MediaTek Inc & Ors v Huawei Technologies Co Ltd & Anor

In a jurisdiction challenge to patent, FRAND and related claims, the court held that claims concerning UK patents remain claims to enforce territorial patent rights even where the relief sought includes a worldwide FRAND licence or cross-licence.

A claim for FRAND relief may be anchored to a UK patent and may relate to that registered right for the purposes of service and jurisdiction gateways. Commercial activity concentrated abroad, parallel foreign proceedings and the possibility of a foreign rate-setting decision do not, without more, make the foreign jurisdiction the appropriate forum.

A case-management stay awaiting foreign proceedings requires an overall assessment of the interests of justice and is exceptional in practice. A limited undertaking not to enforce patents may not remove the useful purpose of a FRAND declaration where the defendant continues to deny the claimant’s entitlement to a FRAND licence.

MediaTek brought claims against Huawei concerning infringement, validity and essentiality of UK standard-essential patents, together with claims for FRAND declarations and a worldwide reciprocal licence. Huawei challenged jurisdiction, forum, service, case management and the adequacy of the pleadings. It relied on extensive patent, rate-setting and anti-trust proceedings in China.

The First Defendant had been served partly under CPR Part 63.14 and partly pursuant to permission to serve out. The Second Defendant was an English company and did not challenge ordinary jurisdiction. The central questions were whether the FRAND claims related to a UK registered patent, whether England was the appropriate forum, whether the Chinese proceedings justified a stay, and whether alternative service should remain effective.

1. Disposition. The jurisdiction applications and most of the strike-out applications were dismissed. Permission to serve the First Defendant out of the jurisdiction was upheld. Alternative-service provisions in the Service Order were set aside, with permission to renew the application if service under the Hague Service Convention had not occurred within eight months. Amendments were permitted subject to further argument on the proposed damages amendment. Costs were reserved.
2. Service and jurisdiction. CPR Part 63.14(2) was sufficiently wide to cover the FRAND claims. Those claims enforced Huawei’s contractual obligations under its ETSI declaration concerning the Challenged Patent, even though the relief sought included a licence covering worldwide portfolios. The relief sought and the subject matter of the claim were distinct. The FRAND claims were also capable of passing through Gateways 11 and 16A, and the Asserted Patents Claims passed through the relevant gateways under the Altimo requirements.
3. Characterisation. The claims were properly characterised as claims concerning UK patent rights, including validity, essentiality, infringement and damages. The FRAND issues formed part of the composite dispute and could not be treated as a freestanding global licensing dispute merely because a worldwide licence might ultimately be determined. The fact that most commercial activity occurred in China, or that MediaTek might be the net payer, did not alter that characterisation.
4. Forum and foreign proceedings. China was an available forum, but Huawei had chosen to seek only Chinese rate-setting relief. The Chinese proceedings would not necessarily determine a global licence, extinguish UK patent rights or create irreconcilable judgments. England was clearly an appropriate forum for the UK patent claims and, alternatively, for the global FRAND dispute. The court could take account of findings or rates determined in China.
5. Stay and undertaking. The case-management stay was refused. Although the interests-of-justice test was broader than a rigid “rare and compelling” formula, the parallel Chinese proceedings did not justify delaying the English proceedings. Huawei’s proposed undertaking was limited, late and did not amount to a licence or answer all pleaded infringement concerns. The FRAND declarations could still serve a useful purpose because an implementer was entitled to a FRAND licence as of right and FRAND concerned both process and result.
6. Other matters. The argument that a Chinese licence or damages award would exhaust UK patent rights was rejected. Alternative service was not justified by delay, the existence of UK proceedings or the anticipated removal of Huawei equipment from UK networks. The Third Claimant’s claims were at least arguable and were not struck out.