October 30, 2020
Towards the end of September 2020, the LG München I (District Court of Munich I) decided in favour of Nokia on a preliminary injunction against Lenovo. The subject matter was an SEP case relating to a video standard (H.264 – also known as MPEG-4 part 10), which Lenovo uses in its laptops and PCs. After payment of the security deposit, which was set at €3.25 million by the LG München, Nokia has now enforced the decision and thereby stopped Lenovo from selling the respective products in Germany. The tech company has also had to remove the products concerned from its German website. Lenovo has already announced that it will not accept this decision and has appealed.
This infringement is only a minor issue in the present decision, while the focus is on the application of the FRAND criteria as established by the Court of Justice of the European Union (ECJ) in Huawei v ZTE. The Munich Court found that Lenovo’s efforts to reach a licence agreement were not sufficient within the meaning of the FRAND criteria. In the present case, the communication between the parties appears to have taken place in principle without significant delay, but without reaching an agreement on the monetary side of the FRAND conditions.
In doing so, the Munich Regional Court is following the guidance of the Federal Court of Justice in Sisvel v Haier (K ZR 36/17). Perhaps surprising is the low security deposit of approximately €3 million. This may be one reason why Nokia enforced the decision in order to increase the pressure on the licensee Lenovo, which, in the view of the Munich court, is unwilling to accept. The current decision is a further step towards Munich courts being SEP owner friendly. In particular, it further increases the requirements for SEP users and their willingness to negotiate. This positive development for SEP owners certainly leads to increased caution for SEP users in product development, but particularly in ongoing license negotiations. This could also be seen as judges strengthening the patent rights against the plans of the German government to change patent law.