On 26 August 2020, the UK Supreme Court handed down its judgment in the appeals from the Court of Appeal judgment in Unwired Planet v Huawei [2018] EWCA Civ 2344 and the Conversant v Huawei and ZTE [2019] EWCA Civ 38 case. It was a much-awaited ruling on several legal and economic issues arising in fair, reasonable and non-discriminatory (FRAND) licensing disputes for standard essential patents (SEPs). The UK Supreme Court dismissed the appeals brought to it by Huawei and ZTE, and upheld the judgments by the lower courts in favour of Unwired Planet and Conversant.
Oxera Partner Dr Gunnar Niels, supported by Partner Dr Avantika Chowdhury, acted as the economics expert for Unwired Planet in the UK proceedings. Oxera Partner Dr Min Shi, supported by Senior Consultant Shreya Gupta, acted as the FRAND expert for Conversant in a related dispute with Huawei in China.
The UK Supreme Court’s judgment is notable for various reasons.
First and foremost, the Supreme Court ruled that UK courts can determine FRAND terms not only for the UK, but also a global licence. The judgment gives due weight to the reasoning of Hon. Mr Justice Birss that agreeing global licences for a portfolio of patents is common practice in the telecommunications industry and has significant benefits. The Supreme Court also explicitly acknowledges that the IPR Policy of the European Telecommunications Standards Institute (ETSI) aims to strike a balance between potential hold-up by licensors as well as hold-out by licensees.
The second key aspect that the Court ruled on is the interpretation of the non-discrimination (ND) element of FRAND. It upheld the High Court’s finding that is not ‘hard-edged’, i.e. the ‘ND’ obligation under FRAND rules does not mean that the same rates must be agreed across all similarly situated licensees. Relying on Oxera’s experts’ testimony on distortion to competition under competition law, J Birss had found that differential rates may not violate the FRAND rules unless it distorts competition among the different licensees (see paras 517–521 of the judgment of J Birss). This is a novel finding, as this is the first time that a Court has used concepts from competition law in assessing non-discrimination under FRAND rules.
The full Supreme Court judgment can be found here.
The full High Court judgement on Unwired Planet v Huawei can be found here.
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