Unwired Planet v Huawei will have far-reaching impact, lawyers predict
Lawyers have told WIPR that the much-awaited decision in Unwired Planet v Huawei will have far-reaching implications for patent owners, the telecommunications industry, and cross-border licensing.
The English Court of Appeal yesterday held that the owner of a standard-essential patent (SEP) is able to meet fair, reasonable, and non-discriminatory (FRAND) obligations through the offer of a worldwide licence.
On behalf of the court, Lord Justice Kitchin confirmed the English High Court’s decision of April 2017 that if an implementer refuses such an offer, the court is able to issue an injunction to prevent continued patent infringement in the UK.
Yohan Liyanage, partner at Linklaters in London, said that the significance of the judgment “goes far beyond” the dispute between Unwired Planet and Huawei.
The decision will impact the terms of future licences in telecommunications where entities are required to operate to certain standards (such as 2G, 3G, and 4G), as well as having an effect on the way that parties negotiate licences, Liyanage suggested.
He added that the ruling will also impact patents related to 5G, the next generation in telecoms technology, for which standards are currently being developed.
Last year’s decision was the first one in which the English High Court had made a FRAND determination and set a royalty rate, which Mr Justice Birss said should be a single rate.
Although Kitchin yesterday disagreed with Birss on this point—that there can only be a single FRAND rate for any given set of circumstances—he still dismissed Huawei’s appeal and upheld Birss’s decision that a global licence is capable of being FRAND.
Alexander Ritter, senior associate in Baker McKenzie’s Munich, Germany office, described the court’s approach as “patentee-friendly”.
Similarly, Avi Freeman, partner at Beck Greener in London, said the decision confirms that the UK courts offer “practically-minded decisions on IP, with a truly commercial and international outlook”.
For example, Kitchin explained that the standards of patent-protected technology have international effect, and it would be “wholly impractical” for SEP owners to have to negotiate patent licences country by country.
As such, the court put an emphasis on the practicality of dealing with multi-jurisdictional licence questions, particularly in the context of large SEP portfolios, Freeman said.
Ritter noted that the decision could facilitate and speed up lengthy court proceedings in the UK as well as giving patentees the option to choose the UK as a “battlefield” in which they can orchestrate a global portfolio licence.
However, he said that the ruling increases uncertainty for potential licensees operating in and outside of the UK, and could further complicate disputes.
“Potential licensees will have to closely watch, even more, the potentially divergent standards applied in the different jurisdictions, leading to increased need for global advice,” Ritter suggested.
According to Liyanage, yesterday’s decision will have a broad cross-industry impact on those operating in, or alongside, the telecoms field.
“With the current development of the ‘internet of things’, businesses in industries other than telecoms also need to take licences of SEPs. This includes ‘smart home’ appliance makers and manufacturers of connected cars,” he explained.
In Freeman’s opinion, there is no need for those who own non-SEP patent portfolios in multiple jurisdictions to be alarmed by the decision, as it is focused in a specific area (ie, the SEP context).
After yesterday’s decision, Arty Rajendra, head of IP disputes, UK, at Osborne Clarke, which acted as co-counsel for Unwired Planet in the dispute, said that the judgment “sets out a blueprint for how SEPs should be licensed to implementers and confirms that a global licence is FRAND”.
However, a spokesperson for Huawei said that the Chinese telecoms company is seeking permission to appeal to the UK Supreme Court. The Court of Appeal already refused Huawei permission to appeal.
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