Max Planck Institute
for Intellectual Property and Competition Law
Competition Law Defenses to Patent Infringement
in Germany
Consequences for EU Law
Josef Drexl
28 April 2011
Max Planck Institute for Intellectual Property and Competition Law
Name / Date
1
Refusal to License as a violation of Art. 102 TFEU

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Volvo v Meng (ECJ, 1988) – design protection
Magill (ECJ, 1995) – copyright
IMS Health (ECJ, 2004) – copyright
Microsoft (CFI, 2007) – trade secrets
4 cumulative requirements: (1) Indispensablity of access
(2) Exclusion of “effective” competition
(3) Prevention of the emergence of a new
product
(including limitation of technological progress)
(4) No objective justification
 “incentives balancing approach”
Max Planck Institute for Intellectual Property and Competition Law
Name / Date
2
Patent Infringement Proceedings in Germany
Why is Germany so important in patent infringement proceedings?

Germany as the economically most important national market within EU
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Jurisdiction: According to EU rules, any alleged infringer may be sued in
Germany for patent infringement in Germany

Quality of the courts (in particular: Düsseldorf, Mannheim), relatively cheap
and quick
 Parties tend to settle the case for the whole of Europe based on decision
for Germany
Max Planck Institute for Intellectual Property and Competition Law
Name / Date
3
Patent Infringement Proceedings in Germany
Why is the competition defense in German infringement proceedings?

The “three-step-step test” of patent infringement defenses
(1) No use of the patent
(2) Invalidity of the patent (not available in Germany; “separation
principle”)
(3) Duty to license (e.g., as a matter of competition law)

The role of German competition law
(1) Parallel application of EU and German competition law
(2) Regulation 1/2003: In the field of unilateral conduct, nationals law may
prohibit what is allowed under EU law
 German courts not bound by EU case law on refusal to license
Max Planck Institute for Intellectual Property and Competition Law
Name / Date
4
Refusal to license under German competition law
German Federal Supreme Court: Standard-Spundfass (2004)
See: 36 Int’l Rev. Intell. Prop. & Comp. L. 741 (2005)
Sec. 20(1) Act against Restraints of Competition: “Discrimination”

Case on standardized (SSO) technology (essential patents)
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Court did not apply “new product rule”

It is the standard, not the technological superiority of the invention that
attributed the whole market to the patent holder
Note: (1) Case limited to standards (maybe even SSO standards)
(2) Duty to license may also apply without discrimination
Max Planck Institute for Intellectual Property and Competition Law
Name / Date
5
Refusal to license under German competition law:
Orange Book Standard (Federal Supreme Court 2009)
See: 41 Int’l Rev. Intell. Prop. & Comp. L. 369 (2010)
 Orange Book Standard: Standard for the production of rewritable compact disks
 What are the procedural requirements for being allowed to use the standard without a
license agreement?
(1)
General principle of good faith in Germany: Plaintiff is prevented from claiming
from a defendant if he would have to give back immediately based on a plaintiff’s
claim (injunction  duty to deal)
(2)
Court: Plaintiff has to act in good faith (as a faithful licensee)
 Has to submit an unconditional application for the license before use
 Must not question the validity of the patent
 Has to act according to reasonable licensing conditions and has to deposit
reasonable royalty fees
For a critique see: Hanns Ullrich, 41 Int’l Rev. Intell. Prop. & Comp. L. 337 (2010)
Max Planck Institute for Intellectual Property and Competition Law
Name / Date
6
Issues for debate
 The IP/Competition Law Interface:
o Does Orange Book Standard limit other defenses too much?
o Will defendants ever be able to rely on competition law after Orange Book
Standard?
 The EU Dimension:
o What kind of procedure does EU law require in case of a duty to license?
o What if also Art. 102 TFEU is violated: Does Orange Book Standard provide for
effective enforcement of EU competition law?
 Comparison with the US:
o US antitrust law will hardly ever support a duty to license
o But: How close is the German case law to the US eBay rule on injunctive relief?
Max Planck Institute for Intellectual Property and Competition Law
Name / Date
7
Thank you!
Max Planck Institute for Intellectual Property and Competition Law
Name / Date
8