Unwired Planet International Ltd v Huawei Technologies Co Ltd & Anor

Where a patent holder has established infringement and the court has settled a licence on FRAND terms, the appropriate final relief is ordinarily an injunction restraining infringement, discharged if the defendant enters into the FRAND licence. Where the licence is time-limited, the injunction should include liberty to return to court before or at its expiry, because future circumstances cannot safely be predetermined. A late undertaking offered after judgment will not necessarily avoid an injunction, particularly where the defendant’s earlier refusal caused the litigation. Pending appeal, the injunction may be stayed on terms securing payment. Costs may reflect issue-based success: the overall winner may recover costs while bearing the costs of a distinct tariff-setting issue on which neither party’s position was accepted.

The judgment determined remedies following the court’s main decision, [2017] EWHC 705 (Pat), which found infringement of valid standard-essential patents and settled a global FRAND licence between Unwired Planet and Huawei.

The principal issue was whether to grant a final injunction or accept Huawei’s late undertakings to enter into and observe the settled licence. The court also addressed the form of the injunction and damages order, declaratory relief, costs, payment on account, and permission to appeal.

1. Injunction. A FRAND injunction should restrain infringement in normal form but provide that it ceases to have effect if the defendant enters into the FRAND licence. Where the licence is shorter than the patent term, the order should include liberty for either party to return to court concerning the position when the licence expires, and liberty to apply if it ends earlier. The court should not pre-judge the future position.
2. Huawei’s undertakings were offered only after prolonged litigation and judgment. Their lateness mattered. Huawei had previously refused to offer an unqualified undertaking to enter into whatever licence the court settled. The appropriate order was therefore a FRAND injunction, stayed pending appeal on terms securing interim royalty payments, rather than acceptance of the undertakings.
3. The injunction and damages order were to cease to have effect if Huawei entered into the settled licence. A declaration was made that the annexed licence represented the FRAND terms applicable between the parties in the relevant circumstances. A further declaration concerning abuse of dominance was refused as unnecessary.
4. Unwired Planet was the overall successful party. Huawei was ordered to pay the costs of the non-technical trial, excluding the Samsung issues and the FRAND-rate issue. The FRAND-rate issue was treated as a tariff-setting exercise: neither party obtained its proposed rate, and Unwired Planet was deprived of the costs of that issue. Huawei was ordered to pay £2.9 million on account of costs.
5. Permission to appeal was granted on Huawei’s global-licensing, hard-edged non-discrimination, and Huawei v ZTE grounds, and on Unwired Planet’s blended-global-benchmark point. Permission was refused on the remaining identified point.

The judgment followed the court’s main judgment, [2017] EWHC 705 (Pat), which found valid patent infringement and settled the FRAND licence. Permission to appeal was granted on specified issues.