Nokia v OPPO (Court of Appeal)

This appeal concerned whether the courts of England and Wales should accept and exercise jurisdiction over proceedings by Nokia to enforce United Kingdom patents declared essential to telecommunications standards (SEPs) and to determine FRAND licence terms, and whether the English proceedings should be stayed on case management grounds in favour of parallel rate‑setting proceedings in Chongqing, People’s Republic of China. The court reaffirmed that the correct characterisation of the dispute is the whole dispute between the parties, which here includes questions of validity, essentiality and infringement of the UK patents as well as FRAND issues arising under Nokia’s undertaking to ETSI (clause 6.1 of the ETSI IPR Policy).

The court held that, because the claim seeks to enforce UK patents, there is a strong territorial element making England an appropriate forum to determine those UK issues. Even if the dispute were characterised as one about global FRAND terms, the Chongqing proceedings were at best no more appropriate than England and did not displace England as a clearly appropriate forum. On the case management stay application, the judge had not erred in refusing a stay: the circumstances were not the rare and compelling ones required to justify staying English proceedings, and the relative advantages relied upon by OPPO did not outweigh Nokia’s interests in adjudicating in England (including the availability of a FRAND injunction and the applicable law for construing ETSI obligations).

Key legal principles applied included the Spiliada forum non conveniens framework, the approach to characterisation in Unwired Planet/Conversant and their Court of Appeal and Supreme Court authorities, the territorial nature of patent rights, the operation of a FRAND undertaking (ETSI clause 6.1) as a defence to infringement and the limited circumstances in which a case management stay of parallel proceedings will be justified.

Background and parties: Nokia (two Finnish companies) own a global portfolio of patents declared essential to UMTS/LTE/5G standards, including three UK patents relied upon in this claim. The defendants are seven OPPO group companies (two English, five PRC/Hong Kong). A licence expired on 30 June 2021; negotiations for a new licence failed.

Procedural posture: Nokia issued proceedings in England on 1 July 2021 seeking declarations of essentiality, validity and infringement of the UK patents, a declaration that Nokia’s offers were FRAND (or alternatively a determination of FRAND terms), a FRAND injunction (or a conventional injunction if OPPO do not take a FRAND licence), delivery up and damages or an account of profits. Permission to serve the claim out of jurisdiction was obtained in relation to the Chinese defendants. OPPO commenced parallel rate‑setting proceedings in the No.1 Intermediate People’s Court, Chongqing, PRC, asking that court to determine global FRAND terms. Master Pester granted permission to serve out; the Chinese defendants sought to set that order aside and applied for a stay; the English defendants sought a forum non conveniens stay. His Honour Judge Hacon dismissed the applications ([2021] EWHC 2952 (Pat)). The defendants appealed to the Court of Appeal.

Issues before the Court of Appeal: (i) the correct characterisation of the dispute for forum analysis (whether it is principally a local claim to enforce UK patents or principally a global FRAND rate‑setting dispute); (ii) whether there was an available alternative forum (Chongqing) sufficient to displace England; (iii) if alternative forum exists, whether Chongqing was the appropriate forum; and (iv) whether the English proceedings should be stayed on case management grounds.

Court’s reasoning and subsidiary findings:

• The dispute must be characterised by reference to the totality of the parties’ dispute. Because Nokia’s claim includes allegations of infringement, essentiality and validity of UK patents and OPPO have pleaded those defences and counterclaims, the dispute properly includes those UK patent issues; those issues can only be tried in a UK court. The Court relied on and applied the reasoning in Conversant/Unwired Planet about characterisation and territoriality of patent rights.
• Although there have been two relevant developments since Unwired Planet — Brexit (removal of the Brussels I Regulation regime) and the SPC judgment in Guangdong OPPO v Sharp holding PRC courts can determine global FRAND terms — those developments did not alter the correct characterisation of the present proceedings or require displacement of England as an appropriate forum when the claim involves enforcement of UK patents.
• If the dispute were characterised purely as one about the terms of a global FRAND licence, the Chongqing court could be an alternative forum; but many connecting factors (including the fact OPPO’s undertaking was to accept a licence only on terms fixed by the Chongqing court and not by the English court) showed the dispute was not forum‑neutral and there was no clear territorial link favouring Chongqing over England. The valuation and technical evidence relevant to FRAND could be provided to any competent forum and the dispute therefore had no single natural territorial home.
• On the case management stay application, the judge properly exercised his discretion. The circumstances were not rare and compelling such that a stay would better serve the overriding objective. The risks of delay or differences in applicable law and relief did not compel a stay: the English court had jurisdiction to grant a FRAND injunction and to apply the law appropriate for construing ETSI obligations (French law for the ETSI IPR Policy), factors which weighed against a stay.

Relief sought: Nokia sought declarations of essentiality, validity and infringement of the UK patents; declarations or determination of FRAND terms for a global licence (or that their offers were FRAND); a FRAND injunction (or conventional injunction), delivery up, and damages/account of profits.

Disposition: The Court of Appeal dismissed the appeal and upheld the judge’s refusal to stay the English proceedings and his characterisation of the dispute. The claimant may continue the listed English trials.

This was an appeal from a case management and jurisdiction decision. The Court of Appeal dismissed the appeal. It held that the dispute is properly characterised as one that includes enforcement of UK patents (validity, essentiality and infringement) together with FRAND issues arising under Nokia’s ETSI undertaking (clause 6.1). England is a clearly appropriate forum for those UK patent issues and, even if the dispute were characterised as one about global FRAND terms, the Chongqing forum was at best no more appropriate than England. The judge did not err in refusing a case management stay; the rare and compelling circumstances necessary to justify a stay of the English proceedings were not present.

Claim began in the High Court, Business and Property Courts, Intellectual Property List (ChD), Patents Court before His Honour Judge Hacon, who dismissed applications to set aside service out of the jurisdiction and to stay proceedings ([2021] EWHC 2952 (Pat)). Permission to appeal was granted and the defendants appealed to the Court of Appeal, which dismissed the appeal ([2022] EWCA Civ 947).