Chinese mobile firms fail in bid to stay FRAND proceedings with Nokia
The English High Court has dismissed a bid from several Chinese mobile companies arguing that litigation over standard-essential patents brought by Nokia should be stayed due to parallel proceedings in China.
The decision was handed down on Thursday 4 November.
The dispute centred around whether English courts had the necessary jurisdiction to settle the dispute over fair, reasonable and non-discriminatory (FRAND) terms of foreign patent licensing.
Nokia seeks a declaration from the UK court that three of its UK patents are essential, valid, and infringed by the Chinese firms and that the terms of a licence offered to them was FRAND.
The Chinese mobile companies, including OnePlus and Oppo, argued that the “landscape of FRAND litigation” in the UK, as well as the jurisdiction of English courts, has changed in light of two recent judgments.
Firstly, the defendants noted a ruling made by the Chinese Supreme Court that claims courts in China have jurisdiction to settle global terms of FRAND licence “even in the absence of agreement between the parties as to the forum in which terms are to be determined”.
Secondly, it cited a development that EU law, in particular Council Regulation (EU) No. 1215/2012 ("the Recast Brussels Regulation") which states that which provides that “persons domiciled in a member state shall, whatever their nationality, be sued in the courts of that member state”, no longer applies in the UK.
The defendants claimed that these cases meant that the UK court has no jurisdiction over several of the defendants as they are not “domiciled in the UK”. As a result, the court should set aside litigation against them and stay the case against the remaining defendants.
High Court Judge Richard Hacon disagreed, dismissing the challenges to the jurisdiction. He said: “In my judgment, none of the factors raised by the parties tips the balance of justice as between the parties in favour of a stay or no stay.”
“That being so, I do not take the view that the circumstances of the present case are of the rare and compelling nature… that the balance of justice favours a stay of the FRAND issues before this court. No stay will be granted.”
Case background
Nokia granted a license on its standard-essential patents to the Chinese companies in July 2018, with expiration in June 2021.
Nokia attempted to negotiate a renewed licence and cross-license, expanded to include 5G patents, without success. The mobile companies claimed that the licence was not FRAND and have said that they would like to take another global licence deal provided that the terms are settled by a court in China.
Since the expiration of the original licence in July 2021, the companies had continued to utilise technology protected by the patents, leading Nokia to file a lawsuit claiming infringement.
In response, OPPO filed two lawsuits against Nokia in the No. 1 Intermediate People's Court of Chongqing Municipality of the People's Republic of China, asking the court to set the terms of a global FRAND licence of Nokia’s SEPs.
The UK-based subsidiaries of the Chinese companies filed an application notice in the High Court seeking a stay of the claims pending final determination of the Chinese court proceedings on 3 August 2021.
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