The District Court in Düsseldorf decides on the Compulsory License Defense against a Standard Essential Patent

In two decisions of November 3, 2015, (4a O 93/14 and 4a O 144/14); the district court in Düsseldorf has for the first time after pronounciation of the European Court of Justice judgement of July 16, 2015 ( C-170/13) dealt with the compulsory license defense. The European court of Justice has defined preconditions under which an owner of a patent which has been chosen by a standardization organization to belong to a standard and who has committed vis a vis to that organization to grant fair, reasonable and non-discriminatory licenses (FRAND) can raise cease and desist claims without misusing its market dominant position in the meaning of Article 102 of the Treaty on the Functioning of the European Union. The owner of a standard essential patent has to notify the infringer about the infringement before raising cease and desist claims. If the infringer is willing to take a license, the standard essential patent owner has to provide a specific written offer of a license under FRAND conditions. The infringer has to react without any delay tactics and if he does not accept the offer, must provide a counter-proposal within a short term, which also corresponds to the FRAND conditions. If the standard essential patent owner rejects this counter-proposal, the patent infringer must nevertheless, as of said date, render an accounting and provide a security bond even with regard to past infringement. The District Court Düsseldorf has hereto concluded that the patent infringer who wants to rely on the compulsory license defense is not allowed to not react on the license offer of the patent owner and to simply continue the infringement. In the cases decided by the District Court Düsseldorf, the patent infringer decided to react on the offer of the patent owner with a counter-proposal. The District Court Düsseldorf came to the conclusion that even if the offer of the patent owner does not correspond to FRAND principles, the infringer, as of the refusal of his counter-proposal, has to render an accounting on the basis of his counter-proposal and to provide a security bond covering the license fees. Because he did not do so, he was not allowed to rely on the compulsory license defense and a judgment for patent infringement has been rendered against him.