InterDigital v. Disney, UPC CFI LD Mannheim, 16 June 2026, Case no. UPC_CFI_86/2025
InterDigital’s patent related to encoding and decoding was found to be valid and infringed. Disney’s FRAND defence failed. An injunction covering 11 countries was granted under EUR 8 million security.
Facts
InterDigital sued Disney for infringement of EP 2 465 265 relating to video encoding and decoding. InterDigital aims its infringement action more specifically at the Disney+ streaming service provided by Disney.
As an exemplary attacked embodiment, InterDigital names Walt Disney Studios’ 1937 “Snow White and the Seven Dwarfs”, that is available via Disney+ in various bitstream formats, including a bitstream format that uses the HEVC (High Efficiency Video Coding, or H.265) standard.
The standard according to InterDigital specifies the so called bitstream syntax – that is the structure of the encoded bitstream to be decoded- and the result of the decoding process. According to InterDigital’s allegations, the encoding process itself, which is used to generate an encoded video signal, is not covered by the HEVC standard.
InterDigital’s legal predecessor submitted a FRAND-licensing declaration in 2017 to the ITU, which is the relevant standardisation organisation.
InterDigital was and is of the opinion that the asserted claims 1 and 15 do not fall within the scope of the HEVC standard and, therefore, are not (neither de jure nor de facto) standard-essential. Thus, according to them, these claims are not “FRAND-encumbered”.
Nevertheless, in July 2022, InterDigital initially contacted Disney regarding the licensing of InterDigital’s so-called “Video Patent Portfolio”. After an NDA had been concluded, InterDigital offered a licence covering video coding technology and, in particular, the asserted patent claims.
Disney is of the opinion that InterDigital would be obliged to make an offer under FRAND conditions, which it refused and refuses to do. Disney did not make a counteroffer for a year and a half.
The parties are of the opinion that, pursuant to the aforementioned NDA, which was concluded at Disney’s request, they are not allowed to disclose any details of the licence negotiations, including InterDigital’s licence offer.
InterDigital terminated the NDA on 23 January 2025. Furthermore, after Disney had raised the FRAND-Defence in their Statement of defence in the present proceedings, InterDigital’s UPC representatives contacted Disney’s UPC representatives and proposed an agreement that would allow both sides to present the history of negotiations in the German and UPC proceedings (with accompanying motions for confidentiality). According to the Court Disney never responded in substance to that enquiry.
FRAND Defence
Even if the Court assumed, solely for the purposes of assessing Disney’s FRAND defence, that the technical teaching of patent claims 1 and 15 is – at least de facto – standard-essential and confers a dominant market position on InterDigital and that Parties must adhere to the negotiation framework established by the ECJ in the case Huawei v. ZTE, the FRAND defence failed since Disney is considered an unwilling licensee.
The Court elaborates significantly on the FRAND / SEP framework from paragraph 205 to 250.
Dominant Market Position
The Court sets out the existing framework regarding dominance on the licensing market and holds that the burden of presenting sufficient facts and – if necessary – proof regarding the patent holder’s dominant position in the relevant licensing market lies, in principle, with the implementer.
The Court concludes that Disney has not presented sufficient facts to allow the conclusion that InterDigital holds a dominant position in any relevant market.
De jure standard
First of all, HEVC clearly defines the encoding process as not being part of its specifications. Therefore, in principle, the asserted patent claims that relate to an encoding method and a video signal encoded in accordance with this encoding method according to the Court are not part of HEVC’s technical specifications and do not constitute a de jure standard.
Consequently, the asserted claims would, in that case, also not fall within the scope of the FRAND declaration of InterDigital’s legal predecessor.
Moreover, even if the technical teaching of the asserted claims were part of a de jure standard, this would according to the Court not “automatically” confer a dominant position in a relevant licensing market.
De facto standard
The Court notes that Disney has not put forward any facts that would support the conclusion that the technical teaching of the asserted claim has become a de facto standard for products or services on the relevant downstream market and thus confers a dominant position on InterDigital in the upstream licensing market.
To the contrary. “In the present case, Defendants have not put forward any facts as to why it should not be possible to operate a streaming service without using the subject matter of the asserted patent claims. Accordingly, Defendants themselves clearly take the view, that they can circumvent the technical teaching of the asserted patent claims by using a “new bitstream”, without having alleged any specific adverse effects on their streaming service in this regard.”
Negotiation obligations according to Huawei v. ZTE
The Court states that it is ‘far from being settled’ whether the principles set out in Huawei v. ZTE also apply in a de facto standard situation.
In particular, in such a case, the Court notes that there is no FRAND-licence declaration on which market participants could reasonably rely to assume that FRAND licences will be granted. But even if the principles apply, Disney’s FRAND defence would still fail as it is considered to be an unwilling licensee.
Firstly, a counter offer was not made for one year and a half.
Also, InterDigital’s licence offer must in principle be examined. However, in the present case, this is not possible, because InterDigital’s licence offer is subject to an NDA, which prevents InterDigital from submitting and explaining it in the present proceedings.
“Consequently, Defendants are to be considered as unwilling licensees due to their refusal to cooperate properly in amending the previous confidentiality regime, thereby effectively preventing the disclosure of the entire history of the negotiations, and due to their insufficient reaction on Claimant’s licence offer.”
An injunction covering Austria, Belgium, Germany, Denmark, Finland, France, Italy, the Netherlands, Portugal, Romania and Sweden was ordered.
Given the financial status of InterDigital, the Court ordered a security of EUR 8 million as a condition for enforcement.
A copy of the decision can be read here.
