These days the FOSS Patents blog is more of a "FOSS Antitrust" blog, but when I chose the name more than ten years ago, I had no idea. So at the moment I'm primarily following the FRAND issues in key automotive cases (with Germany being the patent litigation hotspot it's traditionally known for, while falling behind in innovation) and the app store cases in the Northern District of California.
The most outrageous part of yesterday's Nokia v. Daimler decision by the Mannheim Regional Court involves antitrust law, too. The court's press release already said that the "relatively short remainder of the term of the patent-in-suit led the three-judge panel to exercise its discretion to the effect of denying a stay of the case for the purpose of referring to the Court of Justice of the EU certain questions of competition law raised by the Federal Cartel Office of Germany.
Actually, the European Patent Office's Espacenet search delivers an October 2007 priority date, meaning the patent is still going to be valid for more than seven years .
What was--to my dismay--unsurprising is that German patent judges would deem the limited term of a patent to weigh in a patentee's favor with respect to pretty much any question that has a bearing on access to injunctive relief. It's the exact opposite of what I typically see when eBay v. MercExchange is applied in the United States.
Before bashing the Mannheim court's Second Civil Chamber for this line of reasoning, I firstly wanted to obtain the exact wording of the relevant passage, as opposed to relying exclusively on the court's press release. Meanwhile I've been able to take a look at it, and it's every bit as outrageous as I feared.
Here's how the Mannheim court's Second Civil Chamber justified its denial of the request for a referral and a stay:
The judgment notes that a majority of the proposed questions to be referred have been rendered irrelevant by the court's holding that Daimler and its suppliers weren't willing licensees. (Not only do I disagree with that conclusion, but under Huawei v. ZTE it doesn't matter anyway as the court didn't consider Nokia's proposed terms to be FRAND-compliant either.)
Even against the background of that (legally erroneous) conclusion, the court acknowledges that two of the questions proposed by the Federal Cartel Office for referral to the CJEU remain outcome-determinative:
whether a SEP holder is free to choose whether and at what level of a supply chain it grants a license, and
whether Art. 102 TFEU establishes qualitative, quantitative or other criteria for offering a FRAND license to the supply chain.
The court then stresses its discretion with respect to granting or denying a stay, and notes that an injunction is only available during the patent term, which in the court's opinion poses a risk that injunctive relief might not be able to be enforced anymore.
The CJEU would just need a couple of years to decide, so there would have been plenty of time for a referral anyway. But that's not even the point I'm most concerned about.
The structural problem is that German patent judges generally hold the limited term of a patent against defendants, not against patentees. They often do the same in connection with stays pending a validity determination.
I do understand the difference between "law" and "justice," but I am concerned when judges knowingly and willingly favor, promote and create injustice.
Even if the patent expired in a matter of months, or in 2021 or 2022, that wouldn't give Nokia the right to breach the antitrust laws. If the CJEU answered the Federal Cartel Office's question regarding supply chain-level SEP licenses in Daimler's and its suppliers' favor, Nokia would simply have no case. Its infringement litigation campaign against Daimler would--as it in my opinion does--constitute a highly abusive act. The Mannheim Regional Court's Second Civil Chamber is fine with that possibility. All that matters is to rule in the patentee's favor.
That said, I do give the Mannheim court credit for having stayed two other Nokia cases because the patents were so extremely likely to be invalid that it appeared to be the right choice. Also, Nokia lost one Mannheim cases on the grounds of non-essentiality. But those are technical questions--which is the category of issues German patent judges are comfortable dealing with. Once antitrust law comes into play, they pretty consistently--with a few notable exceptions--prioritize the interests of patent holders over the public interest, and over other fields of law, especially antitrust law.
It would take meaningful legislative reform to bring about change, but the German automotive industry is at the bottom of the IP policy learning curve and getting over it at a snail's pace (to put it mildly). I actually expect patent injunctions to be even more readily available in Germany when the reform process is over than when it began, simply because the modified statute won't help defendants except in a "one in a million" type of exceptional case, while case law is clearly going downhill in the meantime. Contrary to misconceptions and political lies, that's not just a problem with case law at the lower levels: the Federal Court of Justice of Germany is no more balanced than any of the lower courts. Even a patent extremist like Judge Dr. Thomas Kuehnen of the Dusseldorf appeals court is a "moderate" at this stage compared to the country's top court (in practical terms) for patent cases...
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