Supreme Court rules against Huawei in long-rolling Unwired Planet patent sueball: Take the licence terms we set or else
(2020/08/26)
- Reference: 1598443365
- News link: https://www.theregister.co.uk/2020/08/26/huawei_unwired_planet_supreme_court_verdict/
- Source link:
Huawei this morning lost a long-running patent lawsuit against Unwired Planet in a case that will determine global FRAND licensing rates for years to come – and also sets London as the jurisdiction of choice for squabbling telecoms multinationals.
In the judgment
SEPs underpin common technologies such as LTE; to make a working mobile phone in today’s world, you will have to include patented technology that forms part of a mandatory global standard.
A concept called FRAND – Fair, Reasonable And Non-Discriminatory – sat at the heart of this case. SEPs must be offered on FRAND terms to so-called “implementers”, including handset makers such as Huawei, ZTE, Apple and Samsung.
In the case before the Supreme Court (which began [2]years ago in the High Court ) Huawei had wanted a UK-only deal with Unwired Planet for patents it intended to use. Unwired was only willing to strike a deal with Huawei for a worldwide FRAND licence – so the London courts were asked to decide the case by setting the licence terms.
Crucially, Unwired had previously granted favourable licence and royalty terms to Samsung for the same patents. Huawei argued that giving it different terms and conditions from Samsung would be a breach of Unwired’s FRAND commitments. Yet the court rejected the idea that the “most favourable licence” should become a binding FRAND-compliant licence for everyone wanting to use a particular patent.
“The court holds that as a result of the contractual arrangements in the ETSI [intellectual property rights] policy, the courts of England and Wales have jurisdiction and may properly exercise a power, without the parties’ agreement, to grant an injunction to restrain infringement of a UK patent that is a standards-essential patent unless the implementer enters into a global licence of a multi national patent portfolio, and to determine the royalty rates and returns of that licence,” intoned Supreme Court judge Lord Hodge, delivering the court’s unanimous verdict, this morning.
Huawei lost on all five of its grounds of appeal, including an argument that courts in China were better placed to decide the case than London courts.
According to the judgement, Mark Howard QC, acting for Huawei, had earlier argued that English judges were "setting up the English jurisdiction as 'a de facto international or worldwide licensing tribunal for the telecommunications industry'. [And that] In so acting the English courts were out of step with the approach of other national courts."
The ruling has big implications for the international patent world but doesn’t necessarily make UK courts into global setters of patent law and policy, as Andrew Sharples of law firm EIP, which represented Unwired Planet and co-defendant Conversant Wireless Licensing, told The Reg .
“For too long large implementers have been able to hold out and avoid paying royalties on the technologies they are using, tying companies up in lengthy negotiations, litigations or both. Court has recognised that and seen the need to balance the right to access tech with need for patents to be properly compensated for using that tech,” he said.
Sharples added to The Register : “When we were beginning this case there were a number of people who didn’t think that a court would grant an injunction on the basis of an SEP because the owner of that SEP had to give an undertaking to make licences available for that patent on FRAND terms.”
A parallel and related case that formed part of today’s judgments, between Conversant Wireless Licensing and Chinese firm ZTE, is set for further hearings in January.
Related patent lawsuits in America also [3]concerned Unwired Planet's 4G patents , for which it scored $506.2m in FRAND royalties on LTE capability in the iPhone, iPad, and Apple Watch. The firm was once known as Openwave Systems. ®
Get our [4]Tech Resources
[1] https://www.supremecourt.uk/cases/docs/uksc-2018-0214-judgment.pdf
[2] https://www.theregister.com/2017/04/05/huawei_unwired_patent_judgement
[3] https://www.theregister.com/2020/08/12/texas_jury_apple_should_pay/
[4] https://whitepapers.theregister.com/
In the judgment
[1]PDF
, the Supreme Court ruled that Huawei could not use standards-essential patents (SEPs) owned by Unwired Planet without agreeing a worldwide licence and royalties.SEPs underpin common technologies such as LTE; to make a working mobile phone in today’s world, you will have to include patented technology that forms part of a mandatory global standard.
A concept called FRAND – Fair, Reasonable And Non-Discriminatory – sat at the heart of this case. SEPs must be offered on FRAND terms to so-called “implementers”, including handset makers such as Huawei, ZTE, Apple and Samsung.
In the case before the Supreme Court (which began [2]years ago in the High Court ) Huawei had wanted a UK-only deal with Unwired Planet for patents it intended to use. Unwired was only willing to strike a deal with Huawei for a worldwide FRAND licence – so the London courts were asked to decide the case by setting the licence terms.
Crucially, Unwired had previously granted favourable licence and royalty terms to Samsung for the same patents. Huawei argued that giving it different terms and conditions from Samsung would be a breach of Unwired’s FRAND commitments. Yet the court rejected the idea that the “most favourable licence” should become a binding FRAND-compliant licence for everyone wanting to use a particular patent.
“The court holds that as a result of the contractual arrangements in the ETSI [intellectual property rights] policy, the courts of England and Wales have jurisdiction and may properly exercise a power, without the parties’ agreement, to grant an injunction to restrain infringement of a UK patent that is a standards-essential patent unless the implementer enters into a global licence of a multi national patent portfolio, and to determine the royalty rates and returns of that licence,” intoned Supreme Court judge Lord Hodge, delivering the court’s unanimous verdict, this morning.
Huawei lost on all five of its grounds of appeal, including an argument that courts in China were better placed to decide the case than London courts.
According to the judgement, Mark Howard QC, acting for Huawei, had earlier argued that English judges were "setting up the English jurisdiction as 'a de facto international or worldwide licensing tribunal for the telecommunications industry'. [And that] In so acting the English courts were out of step with the approach of other national courts."
The ruling has big implications for the international patent world but doesn’t necessarily make UK courts into global setters of patent law and policy, as Andrew Sharples of law firm EIP, which represented Unwired Planet and co-defendant Conversant Wireless Licensing, told The Reg .
“For too long large implementers have been able to hold out and avoid paying royalties on the technologies they are using, tying companies up in lengthy negotiations, litigations or both. Court has recognised that and seen the need to balance the right to access tech with need for patents to be properly compensated for using that tech,” he said.
Sharples added to The Register : “When we were beginning this case there were a number of people who didn’t think that a court would grant an injunction on the basis of an SEP because the owner of that SEP had to give an undertaking to make licences available for that patent on FRAND terms.”
A parallel and related case that formed part of today’s judgments, between Conversant Wireless Licensing and Chinese firm ZTE, is set for further hearings in January.
Related patent lawsuits in America also [3]concerned Unwired Planet's 4G patents , for which it scored $506.2m in FRAND royalties on LTE capability in the iPhone, iPad, and Apple Watch. The firm was once known as Openwave Systems. ®
Get our [4]Tech Resources
[1] https://www.supremecourt.uk/cases/docs/uksc-2018-0214-judgment.pdf
[2] https://www.theregister.com/2017/04/05/huawei_unwired_patent_judgement
[3] https://www.theregister.com/2020/08/12/texas_jury_apple_should_pay/
[4] https://whitepapers.theregister.com/
2 things
john.jones.name
1/ they are a patent troll and infact boast about it with 16 employees and no products. What it does have is a portfolio of more than 2,000 patents, mostly acquired from Ericsson AB.
2/ I wonder if they paid for the courts time ? otherwise the UK tax payer forked out for exactly nothing...
Re: 2 things
General Purpose
re (2), No, there are no fees for the court's time. There are some court fees - see https://www.gov.uk/court-fees-what-they-are - but there's an underlying principle that the UK provides access to justice for all. (Lawyers can be very expensive but you don't _have_ to hire them to go to court.)
Re: 1/ they are a patent troll
Steve Davies 3
Wrong.
They are a very successful patent troll.
FRAND?
Henry Wertz 1
so judge is going to ignore the Non Discriminatory part of this? Huawei absolutelty deserves the favorable rates samsung got, FRAND demands they do not discriminate between Samsung and Huawei for pricing. This is seriously the point of it; since they have a patent integral to a specification (guaranteed volume), they are supposed to set a fixed reasonably low rate, not negotiate it per customer.
FRAND is not a part of patent law
It is a contractual term, voluntarily entered into by all companies that participate in the standards making process. It does not apply to those who did not participate in the standards process.