On 11 September 2015 the Antitrust Commissioner Margrethe Vestager announced in a speech at the 19th IBA Conference in Florence that certain companies are potentially circumventing the rules established by the Court of Justice in the recent Huawei v ZTE judgment (see our blog posts here, here and here and here).

In that judgment, the Court of Justice held that in certain circumstances a holder of a standard essential patent which has committed to licensing it on fair, reasonable and non-discriminatory (FRAND) terms would be abusing its dominant position if it seeks an injunction against an implementer (typically a manufacturer) which is willing to licence on FRAND terms. However, some companies are now seeking injunctions not against manufacturers, but against other parties further down the distribution chain (for example telecoms operators selling phones), which are exercising the same patent right.

Of course, this isn’t a breach of patent law, which countenances the possibility of “infringing acts” at many different levels of the supply chain. In her Florence speech, however, Vestager made clear that the Commission will consider it an abuse of dominance to impose an injunction on any party exercising the same patent right even if they are not the actual product manufacturer.

Vestager also suggested a broadening of the debate, referring elliptically to “new questions arising in patent enforcement that have a competition law dimension”. Which exact aspect of the exercise of a right-holder’s patent she had in mind is not clear, given there have been a number of types of conduct in this area that have caused DG Competition consternation. Given the Huawei ruling’s endorsement of patentees’ right to seek damages, it is to be presumed that Vestager has claims for injunctive relief primarily in mind.

Vestager also suggested that, as with copyright law, competition law may not always be the solution and that a re-design of certain patent laws and practice may be required. Those involved in the negotiations to reach agreement on the UPC will no doubt wish the Commissioner “good luck” with that particular enterprise…