Panasonic Holdings Corporation v Xiaomi Technology UK Limited & Ors

A FRAND undertaking under clause 6.1 of the ETSI IPR Policy does not itself impose an immediate obligation to grant an interim licence. It requires a SEP holder to undertake to make an irrevocable offer on FRAND terms capable of acceptance. Good faith may in principle create or modify substantive contractual rights, but no sufficiently certain obligation to grant an interim licence was implied here. A SEP holder could continue local patent enforcement in competent foreign courts while a court-determined global licence remained pending. Declarations should not be made where they serve no useful purpose or are principally intended to influence foreign proceedings, since comity requires restraint. The rules on interim payments cannot supply conditions absent from the FRAND framework.

Panasonic brought English proceedings concerning standard essential patents and the determination of global FRAND licence terms. The parties gave reciprocal undertakings to enter into the licence determined at a later FRAND trial. While parallel infringement proceedings continued before the UPC and German courts, Xiaomi sought declarations that Panasonic was required, in good faith, to grant an interim licence. Panasonic applied to decline jurisdiction, strike out or stay the proposed counterclaim.

The judgment records an earlier case-management decision by Meade J, including the listing of the FRAND trial at [2023] EWHC 2872 (Pat). The central questions were whether the FRAND Commitment required an interim licence, whether the proposed declarations would serve a useful purpose, and whether the English court should make declarations affecting proceedings concerning foreign patents.

The Court dismissed Xiaomi’s Interim Licence Application, granted Panasonic’s FNC Application and refused permission to amend the Defence and Counterclaim.

1. FRAND Commitment. Clause 6.1 of the ETSI IPR Policy required Panasonic to give an undertaking to make an irrevocable offer of a FRAND licence capable of acceptance. It did not impose an immediate obligation to grant an interim licence. The Court applied the reasoning in [2023] EWHC 1912 (Pat) and agreed with the analysis in [2017] EWHC 711 (Pat). A licence would arise on acceptance of FRAND terms or following the court’s determination of those terms.
2. Good faith. French law could, in principle, permit good faith to create or modify substantive rights. However, no sufficiently certain term requiring an interim licence could be implied. Panasonic’s continued prosecution of local patent claims in Germany and before the UPC was not shown, to the required high degree of assurance, to frustrate its FRAND Commitment or pursue supra-FRAND terms. The reasoning in [2022] EWCA Civ 1411 and [2020] UKSC 37 supported the importance of meaningful negotiation and avoidance of hold-out.
3. Declaratory relief. Under CPR Part 40.20, declarations required a useful purpose and a live practical question. The proposed declarations would principally influence the German proceedings, have a strong anti-suit flavour, and concern a defence which could naturally be raised before the courts deciding the local patent claims. Comity therefore required restraint. The principles in [2022] EWCA Civ 1617, [2012] EWCA Civ 1624 and [2019] EWCA Civ 1277 supported refusal of the declarations.
4. Interim payments and disposal. CPR Part 25.7 did not apply because none of its gateway conditions was satisfied. The Civil Procedure Rules could not fill gaps in the ETSI IPR Policy. The declarations were refused, the amendments were not permitted, the Interim Licence Application was dismissed and the FNC Application was granted.

High Court (Patents Court) First-instance decision on the applications. The judgment records earlier case-management directions by Meade J at [2023] EWHC 2872 (Pat), but no appeal is described.