In Huawei v ZTE the Court of Justice of the European Union has ruled that the owner of a standard essential patent must first write to potential infringers setting out its licensing terms and specifying the royalties due. It cannot bring an action for an injunction against infringement of the patent, or for the recall of products made using the patent, before making this written offer, or it will be at risk of being seen to abuse its dominant position.
In return, the potential infringer will only be able to argue that an injunction is abusive after it has responded "diligently" with a specific counter-offer if it does not accept the patent owner's terms.
The decision is a very important milestone towards achieving a uniform European case law at the intersection of patent and antitrust law.
The case law of some national patent infringement courts, in particular in Germany, will now need to be adopted to the ground rules laid out by the CJEU.
The Court of Justice of the European Union (CJEU) has ruled that the owner of a standard-essential patent (SEP) could be abusing its dominant position by bringing a prohibitory injunction against an infringer of that patent if it has not first written to the infringer laying out terms and specifying the royalties that are due. An SEP is a 'patent essential to a standard': it is impossible for competitors to make products that comply with that standard without using the patented technology. The owner of any SEP has undertaken to give licenses to third parties on fair, reasonable and non-discriminatory (FRAND) terms.