The European Union’s Court of Justice has set limits and procedures on how competitors in any given market are able to challenge each other on patent infringement grounds.

The case in question refers to Huawei’s claim in Germany that ZTE has infringed its patent relating to a technology integral to the standardisation of LTE. The Court of Justice has ruled that the proprietor of standard-essential technology is not considered to be abusing its market dominant position, providing there is sufficient proof that an effort has been made on behalf of the patent holder to come to an agreement based on fair, reasonable and non-discriminatory terms.

According to an announcement by the Court of Justice for the European Union, Huawei filed for an “injunction prohibiting that infringement, the recall of products, the rendering of accounts and an award of damages ” before also stating Huawei and ZTE had engaged in dialogue concerning the infringement  and the chance of concluding a licence under fair, reasonable and non-discriminatory terms (FRAND), without reaching an agreement. It then went on to distinguish, for future cases, different procedures and requirements for cases seeking a prohibitive injunction  from those seeking the rendering of accounts and award of damages.

First and foremost, the court seeks for evidence the patent holder does not abuse its market dominant position, as long as:

“Prior to bringing that action, the proprietor has, first, alerted the alleged infringer of the infringement complained about by designating the patent in question and specifying the way in which it has been infringed, and, secondly, presented to that infringer, after the alleged infringer has expressed its willingness to conclude a licensing agreement on FRAND terms, a specific, written offer for a licence on such terms, specifying, in particular, the royalty and the way in which it is to be calculated,” the Court of Justice said in a statement.

“Where the alleged infringer continues to use the patent in question, the alleged infringer has not diligently responded to that offer, in accordance with recognised commercial practices in the field and in good faith, this being a matter which must be established on the basis of objective factors and which implies, in particular, that there are no delaying tactics.”