Advocate General Wathelet In Huawei Technologies: Disappointing Opinion

Advocate General Wathelet's disappointing Opinion in Huawei Technologies sets out a test that is divorced from reality.

The application of competition and antitrust law to standard essential patents ("SEPs") is a matter of great debate in many jurisdictions.

There have been a number of significant developments recently in Europe with the recent adoption of two controversial decisions by the European Commission (Samsung and Motorola1) and the consideration of these issues in an Opinion by Advocate General Wathelet to the European Union's highest court in the current Huawei Technologies case.

On 5 April 2013, the Landgericht Düsseldorf (Germany) referred a series of questions to the Court of Justice of the European Union ("CJEU") in relation to litigation between Huawei and ZTE requesting guidance on when an application for an injunction brought by the holder of SEPs could amount to an abuse of a dominant position contrary to Article 102 TFEU.2 This reference resulted from the controversial application of the Orange Book standard3 and its purported application by several lower German courts to conclude that a potential licensee can only be considered to have made a suitable licensing offer to the SEP holder if it commits not to challenge the essentiality, validity and infringement of the patent(s) in suit.

No Reference to the Applicable Legal Test

On 20 November 2014, Advocate General Wathelet delivered his much anticipated Opinion on the issues raised by the referring court.

For those looking for clarity and guidance on these important issues, the Opinion was a disappointment: AG Wathelet confused the notions of abusive refusal to license with the abusive recourse to a court of law. As regards the question of whether the seeking of injunctive relief by an SEP holder may constitute an abuse of a dominant position under Article 102 TFEU, no reference is made to the established legal test set out by the General Court in ITT Promedia4 and Protégé International5 of when the initiation of legal proceedings could constitute an abuse of a dominant position, namely when the legal action (i) is manifestly unfounded, and (ii) proves to be part of a plan to eliminate competition. The reader is referred to the comments of former President of the General Court Bo Vesterdorf, who has written on this subject extensively.6

AG Wathelet's Proposed Approach

The approach recommended by AG Wathelet does not substantially differ from the one adopted by the...