Unwired Planet International Ltd and another v Huawei Technologies (UK) Co Ltd and another

This Supreme Court decision confirms that English courts have jurisdiction to enforce ETSI IPR Policy undertakings and, where appropriate, to grant an injunction restraining infringement of a valid UK SEP unless the implementer enters into a licence the court determines to be FRAND, including worldwide or multi-territorial portfolio licences. The court held that that jurisdiction does not entail deciding foreign patents’ validity or infringement, but rather enforcing a contractual obligation to license on fair, reasonable and non-discriminatory terms and resolving disputed licence terms where the parties cannot agree.

The court rejected arguments that (i) the IPR Policy confines remedies to damages, (ii) the court must refrain from fixing global licence terms because of comity or forum non conveniens, and (iii) the non-discrimination limb of FRAND requires a "most-favoured-licensee" rule. It construed the FRAND phrase as a single unitary obligation ("fair, reasonable and non-discriminatory") and held the non-discrimination element to be a general constraint on pricing, not a hard-edged obligation to match the best prior deal. The court interpreted the CJEU’s Huawei v ZTE guidance as flexible guidance (a safe harbour) rather than a set of inflexible preconditions that automatically make injunctive proceedings abusive if not exactly followed.

The court also held that an injunction is an appropriate remedy in the SEP context in many cases because monetary relief alone would not give effective protection to SEP owners and would encourage hold-out by implementers; damages in lieu were not substituted in this case.

Background and parties:

• Unwired (formerly holding Ericsson patents) and Conversant are patent-licensing entities asserting UK designations of European patents said to be SEPs declared to ETSI. Huawei and ZTE are global implementers (and manufacturers) accused of infringing declared UK SEPs.
• Multiple proceedings existed in the UK, Germany and China on validity, essentiality and infringement; proceedings below included Birss J's multi-stage trials in the High Court and subsequent appeals to the Court of Appeal. The appeals to the Supreme Court were from [2018] EWCA Civ 2344 and [2019] EWCA Civ 38.

Nature of the claims/relief sought:

• SEP owners sought declarations that offered licences were FRAND, determinations of FRAND licence terms (including worldwide rates), and injunctions restraining infringement of UK SEPs unless defendants entered into the FRAND licence fixed by the court. Defendants challenged jurisdiction, forum conveniens, the interpretation of FRAND (including non-discrimination), the effect of EU competition law as explained in Huawei v ZTE, and whether an injunction was appropriate.

Issues before the Supreme Court:

1. Whether English courts have jurisdiction and may determine and (if appropriate) require a global FRAND licence as a condition for refusing an injunction for infringement of a UK SEP.
2. Whether England was the appropriate forum (forum non conveniens) to determine global FRAND terms in the Conversant appeals.
3. How the non-discrimination limb of FRAND should be interpreted and applied (whether it imports a most-favoured-licensee/hard-edged rule).
4. Whether failure to comply with the CJEU guidance in Huawei v ZTE necessarily makes an injunction abusive under article 102 TFEU.
5. Whether an injunction is appropriate or whether damages in lieu should be awarded instead.

Reasoning (concise):

• The court emphasised that the ETSI IPR Policy is a contractual regime (governed by French law) creating undertakings to license SEPs on FRAND terms; that contractual framework authorises national courts called upon to enforce the undertaking to determine licence terms where necessary.
• The courts may determine FRAND global or multi-territorial licences without adjudicating foreign patents’ validity or infringement: the exercise values an international portfolio (allowing for invalid or non-infringing family members) using market practice and comparable licences; national courts’ determinations can be adjusted if foreign courts later alter the factual landscape.
• Comparative jurisprudence (US, Germany, China, Japan and EU materials) did not show that the English approach was out of step; other jurisdictions have taken or may take similar approaches in appropriate cases.
• On forum non conveniens, China was not shown to be a forum with the necessary jurisdictional posture to determine a global FRAND licence; the English courts were therefore an appropriate forum and a permanent stay was not justified. Temporary case-management stays are exceptional and were not warranted here.
• The FRAND undertaking was read as unitary: the non-discrimination limb is "general" (ensuring a market-based fair rate available to similarly situated licensees) and does not import a most-favoured-licensee requirement. ETSI had expressly considered and rejected a most-favoured clause in earlier drafts.
• On Huawei v ZTE, the CJEU provides flexible guidance: prior notice/consultation is mandatory, but the remaining steps (written FRAND offer, diligent response, security for ongoing use, and recourse to independent determination) form a framework to assess abuse — not an inflexible checklist that automatically renders injunctive proceedings unlawful if not precisely followed.
• Finally, injunctions remain an appropriate remedy in many SEP cases because damages alone often cannot secure effective protection for SEP owners and would encourage hold-out; accordingly the remedies granted by Birss J (injunction subject to a FRAND global licence) were appropriate.

Wider implication: the court recognised the international and commercial context of telecommunications SSOs and endorsed an approach that gives effect to ETSI undertakings while accommodating national patent territoriality and comity concerns through flexible case management and adjustment mechanisms.

Appeals dismissed. The court held that English courts have jurisdiction to enforce ETSI FRAND undertakings, including determining global or multi-territorial FRAND licence terms and granting an injunction to restrain infringement of a valid UK SEP unless the implementer accepts a FRAND licence; the FRAND obligation is a unitary obligation ("fair, reasonable and non-discriminatory") and the non-discrimination limb is not a hard-edged most-favoured-licensee rule; the CJEU’s Huawei v ZTE guidance provides flexible criteria (with mandatory prior notice) rather than rigid preconditions; and injunctions may be appropriate remedies in SEP contexts where damages would not provide effective protection.

Appeals to the Supreme Court from the Court of Appeal decisions: Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd [2018] EWCA Civ 2344 (appeal from Birss J’s remedies judgment at first instance [2017] EWHC 711 (Pat) reissued as [2017] EWHC 2988 (Pat)); Conversant Wireless Licensing SÀRL v Huawei/ZTE appeals from Henry Carr J [2018] EWHC 808 (Pat) and subsequent Court of Appeal judgment [2019] EWCA Civ 38. The Supreme Court heard consolidated issues arising from those appeals and dismissed them on 26 August 2020 ([2020] UKSC 37).