Mitsubishi Electric Corporation & Anor v Archos SA & Ors

In FRAND litigation, a party relying on an essentiality ratio must plead the methodology, sources and proposed factual findings with sufficient precision to permit effective case management and trial preparation. The opposing party must have enough information to understand and answer that case. Disclosure concerning the process by which patents were selected for inclusion in a pool may be relevant to testing an asserted essentiality ratio, including a possible discard rate. Requests must nevertheless be confined to information that is relevant and proportionate. The court may require reciprocal disclosure of filtered patent lists and may refuse requests that are too broad, insufficiently precise or disproportionate.

The claimants were pursuing the FRAND stage of patent licensing proceedings against multiple mobile-device defendants. At an earlier case management hearing, the court ordered responses to requests concerning pleaded essentiality rates, applying guidance from TQ Delta v ZyXEL Communications UK Ltd [2018] EWHC 3651. The present hearing concerned further requests for information and disclosure, and the adequacy of the parties’ pleadings on essentiality.

The central issues were whether the parties had pleaded their essentiality cases with sufficient detail, whether disclosure concerning patent selection and review processes was relevant and proportionate, and how various requests concerning patent databases, licences and comparative information should be resolved.

1. The court ordered an exchange of detailed statements of case on essentiality. The claimants were required to state their case on the MCP Pool’s essentiality rate, including alternatives, the sources and nature of the analysis, its relationship to general 3G and 4G essentiality rates and to other patent holders, and the processes by which patents were selected for inclusion.

2. Following the approach in TQ Delta v ZyXEL Communications UK Ltd [2018] EWHC 3651, the methodology for any essentiality review had to be pleaded sufficiently early and precisely to enable active case management and the identification of evidence required for trial. The statements of case had to set out the findings of fact sought and make it apparent how the case would be proved.

3. The court held that the methodology used to select patents for inclusion in the MCP Pool was highly relevant to whether the asserted essentiality ratio could be relied upon. Although patents excluded from the Pool were themselves irrelevant to the licence issue, the discard rate could be relevant to testing the claimed ratio. Disclosure of documents evidencing the selection methodology was therefore ordered.

4. The court refused or limited other requests on proportionality grounds. Request 10 was too broad, request 12 was substantially covered by the amended disclosure request, and request 15(b) was not proportionate. Lists offered by the claimants were to be provided, while request 15(a) was to be addressed in the claimants’ statement of case.

5. The court ordered disclosure of patent lists and the filters used in the parties’ top-down analyses, with reciprocal application to the defendants’ corresponding database filtering. It ordered an answer concerning the proportion of patents in the MCP Pool previously licensed to a specified counterparty, but declined to order disclosure concerning an amendment to a different licence because the request was disproportionate.

The judgment arose from a continuing third case management conference. The court referred to its earlier procedural judgment, [2021] EWHC 493, which had ordered answers to two requests concerning essentiality rates. No appeal was determined in this judgment.