English courts can set global FRAND rates, rules Supreme Court
The UK Supreme Court has ruled today that English courts have the jurisdiction to determine fair, reasonable, and non-discriminatory (FRAND) rates for global patent licenses.
The highly-anticipated ruling came as the country’s top court dismissed appeals from Chinese technology companies Huawei and ZTE, in a win for standard-essential patent (SEP) owners Conversant Wireless and Unwired Planet.
The judgment dealt with one appeal from Huawei against a victory for Unwired Planet, and another from Huawei and ZTE against Conversant.
According to the Supreme Court, a lower appeals court’s ruling that English courts can set FRAND licenses was in line with commercial norms in patent licensing.
The Supreme Court also affirmed English courts’ abilities to issue a ‘FRAND injunction’, if parties do not comply with the licensing rates set down by the court.
In his 2017 decision, Justice Colin Birss, then of the English High Court, issued an injunction against Huawei, which would be lifted if it entered into a global licence with Unwired Planet on the FRAND rates he had calculated.
Huawei challenged an English court’s right to set the global FRAND licence, setting up a dispute which is expected to have a major impact on the UK as a destination for FRAND litigation.
Birss’ approach received the backing of the English Court of Appeal, and now, the Supreme Court.
“If the judgments of the English courts had purported to rule on the validity or infringement of a foreign patent, that would indeed be beyond their jurisdiction. But that is not what Birss J and the Court of Appeal have done,” today’s Supreme Court decision read.
ZTE argued that a Chinese court would be the appropriate venue to set the terms of any global FRAND licence.
But according to the Supreme Court, a Chinese court taking on the job of setting a global FRAND was no more than a “speculative possibility”.
EIP Legal, which represented Unwired Planet and Conversant, hailed the judgment as a “landmark victory” for SEP owners.
The firm added that the UK would now become one of the “leading global jurisdictions for the resolution of such disputes”.
“The most immediate effect will be that Huawei, the world’s largest telecoms equipment manufacturer, will need to enter into the licence with Unwired Planet which the UK Patents Court previously decided was fair and reasonable; should it fail to do so then it will risk being subject to an injunction restraining its further activities in the UK,” the firm’s statement said.
A spokesperson for Unwired Planet welcomed the decision, which it said affirmed the company’s belief that “global licensing is the most efficient and effective solution for both licensors and licensees”.
Conversant CEO Boris Teksler said: “We are obviously extremely pleased at the decision of the UK Supreme Court on a topic fundamental to how IP is licensed in the telecoms sector. The decision reflects the court’s deep understanding of the issues that affect our sector and encourages us to drive this industry forward.”
Legal representatives for Huawei declined to comment when contacted.
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