Unwired Planet International Ltd v Huawei Technologies Company Ltd and Others Unwired Planet Inc. (Ninth Party) Unwired Planet LLC (Tenth Party) Telefonaktiebolaget L M Ericsson (Eleventh Party)
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Birss,Mr Justice Birss |
| Judgment Date | 24 April 2015 |
| Neutral Citation | [2015] EWHC 1029 (Pat) |
| Court | Chancery Division (Patents Court) |
| Docket Number | Case No: HP 2014 000005 |
| Date | 24 April 2015 |
[2015] EWHC 1029 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Justice Birss
Case No: HP 2014 000005
and
Richard Meade QC, Jemima StratfordQC andDavid Bailey (instructed by EIP Legal) for the Claimant and (instructed by Enyo Law) for the Ninth and Tenth Parties
Pushpinder Saini QC and James Segan (instructed by Powell Gilbert) for the First and Second Defendants
Jon Turner QC, Meredith PickfordQC andJames Bourke (instructed by Bristows) for the Third and Fourth Defendants
Paul Harris QC and Robert O'Donoghue (instructed by Bristows) for the Fifth, Sixth and Seventh Defendants
Mark Brealey QC and Daniel Piccinin (instructed by Freshfields Bruckhaus Deringer) for the Eleventh Party
Hearing dates: 19th & 20th March 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Unwired Planet's business is licensing. It holds a portfolio of patents related to telecommunications. Most of them were acquired from Ericsson. Many of the patents in Unwired Planet's portfolio are declared essential to various telecommunications standards including 2G standards (such as GSM/GPRS), 3G standards (such as UMTS) and 4G standards (such as LTE). I will refer to patents which have been declared as essential to a standard as SEPs.
The defendants are companies forming part of three major telecommunications equipment businesses: Huawei, Samsung and Google. All three groups of defendants sell mobile devices. Huawei and Samsung also sell infrastructure equipment such as base stations.
On 10 th March 2014 Unwired Planet brought proceedings for patent infringement in this jurisdiction. It contends that the products sold by the defendants which are compliant with the standards infringe its SEPs. The proceedings involve five SEPs. They are EP (UK) 1 230 818, EP (UK) 2 229 744, EP (UK) 2 119 287, EP (UK) 2 485 514, and EP (UK) 1 105 991. The 514 patent is a divisional of 287. All five SEPs in this case were acquired from Ericsson.
The infringement claim also involves an allegation that some of the defendants' products infringe one of Unwired Planet's patents which is not a SEP. That is EP (UK) 0 989,712. This 712 patent was not acquired from Ericsson. It arises from work done by engineers in Unwired Planet.
In addition to the conventional allegations of patent infringement, the Particulars of Claim also state, for each of Huawei, Samsung and Google, that Unwired Planet has pursued negotiations to license the patents on FRAND terms but thus far has been unsuccessful. In the prayer for relief at paragraph (5) Unwired Planet sets out its claim for injunctive and other similar remedies as follows:
" The claimant claims:
[…]
(5) Save insofar as the defendants and each of them are entitled to and take a licence to the Declared Essential Patents on FRAND terms (in accordance with the claimant's undertakings and the ETSI IPR Policy) and insofar as the claimant is and remains required to grant such a licence:
a. [ injunction]
b. [ removal from channels of commerce]
c. [ delivery up]"
The undertakings referred to are undertakings to ETSI, pursuant to ETSI's IPR Policy, to grant licences on FRAND terms. I will return to this below.
There is a dispute about the nature and extent of any negotiations which took place before the proceedings were issued. However that can be put into perspective given that the various parties have been negotiating behind the scenes and the case has now been on foot for over a year. No agreement has been reached.
Irrespective of negotiations behind the scenes, Unwired Planet has made two open licensing proposals to the defendants, one on 22 nd April 2014 and the second on different dates in June and July 2014. They can be referred to as the April proposal and the July proposal:
i) The April proposal was for a worldwide licence under all Unwired Planet's patents, SEPs and non-SEPs. The proposal was divided into three parts, (cloud and server methods and equipment, (imobile devices and (iiinfrastructure. For mobile devices the proposed royalty rate was US $0.75 per major market end user device and US $0.50 per other end user device. For infrastructure the proposed royalty rate was 0.45% of infrastructure revenue. A 20% prepayment discount was also offered.
ii) The July proposal was for a worldwide licence under Unwired Planet's SEPs only. The cloud and server aspect was not applicable in that case. The proposed royalty for mobile devices was 0.2% of Average Selling Price (ASP) for multi mode LTE end user devices and 0.1% of ASP for other end user devices. For infrastructure the proposed royalty rate was 0.2% of revenue for LTE based infrastructure and 0.1% for other standards.
The defendants' position as explained in their Defences is that none of the patents in suit are valid or infringed. This includes (where relevant) a denial that any given SEP is in fact essential to the relevant standard. The defendants have all stated expressly that they are willing licensees. They are prepared to take a licence under any Unwired Planet patent which has been found to be valid and infringed.
Further key aspects of the defendants' position in these proceedings involve allegations about competition law and FRAND. The detailed positions of the defendants vary but at this stage the matter can be summarised broadly. Ericsson participated in the standard setting process in Europe involving ETSI. Ericsson therefore declared its SEPs to ETSI as essential under the ETSI IPR Policy and gave a FRAND undertaking. It is argued that in transferring patents to Unwired Planet, there was a failure to ensure the transfer of an enforceable FRAND obligation. It is also argued that in splitting Ericsson's SEP portfolio into two parts (Ericsson retains some SEPs itself and transferred some to Unwired Planet) a breach of competition law has taken place in that unfair higher royalties will be earned. There is a point that the agreement and assignment arrangements by which Ericsson transferred patents to Unwired Planet contained terms which were in breach of competition law (Article 101(1) TFEU). On that basis the transfer is said to be void and Unwired Planet has no title to sue. There is also a point referred to as the 'Ericsson control defence'. The allegation is that, even if Unwired Planet is the legal owner of the patents, Ericsson retains control over those patents so that Samsung has a licence to those patents under its licence agreement with Ericsson, or is entitled to procure from Ericsson the grant of a licence. There are allegations of a breach of Art 102 TFEU (abuse of a dominant position). Here it is alleged that the terms offered by Unwired Planet are not FRAND. Another allegation is that in seeking an injunction in these proceedings Unwired Planet has acted contrary to Art 102 TFEU.
Since the competition law arguments involve more parties than the claimant company, Ericsson and two other Unwired Planet companies have been joined into the proceedings. Ericsson and Unwired Planet deny any breaches of competition law and any breach of a FRAND obligation. Unwired Planet denies its April and July proposals are not FRAND.
This is a complex and multi faceted dispute and at an early stage the parties considered that it would help the orderly case management of the proceedings if it was docketed to a single judge. I was designated to undertake that task. The first CMC was in July 2014, a second CMC took place in October 2014 and there have been subsequent case management hearings as well. As a result of these directions hearings, the case has been divided into five technical trials and a single non-technical trial. Technical Trial A starts on 5 th October 2015 and deals with 744. Technical Trial B starts in 30 th November and deals with 514/287. The last technical trial, trial E, will deal with the non-SEP 7It starts on 27 th June 2016. The non-technical trial will deal with competition law and FRAND. It is due to start in October 2016. It is scheduled for 10 weeks but in the course of this hearing the time was increased to 13 weeks.
This hearing was scheduled to deal with the non-technical trial. The major dispute relates to two applications which are closely interrelated. There is an application by Unwired Planet to amend the prayer for relief in its Particulars of Claim to include at paragraph (5A) a claim for a declaration that its licensing proposals are FRAND. There is also an application by Huawei to strike out parts of Unwired Planet's pleaded case relating to the FRAND status of Unwired Planet's proposals and for summary judgment on related issues.
The hearing also involved some other case management issues related to the non-technical trial. Having heard the major dispute I explained that I would give a reserved judgment in due course but in the meantime I would tell the parties in summary form what I had decided to do and give very compressed reasons for it. The reason for doing this was to facilitate the orderly management of the case. If judgment had simply been reserved, that would not allow the case to be managed at all until it was available. If I had simply stated bare conclusions with no...
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