Standard Essential Patents: Telecoms

Optis and Unwired Planet v Apple

• The Court of Appeal recently dismissed an appeal from Apple in the latest stage of a long-running dispute against Optis and Unwired Planet.
• Upholding Meade J’s decision in the High Court, Arnold LJ held that Apple must take a FRAND injunction¹, with terms to be agreed by the court, to restrain them from infringing EP 2229744 B1.
• Addressing Apple’s argument “that the judge's interpretation deprives an implementer who has been found to infringe a SEP of the choice between taking the Court-Determined Licence, once its terms are known, and submitting to an injunction”, Arnold LJ held that “The key words in this argument are "once its terms are known". The argument assumes that an implementer who has been found to infringe a SEP is entitled to the luxury of being able to wait until the court has determined what terms are FRAND before deciding whether to take a licence on those terms or not, and to continue to infringe the SEP in the meantime.” (paragraph [76])
• Commenting further: “But I see no reason why the implementer should be entitled to that luxury. If the implementer wants to avoid the normal consequences of having been found to infringe, it can commit to taking a Court-Determined Licence. If the implementer does not want to commit to taking a Court-Determined Licence, then it should be restrained from infringing (…). Otherwise, as the judge found, hold out by implementers would be promoted.” (paragraph [76])
• A cross-appeal by Optis - seeking to determine the nature of the injunction and clarify when an implementer permanently loses the right to a FRAND license² - was also dismissed.
• In a post-script, Arnold LJ was critical of the current system for determining Standard Essential Patent (SEP)/FRAND licence disputes, remarking that: “(…) Each side has adopted its position in an attempt to game the system in its favour. The only way to put a stop to such behaviour is for SDOs like ETSI to make legally-enforceable arbitration of such disputes part of their IPR policies.” (paragraph [115])

Nokia v Oppo

• Nokia continues to accuse Oppo of infringing its patents concerning 3G, 4G and 5G: patents EP 2070217 B1 and EP 2087626 B1 in the UK; and EP 2981103 B1 in the UK and Germany.
• In response to a UK lawsuit filed by Nokia at the High Court on 1 July 2021, Oppo filed a request for the People’s Court of Chongqing, China to determine a global FRAND licence for Nokia’s portfolio.
• The High Court subsequently dismissed Oppo’s request for a stay of proceedings pending the Chinese court’s decision. The dismissal was largely based on the UK dispute being infringement focussed, rather than licensing focussed.
• At the Court of Appeal, Jackson LJ referenced the Supreme Court’s decision in Unwired Planet v Huawei, which found that a UK court has jurisdiction over claims concerning the infringement and validity of UK SEPs.
• Oppo’s appeal to the Supreme Court has now been dismissed, allowing the infringement and validity proceedings to resume.

Cross-licensing

• Elsewhere, Apple has reached a patent license agreement with Ericsson that includes a global cross-license for patented cellular standard-essential technologies.
• The settlement ends all ongoing patent-related legal disputes between the parties, both companies also agreeing to further collaborate in technology, interoperability, and standards development.
• Huawei and Oppo have signed their own global patent cross-licensing agreement that covers cellular SEPs, including 5G. For Huawei, this marks the continuation of multiple agreements signed or renewed in 2022.
• Most recently, Nokia and Samsung have signed, with effect from 1 January 2023, a multi-year 5G patent license agreement that covers Nokia’s fundamental inventions in 5G and other technologies.

To find out more about SEPs and how intellectual property can help you create commercial value from your innovations, feel free to contact any of our electronics and computing team.

Insight and outlook

Meade J’s decision was consistent with but not reliant upon Birss J’s reasoning in UP Remedies (paragraph [88]), the endorsement by the Court of Appeal adding weight to proper form of injunction in SEP disputes.

The recent cross-licensing deals mirror expanded licensing agreements for connected vehicles and may point to the telecoms sector becoming less litigious.

Further reading

1. From paragraph [3] “[T]he patentee is entitled to an injunction unless and until the implementer undertakes to take a licence on the terms subsequently determined by the court to be FRAND, (a so-called "FRAND Injunction" with the modification that the injunction bites unless the implementer undertakes to take a licence on terms to be determined to be FRAND rather than unless the implementer takes a licence on terms which have already been determined to be FRAND).”
2. More particularly, “that an implementer who fails to commit to take a Court-Determined Licence on having been found to infringe a SEP becomes permanently disentitled to rely upon the SEP owner's ETSI Undertaking.” (paragraph [82]).