Injunctive Relief in SEP Litigation : The Consideration of Innovation and Competition

The injunction is a significant relief for patent holders. However, if a standard-essential patent (SEP) holder apply for an injunction, it may prevent potential competitors from entering into the related market and constitutes abuse of market dominant position. In Huawei v. ZTE case, the CJEU set a rule of “five steps” to judge the justification of the SEP holders’ injunction application. This issue refers to not only the interests between SEP holders and users, but also the aim of innovation incentive and the aim of free competition protection. To better balance the two significant legislative intentions namely ‘innovation incentive’ and‘competition freedom’and further improve the social and economic development, there are more elements need to be concerned: (1)As for market dominant position judgment, SEP holders should not be directly assumed as a market dominator, following elements need to be concerned: the competition situation among different standards, the market share of SEP, whether the standard is a mandatory one, the competition between standard products and non-standard products, the technology transfer costs.(2) As for abuse behavior judgment, the ‘five step’ is not enough. The identity of SEP holders, the time of the injunction application, the good faith of SEP users, whether the SEP holders charges for an unreasonably high royalty, these factors also need to be examined. (3)As for the assessment of validity of injunction application, the principle of weighing advantages and disadvantages needs to be established. The court should uphold the injunction application if the advantages outweigh disadvantages, otherwise the injunction should not be granted.