EXHAUSTION OF PATENT RIGHTS & DIRECT INFRINGEMENT RE-EVALUATED:THE MPEG LA / DPH CASE

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The German Federal Court of Justice (Bundesgerichtshof) with its decision X 2r 33/10, announced on August 21, 2012, rejects claims for infringement of MPEG-2 video coding patents by a Greek DVD manufacturer: The DVD, as such, is NOT a means of infringement of the patent claim in dispute.

On August 21, 2012 the German Federal Court of Justice heard the appeal by the defendant, a Greek DVD manufacturer, in a patent infringement proceeding, and decided that the case in hand was part of a series of actions encompassing several proceedings (indeed nine actions with the same contents were filed against the defendant by nine members of the MPEG Patent pool).

In the case at issue, the plaintiff was the holder of a European process patent for the coding, transfer and decoding of video signals used when producing and playing of DVDs, under the MPEG 2 standard. The defendant, who is a major Greek DVD producer had no business relationship with the plaintiff, as he did not agree to enter into the worldwide standard pool and in particular had no license agreement with the plaintiff in effect. Mpeg La did, in fact, deny the defendant the option of signing a limited – per country- pool licence and then, along with other patent holders, placed a joint test order with the defendant from Germany in 2007. For this purpose, the placer of the test order sent a DVD master to the defendant, who produced – via a conventional process, in which the data are initially burned into a glass master, and thereon a stamper mold is made with which the optically readable data structure is pressed on blank DVDs – the requested 500 DVDs from it and sent these to the tester in Germany. The plaintiff sued, asking not only for an injunction but also for damages and information about the defendant’s distribution channels. The Regional Court of Düsseldorf decided in favour of the action, and the Higher Regional Court denied the defendant’s appeal.

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