Unwired Planet win FRAND case appeal

The English Court of Appeal’s judgment in the case of Unwired Planet International Ltd & Anor v Huawei Technologies Co Ltd & Anor [2018] EWCA Civ 2344 has now been published. In brief, Kitchin, Floyd and Asplin LJJ wrote a joint judgment which in all material respects upheld the decision of Birss J at first instance. The first instance decision was discussed several times on this blog, including here. It seems that Huawei intends to try to appeal again to the UK Supreme Court.

A quick and oversimplified reminder: this case is partly about when the terms (and associated negotiation) of a licence agreement for standards-essential patents (SEPs) should be considered fair, reasonable and non-discriminatory (FRAND). Patent owners who declare (to standards-setting bodies) that their patents are SEPs are required by the rules of the standards-setting body to offer those patents for license on FRAND terms.

In very brief summary, the Court of Appeal decided:

1. Birss was right to say that the licence had to be global, rather than limited to the UK as Huawei sought.
2. It was not discriminatory for the terms of the licence to be different to those UP had previously provided to Samsung.
3. UP had not abused a dominant position by starting legal proceedings against Huawei.

One of the topics that comes up in FRAND licensing is that parties tend to work out the financial terms by counting the number of standards-essential patents that the patent owner has, without looking too closely at whether each of them is valid. This is a crude but sometimes cost-effective approach for the parties to take. Reading through the Court of Appeal’s judgment, IP Draughts was struck by the number of arguments that they addressed and decided, and he wondered whether, in the interests of efficiency, litigation should be reduced to counting the number of arguments that each party makes.

In total the Court of Appeal addressed around 50 detailed sub-arguments that fell within the three numbered issues mentioned above. The Court of Appeal agreed with Birss J on virtually every point discussed in the CA judgment. The most notable area where they disagreed with him was that they held he was wrong to say that there is only ever one set of licence terms that is FRAND in any particular case, but this made no difference to the outcome of the case.

Commentators have today suggested that the Court of Appeal’s judgment will tend to make the UK a jurisdiction of choice for future FRAND licensing disputes. If that is correct, it should benefit both IP litigators and IP contract drafters based in the UK.