Owners of standard essential patents (“SEP”) regularly see themselves considerably limited in their permitted scope of action vis-à-vis potential licensees (so-called implementers). The obligation to grant and agree on licenses on fair, reasonable and non-discriminatory (“FRAND”) terms often paves the way for hold-out tactics by implementers aiming at delaying the negotiations until the patent has expired (socalled patent “hold-out” or “reverse patent hold-up”). There has been limited and sometimes inconsistent guidance by courts on how to deal with hold-out tactics without running the risk of infringing applicable antitrust laws.
The German Federal Court of Justice (Bundesgerichtshof, “FCJ”) recently issued an important decision providing helpful practical guidance for SEP holders on how to deal with hold-out tactics by implementers. This client alert provides an overview of the FCJ’s decision, assesses its potential impact on patent and non-patent licensing disputes and compares the German situation to the current US landscape for FRAND licensing.