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(Also Huawei Technologies Co Ltd and another v Conversant Wireless Licensing SÁRL [2020] UKSC 37 and ZTE Corporation and another v Conversant Wireless Licensing SÁRL [2020] UKSC 37)

On appeal from: [2019] EWCA Civ 38

 

1.This appeal discusses whether the English court has the power or jurisdiction, or is it a proper exercise of any such power or jurisdiction without the parties’ agreement:

  • to grant an injunction restraining infringement of a UK SEP unless the defendant enters into a global licence under a multinational patent portfolio;
  • to determine the rates/terms for such a licence; and
  • to declare that such rates/terms are FRAND?
  1. If the answer to (1) is “yes”, is England the proper forum for such a claim in the circumstances of the Conversant proceedings?
  2. What is the meaning and effect of the non-discrimination component of the FRAND undertaking and does it mean that materially the same licence terms as offered to Samsung must be offered to Huawei in the circumstances of the Unwired case?
  3. Does the CJEU’s decision in Huawei v ZTE mean that a SEP owner is entitled to seek an injunction restraining infringement of those SEPs in circumstances such as those of the Unwired case?

The cases concern a number of patents, which are declared to be essential to the practice of numerous telecommunications standards, held by the Respondents in both sets of proceedings, who commenced proceedings against the respective Appellants for infringing those patents. The Respondents are under an obligation to make available standard essential patents (“SEPs”) on fair, reasonable and non-discriminatory terms (“FRAND”) terms.

In Unwired, two of Unwired’s patents were found to be valid and essential to the standards, and Unwired obtained an injunction against Huawei for the latter’s infringement of the SEPs. Huawei, with the permission of the first-instance judge, appealed to the Court of Appeal on three grounds, namely Issues (1), (3) and (4). Huawei’s appeal was dismissed and Huawei now appeals to the Supreme Court.

The proceedings in Conversant were brought after the High Court judgment was handed down in Unwired. The defendants in the Conversant proceedings challenged the jurisdiction of the English court, raising issues (1) and (2). The application was dismissed but Huawei and ZTE appealed to the Court of Appeal. The appeal was dismissed and Huawei and ZTE now appeal to the Supreme Court.

Held: the Supreme Court unanimously dismisses both appeals. The full Court gives the judgment, which confirms that the contractual arrangements ETSI has created under its IPR Policy give the English courts jurisdiction to determine the terms of a global license of a multi-national patent portfolio.

The Court holds that Unwired had not breached the non-discrimination limb of the FRAND undertaking [112]. ETSI’s IPR Policy requires SEP owners, like Unwired, to make licenses available “on fair, reasonable and non-discriminatory… terms and conditions”. This is a single, composite obligation, not three distinct obligations that the licence terms should be fair, and separately, reasonable, and separately, non-discriminatory.

The Court considers Article 102 of the Treaty of the Functioning of the European Union, the facts of the present case and the decisions of the trial judge and the Court of Appeal. It confirms that bringing an action for a prohibitory injunction without notice or prior consultation with the alleged infringer will infringe Article 102. However, the nature of the notice or consultation required will depend on the circumstances of the case: there is no mandatory requirement to follow the protocol set out in Huawei v ZTE. On the facts, what mattered was that Unwired had shown itself to be willing to grant a licence to Huawei on whatever terms the court decided were FRAND. Unwired had not therefore behaved abusively.

 

For judgment, please download here.

For Court’s press summary, please download here.

For a non-PDF version of the judgment, please see here.

To watch the hearing please visit: Supreme Court website:

21 Oct 2019 Morning session Afternoon session
22 Oct 2019 Morning session Afternoon session
23 Oct 2019 Morning session Afternoon session
24 Oct 2019 Morning session Afternoon session