Unwired Planet International Ltd v Huawei Technologies Co. Ltd & Ors

Applications for summary judgment or strike-out concerning FRAND licensing obligations for standard-essential patents should not be determined summarily where construction depends on disputed facts, competition-law context, licensing practice and the relationship between contractual obligations and injunctive relief. A portfolio licence may be capable of being FRAND, but bundling standard-essential and non-standard-essential patents may be non-compliant; the answer depends on the factual and negotiating context. The court may adjudicate whether concrete licence proposals are FRAND, including whether particular terms would make an offer equitably refusable, but it has no jurisdiction to conduct an open-ended tariff-setting exercise without the parties’ consent.

The claimant, a telecommunications patent licensing business, sued Huawei, Samsung and Google for infringement of five standard-essential patents and one non-standard-essential patent. It alleged that it had made FRAND licensing proposals pursuant to the ETSI IPR Policy and sought injunctive relief if the defendants did not take licences on FRAND terms.

Huawei applied for strike-out and summary judgment on pleaded issues concerning the FRAND status of the April and July 2014 proposals. The claimant applied to amend its claim to seek declarations that those proposals were FRAND and, more broadly, as to the terms or range of terms that would be FRAND.

1. Applications refused in part and amendment allowed in part. Huawei’s application for summary judgment and strike-out was refused. The claimant was permitted to amend its pleading to seek a declaration concerning the April and July proposals, subject to conditions. The wider proposed declaration concerning the terms or range of terms that would be FRAND was refused.
2. The summary judgment and strike-out test was whether there was a real prospect of success. Although a short point of construction or law may sometimes be decided summarily, the issues here could not properly be isolated from their factual and competition-law context. The construction of the ETSI IPR Policy and declaration, the scope of any obligation to offer single-patent, standard-specific or territorial licences, and the effect of the proposals on injunctive relief were interrelated.
3. FRAND had to be distinguished in three contexts: compliance with competition law; compliance with the contractually enforceable obligation arising from the ETSI declaration and policy; and whether licence terms made an injunction equitably refusable. These questions could not be resolved without considering the licence terms actually offered and the surrounding facts.
4. The April proposal’s bundling of SEPs and non-SEPs was the claimant’s strongest point of difficulty and was strongly arguable as non-compliant, but the later SEP-only July proposal and the parties’ negotiations meant that the April proposal could not be assessed in isolation. The court also rejected summary determination of the objections concerning territories, standards, information, costs, interest and offer-capacity because they were fact-sensitive or depended on the negotiating context.
5. The court could decide the FRAND qualities of concrete proposals, including whether a proposal was FRAND but for a particular term. It could not undertake an open-ended Copyright Tribunal-style tariff-setting exercise without consent. The parties were therefore directed to put forward the licence terms on which they relied, including territorial offers for the five patents assuming validity and essentiality, in accordance with the overriding objective in CPR r 1.1.