Apple Retail UK Ltd v Qualcomm (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Morgan |
| Judgment Date | 22 May 2018 |
| Neutral Citation | [2018] EWHC 1188 (Pat) |
| Court | Chancery Division (Patents Court) |
| Docket Number | Case No: HP-2017-000015 |
| Date | 22 May 2018 |
[2018] EWHC 1188 (Pat)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Mr Justice Morgan
Case No: HP-2017-000015
Marie Demetriou QC, Colin West, Brian Nicholson & Chris Hall (instructed by Boies Schiller Flexner (UK) LLP) for the Claimants
Mark Howard QC, James Flynn QC, Nicholas Saunders QC & Gerard Rothschild (instructed by Quinn Emanuel Urquhart & Sullivan LLP) for the Defendants
Hearing dates: 27 & 28 March 2018
Judgment Approved
The Hon
The parties to these proceedings
There are six Claimants. All of the Claimants are companies in the Apple group of companies. The First Claimant is incorporated in England and Wales. The Second and Third Claimants are incorporated in the Republic of Ireland. The Fourth and Fifth Claimants are incorporated in Germany. The Sixth Claimant is Apple Inc which is incorporated in California, USA, and is the ultimate parent company of the other Claimants and of the Apple group as a whole.
As is well known, the Apple group of companies is involved in the design, manufacture and marketing of various mobile communication and media devices, personal computers and portable music devices. Apple's products include the iPhone and iPad devices.
There were originally four Defendants but the Claimants now wish to proceed against only two of them. The remaining two Defendants are now known as the First and Second Defendants. The First Defendant is incorporated in England and Wales and is a wholly owned indirect subsidiary of the Second Defendant. The Second Defendant is Qualcomm Incorporated, which is incorporated in Delaware, USA. It is the ultimate parent company of the companies in the Qualcomm group.
The Second Defendant has described itself as a leading contributor to the development of technologies used in smartphones. It has accumulated over 130,000 relevant patents and patent applications worldwide. Of these, approximately 13,300 are European patents. Its UK patent portfolio consists of 5,168 UK and EP(UK) patents. It has declared approximately 26,700 patents as potentially essential to the European Telecommunications Standards Institute (“ETSI”) mobile telephone standards.
The procedural history
The Claimants issued (but did not then serve) the original Claim Form in these proceedings on 23 January 2017. The Claimants amended the Claim Form on 19 May 2017. The Claimants then served the Amended Claim Form and Particulars of Claim on the First Defendant, the UK company, within the jurisdiction. The Claimants also served the Amended Claim Form and Particulars of Claim, in so far as they put forward certain claims relating to patents, on the Second Defendant, the US company, within the jurisdiction, in reliance on CPR 63.14.
On 30 June 2017, the Claimants applied without notice for permission to serve the Amended Claim Form on the Second Defendant out of the jurisdiction (presumably in so far as the Claimants had not already served it on the Second Defendant within the jurisdiction in reliance on CPR 63.14). On 12 July 2017, Arnold J granted the permission which had been sought.
On 11 August 2017, the Second Defendant served a Defence to the patent claims made against it, save for one of those claims (the patent exhaustion claim). As to the patent exhaustion claim, the Second Defendant contends that that claim is not within CPR 63.14 and was not validly served on it within the jurisdiction.
The applications
On 29 September 2017, the First Defendant (along with two other Defendants who are no longer relevant) applied for an order striking out the claims as against them, alternatively for reverse summary judgment in relation to the claims against them. By the same application notice, the Second Defendant applied for a declaration that the court has no jurisdiction (or ought to decline to exercise any such jurisdiction) in relation to the claims made against the Second Defendant in some (but not all) of the paragraphs in the Prayer for Relief in the Amended Claim Form and for consequential orders such as an order setting aside the permission to serve those claims on the Second Defendant out of the jurisdiction.
On 21 March 2018, the Claimants applied for permission to amend their Particulars of Claim.
On 23 March 2018, the Defendants applied to adjourn the hearing of their applications of 29 September 2017. In support of the application for an adjournment, the Defendants submitted that they needed time to investigate the proposed amended claim as set out in the draft Amended Particulars of Claim. I heard the application for an adjournment on 26 March 2018 and ruled that the hearing of the Defendants' applications of 29 September 2017 and the Claimants' application of 21 March 2018 should proceed on 27 and 28 March 2018 with a view to the court dealing with all of the outstanding applications or, at least, dealing with so much of them as could properly be dealt with without unfairness to the Defendants resulting from the time at which the Claimants provided the draft Amended Particulars of Claim to the Defendants. The various applications were then heard on 27 and 28 March 2018.
The claim against the First Defendant
Although the Amended Claim Form and the Particulars of Claim suggested otherwise, it was made clear at the hearing of the applications that there is only one claim made against the First Defendant. The single claim against the First Defendant is that it is in breach of a contract on which, it is said, all of the Claimants are entitled to sue. The contract relied upon is said to have been made by the First Defendant, as a member of ETSI, and is a contract which requires it to comply with ETSI Directives, including ETSI's Rules of Procedure and Intellectual Property Rights Policy (“IPR Policy”). In this regard, the Claimants rely on certain declarations made in respect of the licensing of standard essential patents (“SEPs”) and in respect of negotiating the grant of such licences on fair reasonable and non-discriminatory (“FRAND”) terms.
As explained above, the First Defendant has applied for an order striking out this claim and/or for reverse summary judgment and an order dismissing this claim.
The claims against the Second Defendant
There are various claims against the Second Defendant. I will start by referring to the claims against the Second Defendant where the Second Defendant has been served within the jurisdiction and where the Second Defendant accepts that those claims can be tried in this jurisdiction. These claims refer to five patents, namely, EP(UK) 1,264,506, EP(UK) 1,192,749, EP(UK) 1,791,286, EP(UK) 1,774,822 and EP(UK) 2,217,031. The Claimants contend that these five patents are invalid on the ground that, in the case of each patent, none of the claims involved an inventive step (I ignore the inappropriate double negative in the Grounds of Invalidity). The Claimants then contend that each of these five patents should be revoked. Next the Claimants seek a declaration that each of these five patents is not essential, i.e. is not a SEP, for the purposes of the ETSI standards.
In relation to the claims described in the last paragraph, it is agreed that the five patents are “registered rights” within CPR 63.14, that the above claims relate to the registered rights and that the Amended Claim Form was served on the Second Defendant within the jurisdiction at addresses for service provided for that purpose.
The next claim made against the Second Defendant is a claim for a declaration that the Second Defendant's rights in respect of all EP(UK)s declared by the Second Defendant to be SEPs for the ETSI standards are exhausted in respect of any device which incorporates a chipset supplied directly or indirectly to an Apple company with the consent of a company in the Qualcomm group. In respect of this claim, the Claimants say that the claim “relates to” the registered rights within CPR 63.14. The Second Defendant does not accept this contention.
Then the Claimants claim a declaration that the Second Defendant has, contrary to Article 102 of the Treaty on the Functioning of the European Union (“TFEU”), Article 54 of the Agreement on the European Economic Area (“EEA”) and section 18 of the Competition Act 1998, abused its dominant position in the relevant market or markets. The Claimants further claim damages said to have been suffered by them by reason of the alleged abuses of dominant position. The alleged abuses of a dominant position are pleaded in considerable detail in the Particulars of Claim and in the draft Amended Particulars of Claim. In relation to these claims, the Claimants accept that they need permission to serve these claims on the Second Defendant out of the jurisdiction. For that purpose, the Claimants rely on “Gateways” 3, 4A and 9(a) as set out in sub-paragraphs (3), (4A) and (9)(a) of paragraph 3.1 of Practice Direction 6B – Service out of the Jurisdiction.
The next claim against the Second Defendant is for a declaration that the Second Defendant is in breach of the ETSI IPR Policy and certain declarations which it made under that Policy. As I understand it, the Claimants do not contend that they are able to rely on CPR 63.14 in relation to that claim and therefore it would seem that they must accept that they need permission to serve that claim out of the jurisdiction. I will proceed on the basis that the Claimants also wish to claim damages for the alleged breach...
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