Wednesday, August 26, 2020

BREAKING: UK Supreme Court upholds lower courts' decisions in Unwired Planet favoring standard-essential patent holders


The latest in a string of judgments in different--particularly, but not only, European--jurisdictions favoring standard-essential patent (SEP) holders just came down in London, where the Supreme Court of the UK announced its decision in the related Huawei v. Unwired Planet, Huawei v. Conversant, and ZTE v. Conversant cases. Note that the order in which I just stated the parties is Appellant v. Appellee, but in each of the three cases the appellant is actually the defendant, and the appellee is the patent-asserting plaintiff. It's also worth noting that Apple intervened in the case, though Apple didn't get to deliver oral argument.

This blog reported and commented on the late October hearing. I had hoped that the top UK court would reverse the prior decisions by the lower courts, the England and Wales High Court in the first instance and the UK Appeals Court. The lower courts held that a UK court should have the authority to enter a conditional injunction: a SEP injunction that would be immediately enforceable unless the implementer takes a global portfolio license on the terms set by the UK court, regardless of what percentage of the defendant's revenues from the accused products is actually generated in the UK.

Lord Hodge, the Deputy President of the UK Supreme Court, just made the announcement, which was broadcast on the court's website. Very regrettably, the outcome is wholesale affirmance.

With all that I had previously written about this case, there's little point in reiterating my views in detail. While the most prominent one of the three related cases, Unwired Planet v. Huawei, has already been settled, the issues are of concern to industry.

The net effect is that SEP holders--especially the most problematic category of them, which is called "privateers" (a term that applies to Unwired Planet and Conversant, who are basically just acting as proxies for Ericsson and Nokia)--can now seek leverage in the UK.

What's already in full swing, but wil inevitably escalate now, is a race to the bottom between jurisdictions seeking to attract SEP infringement cases. It's almost always SEP holders who are first to file (declaratory judgment requests are sometimes seen in the U.S. and the UK, but even in those jurisdictions, patent holders are typically the ones to sue). So the courts that aspire to be leading patent litigation venues are constantly looking for ways to give SEP holders more and more leverage.

Just last week, the Second Civil Chamber of the Mannheim Regional Court ordered a Germany-wide Mercedes sales ban that is very unbalanced. By the way, the FRAND (fair, reasonable and non-discriminatory licensing terms) part of that decision also notes that SEP holders may insist on a global portfolio license, and if the implementer rejects that scope, an injunction enters. That was not the most important or most interesting issue in Nokia v. Daimler, but it shows that territorial overreach is a cross-jurisdictional problem.

But with all that's been disappointing lately on the SEP litigation front, there's a silver lining, too: Next week the Dusseldorf Regional Court will finally hear Huawei's antitrust action seeking to obligate Nokia to make an offer for an exhaustive component-level license on FRAND terms. That issue is of great concern not only, but particularly, to the automotive industry, as a recent joint letter by Tesla, Ford, Daimler and others to the United States Federal Trade Commission, urging the FTC to seek an en banc review of a Ninth Circuit panel's ruling in Qualcomm's favor, shows.

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