Lenovo Group Limited & Ors v Telefonaktiebolaget LM Ericsson (publ) & Anor

At an interlocutory stage, a claim satisfies a merits test where it is coherently pleaded, properly particularised and supported by evidence establishing a sufficiently arguable factual basis. In a service-out or forum dispute, each claim must independently satisfy the jurisdictional requirements. The relevant case must be characterised by reference to the totality of the legal dispute, including the likely answer to the claim, rather than merely its commercial objective. Parallel foreign proceedings do not ordinarily justify a stay unless they offer an earlier resolution in rare or compelling circumstances. A realistic prospect that an English court may grant effective FRAND relief is sufficient to permit amendment and service out, even where foreign proceedings may address related FRAND issues.

The claimants, members of the Lenovo group, brought proceedings concerning infringement and validity of UK standard-essential patents, the parties’ FRAND commitments to ETSI, and the terms of a global cross-licence. Related proceedings were pending before the Eastern District of North Carolina and in other jurisdictions.

The defendants challenged jurisdiction, sought strike-out and opposed amendments adding claims for a FRAND injunction and FRAND and interim declarations. They alternatively sought a case-management stay. The claimants also sought expedition. The central issues were whether the proposed claims satisfied the applicable merits tests, whether England and Wales was the appropriate forum, and whether the English proceedings should be stayed behind the EDNC proceedings.

1. Merits tests. The tests under Civil Procedure Rules 1998, rules 3.4(2), 17.3 and 6.37, were treated as equivalent in this case. The claim had to carry some degree of conviction, be coherently pleaded and properly particularised, and be supported by evidence establishing a sufficiently arguable factual basis. The claims for a FRAND injunction, FRAND declarations and interim declarations met that threshold, subject to correction of drafting defects. The declaration concerning Ericsson’s commitments to other SSOs was struck out as having no reasonable prospect of success.
2. Jurisdiction and forum. Each claim requiring service out had to satisfy the merits test, a gateway in paragraph 3.1 of Practice Direction 6B, and the appropriate-forum requirement. The dispute was characterised by reference to its total legal substance, including patent validity and infringement and the likely FRAND defence. England and Wales was clearly the most appropriate forum because the claim was anchored in infringement of a UK patent. The possibility of parallel FRAND proceedings did not give Ericsson a unilateral right to select the forum.
3. Relief and foreign proceedings. There was a realistic prospect of a FRAND injunction, including where the alleged infringer might ultimately be a net royalty payer, particularly if delay or non-FRAND conduct prevented an adequate remedy. The EDNC might not determine a FRAND cross-licence, and in any event was unlikely to reach trial before late 2026. A stay was therefore refused: there was no earlier resolution and no rare or compelling circumstance.
4. Expedition and disposal. The claimants showed good reason for expedition because injunction proceedings were disrupting their business and the wider dispute was potentially wasteful. The remaining expedition factors required a further case management conference. The strike-out application and challenge to service out largely failed; permission to amend largely succeeded; the stay was refused; and a further case management conference was ordered.