Conversant Wireless Licensing SARL v Huawei Technologies Co. Ltd & Ors

Permission to appeal on justiciability and forum conveniens may be granted where the issues have a real prospect of success, even if related issues are pending before the Court of Appeal. Permission should be refused for an out-of-time challenge raising no issue of law or principle and having no real prospect of success.

A jurisdictional appeal does not automatically require the proceedings to be stayed. The court may direct further steps, provided they do not amount to a submission to the jurisdiction or render the appeal nugatory. The discretion is fact-sensitive and requires the balance of prejudice to be assessed. In proceedings concerning standard-essential patents, delay and hold-out may materially prejudice the patentee.

The claimant brought patent infringement and related FRAND proceedings against Huawei and ZTE. The defendants challenged the justiciability of determining global FRAND terms and the appropriateness of the English forum. They sought permission to appeal those decisions and, if permission were granted, a stay pending the appeal. Huawei also sought permission to appeal an order permitting amendment of the Particulars of Claim.

The court considered whether the pending appeal, and the defendants’ continuing jurisdictional challenge, prevented the technical trials and a later FRAND hearing from being progressed.

1. Permission to appeal was granted on justiciability and forum conveniens. The issues had a real prospect of success, and the fact that related questions were shortly to be considered in Unwired Planet did not justify assuming that the Court of Appeal would determine them. Permission to appeal the amendment decision was refused because the application was out of time and raised no issue of law or principle with a real prospect of success.

2. A stay pending an appeal is discretionary and fact-sensitive. The court must avoid making orders which render the appeal pointless or cause irreparable harm, but the existence of a jurisdictional appeal does not require an automatic stay. Toshiba Carrier UK Ltd v KME Yorkshire Ltd was applied on the need to prevent an appeal being rendered nugatory, while the different balance of prejudice in the present case was recognised.

3. CPR Part 11 distinguishes the first acknowledgment of service from a further acknowledgment after a jurisdiction challenge has failed. Rule 11(8) gives the second acknowledgment its ordinary effect as a submission to jurisdiction. It does not require all other procedural steps to be stayed. The time for filing a second acknowledgment was therefore extended until the jurisdiction appeal was resolved.

4. The court had jurisdiction to make case-management directions while the appeal was pending. Defences, technical trials and a FRAND hearing could proceed, provided the order recorded that compliance was not a submission to jurisdiction and the claimant undertook not to contend otherwise. The court agreed with the approach in Goldman Sachs v Novo Banco SA.

5. The balance of prejudice favoured progression. Continuing delay could deprive the patentee of licensing income, allow alleged hold-out to continue and cause patents to expire before an injunction issue was reached. The court observed that, in an appropriate case involving a valid and infringed standard-essential patent, relief excluding an implementer from the market might be available where there was clear hold-out and no FRAND offer was accepted.

6. Directions were made for two technical trials in March and June 2019 and a FRAND hearing in November 2019. The FRAND hearing estimate was set at 15 days. Defences were to be served after an additional 35-day period allowing an application to the Court of Appeal concerning the refusal of a stay.

First-instance decision on applications for permission to appeal, a stay pending appeal and case-management directions. The judgment granted permission on justiciability and forum conveniens, refused permission concerning amendment of the Particulars of Claim, and refused a stay.