UK trial to hear Samsung’s anti-competition claims against Ericsson deal
The English High Court has said that a trial must determine whether a patent sale from Ericsson to licensing company Unwired Planet breached EU competition law, in a dispute related to the alleged infringement of six standard-essential patents (SEPs).
At the centre of the SEP row is a claim asserted by Unwired Planet that Samsung, Google and Huawei infringed six of its patents.
The company filed the claim in March 2014 after it attempted to agree a licensing deal with the defendants on fair, reasonable and non-discriminatory (FRAND) terms. The defendants claimed it was not a FRAND deal, and the case is continuing.
Unwired Planet bought five of those patents from technology company Ericsson as part of a 2013 master sale agreement (MSA), which involved the sale of 2,185 patents in total. The sixth patent was registered by Unwired Planet at the UK Intellectual Property Office.
Under the MSA, Ericsson is able to take some of the revenue that Unwired Planet generates from licensing the patents to third parties.
All six patents cover technology used by telecommunications companies and are considered SEPs by the European Telecommunications Standards Institute—a telecoms industry standard-setting organisation, of which both Samsung and Ericsson are members.
Samsung filed a counterclaim against Unwired Planet in which it said Ericsson failed to complete the transfer of the FRAND obligation through the 2013 MSA and that the terms of the deal breached European competition law.
On July 21, Mr Justice Birss, presiding over the case, discussed Ericsson’s application to dismiss Samsung’s claims.
Birss said the claim that the FRAND obligation was not transferred was “hopeless” and should not be heard at a trial.
But he added that the second question, centring on whether Ericsson’s MSA with Unwired Planet breached competition law, should be heard at a trial.
He said: “The MSA is not merely a sale of patents to Unwired. Ericsson retains a share in the royalties to be earned and can transfer a substantial further body of patents to Unwired if it wishes.
“The relationship between SEPs, FRAND, non-practising entities (NPEs) and competition law is a developing one. It is an important area in the context of telecoms technology. There are very few cases which deal with it and that adds to my reluctance to strike out a fact-sensitive issue like this one,” he added.
The case will now proceed to five technical trials, where the details of the patents will be discussed.
The first is scheduled for October 5 this year and the last will be on June 27, 2016.
A non-technical trial concerning Samsung’s claim is due to start in October 2016.
A spokesperson for Ericsson told WIPR: "We are pleased that the court struck out part of the case and states, in the ruling, that Ericsson properly transferred applicable FRAND obligations to Unwired Planet. This is consistent with Ericsson’s long history of fairly sharing our technology.
"We are confident that at full trial we will prove that the remaining allegations are also meritless," the spokesperson added.
Caitlin Stickler, an associate at law firm Olswang, said: "As the judge points out, the relationship between SEPs, FRAND, NPEs and competition law is developing. The development is partly driven by the much-criticised, but seemingly growing, trend for companies to siphon off their patents to NPEs in order to monetise them more effectively, a practice termed 'privateering'.
"Judicial guidance on the competition law implications of privateering would be welcome for both owners of large patent portfolios who want to divest some of their portfolio, as well as for implementers of the standards (ie, prospective licensees), who will want to ensure they pay FRAND royalty rates regardless of who owns the SEPs in question," she added.
Neither Unwired Planet nor Samsung had responded to a request for comment at the time of publication but we will update the story should the companies get in touch.
