Interdigital Technology Corporation & Ors v Lenovo Group Ltd & Ors

Disclosure in a FRAND case is governed by proportionality. The court must weigh the likely improvement in the quality of estimates against the cost, delay, confidentiality concerns and other consequences of disclosure. Evidence need not produce a precise or true value where the court can make a fair estimate and assess its quality using existing material and public information. A party is not entitled to disclosure merely because it may improve the accuracy of a comparable-licence analysis. Post-agreement royalty data is capable in principle of being relevant to the objective value of licensed property, but its relevance does not make disclosure proportionate. Comparable licences concerning materially different portfolios may provide little assistance on particular licence terms.

The claim concerned the terms of a FRAND licence for standard-essential telecommunications patents. The parties had disclosed a number of licences and relied on selected licences as comparables in relation to an offer made by InterDigital in January 2020.

Lenovo sought disclosure of royalty reports for the licences relied on by both parties, including historical payment data. InterDigital opposed the application on proportionality and third-party confidentiality grounds. InterDigital separately sought disclosure of licences to which Lenovo was a party, to address disputed terms of the proposed licence. The court determined both disclosure applications.

1. Royalty reports. The application by Lenovo for disclosure of royalty reports was refused. The issue was a case-management discretion governed by the overriding objective, with proportionality as a critical consideration. The sums at stake were large, but that did not justify every potentially useful category of evidence.
2. The purpose of unpacking comparable licences was to assist the court in estimating portfolio value. It was not necessary to obtain a precise or objectively true value for each licence. Public information could enable unpacking to a significant and sufficient extent. The resulting estimates would still be data points of differing quality, and the court could assess their reliability.
3. The court had to compare the value of any improvement in accuracy with the costs of disclosure, including time, trouble, third-party confidentiality and the significance of deciding the case on publicly available information. The possibility that royalty reports would produce better estimates did not establish that the improvement would be sufficiently substantial to justify disclosure.
4. InterDigital’s argument that post-agreement royalty payments were incapable in principle of being relevant was rejected. Actual royalty levels could assist in assessing the objective value of the licensed property. That conclusion did not mean that the reports were proportionate or necessary in this case.
5. Specific difficulties concerning cellular-enabled computers, contract manufacturers, Innovius and Fujitsu did not alter the result. If a licence could not sensibly be unpacked, its evidential weight could be reduced or reliance on it could fail. That consequence did not make the additional disclosure necessary.
6. Lenovo licences. InterDigital’s application for disclosure of Lenovo licences was also refused. Existing evidence was sufficient for the smaller drafting issues. Disclosure would not materially illuminate proposed mechanisms concerning foreign proceedings, global blended rates, volume discounts or releases for past sales. Lenovo’s proposed witness statement, with anonymised data, was a proportionate response on new-business provisions. Further disclosure was not justified for licence terms or definitions where the existing material and ordinary judicial analysis were sufficient.