Intel Corporation v Via Technologies Inc. & Anor

Competition-law defences to patent infringement claims should not be summarily rejected where the pleaded facts have a more than fanciful prospect of establishing an abuse of dominance or an anti-competitive licensing arrangement. The exceptional-circumstances principle under Article 82 is not confined to cases involving the exclusion of an entirely new product or all competition. The relevant circumstances may develop as European competition law develops.

A licensing term collateral to the exploitation of patent rights must be justified on its own merits. It cannot derive justification merely from its inclusion in a patent licence. A court may decline infringement relief where enforcement would support conduct contrary to Articles 81 or 82.

Intel brought patent infringement proceedings against Via concerning CPUs and chipsets. Via advanced defences under Articles 81 and 82 EC and the corresponding provisions of the Competition Act 1998, alleging abusive refusal to licence and anti-competitive licensing terms.

Lawrence Collins J granted Intel summary judgment on the competition defences. The Court of Appeal considered whether Via had a real prospect of establishing that Intel’s licensing policy or proposed licence terms restricted competition, and whether those matters could constitute a defence to infringement or to the relief sought.

1. Appeal allowed. Via’s competition-law defences were restored, subject to the agreed exclusion concerning certain relief in the CPU Action. The order of Lawrence Collins J was discharged in material respects, and the parties were directed to seek further directions from Jacob J.
2. Under CPR rule 24.2, summary judgment was inappropriate. The pleaded competition issues involved developing European jurisprudence and mixed questions of fact and law. The validity and scope of the patents had not yet been determined, so the extent of any restriction on competition remained uncertain.
3. The exercise of an intellectual property right may constitute abuse of dominance in exceptional circumstances. The examples in Magill and IMS Health were not exhaustive. Article 82 could potentially be infringed without exclusion of an entirely new product or of all competition. The pleaded allegations that access to compatible chipsets was impossible without Intel’s licence, and that Intel sought to exclude Socket 370 and EBGA products, therefore had a real prospect of success.
4. The Asymmetric Licence and Market Division term were also arguable infringements of Article 81. The former arguably granted Intel broader rights in Via’s patents than Via received in Intel’s patents. The latter arguably restricted sales and use after manufacture, not merely manufacture itself. Following Windsurfing International Inc v European Commission, a licence term regulating products or uses outside the patent monopoly could not be justified merely because it appeared in a patent licence.
5. The principle in British Leyland Motor Corporation Ltd v TI Silencers Ltd was sufficiently broad to make it arguable that infringement proceedings or remedies could be withheld where enforcement would compel or support conduct contrary to Community competition law. The possibility of Article 81 illegality could also affect the remedies, even if it did not ultimately defeat liability.

No reference to the European Court of Justice was appropriate before the relevant patent facts had been determined.

• Court of Appeal (Civil Division) — [2002] EWCA Civ 1905: appeal allowed; material parts of the summary judgment order were discharged and the proceedings were remitted for further directions.
• Patents Court, Chancery Division — Lawrence Collins J granted Intel summary judgment on the competition-law defences.