TQ Delta, LLC v Zyxel Communications UK Ltd & Anor

A later patent action is not an abuse merely because it concerns the same products as earlier proceedings. The court must assess the matter broadly and on its merits, while considering whether the claimant fairly put the potential scope of its case before the court and the defendant. Separate patents remain separate legal rights. A material change in the defendant’s position may justify later proceedings. A purported waiver of RAND obligations does not automatically eliminate a live commercial dispute. Its scope and effect may require trial, particularly where questions concern group undertakings, customers, competition law and the interaction between United Kingdom and foreign rights.

The claimant pursued patent infringement proceedings concerning DSL standard-essential patents and a dispute about RAND licensing obligations. Following a technical trial, one patent was held valid and essential in [2019] EWHC 562 (Pat), while another was invalid. The defendant then changed its position, declined to take a RAND licence and purported to waive its rights to enforce the claimant’s United Kingdom RAND obligations.

The claimant sought amendments in the existing proceedings and advanced two further patent claims in the 2019 action. The defendant applied to strike out that action as an abuse of process, remove the non-technical RAND trial from the list and resist the amendments. The central issues were whether the further claims were abusive, whether the waiver removed any real dispute, and whether the proposed amendments were arguable.

1. The 2019 patent action was not an abuse of process. The jurisdiction under Johnson v Gore Wood ([2002] 2 AC 1) is broad and merits-based. Aldi Stores Ltd v WSP Group plc ([2007] EWCA Civ 1260) requires a party to bring forward the whole of its case so that litigation can be managed fairly. That obligation was satisfied because the claimant had stated at an early stage that it had a substantial patent portfolio and might bring further proceedings as necessary. The patents were separate legal rights, and one of the later patents had not been granted when the earlier action began.
2. The defendant’s substantial change of position was important. The earlier pleaded position contemplated taking a RAND licence covering the relevant portfolio. The later refusal to take any RAND licence created the need for further patent proceedings. The new action could therefore proceed.
3. The proposed amendments were arguable. The waiver raised substantial questions, including whether RAND obligations operated worldwide, whether the licence was an undertaking-to-undertaking obligation, the legitimate interest in determining RAND terms, the position of customers, possible competition-law obligations and the effect of foreign determinations. The court did not decide those issues finally.
4. A party’s assertion that no dispute exists does not itself eliminate a dispute. Whether the waiver removed a dispute between the claimant and the individual defendants depended on its proper scope and effect. Those issues were suitable for the non-technical trial. The relevant approach was discretionary and concerned whether declarations should be granted, rather than jurisdiction in the strict sense.
5. The non-technical trial should continue. The amendments were allowed except for wording referring to the wider defendant group rather than the individual defendants. The defendants were ordered to pay the claimant’s costs of the hearing.