We reported some months ago on the German case concerning the relationship between patents and standards for recordable CDs.
In that case, the German Federal High Court decided that the so-called “FRAND defence” could apply to patents relevant to standards. In other words, it is possible for a company implementing a standard to obtain a licence as long as it sets aside a reasonable licence fee.
The Dutch Court in the Hague explicitly rejected this defence and noted that its decision was different to that drawn by the German Federal High Court. The Dutch Court noted that there was no concept of “compulsory licence under cartel law”. Dutch law (like German law) has a specific provision in its patent code for the granting of compulsory licences. Such licences only come into effect when they have been granted by a court. The Dutch Court states that this is reasonable as nobody would otherwise understand the conditions under which the licence had not been granted.
There’s an implicit criticism of the defendant in the case that it had apparently never attempted earlier to take a licence to the technology from Philips. 
The Court clearly stated the defendant should have attempted earlier (on starting sale of the goods or becoming aware of the need) to obtain a licence under FRAND conditions and, if this attempt had not been successfuly, the defendant could have asked for a compulsory licence to be granted. The Court points out that at least a preliminary licence could have been granted in summary proceedings.
The decision highlights two issues of European Patent Law.
Firstly the need for a uniform patent litigation system to harmonise the decisions of the different national courts. The different decisions in the German and Dutch courts are based on different legal traditions and codes of civil procedure (and contractual law). The Dutch have traditionally granted complusory licences more readily than the German courts and so it’s not surprising that the Court in the Hague suggested this route, whereas the German Federal High Court suggested an alternative option.
Secondly the need for clarity under which licenses to patents required to implement standards can be granted. Most Standards Setting Orgnisations have a clear policy on intellectual property – licences will be granted on Fair Reasonable and Non-Discriminatory (FRAND) conditions. There are, however, difference on how to interpret these conditions – there’s little or no case law to enable a market entrant to assess its risks and It’s clearly impractical in a single European market to have to go to multiple courts to obtain compulsory licences (as the Dutch want) or post multiple bonds (as suggested in Germany).
The case has also been discussed on the EPLawblog here
Technorati Tags:
CD-R, Patent licence, Standards, Orange Book, Philips
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