Unwired Planet International Ltd v Huawei Technologies Company, Ltd and Others Unwired Planet, Inc. (Ninth Party) Unwired Planet Llc (Tenth Party) Telefonaktiebolaget LM Ericsson (Eleventh Party)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Birss |
| Judgment Date | 29 April 2016 |
| Neutral Citation | [2016] EWHC 958 (Pat) |
| Court | Chancery Division (Patents Court) |
| Date | 29 April 2016 |
| Docket Number | Case No: HP-201400005 |
[2016] EWHC 958 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice, Rolls Building,
Fetter Lane, London, EC4A 1NL
The Hon. Mr Justice Birss
Case No: HP-201400005
and
and
Sarah Ford (instructed by Enyo Law) for Unwired Planet
James Segan (instructed by Powell Gilbert) for Huawei
Meredith Pickford QC (instructed by Bristows) for Samsung
Mark Brealey QC and Daniel Piccinin (instructed by Freshfields Bruckhaus Deringer) for Ericsson
Hearing dates: 25 th April 2016
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.
In this application Samsung contends that the competition law aspects of the case should be transferred to the Competition Appeal Tribunal (the CAT). Its application is supported by the witness statement of Sophie Lawrance. Ericsson opposes the transfer, supported by Unwired Planet. Huawei adopts a neutral stance. In order to address the issue it is necessary to recap briefly on the nature of these proceedings even though I have given numerous previous judgments doing so.
Unwired Planet 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 GSM, UMTS and LTE. I will refer to patents which have been declared as essential to a standard as SEPs.
The first to fourth defendants are companies forming part of two major telecommunications equipment businesses: Huawei and Samsung. Both groups sell mobile devices and 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 Huawei and Samsung which are compliant with the standards infringe its SEPs. I will refer to Huawei and Samsung together as the patent defendants. The patent defendants deny the infringement claims. They contend the patents are invalid, are not infringed and are not essential to the relevant standard.
In addition to the conventional allegations of patent infringement, there are also disputes about FRAND. FRAND stands for fair, reasonable and non-discriminatory. The Particulars of Claim allege that Unwired Planet has pursued negotiations with each of the patent defendants to license the patents on FRAND terms but the patent defendants have refused to take a FRAND licence. Unwired Planet accepts that it owes an obligation to the standard setting body for telecommunications in Europe, ETSI, to offer licences on FRAND terms under the ETSI IPR Policy. The patent defendants contend the licences on offer are not FRAND and have made counter offers of licence terms they contend are FRAND.
Furthermore the patent defendants have also brought counterclaims for breaches of competition law. The counterclaim is against Unwired Planet and joins Ericsson. The allegations include claims based on Art 101 and Art 102 TFEU. One of the main allegations is that the terms offered by Unwired Planet are not FRAND. Another is that by seeking an injunction in these proceedings Unwired Planet has acted contrary to Art 102 TFEU. Claims based on Art 101 TFEU focus on the Master Sale Agreement (MSA) by which Ericsson's patents were transferred to Unwired Planet. One of the main allegations is that Ericsson and Unwired Planet are in breach of competition law because, via the MSA, Ericsson divided its patent portfolio and assigned part of it to a "hybrid NPE" (Unwired Planet). Unwired Planet is said to be a hybrid NPE because Ericsson retains the right under the MSA to a substantial share in the licensing revenue generated by Unwired Planet and can transfer further (unspecified) patents to Unwired Planet in future.
Part of the reasoning why transferring patents to a hybrid NPE like Unwired Planet is said to be a breach of competition law arises from the different positions in the market in which the assignor and assignee are situated. The original patent holder, Ericsson, competed in the downstream market with potential licensees such as Samsung and was therefore open to and indeed probably needed cross-licences from those competitors. This is said to have strongly influenced its licensing approach. Also as a major R&D organisation, manufacturer and seller, its commercial reputation is a matter of importance. On the other hand, as an NPE, Unwired Planet is in a different position. It is said simply to be seeking to monetise the patents it holds whereby it can act aggressively, threaten and sue putative licensees with no adverse consequences, reputational or otherwise. It has no products and so is not interested in cross-licences.
The core point in the defence of Unwired Planet and Ericsson to these allegations is again FRAND. They contend that FRAND licences are and always have been available, that that is what competition law demands, and that as a result there is no breach.
A further issue is what is referred to as the Ericsson control defence. The point is that Samsung has a patent licence from Ericsson which is dated after the MSA. Therefore Ericsson and Unwired Planet say it is not a licence of the Unwired Planet patents. Samsung contends that for various reasons the patents nominally held by Unwired Planet are in fact and in law still held or controlled by Ericsson and are therefore licensed under the later licence.
The relief claimed by the patent defendants in the counterclaims includes declarations that the MSA is void for breach of Art 101, that Unwired Planet has infringed Art 102 by failing to offer any FRAND licences, an injunction to restrain Unwired Planet from enforcing the patents until FRAND terms have been agreed or settled by the court and an indemnity or damages including exemplary damages for breaches of competition law against both Ericsson and Unwired Planet.
The proceedings involve other issues as well but there is no need to go into them at this stage. Managing the proceedings was going to be a major task and the case was docketed to a single judge. To make it triable, the case has been split into a set of distinct trials. The first four are technical trials (A to D) which relate to the validity and infringement/essentiality of four Unwired Planet SEPs. So far three of those trials have been completed and the fourth is due to start next week. A fifth technical trial (E) is due before the end of July. It relates to the only non-SEP in the group of patents on which Unwired Planet sued in the first place. In that case Google remains a defendant because although Google and Unwired Planet have settled as regards SEPs, they have not settled as regards non-SEPs. A sixth trial is set for 13 weeks in the autumn of 2016. That is the so-called non-technical trial. This trial will deal with the competition law issues, FRAND and the Ericsson control defence. Finally and only if necessary there might be a seventh trial. This would deal with various further factual issues relating to the patent infringement claims, including allegations of joint tort liability and the position of products alleged to infringe which were not the sample products used at the technical trials. Although one cannot say for certain, the seventh trial is only likely to be required in fairly unlikely circumstances.
The transfer application relates to the non-technical trial. Samsung asks that the competition law issues in the non-technical trial, which represent the bulk of it (everything except the Ericsson control defence), be transferred to the CAT. The parties are now in the process of exchanging substantial expert evidence on economics from eight economists (the figure eight is disputed but the number must be at least about six). Samsung submits that the CAT was established to provide a forum benefitting from dedicated, specialist expertise appropriate for resolving the mixed issues of law and economics that ubiquitously arise in connection with competition law and that the CAT is uniquely well suited as the forum for hearing lengthy, complex, economics heavy cases such as the present one. Since this is a stand-alone case it could not originally have been brought in the CAT but that anomaly was removed on 1 st October 2015 in a move intended to enable litigants in stand-alone actions as well as follow-on claims to benefit from the CAT's expertise and resources. Importantly, Samsung has established that there would be no delay if these matters were transferred because the CAT is presently able to accommodate the case in precisely the same period in which the non-technical trial is currently listed. There would be no lack of continuity because the same judge (Birss J) who will hear the non-technical trial can sit as a Chairman of the CAT. One difference would be that in the CAT I would sit as the chairman of a panel of three judges, one of whom would be a distinguished economist and the other of whom would be able to bring specialist knowledge and expertise in competition issues from a field such as accountancy, industry or law. The second difference would be that the CAT panel benefits from outstanding logistical and legal support provided by CAT staff and legal assistants ("referendaires") which is of particular value in lengthy complex actions.
Ericsson submits the issues should...
To continue reading
Request your trial
-
Recent Decisions In UK Cases
...a licence arrangement provides a defence to patent infringement. View the decision 29 April 2016 - Unwired Planet v Huawei & Ors [2016] EWHC 958 (Pat) Patent - N/a Court - Patents Court: Birss J Comments - Huawei's application was declined for competition law aspects of the case to be t......