Nokia OYJ v IPCom GmbH & Co KG

Where parties undertake to determine FRAND terms for a specified patent form, the inquiry depends on that form remaining a legally effective and commercially relevant patent. If a European patent tribunal determines that the specified form cannot survive, an amended patent is insufficient where the inquiry would concern a patent which can never exist in that form. The undertaking may therefore be treated as subject to a determination of invalidity even without an express finding that the patent is wholly invalid. A related damages inquiry may properly be stayed where its recoverability depends on a pending appellate decision and proceeding immediately risks substantial wasted costs.

Nokia sought revocation of IPCom’s patent, and IPCom counterclaimed for infringement. The patent had been held valid in amended form, infringed by Nokia in relation to certain devices, and essential to the UMTS standard. Consequential hearings had been ordered to determine FRAND licence terms and damages. HTC later undertook to take a FRAND licence and was permitted to participate in the FRAND inquiry.

After the European Patent Office Technical Board of Appeal determined that the patent could survive only in an amended form and remitted further issues, 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. The central questions were whether the undertakings still required the inquiries and whether the changed patent position made them irrelevant.

1. The FRAND inquiries were adjourned. The undertakings concerned the patent in the form considered by Floyd J, not whatever amended form might ultimately emerge from the European proceedings. The parties’ shared construction was correct: the relevant “Patent” was the patent in the Floyd form.
2. The proviso concerning invalidity was construed in context and in light of the purpose of the orders. The parties intended that an inquiry would proceed if it might produce a relevant licence, but not if the patent had already become incapable of existing in the form to which the inquiry related.
3. The Technical Board’s decision implicitly determined that the Floyd form was invalid for the purposes of the undertakings. Although the patent remained alive in an amended form, the Floyd form could never be an effective patent. A FRAND inquiry concerning royalties and other terms for exploiting that form would therefore be irrelevant. The uncertainty concerning the amended claim, its scope, technical contribution, infringement and future forms reinforced that conclusion.
4. The possibility that amendment had been contemplated when the orders were made did not outweigh the purpose and practical effect of the undertakings. The result was not an adjournment justified by a mere change of circumstances, but the loss of the legal basis on which the inquiries had been ordered.
5. HTC’s inquiry fell with Nokia’s inquiry. HTC’s participation had been dependent on the Nokia FRAND inquiry and the relevant undertaking was materially the same.
6. The Nokia damages inquiry was also adjourned. Much of its cost overlapped with the FRAND inquiry, and its continuation before resolution of the recoverability issue in Virgin Atlantic Airways v Contour risked making the inquiry otiose. It was stayed pending that decision, with liberty to restore. The court noted that Nokia’s proposed interim payment protected IPCom against prejudice from delay.

First-instance decision on applications to adjourn and stay consequential patent proceedings. The judgment records that permission to appeal on validity was refused, while an application concerning the damages inquiry was adjourned by the Supreme Court pending related proceedings.