Enforcing Standard-Essential Patents-The European Court of Justice's Judgment in Huawei v. ZTE

摘要

Immediate press reactions to the ECJ Judgment have interpreted it as shifting the balance of power in licensing negotiations to patent users (referring notably to the requirement established by the judgment that SEP holders must make an initial FRAND license offer). This conclusion seems premature. On balance, the Judgment places SEP holders in a stronger position than they appeared to be under the Commission's Motorola and Samsung decisions, or even under the procedure suggested by AG Wathelet in his opinion. In particular, the ECJ Judgment removes SEP users' unique "safe harbor" that allowed them to avoid an injunction by agreeing to have the terms of the license determined by a court or arbitration tribunal. Instead, third-party determination only will be available by common agreement. Moreover, if the parties fail to reach agreement on the terms of the license, the SEP user must provide appropriate security and be able to render accounts, putting a clear and important burden on the SEP user.