On 20 June 2012, the District Court of The Hague (the "Court") handed down three final judgments in the Dutch arm of the worldwide intellectual property dispute between Samsung and Apple.1 Earlier, on 14 March 2012, the Court had already handed down an interim judgment in these three proceedings on the merits.2 From these judgments important lessons can be learned with respect to the enforcement of standard essential, 'FRAND pledged' patents ("SEPs"). The Court denied Samsung's claims for an injunction against Apple for alleged infringement of four SEPs, accepting both an exhaustion defence as well as a 'FRAND defence' by Apple.

In October last year the preliminary relief judge of the same court in the same dispute had also accepted Apple's FRAND defence. At that time we wrote, amongst other things, that "if holders of FRAND pledged patents stay within the boundaries set by the court in this decision as to their 'attitude' in prior licence negotiations, they may (still) be able to successfully enforce their FRAND pledged patents."3 In the above mentioned judgments the Court provides further guidance as to what this attitude should be in order to avoid a violation of FRAND commitments.

We will recap and analyse the Court's considerations in Section 4 of this article. The first part of this article, specifically Section 3, deals with the Court's assessment of Apple's exhaustion defence. The Court seems to have widened the scope for application of the exhaustion doctrine in the context of SEPs. We will discuss whether this is justified, and how it may affect licensing strategies for SEPs.

We conclude that, all in all, the possibility of obtaining an injunction based on SEPs is still very much alive in the Netherlands, although it requires some careful manoeuvring on the part of the patentee.

2. Background: overview of pending cases

Samsung has based its claims against Apple in the Netherlands on four patents, all of which are, according to Samsung, essential to the UMTS standard. It started four separate preliminary relief proceedings based on each of these patents, and it brought three separate proceedings on the merits.4 In all these cases Apple raised the same 'non-technical' defence, i.e. an exhaustion defence and a FRAND defence. As to the preliminary relief proceedings, for the sake of 'process economy' the preliminary relief judge decided to first render a single decision for all four cases with respect to this non-technical defence prior to dealing with the technical aspects of the different cases separately at a later stage. We reported on that decision in our article of October last year.5 In the proceedings on the merits, the Court has adopted the same procedural approach and first rendered a decision on Apple's exhaustion defence and FRAND defence in its interim judgment of 14 March 2012, which constitutes a decision in all three proceedings on the merits.

3. Exhaustion: are conditional customer nonasserts moot in the context of SEPs?

The technology to which the SEPs relate would allegedly be implemented in the 'baseband chips' of Apple's products. Apple sources these baseband chips from certain third-party suppliers. According to Apple the baseband chips of the iPhone 4S are sourced from Qualcomm and the baseband chips in other 3G Apple products were sourced from Infineon until 31 January 2011 and from then on from Intel, subsequent to its acquisition of Infineon.

Apple claimed that Samsung had concluded licences with these suppliers in respect of its baseband chips, and that the terms of these licences would also allow the use by Apple of these chips. In other words, Samsung would have 'exhausted' its enforcement rights vis-à-vis Apple pursuant to these licences.

Unlike the preliminary relief judge a few months earlier, the Court accepted Apple's exhaustion defence with respect to baseband chips sourced from Qualcomm as Apple meanwhile had been able to substantiate its claims by submitting (relevant parts of) the Qualcomm licence agreements (these parts were considered confidential and do not appear verbatim in the decision). Apple's exhaustion defence with respect to baseband chips sourced from Infineon and Intel was denied.

Baseband chips from Qualcomm

The licence agreement between Samsung and Qualcomm with respect to the SEPs in suit contained a conditional non-assert clause in respect of Qualcomm customers and their affiliates. The clause stipulated that Samsung would not assert the patents vis-à-vis customers of Qualcomm unless such customer were to initiate legal proceeding against Samsung.

The Court agreed with Apple that invoking this condition (and asserting the patents) would, however, be contrary to the ETSI regulations and Samsung's FRAND declaration as these obliged Samsung to grant "irrevocable licences". According to the Court, suing Apple would constitute a "revocation of (part of) a licence". Therefore, the Court held that Samsung, in respect of the Apple products with Qualcomm baseband chips, i.e. the iPhone 4S, remained bound to the aforementioned non-assert commitment.

We doubt whether the reasoning of the Court, which implies that the aforementioned condition in a nonassert clause vis-à-vis customers of the licensee – a common condition in the industry – can never be relied upon in respect of SEPs, is justified. First of all, we note that it is actually unclear (at least from the non-confidential version of the judgment) whether the Court considers the alleged revocation to be a revocation of (part of) a FRAND licence with Qualcomm, or a revocation of a FRAND licence with Apple, or both. If one would assume that the Court meant the former, the following applies. Even if the act of invoking the condition can be equated with 'revoking' this particular term, it is obvious that it does not amount to revoking the entire licence with Qualcomm. Perhaps one could argue that if the 'essence' of a FRAND licence is revoked, it would be a violation of the obligation of irrevocability.

However, neither the ETSI rules nor the FRAND declaration contain any indications as to which licence terms should be considered FRAND or not (i.e. they do not provide guidance as to what is the essence of a FRAND licence). More specifically, they do not contain any prohibition of 'conditional (customer) non-assert clauses' in FRAND licences. It is difficult to see how invoking or revoking a certain licence term with respect to which the rules are silent, should necessarily be considered a revocation of the essential part of a FRAND licence (or: the 'FRAND' part of the licence) that the rules aim to protect.

In so far as the Court wanted to suggest that invoking the condition should be considered a revocation of a "licence" between Samsung and Apple, this would run counter to its reasoning presented in the context of Apple's FRAND defence (which is addressed in more detail in the next Section). The Court explicitly held that a FRAND declaration in itself is not a licence, amongst other things as it does not contain certain essential constitutive elements of a licence, such as the price. This cannot be reconciled with claiming that the non-assert clause agreed with Qualcomm for the benefit of its customers (which does also not stipulate any licence terms, let alone price) would automatically bring about a FRAND licence with Qualcomm's customers, including Apple.

The reasoning of the Court is quite similar to a previous decision of a French court which also denied Samsung an injunction against the iPhone 4s based on this 'exhaustion' argument.6 Also in the French decision it is not completely clear whether the court considered the alleged revocation to be a revocation of a FRAND licence with Qualcomm, or a revocation of a FRAND licence with Apple, or both.

Baseband chips from Infineon and Intel

The Court rejected Apple's exhaustion argument with respect to baseband chips sourced from Infineon prior to its acquisition by Intel on 31 January 2011, as Apple had not claimed, let alone proven, that these chips had been supplied by Infineon pursuant to a licence with Samsung. Apple had only been able to furnish a (cross) licence agreement between Samsung and Intel under the SEPs.

According to Apple this license agreement would also cover the sale of products that were not manufactured by 'Intel Corporation', but by a separate subsidiary to which the Infineon business was transferred after its acquisition by Intel Corporation. The Court reasoned – referring to US case law – that Apple's interpretation of Intel's rights under the license would imply that Intel even had the right to resell (infringing) baseband chips procured from any unlicensed third parties. According to the Court it would not have made sense for Samsung to agree to such a broadly defined right. It therefore disagreed with Apple's interpretation and rejected Apple's exhaustion argument in respect of the base band chips that it had procured from Intel.

As the Court thus held that not all of Samsung's rights were exhausted, it also needed to consider Apple's FRAND defence.

4. Apple's FRAND defence

The FRAND defence of Apple comprised three main arguments:

I. By applying the relevant standard, Apple had accepted an unconditional licence offer of Samsung, i.e. Samsung's FRAND declaration, which automatically resulted in a licence agreement (the existence of which would bar Samsung from claiming an injunction).

II. Claiming an injunction would constitute an abuse of rights, would be contrary to 9pre-contractual good faith' and would constitute an abuse of a dominant position.

III. Samsung had forfeited its right to enforce its patents by disclosing the patents only after the standard was 'frozen'.

The Court's findings in respect of these three arguments are discussed below.

I. FRAND declaration + application of standard = licence?

The Court rejected the first, quite far-reaching argument of Apple for similar reasons as the preliminary relief judge did in October last year. It held that by accepting the 'promise of a licence' contained in Samsung's FRAND declaration, Apple had (only) obtained an irrevocable contractual entitlement to a licence under FRAND terms, rather than a licence itself. According to the Court, the fact that Samsung's FRAND declaration lacked the most crucial element of a licence agreement, i.e. the (FRAND) licence terms, was hardly reconcilable with the submission that it should be considered an offer that, through mere acceptance, brings about an agreement. The Court even pointed to support in the expert opinions submitted by Apple itself for the qualification of the declaration as a 'promesse de contrat', an irrevocable commitment to enter into a FRAND licence, instead of an actual agreement ('contrat définitif') under French law.

See our previous article for our observations on which law would be applicable to ETSI declarations.7

Finally, the Court touched upon an additional argument that the preliminary relief judge did not consider in its earlier decision. The Court held that the application of the standard cannot be considered an actual 'acceptance' of an offer, as it does not necessarily imply a willingness of the party applying the standard to enter into any licence, let alone a licence under FRAND terms.

II. Enforcement of SEPs abuse of rights / good faith / dominant position?

As in the preliminary relief proceedings, Apple further argued that Samsung's claim for an injunction under its SEPs would amount to an abuse of rights, a violation of pre-contractual good faith and an abuse of a dominant position.

A. Enforcing SEPs not abusive in itself

The Court first of all emphasised very clearly, referring to its previous decision in Philips v SK Kassetten8, that enforcing SEPs should – contrary to Apple's submission – not be considered abusive in itself, implying that obtaining an injunction under SEPs should be possible in principle.

Only one week before this decision in the interim judgment, the Commission published its clearance decision in the Google/Motorola Mobility case. In this decision, the Commission commented as follows on the very same issue of whether claiming injunctions under SEPs would be possible at all:

"Furthermore, the seeking or enforcement of injunctions on the basis of SEPs is also not, of itself, anti-competitive. In particular, and depending on the circumstances, it may be legitimate for the holder of SEPs to seek an injunction against a potential licensee which is not willing to negotiate in good faith on FRAND terms."9

B. Samsung's enforcement of its SEPs in this case neverthe less amounts to abuse because of unwillingness to negotiate in good faith

Earlier case law: FRAND defence in principle rejected, unless 'special circumstances'

In earlier cases involving standard essential patents, the District Court of The Hague (the Court has exclusive jurisdiction over patent disputes in the Netherlands) had quite easily rejected FRAND defences. In Philips v SK Kassetten10, the Court considered that it is the responsibility of the defendant, the licence-seeking party, to obtain a license prior to entering the market and to start proceedings against the patentee if it were to unreasonably withhold such a licence (again, prior to entering the market). According to the Court, if the defendant has failed to do this, the patentee may in principle enforce its essential patents, unless 'special circumstances' apply (which circumstances were not found to apply in that particular case). This Dutch view on the FRAND defence was considered substantially more patentee-friendly than the German approach under the 'Orange Book' regime. However, subsequent cases have shown that the 'special circumstances' exception left sufficient scope for the Court to assess FRAND defences in a more defendant-friendly manner.

The preliminary relief judge of the Court found 'special circumstances' to exist in the case LG Electronics v Sony of March 2011, and accepted Sony's FRAND defence.11 In that case, LG applied for an injunction and border seizure measures against Sony under SEPs essential to the Blu-ray standard at a time when the parties were engaged in FRAND negotiations (LG had made Sony an offer which it had not yet accepted, but not rejected either), and while the bylaws of the Blu-ray Disc Association (of which both parties are a member) contain the obligation for members to arbitrate in case of a dispute regarding FRAND terms and conditions (where the arbitrator would ultimately have the authority to set the conditions). The preliminary relief judge held that pursuant to these bylaws it was therefore 'inevitable' that the parties would ultimately reach an agreement on the FRAND conditions, which in its view removed the justification for LG's enforcement of its SEPs.

"Special circumstances" in this case: Samsung's unwillingness to negotiate in good faith

In the case at hand, the Court again (as the preliminary relief judge before it) refers to 'special circumstances' in accepting a FRAND defence and blocking the enforcement of SEPs. First of all, in respect of the requirement mentioned in SK Kassetten that a licence should be requested prior to entering the market, the decision mentions that although Apple in this case indeed entered the market without having requested a licence, Samsung had been aware of that fact since the beginning of 2008 and had not objected to this. On the contrary, Samsung had only encouraged it, as Apple was one of its most appreciated clients. As soon as Apple became aware of the fact that Samsung would not 'condone' its (unlicensed) activities any longer, Apple immediately asked for a licence.

The Court continued that "the way in which [Samsung] had wielded its powers" (i.e. its enforcement powers pursuant to its standard essential patents) in this case would be "in violation of its obligation to grant FRAND licences and its commitment to negotiate in good faith about those licences". It concluded that therefore "in this case, the filing [by Samsung] for an injunction during the FRAND licence negotiations should be considered abusive and contrary to the principles of pre-contractual good faith, as the threat of the requested injunction puts Apple under improper pressure in these negotiations to agree to licence terms that are not FRAND".

The last part of this sentence in the Court's judgment ("as the threat...FRAND") is perhaps the most interesting part. One may be inclined to read into this that the Court considers instituting injunction proceedings during FRAND licence negotiations a per se violation of FRAND commitments, as some commentators have done. This would of course be an impractical and arbitrary test (how do you determine whether negotiations are on-going, 'on hold' or 'broken off'?), and generally to the disadvantage of the patentee. We believe that this is not, or at least not necessarily, how this part of the decision should be interpreted. As in LG v Sony described above, there was much more going on in this case than a mere filing of injunction proceedings pending FRAND negotiations. In LG v Sony, it was the fact that the BDA bylaws provided for a procedure that would inevitably lead to a FRAND licence (at least according to the Court): to us this appears to have been the 'overriding' argument for the judge in that case to establish a violation of FRAND commitments (rather than the mere fact that it the negotiations were still 'pending'). In the case at hand, in our opinion it is clear from the Court's reasoning taken as a whole that the filing of injunction proceedings by Samsung was not considered abusive just because the proceedings were lodged pending negotiations, but mainly because the Court found that Samsung was not willing to negotiate in good faith on a FRAND licence.

The Court did, thus, not actually positively establish that Samsung's requested licence terms were not FRAND (or that Apple's offered terms were). It is, however, implicit in the decision that the Court arrived at the assumption that Samsung's offer was not (or: could not have been) FRAND after having assessed Samsung's negotiation behaviour against Apple's negotiation behaviour. This judgment thus confirms the main take-away from the previous decision of the preliminary relief judge: if it is established that the patentee is/was unwilling to negotiate on a FRAND licence in good faith, like Samsung in the present case, an injunction will be denied. Conversely, if the patentee is not found to have been unwilling to negotiate in good faith, we believe it would in principle be entitled to an injunction, even pending negotiations.

As we explained in our previous article, we believe that pursuant to Dutch evidentiary rules it would not be for the patentee to demonstrate that it was willing to enter into a FRAND licence agreement, but rather for the defendant to demonstrate that the patentee is, contrary to the defendant, unwilling to enter into a FRAND licence agreement. In this case, Apple simply satisfied that burden of proof.

Negotiation facts demonstrated unwillingness on the part of Samsung

We will now turn to the various relevant factors that led the Court to conclude that Samsung had not negotiated in good faith. In the judgment, the Court paints, in slightly more detail than the preliminary relief judge did previously, the picture of an unbalanced negotiation process in which Samsung had taken a rather uncompromising, inflexible position. The most relevant facts in this respect are:

  • Apple indicated at an early stage, just after Samsung had initiated legal proceedings in several countries and before it did so in the Netherlands, that it was willing to take out a licence by asking Samsung under what terms it was prepared to grant a licence for (all) its essential 3G patents.
  • Samsung initiated proceedings in the Netherlands before it replied to Apple's aforementioned licence offer request.
  • Samsung only made a single offer to Apple for a licence, which it expressly labelled as an 'opening offer', and failed to respond to two subsequent counter offers by Apple.
  • Apple's second counteroffer was limited to the patents in suit and to the Netherlands, but both its counteroffers were made after Samsung had already initiated proceedings in the Netherlands and its first counteroffer involved a worldwide licence to all Samsung's (3G) essential patents.

It is not difficult to see why these facts led the Court to believe that Samsung was never really interested in negotiations on a FRAND licence with Apple, whereas Apple on the other hand had undertaken serious attempts to conclude a licence agreement.

And Samsung failed to prove unwillingness on Apple's part Samsung defended itself by arguing that Apple was not "in reality" willing to enter into a licence on FRAND terms as Apple had broken off earlier negotiations about a cross-licence by initiating legal proceedings in the United States against Samsung (pursuant to certain non-essential patents and other IP rights). The Court noted that while Apple apparently was unwilling to license or cross-license certain of its own nonessential patents and other IP rights, this did not mean that Apple did not want a FRAND licence to the (unrelated) SEPs in suit. In that connection, it emphasised that Apple had specifically asked Samsung about the terms for a FRAND licence for these SEPs just after it had initiated the proceedings in the U.S. and before Samsung initiated the proceedings against Apple in the Netherlands.

The Court furthermore considered that the alleged unwillingness of Apple also did not follow from the licence fee that it had offered to Samsung. Apple had thoroughly motivated the offers it had made and its assumptions did not 'appear too unreasonable' to the Court. It therefore concluded that Apple had negotiated in good faith.

Apple's offer was, amongst other things, based on a cumulative royalty ceiling that – according to Samsung – is lower than is actually used in practice (the exact figure was not disclosed). The Court, however, considered that this did not appear to be unreasonable in light of the motivation for the figure and the fact that it was a first bid. The Court also considered that it was not unreasonable that Apple made the assumption that the cumulative royalty ceiling should be divided equally over all 1889 patent families, of which 103 are owned by Samsung. Although the Court agreed with Samsung that the value of the patents depends on their content, the Court stressed that it is not unreasonable to at least start from the assumption that all patents have an equal value. Moreover, Samsung did not substantiate why the assumption would in this case be unjustified.

Finally, the Court addressed Samsung's claim that Apple's unwillingness to take a FRAND licence followed from the fact that it had limited its offer to the Netherlands and to the patents in suit. The Court did not find it unreasonable that Apple had limited its second counter offer in said manner, as Samsung had 'triggered' this by initiating proceedings in the Netherlands. It is interesting to compare this approach to that of the Landgericht of Mannheim in a parallel case between the parties. According to the Landgericht, the license seeking party should in principle be free to limit its offer geographically and should also be able to choose which patents out of the full portfolio of the patent holder it would like to licence. However, the Landgericht explicitly suggested that this freedom has its boundaries where 'bad faith intentions' are involved:

"The plaintiff may generally not rely on the assumption that it is able to refuse the "single license" under the patent in suit that the defendant asked for because it is ready to grant a license under its patent portfolio...There is one exception, if the proposed licensee's request for only one single license under a patent in suit, results from his intention to otherwise act in bad faith against the patent proprietor, and to infringe his other property rights until the proposed licensee is sued for patent infringement. However, such circumstances have not been substantiated here. The plaintiff 's allegation that the defendant needs to use all property rights of the portfolio in its product – which is not undisputed – is not sufficient."12

In the case at hand, we believe that the intentions of Apple behind the limitation were unclear at best. The fact that Apple limited the offer to a particular country while the patents in suit are also valid in other countries in which Apple is active as well (and where Apple would thus infringe these patents) could arguably – at least under the above described doctrine set out by the Landgericht Mannheim – be an indication of 'bad faith intentions'. In any event, whether or not the limitation was actually in retribution for an act of the patentee should in our view (contrary to that of the Court, apparently) not be the decisive factor in assessing the willingness of the licence-seeking party to negotiate on a FRAND licence. Furthermore, aside from the example mentioned above, limiting ones previous licence offer could also be a sign of unwillingness to negotiate in good faith on FRAND term (regardless of whether or not it was as a 'retribution' for the patentee's instituting proceedings) if by doing so the licence-seeking party would reject a FRAND offer of the patentee. In sum, we do not believe (and it doesn't follow from this judgment either) that in all circumstances the patentee has an obligation to negotiate offers that are limited to only a subset of the countries in which the licenceseeking party will likely infringe the patent. We note that such could also be a violation of its commitments towards other licensees to apply non-discriminatory conditions.

Would demonstrating Apple's unwillingness have actually been sufficient for Samsung?

Samsung apparently only focused on demonstrating Apple's unwillingness to negotiate in good faith on a FRAND licence, but – if the judgment presents a complete overview of Samsung's arguments – did not substantiate that its own offer (contrary to Apple's claim) reflected a willingness to negotiate in good faith on a FRAND licence. In view of this, it is doubtful whether it would have even helped Samsung if the Court had agreed that Apple was not willing to enter into a FRAND licence either. In the hypothetical scenario that a Court is confronted with unwillingness on both sides, an injunction should be denied, as the unwillingness on the part of the patentee amounts to a violation of its FRAND commitments.

But, again, it is the defendant that has the burden to prove the unwillingness on the part of the patentee, which Apple satisfied in the present case.

Why did the Court not reconsider its decision with respect to abuse in its final judgments?

As indicated above, the Court had rendered its decision that Samsung's enforcement of its SEPs would amount to an abuse of rights in its interim judgment of 14 March 2012. Without offering any explanation, the Court decided to persist in this decision in its final judgments of 20 June 2012. It could well be that Samsung did not make any substantial further moves in the negotiation since the interim judgment, but we believe that if Samsung in the meantime would have demonstrated its willingness to enter into a licence on FRAND terms, e.g. by making an offer that actually was FRAND (and subsequently would have brought it to the attention of the Court), the Court would have been compelled to reconsider its decision in this respect.

C. Abuse of dominant position?

Because the Court denied Samsung's claim for an injunction on the grounds of abuse of rights and a violation of pre-contractual good faith, it did not have to respond to Apple's defence that claiming an injunction would (also) constitute an abuse of a dominant position.

Interestingly enough, in Germany the FRAND defence is primarily a competition law defence. In practice, however, we see a rather similar assessment by the courts in both jurisdictions: basically an assessment of negotiation behaviour. It would nevertheless be interesting to see how a Dutch court would address a FRAND defence under competition law (abuse of dominance). In particular it would be interesting to see how they would go about establishing the dominant position of the holder of the SEPs in suit. German courts have so far attached less importance to assessing this factor in finding an infringement, by basically equating the ownership of standard essential patents to dominance in the relevant market. However, we believe this equation would not necessarily hold in all cases, and we would therefore support a more detailed analysis by the courts instead of the abovementioned 'per se' approach.

Samsung claimed not only an injunction but also damages. The part of Apple's FRAND defence discussed above was only aimed at preventing an injunction. In respect of Samsung's claim for damages, Apple also made the argument that Samsung had forfeited its right to enforce its patents by disclosing the patents after the standard was 'frozen' (in violation of FRAND commitments). This argument is discussed below.

III. Could disclosing patents after the standard was 'frozen' lead to forfeiture of rights or abuse?

The Court did not agree with Apple that disclosing the patents at issue after the standard was "frozen" would constitute a forfeiture of rights. The Court pointed out that this could have been different if the late disclosure would have given rise to a legitimate expectation for Apple that Samsung would not enforce its patents. However, Apple did not argue this. Furthermore, the Court indicated that there could have been a forfeiture of rights if the enforcement by Samsung would prejudice Apple. However, the Court could not find that the late disclosure caused any disadvantage for Apple whatsoever.

The Court shared Samsung's view that during the development of the 3G standard the main focus was on weighing the technical pros and cons of a proposal. Patent rights only played a role if the patent proprietor indicated that it was not willing to make a FRAND declaration. So the Court did not agree with Apple that an earlier disclosure would have led the ETSI to exclude the patented technology from the standard. In this respect the Court also referred to Philips v LG (Court of The Hague, 27 April 2007) in which the court did deny an injunction under a JPEG standard essential patent because Philips had failed to disclose the patent, even though it had participated in the standard setting working groups and thus was aware of its relevance to the standard. The Court, however, pointed out that in that case it was established that the objective was to develop a patent-free standard. In addition, in that case Philips had not made a general FRAND declaration, unlike Samsung in the present case.

Finally, the Court considered and dismissed Apple's argument that Samsung had abused a dominant position by disclosing the SEPs after the standard was 'frozen'. The Court held that Samsung did not in any event have a dominant position at the time the standard was developed. Furthermore, the Court pointed out that the alleged fact that Samsung facilitated the creation of a dominant position by its failure to disclose could not be held abusive (in principle, pursuant to the European competition law regime, only the 'strengthening' or 'maintaining' of a dominant position can be held abusive).

It is not clear whether the judgment accurately reflects Apple's arguments in this respect. It is rather obvious that Samsung's alleged 'late disclosure' could not have amounted to an abuse of dominance as such, either then or now. This does not mean, however, that current conduct in respect of a dominant position (e.g. a position pursuant to the ownership of standard essential patents) might be considered abusive in view of conduct in the past. This reasoning was also applied by the European Commission in the patent ambush case involving Rambus. The Commission held that the abuse of Rambus was to be found in the 'claiming of unreasonable royalties' for certain standard essential patents, whereby the alleged unreasonable ('excessive') nature of the royalties stemmed from the fact that it allegedly failed to disclose these patents during the development of the standard.13

Because the Court thus found that Samsung had not forfeited its rights to damages, it needed to subsequently assess whether Apple had infringed Samsung's patents. The Court held that Apple infringed one of Samsungs' patents (one other patent was held invalid and the others were held to be not infringed) and that it was therefore liable for damages. The amount of damages is to be determined in separate proceedings.

5. Conclusion: helpful further guidance on successfully enforcing SEPs

Making a FRAND declaration implies a willingness to enter into good faith negotiations on FRAND terms. This obliges the patent holder to conduct (serious) negotiations with a party seeking a licence and to submit (upon request – the licence-seeking party still has to take the first step) an offer that, while not necessarily FRAND itself, demonstrates its willingness to negotiate in good faith on a FRAND licence. If it then becomes clear that the party seeking a licence is, contrary to the patent holder, not willing to negotiate in good faith, the patent holder can initiate injunction proceedings. If this is not clear, enforcing the patent can constitute an abuse of rights or can be regarded to be contrary to pre-contractual good faith.

This does not mean that the party seeking a licence can endlessly protract negotiations just by continuing to respond with counteroffers. The patent holder has at least two possibilities to counteract such behaviour:

1) When it can show that these counteroffers are, contrary to its own offer, so far removed from FRAND terms that it in fact indicates an unwillingness on the part of the licence-seeking party to negotiate in good faith on a FRAND licence; or

2) When it can demonstrate that its own latest offer, which was (implicitly or explicitly) rejected by the licence-seeking party through the submission of the counteroffer, actually was FRAND.

In at least these two scenarios, the patent holder could institute injunction proceedings. In such proceedings, the patent holder would be aided by the fact that the burden of proof is on the defendant (the party invoking the FRAND defence) to demonstrate that the patentee was, contrary to the defendant itself, unwilling to negotiate in good faith on a FRAND licence.

In short, we believe that all this leaves sufficient room to successfully enforce SEPs in the Netherlands, provided that one manoeuvres prudently in the licence negotiations. The latter is something that Samsung clearly has not done in the present case. Samsung initiated proceedings before it had even made a first offer to Apple, and in the face of an explicit request by Apple for the terms of a FRAND licence. Furthermore, it entirely failed to respond substantively to the two subsequent counteroffers made by Apple. Given this context, it was obviously very difficult for Samsung to argue that it itself was willing to negotiate in good faith on the terms of a FRAND licence, while Apple was not. We believe this to a great extent determined the outcome of these proceedings thus far. It should however be noted that the decisions, and in particular the decision of the preliminary relief judge of October last year, leave open the possibility for Samsung's entitlement to an injunction against Apple to 9revive' if Samsung makes an offer that is considered FRAND (or rather: that demonstrates a willingness to negotiate in good faith on a FRAND licence).

Footnotes

* Mr. GertJan Kuipers is advocaat in Amsterdam, mr. Douwe Groenevelt is advocaat in Brussel en mr. Oscar Lamme is advocaat in Amsterdam.

1 District Court of Th e Hague, 20 June 2012, case numbers/docketnumbers 400367/HA ZA 11-2212, 400376/HA ZA 11-2213 and 400385/HA ZA 11-2215.

2 District Court of Th e Hague, 14 March 2012, interim judgment, LJN: BV8871, in case numbers/docket numbers 400367/HA ZA 11-2212, 400376/HA ZA 11-2213 and 400385/HA ZA 11-2215.

3 Kuipers, Groenevelt and Lamme, 'A different perspective on Samsung v. Apple: Guidance on enforcing FRAND pledged patents in the Netherlands', http://www.debrauw.com/News/LegalAlerts/Documents/Intellectual%20Property/Intellectual%20Property%20Legal%20Alert%20-%2026%20October%202011.pdf ,published on 26 October 2011.

4 These are based on the same four patents, but instead of filing separate proceedings for each of these patents (as in the preliminary relief proceedings), it jointly asserted two of the patents in a single case.

5 Kuipers, Groenevelt and Lamme, 'A different perspective on Samsung v. Apple: Guidance on enforcing FRAND pledged patents in the Netherlands', http://www.debrauw.com/News/LegalAlerts/Documents/Intellectual%20Property/Intellectual%20Property%20Legal%20Alert%20-%2026%20October%202011.pdf ,published on 26 October 2011.

6 Interim relief judge of the Tribunal de Grande Instance of Paris, 5 October 2011, docket number 11/58301. An (unofficial) English translation can be found at http://www.veron.com/publications/Decisions%5C20111222%5C2011-12-08_(EN)_Tribunal_de_Grande_Instance_de_Paris_SAMSUNG_EL_v.__APPLE.pdf?card=1179 .

7 Kuipers, Groenevelt and Lamme, 'A different perspective on Samsung v. Apple: Guidance on enforcing FRAND pledged patents in the Netherlands', WWW http://www.debrauw.com/News/LegalAlerts/Documents/Intellectual%20Property/Intellectual%20Property%20Legal%20Alert%20-%2026%20October%202011.pdf , published on 26 October 2011.

8 District Court of Th e Hague. 's-Gravenhage 17 March 2010, case numbers / docket numbers 316533 / HA ZA 08-2522 and 316535 / HA ZA 08-2524.

9 Case COMP/M.6381, para. 126.

10 District Court of The Hague, 17 March 2010, cases 08-2522 and 08-2524

11 Preliminary Relief Judge of the District Court of Th e Hague, 10 March 2011, case number/docket number 389067 / KG ZA 11-269 (SonySCS v. LG)

12 Unofficial English translation of the judgment of the Landgericht Mannheim of 27 May 2011, Docket No: 7 O 65/10

13 Case COMP/C-3/ 38 636

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