Kigen (UK) Limited v Thales Dis France SA

A court has jurisdiction to determine FRAND licence terms where a pleaded free-standing contractual claim asks it to do so. Determination need not await an infringement finding or an implementer’s undertaking. However, where the claimant’s pleaded case seeks a licence for all essential intellectual property rights but its actual position is conditional, continuing the claim without clarification may be an abuse of process. The court may require an amendment limiting the claim to patents found valid and essential, or an undertaking to enter a licence, and may stay the FRAND claim until then. No universal undertaking requirement applies to every free-standing FRAND claim. The question depends on whether there is reason to doubt the claimant’s willingness to take a licence.

Thales applied for a determination that the court lacked jurisdiction, should not exercise it, or should stay part of Kigen’s claim. Kigen sought declarations concerning the validity and essentiality of two UK patents, together with declarations that it was entitled to licences of Thales’s essential intellectual property rights on FRAND terms and a determination of those terms.

The claim was pleaded as a free-standing contractual claim. During the application, Kigen stated that it would take a licence only for patents found valid and essential after the conclusion of any appeals, and declined to give an unconditional undertaking. The central issues were whether the court had jurisdiction to determine FRAND terms before infringement was established, and whether the claim should be stayed or treated as abusive unless Kigen clarified its position.

1. The court rejected the jurisdiction objection. The pleaded claim was a free-standing contractual claim for a licence on FRAND terms and a determination of those terms. It therefore provided a proper basis for the court to determine the disagreement. Such a determination did not depend on a prior finding of infringement or an undertaking by the implementer to take a licence [20].
2. The issue was instead whether proceeding on the pleaded basis was abusive, or whether case management required a stay [21]. The situation in Optis v Apple, Trial F, [2022] EWCA Civ 1411, where infringement had been established and the implementer had been put to its election, was not the same [22]-[23]. Nevertheless, the reasoning that a well-advised implementer could form a reasonably good view of likely FRAND terms remained applicable. Kigen’s refusal to commit merely because it did not yet know the terms was therefore unpersuasive [23]-[25].
3. Kigen’s position in correspondence and argument differed materially from its pleaded claim. If it intended to pursue only a licence for patents found valid and essential, it had to amend its claim to say so. Alternatively, it could give an undertaking to enter a licence for all relevant essential intellectual property rights. Until one of those steps was taken, the FRAND declarations claim was stayed, with the stay lifting automatically on amendment or undertaking [26]-[27]. Continuing the claim as pleaded while maintaining the conditional position would be an abuse of process, particularly where litigation costs might exceed the licence value [29].
4. The court emphasised that no undertaking is required in every free-standing FRAND claim. There may be no reason to doubt a claimant’s willingness to take a licence, and an unconditional undertaking could then be onerous [30]. The patent validity and essentiality issues were legitimate and were not themselves abusive [31]. WIPO mediation was not an alternative forum for forum non conveniens purposes [33]. The application was granted in part. Thales succeeded on one ground, and was awarded two-thirds of its application costs [34]-[40].

not stated in the judgment.