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ANOTHER VICTORY FOR SISVEL IN KARLSRUHE – COURT OF APPEALS CONFIRMS JUDGMENT OF THE DISTRICT COURT IN MANNHEIM IN SISVEL VS. WIKO CASE

Luxembourg, March 3, 2021 

The Appeals Court in Karlsruhe has recently released the redacted version of its decision rendered on December 9, 2020 in Sisvel vs. Wiko (6 U 103/19). The decision confirms the findings of the first instance decision in Mannheim. The Mannheim Court had confirmed the infringement of the German part of Sisvel’s European patent EP 1 119 997. The court had also granted an injunction against Wiko and considered Wiko be an unwilling licensee that pursued delaying tactics, which disqualified them for any further arguments relative to Sisvel’s FRAND commitment. The court considered the offer of Sisvel under its Mobile Communication Program not to be evidently outside the FRAND-framework, after carefully reviewing the arguments put forward by the parties.

Sisvel’s MCP Licensing Offering

The Appeals Court considered Sisvel’s license offering under its Mobile Communication Program not contradicting Sisvel’s FRAND obligations. Furthermore, it noted that Sisvel had met every requirement as set out by the European Court of Justice in (“ECJ”) in Huawei/ZTE during its attempts to grant Wiko a license, before moving to file for litigation. The Court considered that Sisvel’s royalty rates were placed within the range of comparable license offerings and no convincing arguments to the contrary were made by the defendant. The arguments of defendant included reference to: i) alleged discriminatory prior licenses granted by Sisvel, ii) applicability of cost-based pricing to royalties (aka SSPPU), iii) insistence on a European regional license, instead of the offered global license and iv) an aggressive top-down calculation, which were all considered unconvincing or irrelevant. The Court interestingly made the point that defendant should have brought any such complaint regarding the offered terms promptly and early on in the negotiations. By bringing such arguments only on the doorsteps of Court, defendant gave the Court a clear impression such complaints were only made only as part of a design to hold-out.

Evident Hold-Out Strategies Have No Future

By referring to the decision of the German Federal Court of Justice in Sisvel vs. Haier, the Appeals Court points out that an implementer must actively engage in the licensing negotiations with the clear, distinct and unconditional intention of obtaining a license – mere “lip service” is not sufficient. In the present case the entire behavior of Wiko before and during the litigation only aimed at delaying as much as possible the conclusion of a license agreement. The willingness to conclude a license also does not have to be expressed only once in a time, it has to be always present and the implementer has to show that he actively participated in the negotiation.

The Court gave a very thorough account of the behavior of the defendant and its positions in court, which on several occasions confirmed its unwillingness to take a license under the disputed patents.

No stay of the proceedings and referral to the European Court of Justice

In a last-minute attempt before the rendering of the decision, Wiko tried to convince the Appeals Court to stay the case and refer certain question related to the interpretation of willingness to the ECJ. Wiko expressively referred to the latest decision of one of the patent chambers of one district courts in Düsseldorf that referred certain question related SEP licensing to the ECJ. The court of appeal refused to follow Wiko’s arguments as in cases where delaying tactics are so obvious the court does not expect any new guidance from the ECJ.

Florian Cordes, Sisvel’s Head of European Litigation:

“We are very happy to see how the Appeal’s Court in Karlsruhe has applied the recent rulings of the German Federal Supreme Court. The court has analyzed each and every step undertaken by Wiko but considered all of them only motivated by the underlying delaying tactics”, says Florian Cordes, Sisvel’s Head of European Litigation. “The Court even went so far by stating that certain ample requests put forward by Wiko had the only aim of further delaying the negotiations and harassing the plaintiff”. Last but not least, Cordes adds: “We have seen our expectations fully confirmed by this first decision after the referral of one of the Düsseldorf courts to the ECJ because the Appeals Court made it clear that no clarification from the ECJ is necessary: cases of delaying tactics applied by implementers are not to be tolerated.”

David Muus, Program Manager of the MCP Licensing Program:

“The Karlsruhe Appeal’s Court implements the BGH’s interpretations of FRAND obligations on both licensor and implementer to the present case and is making it equally clear that hold-out behavior does not find shelter in the FRAND-commitments of the owners of standard essential patents. The decision gives us a clear catalogue of common delay tactics that should not be tolerated.” said David Muus, Manager of Sisvel’s Mobile Communication Program. He continues: “Hold-out tactics still take place on a considerable scale in SEP licensing. We consider this verdict another milestone, which hopefully makes companies using such tactics reconsider and decide to join us at the negotiation table to find a good and fair deal.”

For additional information about the program, please visit the dedicated section of our website: https://www.sisvel.com/licensing-programs/wireless-communications/mcp/introduction

About Sisvel
Sisvel is a world leader in fostering innovation and managing intellectual property. The Group identifies, evaluates and maximizes the value of IP assets for its partners around the world, providing firms with a revenue stream which can be reinvested in innovation for the generation of future revenues. Founded in 1982, the Group is headquartered in Luxembourg and has subsidiaries in China, Germany, Italy, Japan, Spain, the United States and the United Kingdom. The Group has a long history of managing successful patent portfolios including those related to the audio compression standards known as MP3 and MPEG Audio, as well as broadcasting and receiving of digital terrestrial television standards maintained by the DVB Project. Sisvel currently operates patent pools and joint licensing programs in the fields of mobile communication; wireless local area networking 802.11; digital video broadcasting; recommendation engine and broadband access to data networks. 

For additional information, please visit: www.sisvel.com.

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