted the alleged infringer of the infringement complained about by designating that patent and specifying the way in which it has been infringed, and, secondly, after the alleged infringer has expressed its willingness to conclude a licensing agreement on fair, reasonable and non-discriminatory (FRAND) terms, presented to that infringer a specific, written offer for a licence on such terms, specifying, in particular, the royalty and the way in which it is to be calculated, and

-      where the alleged infringer continues to use the patent in question, the alleged infringer has not diligently responded to that offer, in accordance with recognised commercial practices in the field and in good faith, this being a matter which must be established on the basis of objective factors and which implies, in particular, that there are no delaying tactics.

Those requirements seek to ensure a fair balance between the interests concerned. Thus, although the irrevocable undertaking to grant licences on fair, reasonable and non-discriminatory terms given to such a body by the proprietor of an SEP cannot negate the substance of the rights guaranteed to that proprietor by Article 17(2) and Article 47 of the Charter of Fundamental Rights of the European Union, it does, none the less, justify the imposition on the proprietor of such a patent of an obligation to comply with the abovementioned specific requirements when bringing actions against alleged infringers for a prohibitory injunction or for the recall of products.

(see paras 55, 59, 71, operative part 1)

3.        Where, on the one hand, the proprietor of a European patent has notified that patent to the European Telecommunications Standards Institute (ETSI), a body the objective of which, in the field of intellectual property rights, is to create standards which meet the technical objectives of the European telecommunications sector, as a patent essential to such a standard and, at the same time, has undertaken to grant licences to third parties on fair, reasonable and non-discriminatory (FRAND) terms, and, on the other, a third party markets products that operate on the basis of that standard, thus using the patent without a licence and without paying a royalty to the proprietor or exhaustively rendering an account to the proprietor in respect of past acts of use, Article 102 TFEU must be interpreted as not prohibiting the undertaking that is the proprietor of the patent, in such circumstances, from bringing an action for infringement against the alleged infringer of its patent and seeking the rendering of accounts in relation to past acts of use of that patent or an award of damages in respect of those acts of use.

In such circumstances, actions for infringement brought by the proprietor of such a patent and for that purpose do not have a direct impact on products complying with the standard in question manufactured by competitors appearing or remaining on the market.

(see paras 74, 76, operative part 2)