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

Applications to vary an order for Extended Disclosure in proceedings governed by the Disclosure Pilot are determined under its specific requirements. The applicant must show that the variation is necessary for the just disposal of the proceedings and is reasonable and proportionate. The stricter approach applicable to the general power under CPR rule 3.1(7) does not govern.

A previous refusal remains relevant to reasonableness and proportionality, even though it may not determine necessity. Third-party licences in a FRAND dispute can have evidential value, although ordinarily less value than licences concerning the portfolio in issue. Disclosure may nevertheless be refused where the pleaded case, timetable, confidentiality issues and additional evidential burden make it disproportionate.

Conversant sought further disclosure from Huawei and ZTE in FRAND proceedings concerning patents declared essential to 2G, 3G and 4G standards. It sought lists of relevant licences, followed by disclosure of selected licences, to assist assessment of the appropriate royalty rate.

HHJ Hacon had previously refused substantially the same application. The renewed application relied on the Disclosure Pilot, the possible effect of the rule in Hollington v Hewthorn, and difficulties in assessing a Huawei-Nokia licence relied on by Huawei. The central issues were whether the application satisfied the test in PD 51U paragraph 18 and whether the proposed disclosure was reasonable and proportionate.

1. Applicable test. The application was governed by paragraphs 18.1 and 18.2 of PD 51U, not by the general principles applicable to variation under CPR rule 3.1(7) and Tibbles v SIG Plc. Paragraph 18 expressly provides a different test for varying an order for Extended Disclosure. The applicant had to establish that the variation was necessary for the just disposal of the proceedings and reasonable and proportionate.
2. Effect of the earlier refusal. The fact that substantially the same disclosure had previously been refused remained a relevant consideration. It was not necessarily part of the assessment of necessity, but it was highly relevant to whether a fresh order was reasonable and proportionate. The correctness of HHJ Hacon’s earlier decision was not determined on the renewed application.
3. Third-party licences. The court declined to accept that third-party licences in which companies in the defendants’ groups were licensees could never have evidential value in a FRAND case. Such licences could be relevant, depending on the pleaded cases and the evidence available. Their value was ordinarily secondary to licences concerning the portfolio in issue or the larger portfolio from which it was derived. The approach in Unwired Planet was fact-sensitive and did not establish an absolute rule excluding such evidence.
4. Application of proportionality. The proposed disclosure would introduce substantial additional evidence, confidentiality issues and significant preparation work. Even the reduced proposal would have made it impossible for the parties to prepare fairly while preserving the trial date. There was also no pleading supporting the proposed material. The application therefore failed the requirement of reasonableness and proportionality.
5. Disposition. The application for further disclosure was dismissed. The court summarily assessed costs at £100,000 for Huawei and £60,000 for ZTE.

The judgment describes an earlier refusal by HHJ Hacon, stated as [2009] EWHC 1982 (Pat). This court declined to determine whether that decision was correct and dismissed the renewed application on the applicable Disclosure Pilot test.