29 July 2024

Panasonic Business: Clarification on comparable licence production before the JUB (Order for Production of Evidence).

This week, we reported on the case between Huawei and Netgear, in which the defendant had obtained an order for the production of a comparable license granted by Huawei to Qualcomm, which Netgear had obtained production of via a decision of the Munich Local Division of 24 April 2024. It is interesting to note that this case is not the only one of its kind, and that these cases, which concern the production of comparable licenses in SEP litigation, appear to constitute the embryo of the UPC's SEP/FRAND case law.

Thus, a few months after this initial decision, it is the turn of the local division in Mannheim to rule on a request for the production of comparable licences in disputes between Panasonic and Xiaomi and Oppo. At the end of July 2023, Panasonic filed infringement actions against Xiaomi and Oppo, invoking 4 SEP patents declared essential to the WCDMA and LTE standards. The plaintiff filed no fewer than twelve actions against the two defendants before the UPC's local divisions in Mannheim and Munich, alongside ongoing litigation in Great Britain and new national disputes filed in Germany.

On 30 April and 16 May 2024, the Mannheim local division issued two important decisions concerning applications for the production of evidence, namely comparable licences, as was already the case in the Huawei matter. The Panasonic cases, however, are notable for providing further detail on the framework for the production of comparable licences before the JUB.

First decision

The first decision was made in the case between Panasonic and Xiaomi. In this case, the President of the Court reiterates the importance of transparency in disputes FRAND and therefore the necessity to produce the licences SEP existing ones that Applicant has concluded with third parties (UPC_CFI_218/2023, UPC_CFI_219/2023, UPC_CFI_223/2023). In this case, the request originated from Panasonic, which sought authorisation to disclose licences concluded with third parties. The Court accepted this request on the condition that certain confidential information of third parties be protected.

Second ruling

In the second case, Panasonic v Oppo, the court president refused to authorise the production of comparable licences (UPC_CFI_216/2023). In this case, it was the defendant, not Panasonic, who requested the production of licences concluded or to be concluded by the claimant concerning 3G and 4G for mobile devices. The request was rejected as being too vague and too broad, and thus akin to a fishing expedition. The court noted that Oppo's request seemed indeed to denote a will to dig deeper into the patent holder's licensing practice, while pointing out that the order to produce evidence would probably not be granted if the defendant was considered a reluctant licensee from the outset.

The JUB and FRAND licences

In general, it can be noted that the Court here asserts its desire to participate in debates on FRAND licences. But in the decision of 30 April in particular, the Court analyses the necessity of a document production order in light of the idea that a SEP is subject to EU competition law, in particular Articles 101 and 102 TFEU, as developed in the case law of the CJEU in the Huawei v ZTE case. As a reminder, in that case, the Court of Justice established a procedural framework for balancing the interests and obligations of intellectual property rights holders and implementers in FRAND negotiations. This reminder of the UPC It is important as it reminds us that the case law of the Court of Justice must be applied by the UPC, so that the Court of Justice continues to set the framework for FRAND litigation. This is not a surprise, particularly in light of Article 20 of the UPCA and Article 326 TFEU on enhanced cooperation, but it is a reminder that sets the scene from the outset: SEP holders will need to continue to respect the principles established by the CJEU's case law before attempting to enforce their rights before the UPC.

But paradoxically, while logically accepting the CJEU's jurisdiction, the Court also seems to do so to better position itself in the SEP/FRAND debates. While the European Commission has taken up the issue of FRAND licences with a view to harmonisation, the UPC states that certain practical necessities, such as transparency in FRAND licence negotiations, can already be handled by the UPC itself. Perhaps if the development of SEP/FRAND litigation allowed for the harmonisation of European positions on the matter, the Commission would abandon its much-debated project? The JUB still has several questions to answer, which I will address (in part) in my next article.

Author : Dhenne Avocats.