It would be impossible to do justice to the intricacies of the Unwired Planet v Huawei saga on Standard Essential Patents (SEPs) in this short Passle, but one thing is certain: the Supreme Court’s judgment brings an end, and hopefully certainty for the parties, to this particular dispute on Fair, Reasonable and Non-Discriminatory (FRAND) licensing. To pick up a few key points:
Huawei appealed to the Supreme Court against the Court of Appeal decision (which had affirmed Mr Justice Birss' highly-regarded High Court decision). The original decision held that English courts had the power to set FRAND licence rates and terms; not just for licences concerning the UK, but globally. In this case, that meant Huawei had to take a licence from Unwired Planet for 2G/3G/4G technology. Should it refuse, UP would be entitled to an injunction in the UK.
The Supreme Court unanimously dismissed Huawei's appeal. The lower courts were right to find that English courts had the jurisdiction and power to set terms of global licences, particularly as it had the power to grant appropriate reliefs (whereas China, in this case, didn’t).
Amongst the Supreme Court assessment of five key issues, it found that Birss J’s judgment was correct to rule that a SEP implementer should accept a global FRAND licence. It agreed with Birss J that there are no reasons of unfairness or disproportionality as to why a national court could not set a FRAND rate licence.
Further it said that the “non-discriminatory” element should be read together with “fairness” and “reasonableness”, rather than as a standalone element.
The Supreme Court did not get into the meat of what an appropriate rate for licensing would be; this would be considered on a case by case basis with the correct information inputs.
The key take-away from the Supreme Court is that it provides a clear signal that the UK remains open for business and SEP holders should continue to see the UK as its usual forum to obtain FRAND rate determination.
This is another setback for Huawei, which has been at the epicentre of UK-China political tensions and which, in July, was banned from the UK’s 5G mobile networks. At the same time this decision cements the UK’s position globally as the go to place for FRAND licences. Bring on the FRAND litigation!
In our view, the undertaking imports a single unitary obligation. Licence terms should be made available which are “fair, reasonable and non-discriminatory”, reading that phrase as a composite whole. There are not two distinct obligations, that the licence terms should be fair and reasonable and also, separately, that they should be non-discriminatory. Still less are there three distinct obligations, that the licence terms should be fair and, separately, reasonable and, separately, non-discriminatory.
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