As our news roundup shows, competing or aligned commercial interests, alongside infringement and validity disputes, underscore the complexities surrounding FRAND licence agreements for smartphones and IoT.
The recent spate of standard essential patent, SEP, litigation involving FRAND licensing has made it even more critical that clients seek professional advice at an early stage where SEPs and FRAND licensing may be involved.
Arriving at, and abiding by, FRAND terms is a delicate balancing act.
FRAND LICENCE AGREEMENTS FOR SMARTPHONES
ERICSSON & APPLE
- Ericsson is accusing Apple of infringing its patents in respect of their 5G chips used in current iPhones.
- The relationship between these companies appears hostile: Apple sued Ericsson in December of last year, claiming that the Swedish company violated FRAND terms; and Ericsson in turn accused Apple of wasting court resources by forcing unnecessary litigation on two fronts.
- Both companies are trying to get import bans placed on products made by the other: the iPhone on one side, and a mobile base station on the other.
- Since there is no dispute that Ericsson owns the patents, and Apple is currently infringing them by not renewing its licenses, the Swedish company is likely to succeed in achieving an injunction against the import of iPhones in one or more countries.
- But drawing out the litigation may allow Apple to negotiate better terms. On the other hand, behaving aggressively could prove counterproductive, e.g., if it adds to antitrust pressures, suggests acting as an unwilling licensee, and/or damages commercial reputation.
APPLE & OPTIS
- Apple is also involved in multiple proceedings against Optis, the latter holding several SEPs for 3G and 4G.
- In June, the Court of Appeal rejected an appeal by Apple concerning the validity of Optis’ standard essential patent, EP 2229744 B1. In the first instance, the judge found the patent essential to the standard and infringed by Apple.
- Of possible interest, the defendant based its appeal on claim construction. The Court of Appeal confirmed that claims as properly construed are novel, rendering the patent valid.
- Ongoing cases between the two parties include a FRAND trial to determine the rate at which Apple may take a global portfolio licence.
NOKIA & OPPO
- Elsewhere, Nokia has experienced success in various disputes against Oppo.
- Mannheim Regional Court, Germany, ruled in June that Oppo infringed Nokia’s implementation patent, EP 1704731 B1, which protects a technology for scanning for WiFi networks.
- The latest case is the first ruling regarding two disputed EP SEPs which cover 4G and 5G technology.
- Nokia sued Oppo and OnePlus for infringement, as well as a cease-and-desist order, regarding two SEPs, EP 2981103 B1 and EP 3220562 B1, that disclose efficient assignments of preambles when initiating random access to an LTE (4G) network or NR (5G) network. The patents belong to the same family as implementation patent EP 1704731 B1.
- The judge granted Nokia’s request for an injunction, however, Oppo plans to appeal both decisions.
- The court rejected the defendant’s FRAND objection and judged Oppo to be an unwilling licensee.
- Further rulings are expected at the end of July and beginning of August.
FRAND LICENCE AGREEMENTS FOR IoT
- Huawei and Nordic Semiconductor have entered into a global FRAND licence agreement through which Nordic can access Huawei's low power, wide area cellular IoT SEPs for its range of products.
- The agreement, reached through a transparent and amicable discussion within a short period of time, is a major step in bringing the IoT industry in line with developments in FRAND and SEP licensing practices.
- Huawei’s agreement in this setting contrasts with an action brought by Unwired Planet against Huawei for infringement of five UK patents which Unwired claimed to be standards essential. This case, along with Conversant v Huawei & ZTE, ended with the UK Supreme Court confirming that the courts of England and Wales have the jurisdiction to determine global FRAND terms and rates.
INSIGHTS & OUTLOOK
- If successful, Huawei and Nordic Semiconductor’s global FRAND licence agreement may motivate an expansion of FRAND licencing within the IoT sector and beyond (e.g., the vehicles sector).
- The above highlights issues covered by the UKIPO’s recent call for views on SEPs and innovation. A response from the UK government is expected later this year.
To find out more about standard essential patents and how IP can help you create commercial value from your innovations, feel free to contact any of our electronics and computing team.