European Commission limits Ability to seek Injunctions relating to Standard Essential Patents

by K&L Gates LLP

On 29 April 2014, the European Commission ("Commission") issued two decisions clarifying its approach where holders of standard essential patents (“SEPs”) seek injunctions against their prospective licensees, in particular as to when such an action may constitute an abuse of an SEP holder’s dominant position in breach of Article 102 of the Treaty on the functioning of the European Union (“TFEU”).

SEPs are patents essential to implement a specific industry standard. It is not possible to manufacture products, in this case smartphones and tablets, that comply with a certain standard without accessing these patents by obtaining a licence. This may give companies owning SEPs significant market power. As a result, standards bodies often require their members to commit to license SEPs on fair, reasonable and non-discriminatory (“FRAND”) terms, ensuring effective access to the standard by market players and ultimately leading to a broader choice of interoperable products for consumers while ensuring adequate remuneration to the SEP holder.

Seeking injunctions (which is likely to entail the exclusion of the infringing product from the market) is generally considered a legitimate remedy for patent infringements. However, the Commission has now clarified that the seeking of an injunction based on SEPs may constitute an abuse of a dominant position if an SEP holder has given a voluntary commitment to license its SEPs on FRAND terms and the company against which an injunction is sought is willing to enter into a licence agreement on such terms.

Commission’s Decisions
The Commission has been pursuing two cases against SEP holders who had committed to the European Telecommunications Standardisation Institute to license on FRAND terms their patents relating to key industry standards for mobile and wireless communications. The Commission has now concluded the first case on the basis of binding commitments which had been put forward and has reached a finding of infringement in the second case.

The commitments involve a requirement not for the next five years to seek any injunctions in the European Economic Area on the basis of any SEPs, present or future, relating to technologies implemented in smartphones and tablets against any company that agrees to a particular licensing framework. The stipulated framework permits a negotiation period of up to 12 months and stipulates that if no agreement is reached, there will be a third party determination of FRAND terms by an arbitrator if both parties agree or otherwise by a court. This effectively creates a safe harbour for potential licensees of the relevant SEPs such that if they agree to the licensing framework, they can be confident that they will not face an injunction for infringement of the SEP.

The acceptance of commitments does not involve any finding of infringement and cannot therefore be relied on in any follow-on damages actions.

In the second case, the Commission reached a finding that Article 102 TFEU prohibiting the abuse of a dominant position had been breached by the SEP holder seeking and enforcing an injunction against its prospective licensee, which had agreed to a licence and to be bound by a determination of the FRAND royalties by the relevant German court. The Commission also considered to be anti-competitive the SEP holder’s insistence that the licensee give up its rights to challenge the validity of the SEPs or the licensee’s infringement of them. Nevertheless, the Commission decided not to impose a fine on the SEP holder in view of the legal uncertainty regarding the disputed conduct but only to require that the negative effects of the infringing conduct must be eliminated.

In light of the Commission’s decisions, SEP holders looking to enforce their patents should be mindful of the obligation to offer FRAND terms to prospective licensees. Likewise those seeking to benefit from SEPs need to be willing to enter into licences on FRAND terms. If agreement cannot be reached, in particular regarding royalty rates, both parties should consider third party mediation, arbitration or court processes.

It is worth bearing in mind that the Court of Justice of the European Union (“CJEU”) is due to rule on similar issues in the next 12 months following a referral from the German courts and the formal precedential value of the Commission’s decisions therefore remains subject to the CJEU’s confirmation.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© K&L Gates LLP | Attorney Advertising

Written by:

K&L Gates LLP

K&L Gates LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.