Unwired Planet & Conversant v Huawei & ZTE

The Supreme Court has delivered its long-awaited judgment concerning global telecommunications licensing in the Unwired Planet and Conversant appeals.  Upholding the decisions of the Court of Appeal and High Court in both sets of proceedings, the Supreme Court has decided (in summary) as follows:

(i)         “FRAND injunctions”:  The UK courts have jurisdiction, and may properly exercise it without the agreement of both parties, (a) to grant an injunction to restrain the infringement of a UK patent where the patented invention is an essential component in an international standard of telecommunications equipment, which is marketed, sold and used worldwide, unless the implementer of the patented invention enters into a global licence of a multinational patent portfolio, and (b) to determine royalty rates and other disputed terms of such a global licence (paras 50-91).

(ii)        Forum non conveniens:  The English courts are the appropriate forum to determine such matters in the Conversant case as the only other suggested forum was China, and “the Chinese courts do not, at present, have jurisdiction to determine the terms of a global FRAND licence, at least in the absence of agreement” (paras 92-104).

(iii)       Non-discrimination:  The requirement that a licence under a Standard Essential Patent (“SEP”) must be non-discriminatory does not equate to a most-favoured licensee obligation and instead “…indicates that the terms and conditions on offer should be such as are generally available as a fair market price for any market participant, to reflect the true value of the SEPs to which the licence relates and without adjustment depending on the individual characteristics of a particular market participant” (paras 105-127).

(iv)       EU and UK competition law:  The steps laid down by the Court of Justice of the European Union in Huawei v ZTE (Case C-170/13) [2015] 5 CMLR 14 [2016] RPC 4 are – except for the prior notice criterion in para 60 thereof – only a “safe harbour” rather than mandatory requirements (paras 128-158).

(v)        Damages in lieu of an injunction:  An award of damages is unlikely to be an adequate substitute for what would be lost by the refusal of an injunction in a SEP case (paras 159-169).

A copy of the judgment can be found here.

Michael Bloch QC acted for ZTE, instructed by Bristows.  James Segan QC acted for Huawei, instructed by Allen & Overy and Powell Gilbert.