2020, the UK Supreme Court issued its judgment in a standard-essential patent (SEP) dispute between Huawei and Unwired Planet (see full alert memorandum).
Unwired Planet is a patent assertion entity that acquires and licenses patents. In 2013, it acquired telecoms patents from Ericsson, 276 of which were declared to be SEPs to the relevant standard setting organisation, ETSI. In 2014, Unwired Planet sought an injunction against Huawei, Samsung, and Google based on five UK patents from the Ericsson portfolio. Huawei had previously licensed the patents from Ericsson, but the license expired in 2012 and Huawei had continued to use the patented technology without a license. The High Court had to determine whether the terms of the parties’ latest licensing offers to each other were ‘fair, reasonable and non-discriminatory’ (FRAND), and, if not, to determine the terms that would be FRAND. The High Court set worldwide licence terms, holding that a UK-only licence would not be FRAND because a willing licensor with a global portfolio and a willing licensee with almost global sales could reasonably be expected to agree a worldwide licence. Birss J. imposed an injunction if Huawei did not accept the terms he had set. The Court of Appeal dismissed Huawei’s appeal on all grounds (except that the Court of Appeals found that a FRAND royalty rate can be a range rather than a single percentage).
The Supreme Court unanimously dismissed Huawei’s appeal against the Court of Appeal’s judgment. The Court held:
- An English court has jurisdiction to enjoin infringement of a UK patent even if the infringer accepts a UK license on FRAND terms set by the courts but resists a worldwide license;
- England and Wales is a more appropriate forum for the dispute than China because Chinese courts have no jurisdiction to determine FRAND terms for global licenses without the parties’ consent;
- The ‘non-discrimination’ prong of FRAND does not impose obligations that are separate from the ‘fair and reasonable’ prong, and does not prohibit different royalties for similarly-situated licenses, if commercially justified;
- The CJEU’s ruling in Huawei v ZTE – where it was held that an SEP owner does not breach Article 102 TFEU by seeking an injunction prohibiting the infringement of a patent, if it has previously alerted the infringer of the infringement and presented a written offer for a license on FRAND terms, and the infringer has not accepted that offer – provides a ‘safe harbour’ for SEP holders seeking injunctions against infringers, but not a set of mandatory requirements; and
- An injunction may be a proportionate remedy for infringement of a UK patent unless a worldwide license is taken.