Key takeaways
An intangible data stream, like a video bitstream, is a “product” under Art. 25(a) and 25(c) UPCA, allowing direct enforcement of encoding patents against streaming services.
There is no relevant difference between data on a physical carrier and data transmitted over a network; the carrier has no technical significance for the data’s use. The bitstream is therefore a product under Art. 25(a) UPCA despite the absence of a data carrier (para. 174).
The signal is additionally a product directly obtained by the patented encoding method under Art. 25(c) UPCA. This dual basis bridged the gap between encoding claims and a streaming service that only transmits the resulting signal (para. 175).
A FRAND defence fails where the defendant is an “unwilling licensee,” for instance by using an NDA to obstruct the court’s review of the licensing negotiations.
The Court assumed in the Defendant’s favour, without deciding, that the claims are at least de facto standard-essential, that they confer a dominant position, and that the “Huawei/ZTE framework” applies (para. 206). The defence failed even under these assumptions.
The Defendant was deemed unwilling for invoking an NDA clause – added at its own request – that prevented the Claimant from disclosing its offer and proving FRAND compliance, then ignoring the Claimant’s proposal to mutually lift confidentiality. The Court signalled (obiter) that such clauses may violate EU ordre public, since competition law forms part of it (paras. 245, 246).
The Defendant’s failure to sufficiently contest an infringement notification led to it being deemed true under R. 171.2 RoP, reinforced by its contradictory NDA conduct (para. 235). Separately, the Defendant’s own admission of a non-infringing workaround undermined its claim that the patent confers a dominant market position (paras. 218, 256).
De facto / de jure standard distinction and a balanced “Huawei/ZTE framework” emphasised.
HEVC expressly excludes the encoding process from its specification. The asserted encoding claims may therefore fall outside the de jure standard and outside the FRAND declaration, which covers only claims actually part of the technical specifications.
Whether “Huawei/ZTE” applies at all to a de facto standard is, in the Court’s words, “far from being settled,” particularly absent a FRAND declaration (para. 221).
The burden of pleading the relevant market and dominance lies with the implementer, who failed to define any market or substantiate dominance. The loss of HEVC’s technical advantages alone does not confer dominance, and the Defendant’s own admission of a non-infringing “workaround” undercut its argument (para. 213-219).
Under a correct “Huawei/ZTE” analysis, the SEP holder’s offer must in principle always be reviewed for FRAND compliance – not merely the implementer’s counteroffer (paras. 226-227). Here, review was impossible only because the Defendant blocked disclosure (paras. 239, 240, 244).
Division
LD Mannheim
UPC number
UPC_CFI_86/2025 (Counterclaim for Revocation: UPC_CFI_490/2025)
Type of proceedings
Infringement action and Counterclaim for revocation
Parties
Claimant: InterDigital VC Holdings, Inc.
Defendants: The Walt Disney Company and ten of its subsidiaries
Patent(s)
EP 2 465 265
Jurisdictions
Austria, Belgium, Germany, Denmark, Finland, France, Italy, the Netherlands, Portugal, Romania and Sweden
Body of legislation / Rules
Art. 25, 31, 33, 63, 64, 67, 68, 69 UPCA, R. 119, 171.2, 262A, 263, 354.3 RoP
