The UK Court of Appeal has upheld the UK High Court decision’s in the ongoing Unwired Planet v Huawei dispute over standard-essential patents (SEPs).
UK High Court judge Justice Birss ruled that Unwired Planet was in a dominant position in the market, but had not abused its dominant position by pursuing proceedings in the way that it did.
He found that willing and reasonable parties would agree on a global licence, and such a licence was the fair, reasonable and non-discriminatory (FRAND) licence for a portfolio such as the one held by Unwired Planet and for an implementer like Huawei.
Unwired Planet was therefore entitled to insist on it and if Huawei did agree to enter into the licensing agreement, it could be enjoined from selling its mobile phones in the UK.
The Court of Appeal upheld this ruling, stating that a global SEP owner can meet its FRAND obligations by offering a worldwide licence. If the offer is refused then the implementer may be subject to an injunction preventing further infringements in the UK.
In its decision, the Court of Appeal also held that Unwired Planet had not discriminated against Huawei, and that the FRAND obligation did not amount to a “most favoured licensee” clause.
Instead, the court found that an SEP holder’s FRAND undertaking requires it to offer licences that reflect the proper valuation of its portfolio.
However, the court conceded that Huawei was correct that the “potential exists for discrimination below the benchmark rate”.
Huawei said it will appeal this decision, contending that, far from being FRAND, the imposition of a global licence on terms set by a national court based on a national finding of infringement is wrong in principle and leads to results which are manifestly unjust.
Huawei also contends the judge’s ruling on the global rate of a licence. It argued that the set global rate and terms of a licence in circumstances where 64 percent of the money to be paid relates to Chinese patents owned by Unwired Planet, rather than to any patent owned by Unwired Planet.
Huawei argued that there is currently ongoing patent litigation in both Germany and China and that there are some countries that Unwired Planet holds “no relevant” patents at all.
Gary Moss, head of litigation at EIP, who was part of the team representing Unwired Planet, commented: “We are pleased by the outcome of the appeal.”
“The court’s judgment confirms several important points of principle as to the appropriate scope and value of SEP licences. This provides global patent holders and licensees with a more efficient framework to help resolve SEP licensing issues.”
Arty Rajendra, partner at Osborne Clarke which was also co-counsel for Unwired Planet, added: "We are delighted by the outcome of the appeal,”
“The Court of Appeal judgment sets out a blueprint for how standard essential patents should be licensed to implementers and confirms that a global licence is FRAND. This judgment takes a pragmatic approach. It will help to enable efficient licensing discussions for both licensees and global patent holders."