Sisvel International S.A. v. Haier Deutschland GmbH - 2020

“FRAND obligations apply equally — an implementer must show genuine willingness to take a licence.”

Short Description

This landmark German decision refined the legal test for determining whether an implementer of Standard-Essential Patents (SEPs) is a willing licensee under the FRAND framework. Sisvel, a major SEP holder, accused Haier of infringing several patents essential to wireless communication standards. Haier argued that Sisvel did not offer FRAND terms. The German Federal Court of Justice (BGH) stressed that both sides have duties: SEP owners must offer FRAND licences, but implementers must respond promptly and seriously. If the implementer delays, negotiates abusively, or fails to engage, they may be deemed an unwilling licensee, justifying injunctions.

Facts

Sisvel owned a portfolio of SEPs relating to wireless technologies (e.g., GSM, UMTS). Haier manufactured and sold phones that used these standards without obtaining a licence from Sisvel. Negotiations began, but Haier repeatedly delayed and questioned the FRAND nature of Sisvel’s offers without providing a clear counteroffer. Sisvel argued that Haier’s conduct demonstrated unwillingness to conclude a licence. Haier insisted that Sisvel’s demands were unreasonable. The dispute reached the German Federal Court of Justice, where the central question was whether Haier acted as a genuinely “willing licensee” during negotiations.

Findings / Reasoning

The BGH ruled that:

⦁ “Willingness” is not a mere declaration; the implementer must actively participate in negotiations.

⦁ Haier’s repeated delays, lack of timely counteroffers, and inconsistent responses showed bad-faith or insufficient engagement.

⦁ Sisvel fulfilled their FRAND obligations because they had made a proper licence offer.

⦁ Implementers cannot use procedural tactics to delay licensing while continuing to exploit the SEP technology commercially.

⦁ Courts can grant injunctions if the implementer behaves in a way that undermines FRAND negotiations.

This judgment made Germany one of the strictest jurisdictions regarding implementer obligations in SEP cases.

Suggestions / Observations

The decision serves as a warning for companies using standard-based technologies: they must prove consistent and transparent willingness to take a FRAND licence. Delaying tactics or uncooperative behaviour may lead to injunctions even when negotiations are ongoing. SEP holders benefit from clearer protection, while implementers must adopt structured negotiation practices. The ruling strengthens the bargaining position of patent owners and encourages timely licensing processes.

Judgment & Date

The German Federal Court of Justice held that Haier was not a willing licensee, and Sisvel was justified in seeking an injunction based on SEP infringement.

Judgment Date : 5 May 2020