FSA welcomes the pursuit for legal certainty on important SEP licensing questions

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Brussels, November 26, 2020 – The Fair Standards Alliance (FSA) welcomes the Regional Court of Düsseldorf decision to refer legal questions on licensing of standard essential patents (SEPs) to the Court of Justice of the EU (CJEU).

On 26 November, in legal proceedings brought by Nokia seeking an injunction against Daimler, the Court concluded that it is decisive whether and if so, under which circumstances, an SEP holder may abuse its dominant position by pursuing an injunctive relief against an end-product manufacturer, having refused to grant SEP licence to its suppliers of intermediate products. The Regional Court of Düsseldorf therefore decided to refer to the CJEU for a preliminary ruling on a number of related legal questions.

Questions on the availability of SEP licenses to companies across the value chain are of great economic and legal significance. They will define the future of innovation in Europe, especially for the IoT and related industries. Predictability on SEP licensing and legal certainty are critical for business to be able to plan activity, including investment into R&D.

The landmark CJEU ruling in the Huawei vs ZTE case provided important clarifications. Yet many questions remain unresolved. The CJEU is well placed to provide the much-desired legal certainty on SEP licensing and avert the divergence in national case law across Europe.

The answers to the legal questions related to SEP licensing go beyond an individual case and beyond the automotive industry. The uncertainties arising from the continued refusal by SEP holders to grant licences to many upstream market participants is stifling innovation and stalling the uptake of the IoT in Europe. FSA therefore applauds the pursuit for legal certainty.

In June, the German competition authority, the Bundeskartellamt (BKartA) has urged German courts to refer to the CJEU for a preliminary ruling on several legal questions, including on SEP licence availability across the production chain.

The FSA fully agrees with the BKartA that “it is not readily apparent what are the competitive aims pursued by the SEP holder” that seeks an injunction against end-product manufacturers, having refused a full SEP licence to companies upstream, in the same production chain that are willing to take a licence.

“We are extremely pleased that the Court of Justice of the EU will now be given the opportunity to provide much-needed clarification on the issues relating to refusals to grant licences to companies that want a licence to SEPs,” – said Robert Pocknell, the Chairman of the FSA. “The FSA’s position is clear that companies participating in the standardisation process must not be allowed to hinder innovation by refusing to license companies that want to innovate on top of standards. The impasse that has been reached in the coming together of the automotive and telecommunications industries cannot be allowed to continue in other sectors and industries such as energy and healthcare.”

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