Lenovo Group Limited & Ors v Interdigital Technology Corporation & Ors

An interim declaration is a discretionary remedy. The court must apply the principles governing declarations and may use interim-injunction principles by analogy where appropriate. However, an interim declaration should not determine substantive contractual rights that are susceptible only to a final answer. If the court nevertheless grants such relief, it should generally require a high degree of assurance that the declaration is justified. The court may consider the practical consequences and relative utility of the declaration, including whether its substantial purpose is to influence foreign proceedings. A stay for parallel foreign proceedings is justified only in rare or compelling circumstances, and is unavailable where the foreign proceedings will not determine the relevant issues.

The claim concerned two applications in ongoing FRAND litigation between Lenovo Group Limited & Ors and Interdigital Technology Corporation & Ors. Lenovo sought an interim declaration that proposed terms for a licence of cellular standard-essential patents were fair, reasonable and non-discriminatory. InterDigital sought a stay of overlapping aspects of the English proceedings pending German infringement proceedings concerning one of its patents.

The English proceedings would ultimately determine FRAND terms for a global licence. The German proceedings concerned whether an injunction should be granted and, on the evidence, were unlikely to determine FRAND terms. The central issues were whether the interim declaration should be granted and whether the German proceedings justified a case-management stay.

1. Interim Licence Application refused. An interim declaration remains a declaration and is discretionary. The court should consider the principles governing declarations, including justice to the claimant and defendant, whether the declaration would serve a useful purpose, and any special reasons for or against relief.
2. Where an interim declaration performs a function similar to an interim injunction, the principles in American Cyanamid v Ethicon may be applied by analogy. They do not provide a complete answer where the declaration concerns substantive law that permits only a final determination, including contractual rights.
3. The question whether the proposed interim licence was FRAND was not suitable for a temporary answer. The royalty was based on a blended historical rate, the relevant technology had changed, and the proposed running royalty involved risks not addressed by evidence. The court therefore lacked the required high degree of assurance that the terms were FRAND.
4. The declaration offered little utility in the English proceedings. Its substantial purpose was to influence the German proceedings. Although a possible incidental effect on foreign proceedings is not automatically adverse, the court may treat limited English utility and a substantial foreign-influence purpose as negative considerations. The commercial disadvantages to InterDigital also weighed against relief.
5. Stay Application dismissed. A stay based on parallel foreign proceedings is justified only in rare or compelling circumstances. The German proceedings were unlikely to determine FRAND terms, and no arbitration or separate German contractual proceedings were pending or contemplated. The necessary precondition for a stay was therefore absent, and a stay would have provided little case-management benefit.
6. Both applications were refused.