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

A global FRAND claim based on infringement of UK standard-essential patents is justiciable in England even though foreign patent validity cannot be determined there. Foreign validity and infringement may be resolved in the relevant states, with the results reflected through licence terms or royalty-adjustment mechanisms. For UK-domiciled defendants, the Brussels I Recast Regulation excludes a forum non conveniens stay where the English claim is not concerned with patent validity. The forum inquiry must address the substance of the dispute, not merely the relief sought. China was not shown to be an available forum for determining UK patent infringement or a global FRAND rate. The jurisdictional and stay applications were rejected, service in England on the Chinese defendants was found invalid, and permission for service out was granted.

The claimant alleged infringement by Huawei and ZTE group companies of four UK designations of European patents and sought a global FRAND licence or FRAND injunction. The Chinese parent companies had begun Chinese proceedings concerning the validity, infringement and FRAND terms for Chinese patents. All defendants challenged the English court’s jurisdiction, arguing that the claims were in substance foreign-patent disputes, that China was the appropriate forum, and that service on the Chinese companies was invalid. The court determined justiciability, forum conveniens, service, service-out gateways and whether there was a serious issue to be tried.

1. Justiciability. The English court could not determine the validity of foreign patents, and a defence asking it to find foreign patents invalid would be non-justiciable. That principle was considered in Chugai Pharmaceutical Co Ltd v UCB Pharma SA [2017] EWHC 1216 and applied with the common-law rule explained in Lucasfilm v Ainsworth [2011] UKSC 39. It did not, however, prevent adjudication of UK patent infringement or a global FRAND licence.
2. Global FRAND relief. Applying Unwired Planet International Ltd v Huawei Technologies Co Ltd [2017] EWHC 2988, the court held that foreign validity and infringement could be determined in the appropriate jurisdictions and reflected in the terms of a global licence, including by royalty-adjustment provisions. An objection that proposed licence terms were not FRAND was a matter for the FRAND trial, not jurisdiction. The court declined to question the material correctness of the earlier judgment.
3. Forum conveniens. The court applied the principles in Spiliada Maritime Corp v. Cansulex Ltd [1987] AC 460 and VTB Capital plc v Nutritek International Corp and others [2013] UKSC 5. China was not shown to be available to determine UK patent infringement or a global FRAND rate. The UK defendants had to be sued in England under the Brussels I Recast Regulation, consistently with Owusu v Jackson [2005] QB 801. The substance of the dispute, rather than only the relief claimed, controlled the inquiry, following Re Harrods (Buenos Aires) Limited [1992] Ch 72. Bifurcation also created an undesirable risk of inconsistent findings.
4. Service and service out. A foreign company could not be served in England merely at the premises of a related company unless it carried on business there. Service on the UK group companies therefore did not validly serve Huawei China or ZTE China. The claims fell within Gateway 2 of Practice Direction 6B because an arguable FRAND injunction concerned acts within the jurisdiction, and the related claims fell within Gateway 3.1(4)(a). Gateway 11 was also satisfied because the claims principally concerned UK patent property. There was a serious issue to be tried. Permission to serve out was granted, and the claims were to continue in England.