A speech last week by Alexander Italianer, number two at DG
Competition, signals that the European Commission is carefully watching the
activities of patent assertion entities (PAEs) in suing the distributor of a
mobile phone for allegedly infringing its patents. The comments were made
in relation to ongoing litigation in Germany but could have wider implications.
A PAE collects and enforces patents often on behalf of the
original owners. In a recent case a standard essential patent (SEP) owner
has sued the distributor – Deutsche Telecom - rather than the phone
manufacturer. A similar case is pending against Vodafone.
The remarks are interesting and add to the debate in
this controversial area of law at the interface between IP and competition
law. Litigation against the distributor is a neat technique which
prevents the manufacturer raising a FRAND defence, namely that the alleged
infringer is willing to license the patents on fair, reasonable and
non-discriminatory terms. This is because the manufacturer is not the
direct target of the injunction in litigation against PAEs. However,
where the distributor itself is sued the practical result may be the same
in that the distributor is not able to market the product without securing a
licence. Litigation against the EU distributor may well be the most
viable option where the devices are manufactured abroad.
The Commission has not indicated that it is formally
investigating PAEs, although this would not be a surprising development after
the Commission’s recent enforcement actions in the Samsung and Motorola
cases.
Source: Speech by Alexander Italianer "Shaken, not
stirred. Competition Law Enforcement and Standard Essential Patents",
Mentor Group – Brussels Forum, 21 April 2015
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