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CJEU ruling in Huawei/ZTE leaves the door open to injunctive relief in SEP litigation

Antonio Bavasso, Allen & Overy Memorandum, July 2015

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The Court of Justice of the European Union (CJEU) today handed down its much-awaited decision in the Huawei v. ZTE dispute, in which it was asked to clarify whether and when standard essential patent (SEP) owners may seek and obtain injunctive relief.
The Court sought to strike a balance between the interests of implementers and consumers, on the one hand, and innovative SEP owners, on the other hand. In doing so, it tried to lay down guidelines of behaviour for both parties to follow, which make implementers immune from the threat of an injunction, and provide a safe harbour from antitrust enforcement to patentees.
The Court did recognise that SEP owners may seek and obtain injunctive relief, but only if they comply with two conditions: 1. they must alert the implementer of the infringement and 2. present a specific written offer on FRAND terms. If the implementer does not diligently respond to that offer, in accordance with recognised commercial practices in the field and in good faith, then injunctions can be sought and issued.
While this ruling provides useful guidelines to SEP owners and implementers alike, it leaves some essential questions unanswered: – When does ownership of an SEP confer a dominant position in the first place? How much is a FRAND rate and how should it be calculated? – and raises additional issues of its own.
It is therefore to be feared that the Court’s ruling will not at all put an end to the wave of SEP litigation.

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