17/04/2018

First jurisdiction decision in a FRAND case

Conversant Wireless Licensing S.A.R.L v. Huawei Technologies Co Ltd & ors [16.04.18]

Mobile phones can talk to each other because industry standard-settings organisations (SSOs) set technical standards (3G, 4G etc) which manufacturers and network operators comply with. Those standards are defined in part by reference to patented technology (so-called ‘standard essential patents’ – SEPs). To help meet competition law concerns and facilitate the use of the standards, the SSOs require SEP patentees to undertake to licence the use of their technology to any person on terms that are ‘fair reasonable and non-discriminatory’ (FRAND).

There is a tension between the pan-global reach of mobile phone networks and the national validity and territorial scope of patents. Last year, in Unwired Planet International Ltd v. Huawei Technologies Co Ltd & ors [2017] EWHC 711(Pat) and [2017] EWHC 1304 (Pat), Mr Justice Birss upheld a claim for a global patent licensing agreement, which he held to be FRAND, as the basis for lifting an injunction to restrain the infringement of purely UK patents. The decision is subject to appeal which is due to be heard in May.

In Unwired Planet, the defendants did not contest the jurisdiction of the English court. But in a further similar case, Conversant Wireless Licensing S.A.R.L v. Huawei Technologies Co Ltd & ors, the Defendants did contest the jurisdiction of the English court over a claim for a declaration as to the FRAND nature of a global licence, as the basis for permitting the use of technology (said to be) protected by UK patents. Relying on arguments as to the justiciability of such a claim in the English courts and as to the inability of the claimant to show that England was the forum conveniens to determine a claim for a global FRAND licence, they contended that the case should be stayed in favour of China, as the place of manufacture of the relevant mobile phones where the Claimant had patents which would affect a much higher proportion of global sales than would be affected by UK licences.

In a judgment handed down today, 16 April 2018 [2017] EWHC 0000 (Pat), Mr Justice Henry Carr rejected those arguments and held that England was the appropriate forum. It is believed that this is the first time that an English (or perhaps any) court has had to deal with a jurisdictional dispute in the context of a claim for a global FRAND licence and this judgment unlikely to be the English courts’ last word on the subject.

The Huawei Defendants were represented by Alexander Layton QC leading Henry Forbes Smith of One Essex Court, instructed by Allen & Overy LLP. The Claimants were represented by team led by Adrian Speck QC of 8 New Square, instructed by EIP and the ZTE Defendants by Michael Bloch QC of Blackstone Chambers, instructed by Bristows.