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19 April 2024NewsStandard essential patentsLiz Hockley

Ericsson loses bid to move FRAND case from UK

Swedish multinational asked court to hand jurisdiction over global cross-licence to US court | Judge said FRAND determination on cellular SEPs would be ‘a first’ for US district court.

A UK judge has denied Ericsson’s challenge to the jurisdiction of the England and Wales High Court to decide fair, reasonable and non-discriminatory (FRAND) issues in its long-running patent licensing dispute with Lenovo.

The Swedish telecom giant had proposed to have FRAND issues decided in North Carolina instead.

Justice Jonathan Richards opined yesterday, April 19, that the UK was “clearly the most appropriate forum” for the dispute, which is part of a broader battle between Lenovo and Ericsson to reach an agreement on a global cross-licence for cellular standard-essential patents (SEPs).

Lenovo instigated proceedings against Ericsson in the UK court in October 2023, seeking to assert that Ericsson had infringed a Lenovo patent, EP (UK) 3,780,758, which it said was essential to 5G, and that certain patents held by Ericsson were invalid and not standard-essential.

It also sought declarations that Ericsson was in breach of its FRAND commitment, and clarity on what the FRAND terms would be for a cross-licence between Lenovo and Ericsson covering various patents in both firm’s portfolios.

Lenovo also made a claim for a FRAND injunction, which would restrain Ericsson from infringing the ‘758 patent and could only be lifted if Ericsson entered into a licence for various patents on FRAND terms.

Among other matters, Ericsson argued Lenovo should be refused permission to include the FRAND injunction claim, and contested the jurisdiction of the English court to decide the terms of a global patent cross-licence.

North Carolina court ‘never determined a FRAND rate’

Ericsson filed a complaint at the US District Court for the Eastern District of North Carolina in October last year, alleging that Lenovo was infringing four of Ericsson’s US patents and was in breach of contractual obligations under the European Telecommunications Standards Institute (ETSI)’s policy on IP rights.

It asked the North Carolina court for a declaration that its offer of a global cross-licence made to Lenovo on October 11, 2023 complied with its FRAND commitment under ETSI, and if it did not, that the North Carolina court declare a FRAND rate for a global cross-licence of SEPs between the two companies.

Lenovo counter-claimed in December 2023, alleging that Ericsson was infringing various Lenovo patents, and asked the North Carolina court to set FRAND royalty rates.

Justice Richards said that while neither party disputed the jurisdiction of the North Carolina court to determine the complaints raised, Lenovo’s position was that “the English courts are a better forum”.

Ericsson argued that the UK court should decline jurisdiction on the basis that the North Caroline court was “a more appropriate forum” to determine the FRAND issues.

Justice Richards pointed out that the North Carolina court had “never previously determined a FRAND rate for cellular SEPs”, and could certainly do so but that this would be “a new kind of proceeding for it”.

There was a possibility that it would not ultimately determine a FRAND rate for a global cross-licence, he said, and that a trial was unlikely to take place before late 2026.

Bid for case management stay refused

“It follows that there is a realistic prospect that an English court will not face a situation in which it is asked to make FRAND declarations that the [district court] will also be making,” he concluded.

Justice Richards ordered a case management conference (CDC) on the claims that could proceed, and said that the parties should seek to agree how long a FRAND-only trial would take. Ericsson’s application for a case-management stay was refused.

“I hope that the parties will be able to have a more focused discussion on that issue in the light of my decision to the effect that the English proceedings will be working towards a resolution of FRAND issues,” he said.

In Lenovo v Ericsson, Lenovo is represented by Michael Bloch, James Segan and Femi Adekoya (instructed by Kirkland & Ellis), and Ericsson is represented by Sarah Abram and Josephine Davies (instructed by Taylor Wessing and Pinsent Masons).

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