Nokia OYJ v IPCom GmbH & Co Kg

An undertaking to take a FRAND licence may be construed by reference to the particular form of patent identified when the undertaking was given. Where that form has been rendered incapable of existing by a subsequent patent decision, the legal basis for the FRAND inquiry may have disappeared, even though the patent survives in amended form. An inquiry should not proceed where it would determine terms for an ineffective patent and risk substantial wasted costs. A related damages inquiry may also be stayed where its outcome depends on a pending appellate decision and proceeding may render the inquiry otiose.

Nokia sought revocation of IPCom’s standard-essential patent and had been found to infringe the patent in the form upheld by Floyd J. Nokia and IPCom subsequently undertook to grant and take a FRAND licence, and a FRAND inquiry was listed. HTC later entered a similar arrangement so that it could participate in the inquiry.

The European Patent Office Technical Board of Appeal subsequently indicated that the patent could survive only in amended form. Nokia and HTC applied to adjourn the FRAND inquiries. Nokia also sought a stay of the damages inquiry pending the Supreme Court’s decision in Virgin Atlantic Airways v Contour, which concerned whether damages remained recoverable after amendment or revocation.

1. The FRAND inquiries were adjourned. The undertakings concerned the patent in the form upheld by Floyd J, rather than any form into which the patent might later be amended. The parties’ shared construction was correct because Nokia could not realistically have undertaken to submit to an inquiry concerning an unknown future patent form (paras [33]–[35]).
2. The EPO decision amounted to a determination that the patent was invalid for the purposes of the undertakings. Although the patent survived linguistically and was not finally revoked, the Floyd form could no longer exist as an effective patent. The purpose of the order was to require an inquiry if its result might be relevant, but not if the inquiry had become irrelevant (paras [36]–[43], [48]).
3. An inquiry into royalties for the Floyd form would serve no useful purpose. The technological contribution and scope of the effective patent were uncertain, and the final form might be narrower or might not survive at all. The absence of a finding of infringement of the amended form reinforced that conclusion. Essentiality did not produce the same result because it concerned IPCom’s obligation to grant a licence rather than Nokia’s need to take one (paras [44]–[46]).
4. The same conclusion applied to HTC. Its FRAND inquiry had been arranged to enable participation in Nokia’s inquiry, and the basis for that otherwise premature inquiry had disappeared (paras [50]–[51]).
5. The Nokia damages inquiry was also adjourned, with liberty to restore, pending the Supreme Court’s decision in Virgin Atlantic Airways v Contour. Proceeding before that decision would risk substantial expense on an inquiry which might prove otiose. Nokia’s proposed interim payment reinforced the appropriateness of a stay (paras [52]–[55]).

The judgment records earlier decisions concerning validity, infringement and the FRAND arrangements, including the judgment of Floyd J at [2011] EWHC 1470 (Pat) and a Court of Appeal decision upholding that order. Those decisions formed the background to the present applications; this court adjourned the outstanding inquiries.