Mitsubishi Electric Corporation & Anor v Oneplus Technology (Shenzhen) Co Ltd & Ors (FRAND CMC Judgment)

In FRAND patent proceedings, a party intending to rely on an extensive patent-essentiality review must plead at least the basic methodology proposed. The precise methodology and inputs may develop in expert evidence, but the evidential case must be sufficiently foreshadowed to permit appropriate disclosure, expert evidence and case management. Where a proposed methodology may materially affect the issues for trial, the court may require further information before expert reports are served. This approach helps ensure that opposing experts address the same issues and materials and avoids prejudice, delay and unnecessary cost.

The claim concerned patents alleged to be essential to 3G and 4G telecommunications standards and the FRAND terms on which they should be licensed. At a case management conference, the claimants sought answers to requests for further information concerning proposed weighted essentiality rates and the assumptions underlying them. The defendants said that the requests concerned expert evidence and that they might develop a patent-counting case involving an extensive review of patent essentiality.

The issue was whether the methodology for any such essentiality review had to be pleaded before expert evidence was served, and whether answers to the two requests should be required at that stage.

1. The applications and directions. The claimants agreed to await most responses to their requests for further information. The court nevertheless required answers to Requests 14 and 15, and directed both sets of defendants to answer the outstanding requests by 10 am on 22 March 2021.
2. Pleading the methodology. Where a party proposes to run a case based on an extensive review of patent essentiality, at least the methodology of the review must be pleaded. If pleading the methodology requires a worked example producing a figure such as an essentiality rate, that example should be included. The precise methodology may change with the inputs used in expert evidence, but the basic methodology must be identified in the statement of case.
3. Case management consequences. The court applied the approach indicated by Arnold J in TQ Delta v ZyXEL Communications UK Ltd [2018] EWHC 3651. In that case, an unpleaded essentiality review raised the need for further experts, supplementary evidence and an opportunity to respond, contributing to an adjournment of the trial. Similar risks justified requiring clarification here.
4. Subsequent changes. If the methodology changes significantly by the time of the first expert reports, whether amendment is required will be a question of degree. The court recognised the difficulty in FRAND cases of identifying the boundary between pleading and evidence, but held that sufficient pleading is important so that experts address the same issues and materials.