Vestel Elektronik Sanayi VE Ticaret AS Vestel UK Ltd v HEVC Advance LLC & Anor

For service out of the jurisdiction, the claimant must establish a relevant jurisdictional gateway, a reasonable prospect of success, and that England and Wales is the proper place for the claim. A gateway based on damage requires evidence of significant damage that the claimant has suffered or will suffer. Vague assertions of possible financial consequences, without quantified evidence and without addressing reasonable mitigation, are insufficient. A claim relating to a worldwide patent pool does not relate principally to property within England merely because a small proportion of the patents designate the United Kingdom. The gateway for a further claim arising from closely connected facts concerns a further cause of action; it cannot be used merely to add a request for FRAND declarations to a competition claim.

Vestel UK and its Turkish parent alleged that HEVC Advance and Philips had abused dominant positions by offering non-FRAND licences for standard-essential patents in the HEVC patent pool. Vestel sought declarations concerning abuse, FRAND terms and the defendants’ ability to seek injunctive relief.

Philips challenged jurisdiction under Article 7(2) of Regulation (EU) 1215/2012. Advance challenged permission to serve out of the jurisdiction under gateways 9, 11, 3 and 4A of CPR Practice Direction 6B. The central issues were whether Vestel UK had suffered or would suffer sufficiently direct and significant damage, whether the claim related principally to property in England, and whether the remaining jurisdictional and merits requirements were met.

1. Philips. The court had no jurisdiction under Article 7(2) of Regulation (EU) 1215/2012. In an anticompetitive-conduct case, jurisdiction based on the place where damage occurred requires initial rather than consequential damage and alignment between that place and the affected market. However, the court accepted that, if Vestel UK had suffered damage, it would have been direct damage. Vestel’s evidence disclosed no credible basis for finding that Vestel UK had suffered or would suffer damage from Philips’s alleged abuse. Any licence settled by a court would be on FRAND terms and would not itself constitute an abuse.
2. Advance—gateway 9. The claim did not satisfy paragraph 3.1(9) of CPR Practice Direction 6B. Vestel failed to establish a good arguable case that Vestel UK would sustain significant damage. The evidence concerning uncertainty over future royalties was vague, lacked hard figures, did not adequately identify the claimant suffering the loss, and failed to explain why sums could not be set aside by another group company pending settlement. Vestel was also required to address its duty to mitigate.
3. Advance—gateway 11. The claim related to all patents in the Advance Pool. Since only a small percentage designated the United Kingdom, the subject matter did not relate principally to property within the jurisdiction. The proposed amendment did not alter the substance of the claim, because the alternative relief still sought a global FRAND determination.
4. Advance—gateways 3 and 4A. Gateway 3 failed because it depended on jurisdiction over Philips. Gateway 4A could not support the FRAND relief. A “further claim” means a further cause of action, whereas a claim for settlement of FRAND terms was not a separate cause of action on the pleaded case. The proposed declaration concerning foreign enforcement would in any event risk an impermissible assertion of jurisdiction over foreign matters.
5. Other requirements and disposition. Damage was an essential element of the pleaded abuse, so Vestel had no reasonable prospect of success on the evidence. The forum requirement could not enlarge jurisdiction where no gateway was satisfied. The applications by Advance and Philips succeeded, and the court had no jurisdiction over either claim.