返回概览 The Landmark Decision “Orange-Book-Standard”

The Federal Court of Justice in Germany (BGH) delivered a landmark decision dealing with the use of the so-called “compulsory license objection under antitrust law” in patent infringement proceedings.

In the dispute, the patent proprietor sued the defendants for infringement of a patent related to the “Orange Book Standard”, which all manufacturers of standard read-only compact discs (CDR) and read-write compact discs (CDRW) must comply with. The defendants argued that by refusing to grant a licence under the terms they proposed, the patent proprietor abused his position of market dominance and is, therefore not entitled to injunctive relief.

The Federal Court of Justice stated that a defendant, who is sued for a patent infringement, can defend himself against a claim for injunctive relief asserted by the patent proprietor by pleading abuse of a dominant position within a market, if the patent proprietor refuses to conclude a patent licence agreement with the defendant on the basis of non-discriminatory and non-restrictive terms and conditions (“compulsory license objection under antitrust law”).

However, in order to successfully argue abuse of a position of market dominance, the defendant must demonstrate that he has made an unconditional and binding offer to the patent proprietor to conclude the licence agreement, which could not have been rejected by the patent proprietor without violating the prohibition of discrimination or engaging in anticompetitive behaviour. If the defendant has already been using the subject-matter of the patent before the conclusion of the licence agreement, he must comply with the obligations resulting from the yet to be concluded licence agreement for the duration of the use of the patent. In particular, the defendant must pay or at least secure the payment of adequate royalties to the patent proprietor.

If the defendant considers the patent proprietor’s license demands to be excessive or if the patent proprietor refuses to quantify the royalties, the requirement for an unconditional offer is met if the defendant makes an offer to conclude a license agreement, with the royalty payment to be determined by the patent proprietor under the principles of equity.

In the specific case decided by the Federal Court of Justice, the Court found that the above conditions were not met, and the injunction granted to the patent proprietor was upheld.

Download the full text of the decision KZR 39/06 “Orange-Book-Standard” of the BGH of May 06, 2009 under:

http://www.mueller-bore.de/tl_files/Decisions_BGH/Orange_Book_Standard.pdf

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