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

Costs following determination of discrete issues in a staged trial remain subject to the court’s discretion. The general rule is that the unsuccessful party pays the successful party’s costs, but the court may reserve costs where there is a real possibility that later issues will affect the parties’ entitlement to costs of the earlier issues. The court must apply those principles to the issues actually determined, rather than follow ordinary practice mechanically. Where validity, essentiality and infringement have been finally resolved as distinct issues, and the later trial cannot affect the significance of those findings, costs may properly follow the merits of those issues even though the overall dispute remains unresolved.

The claimant brought patent proceedings concerning the validity, infringement and essentiality of telecommunications-standard patents, together with competition-law and FRAND issues. The proceedings were divided into technical trials and a later non-technical trial.

At Trial A, the court held that the patent was valid, infringed and essential. The present hearing concerned the appropriate costs order. The defendants sought an order recognising their success on the technical issues but reserving the costs pending the outcome of the non-technical trial. The central question was whether that later trial created a real possibility that the parties’ entitlement to the costs of Trial A would be affected.

1. Costs discretion. Under CPR 44.2, the court has discretion as to costs. Although the general rule is that the unsuccessful party pays the successful party’s costs, a different order may be made where the circumstances justify it [27].
2. Deferred costs. Following Weill v Mean Fiddler Holdings [2003] EWCA Civ 1058, where a hearing finally determines some issues but the overall dispute continues, the court should ask whether there is a real possibility that the later outcome will affect the merits of the parties’ entitlement to the earlier costs. If so, postponement or reservation may be appropriate [24], [28]-[29].
3. The later non-technical trial could not affect the significance of the findings on validity and essentiality. Nor could it affect the costs attributable to the technical determination of infringement, subject to qualification of the Samsung declaration because a licence might later be established. The defendants had lost the distinct technical issues, so the claimant was entitled to the costs attributable to Trial A [30]-[33].
4. The court therefore made the costs orders sought by the claimant and omitted the proposed proviso reserving the ability to revisit those costs [34]. Permission to appeal was granted on construction, priority and obviousness, but refused on novelty and the proposed compelling-reason ground [35]-[37].

First-instance costs decision following the technical patent judgment reported at [2015] EWHC 3366 (Pat). Permission to appeal was granted on construction, priority and obviousness and refused on novelty and the other proposed ground [35]-[37].