Nokia Corporation v Interdigital Technology Corporation

A properly constituted patent-revocation action should not ordinarily be stayed merely because the applicant hopes that its outcome will influence related arbitration or another tribunal. A person’s commercial motive for seeking revocation is irrelevant. The public interest favours ready access to the court to test patent validity.

A declaration concerning whether patents are essential to a technical standard may be granted under the court’s inherent jurisdiction where the standard, the patents and the issue are sufficiently defined. An existing licence, pending arbitration, possible settlement or imminent patent expiry does not prevent a real and live commercial dispute from being determined.

InterDigital held three United Kingdom patents which it asserted were essential to compliance with the GSM technical standard. Nokia, while licensed under the portfolio, disputed that assertion and commenced proceedings to revoke the patents. It also sought a declaration that equipment compliant with the specified GSM standard did not require infringement of the patents.

Pumfrey J refused InterDigital’s application to stay the proceedings pending ICC arbitration, refused to restrain Nokia’s United States document-discovery applications, and permitted Nokia’s amendment adding the declaration of non-essentiality. He also effectively rejected InterDigital’s strike-out complaint. InterDigital appealed those rulings.

1. Appeal dismissed. Lord Justice Jacob, with whom Lord Justice Rix and Lord Justice Mummery agreed, upheld each of Pumfrey J’s decisions.

2. The revocation proceedings should not be stayed. The fact that Nokia wished to influence the related arbitration was no reason for a stay. Any person may seek revocation, and private commercial motives do not detract from the public interest in removing invalid patents. The licence, the prospect that arbitration might make the proceedings unnecessary, and the potential saving of court time did not make the proceedings abusive or show that the judge had wrongly exercised his case-management discretion.

3. The unsuccessful United States applications under 28 USC 1782 left no substantive injunction issue. Their later failure did not undermine the judge’s costs order, which could not be faulted.

4. The construction pleadings were not an impermissible attempt to construe patent claims by reference to subsequent conduct. They alleged the constructions for which InterDigital would need to contend if its essentiality assertion were correct. In any event, once Nokia’s amendment was allowed, a strike-out would serve no practical purpose.

5. The proposed declaration of non-essentiality was sufficiently defined by the relevant standard, the patents and the agreed definition of essentiality. It was not the specific form of declaration of non-infringement governed by section 71 of the Patents Act 1977, but it fell within the court’s inherent jurisdiction. The issue was a real commercial dispute because essentiality affected patent value and future licensing, notwithstanding the current licence, arbitration, possible settlement, optional technical routes or the impending expiry of one patent.

6. Permission to appeal was granted. InterDigital was ordered to pay Nokia’s appeal costs, subject to immediate detailed assessment.

• Court of Appeal (Civil Division) — In [2005] EWCA Civ 614, permission to appeal was granted but the appeal was dismissed.
• High Court (Pumfrey J) — Refused a stay and an injunction relating to the United States proceedings, allowed Nokia’s amendment seeking a declaration of non-essentiality, and effectively rejected the strike-out application.