Munich Regional Court takes new approach to FRAND

SEP owners and implementers are to go through proceedings at the Munich Regional Court while working towards a licence agreement. The 21st Civil Chamber of Munich Regional Court made this clear in the first FRAND proceedings between Nokia and Oppo. It seems the court has modified its previous 2020 guidelines on FRAND.

28 March 2022 by Mathieu Klos

FRAND, Munich Regional Court In the case between Nokia and Oppo, the Munich Regional Court has set out a new interpretation of the Federal Patent Court's FRAND guidelines. In FRAND cases, both parties must now demonstrate a willingness to conclude a licence agreement before the end of the oral hearings ©JUVE Patent

On March 23 2022, the 21st Civil Chamber heard the first FRAND proceedings in the global dispute between Nokia and Oppo. During the hearing, presiding judge Georg Werner took the opportunity to redefine the court’s FRAND guidelines.

In 2020, the Munich Regional Court provided SEP holders and implementers with guidelines on how to behave in FRAND proceedings, through which the two patent chambers set out their view of the CJEU stipulations determined in Huawei v. ZTE.

But things have changed. Firstly, the Munich Regional Court now has three patent chambers. Furthermore, the German Federal Court of Justice also announced two leading decisions on FRAND in Sisvel vs. Haier I and II, which the Regional Court Munich has now reacted to. Old guidelines announced by the court prior to Sisvel vs Haier I and II are no longer available on the court’s website.

Munich Regional Court on FRAND

Last week, presiding judge Georg Werner used the 30-minute introduction to several FRAND cases in Nokia v. Oppo to announce the court’s current view on SEP proceedings. Above all, Werner emphasised that both parties must demonstrate willingness to conclude a licence over a long period of time, drawing guidance from the Federal Court of Justice’s decision in Sisvel vs. Haier I and II. Previously, the Munich Regional Court had primarily held implementers accountable.

In 2020 and 2021, the Federal Court implemented CJEU guidance in SEP proceedings. Germany’s highest patent court strengthened the position of SEP holders by ordering implementers to work purposefully towards the conclusion of a licence to avoid a so-called hold-out. But SEP holders must also contribute constructively to a licence agreement.

As explained by the judge, in future the three Munich patent chambers will implement the requirements of the Federal Court of Justice. Werner emphasised that the Munich patent chambers, like the Federal Court of Justice, assume that a court cannot prescribe a good licence agreement. Rather, said Werner, it must be the result of the parties’ negotiations.

This means that the 21st Civil Chambers expect both parties to work openly and purposefully towards a FRAND licence until the end of the oral hearing.

Willingness to license

In the so-called Munich Procedure, there is an early first hearing with a later main hearing. Only at the end of the main hearing can the court form an impression as to whether both parties have worked towards a licence.

Even under the previous guidelines, the parties could make their offers up to this point and improve them if necessary. However, the guidelines did not previously explicitly state that the court would examine the parties’ willingness to take a licence over a long period of time. The court wants the parties to conclude a licence during the course of the proceedings, instead of relying on a judge’s decision.

Georg Werner, Chair of new chamber, Regional Court Munich

Georg Werner

According to Werner, the CJEU requirements stipulate that the first offer from the SEP holder remains the starting point for the licensing negotiations.

However, both the SEP holder and the implementer cannot just make an offer. They must also demonstrate to the court that they are actively seeking a licence until the end of the oral hearing.

Werner also said that there is no general rule for setting a FRAND rate. Rather, he indicated that a FRAND licence is always subject to a certain range because it depends on many underlying conditions, such as the specifics of the industry, the parties’ markets, and the specific dispute.

As yet, the court has not confirmed whether the other two chambers share the new view of the 21st Civil Chamber on FRAND. In the past, however, they have always coordinated closely on fundamental issues.

Currently, the Regional Court Munich is Germany’s busiest patent court. It primarily hears lawsuits relating to mobile communications patents.

Behind closed doors

The 21st Civil Chamber of the Munich Regional Court excluded the public, following the introduction, due to confidential contract details. Therefore, it is unclear how Nokia and Oppo dealt with the requirements.

In total, the court heard FRAND issues on nine claims brought by Nokia against various Oppo companies (case IDs: 21 O 8879 to 81/21, 21 O 8890 and 91/21, 21 O 11522/21, 21 O 12125/21, 21 O 110039/21, 21 O 12142/21).

The claims were based on four standard-essential Nokia patents (EP 20 80 193, EP 17 28 352, EP 35 57 917 and EP 33 96 868). Munich Regional Court scheduled the main hearings in these proceedings for 15 and 29 June 2022.

The court had already held initial hearings on the technology in individual Nokia lawsuits in mid-March. Further hearings in other Nokia lawsuits will follow by May.

Global approach

Alongside the current Munich Regional Court proceedings, the two companies have faced each other in global patent courts since 2021. The main disputes are over SEPs, including various 5G patents. But implementation patents are also in dispute. According to JUVE Patent information, Nokia has filed lawsuits mainly in Europe, but also in India, Indonesia and Russia.

Nokia sued over nine SEPs and five implementation patents in Munich, Mannheim and Düsseldorf. A total of 26 lawsuits by Nokia against several Oppo companies are currently pending in Germany.

Oppo, for its part, has asserted seven SEPs against Nokia. Additionally, the two companies attacked the validity of each other’s patents-in-suit. They also face each other in oppositions at the European Patent Office.

In the UK, Nokia filed four claims, three of which concerned SEPs, according to JUVE Patent information. In France and Spain, Nokia asserted two implementation patents each.

Oppo has not filed claims concerning its own patents in these countries. However, JUVE Patent learned that Oppo filed nullity suits against Nokia patents in the Netherlands, which Nokia countered with infringement suits. Nullity suits are also pending in China. The dispute is based on the renewal of a cross-licensing agreement, which ended last year.

Hogan Lovells for Oppo

Hogan Lovells’ partners are no strangers to mobile phone lawsuits. The firm regularly represents industry giants such as Apple, Google and Vodafone. But while Asian companies such as ZTE and Xiaomi are also among their clients, it is relatively new alongside Oppo. The relationship began with a dispute between Oppo and Sharp last year.

In the dispute against Nokia, the law firm is mainly defending Oppo against Nokia’s claims. Here, its lawyers are supported by in-house patent attorneys. In addition, the patent attorneys of Maikowski & Ninnemann are involved in a number of proceedings. Hogan Lovells is also active for Oppo in the UK, Spain, France and Russia.

Bardehle Pagenberg is also active for the Chinese mobile phone manufacturer in Germany. The Munich-based IP boutique is leading the active claims against Nokia at the Munich Regional Court, as well as parallel nullity suits. The firm also advises Oppo in oppositions against Nokia patent at the EPO.

Henrik Lehment, Hogan Lovells, patent litigation

Henrik Lehment

Three patent attorney firms plus Bird & Bird

Nokia is relying on its regular advisors. The Finnish company has a long-standing relationship with Bird & Bird. The firm is handling the proceedings primarily from its London and Düsseldorf offices, through its two respective lead partners Richard Vary and Christian Harmsen.

On the other hand, Munich partner Boris Kreye is handling the defence against Oppo’s claims.

Arnold Ruess advises Nokia on its suits concerning the patents it has already brought against Daimler. The Düsseldorf IP boutique essentially led the connected cars proceedings against the German carmaker. Here, Bird & Bird did not appear in court.

On the patent attorney side, Nokia relies on Bird & Bird partner Felix Landry in the German proceedings. This is alongside patent attorney Wolfgang Lippich from Samson & Partner, and Cohausz & Florack partner Christoph Walke.

David Molnia of df-mp completes the team for Nokia. The three patent attorney firms had already assisted in the lawsuits against Daimler and are therefore very familiar with the patents-in-suit. Arnold Ruess was also involved in these proceedings.

A mixture of advisors

Christian Harmsen, Bird & Bird, Düsseldorf, patent litigation

Christian Harmsen

For Nokia
Bird & Bird (Düsseldorf, Munich): Christian Harmsen (lead), Boris Kreye, Marc Grunwald, Felix Landry (patent attorney), Stephan Waldheim (competition law); counsel: Nick Pearson, Tobias Wilcke, Malte Frese (patent attorney); associates: Bastian Selck, Elaine Jatta, Tamy Tietze (competition law), Katharina Pehle, Simon Reuter, Maximilian Groß
Arnold Ruess (Düsseldorf): Arno Riße (lead), Cordula Schumacher; associates: Jan Wergin, Tim Smentkowski, Theresa Schulz
Cohausz & Florack (Düsseldorf): Christoph Walke (lead), Philipe Walter, Fabian Vogelbruch, Matthias Waters, Michel Kaminsky, Björn Brouwers, Peter Reckenthäler (all patent attorneys)
Samson & Partner (Munich): Wolfgang Lippich Georg Jacoby, Alexander Münster, Marcus Otten (all patent attorneys)
df-mp Dörries Frank-Molnia & Pohlman (Munich): David Molnia (patent attorney)
In-house: Taliah Walklett (Lead, Wimbeldon), Clemens-August Heusch (IPR litigation), Armin Schwitulla (both Munich)

For Oppo
Hogan Lovells (Düsseldorf): Henrik Lehment, Martin Fähndrich (both lead), Clemens Plassmann, Steffen Steininger (Munich), Christian Stoll (Hamburg), Miriam Gundt, Alexander Klicznik, Andreas Schmid (both patent attorneys, Munich), Anna-Katharina Friese (Hamburg), Martin Sura (regulatory); counsel: Markus Kuczera, Felix Banholzer, Kerstin Jonen, Elena Wiese (regulatory); associates: Dania Esser, Bastian Englisch, Teresa Christof, Verena Dormann, Martin Koch, Lars-Fabian Blume, Daniel Kaneko, Cedric Rohr, Michael Jordan, Stephan Stürwald, Niels Gierse, Miriam Werner, Cao Yang, Julian Urban (regulatory)
Bardehle Pagenberg (Munich): Tilman Müller-Stoy (lead), Jan Bösing, Stefan Lieck, Alexander Haertel, Ronja Schregle, Rebekka Jeschke, Sebastian Horlemann; patent attorneys: Tobias Kaufmann (lead), Patrick Heckeler, Christian Haupt, Benjamin Ruckert, Michael Wolfgang Waschak, Nikolaus Buchheim, Marius Fischer, Johannes Scholz, Max Link, Zhicheng Yu
Maikowski & Ninnemann (Berlin): Gunnar Baumgärtel, Felix Gross, Ralf Emig, Andreas Tanner, Frederick Kramer, Sandro Staroske, Matthias Euler, Piet Schönherr (all patent attorneys)

Munich Regional Court, 21st Civil Chamber
Georg Werner (presiding judge), Anna-Lena Klein, Sebastian Benz