Comment on the jurisdictional issues raised and resolved in the case of Unwired Planet v Huawei

Comment on the jurisdictional issues raised and resolved in the case of Unwired Planet v Huawei [2020] UKSC 37.
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Case study

Comment on the jurisdictional issues raised and resolved in the case of Unwired Planet v Huawei [2020] UKSC 37.

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Conflict of Law:
Comment on the Jurisdictional Issues Raised and Resolved in the Case of Unwired Planet v Huawei [2020] UKSC 37.

Date of Submission
In 2020, the United Kingdom Supreme Court gave the much-awaited decision stating that the ETSI IPR Policy is a contractual arrangement. English courts have the jurisdiction to decide and set up the terms to a global license to a multinational patent portfolio. This was mentioned in the case Unwired Planet International Ltd and another) v Huawei Technologies (U.K.) Co Ltd and another [2020] UKSC 37. From this decision, the court did acknowledge that the lower court had gone to a greater extent in demonstrating its willingness to establish the FRAND License’s terms, which the parties could not come into agreement with. The judgment did provide clarifications in various SEP licensing issues.
Background of the Case
Unwired Planet, a non-practising entity, got several patents and patent applications from Ericson and contended the parents against Huawei and others in the UK, Germany, and china. Ericson and Unwired Planet indicated that the patents were essential for the 2G, 3G, and the 4G wireless standards and adhered to the European Telecommunications Standards Institute (ETSI) for licensing the patents if Fair Reasonable and Non-Discriminatory (FRAND) terms. Following several trials in the High Court, two of Unwired Planet’s did assert the validity of U.K. patents fundamental to particular wireless standards hence an infringement by Huawei. The High court held the following trial limited to whether the Unwired Planet’s global license offers were in line with the applicable FRAND commitments. Huawei indicated that the offers were not FRAND partially due to the offers requiring it to License the plaintiff’s global portfolio when the former had only been found to have infringed the latter’s U.K. patents. Huawei further stated that the SEP owner needed to grant the same or similar terms to all licenses in similar situations, which the court considered to be “hard-edged non-discrimination.”
The court did disagree with Huawei on both points. It considered how the real-world license negotiations between multinational corporations and a SEP owner with a global portfolio play out. It concluded that a licensor and licensee acting reasonably and willingly could agree on a worldwide license. It also found the hard-edged discrimination not applicable since the FRAND rate needs to be determined primarily by referring to patents’ value to be licensed and not the licensee’s conditions. The Justice would conclusively state the Unwired Planet’s global portfolio license offer to Huawei was FRAND and that it was proper to have an injunction barring Huawei’s sales for infringing products in the U.K. Huawei would appeal this decision making several arguments, including the FRAND license should not be worldwide, Unwired Planet should have offered it a similar royalty rate as it does to similarly situated competitors, and Unwired Planet has no entitlement to an injunction b as it did not make its FRAND offer before starting the litigation. The Court of Appeal disagreed, and Huawei would appeal again to the Supreme Court.
Jurisdictional Issues Raised and Resolved in the Case
1. The English Court’s Jurisdiction to Grant and Determine the Terms of a Global FRAND License.
In this matter, the Supreme Court was to decide whether the English courts do have the jurisdiction to exercise power without an agreement from both parties on granting an injunction for restraining the infringement of a U.K. patent that is a SEP except when the implementer to the patented invention does enter a worldwide licence of a multinational patent portfolio and also determining royalty rates and other terms of the license.
The Supreme Court stated that these courts have jurisdiction and could appropriately exercise powers on these issues. They indicated that the jurisdiction in determining a FRAND license comes from the lawfully enforceable duty established by the ETSI IPR Policy that the holders of SEP permit implementers to get licenses to standard-essential technology on FRAND terms. It also emphasizes the fact that the FRAND application applies to the license negotiating process and the terms.
A consideration of the commercial practices within the industry of licensing whole patent portfolios notwithstanding the patent’s validity or the infringement on using relevant technology within the standard. They noted that the FRAND license rates are readily adjustable if the patents are found to be invalid or not infringed. The decision also considered approaches taken in the USA, China, Japan, Germany, and the European Commission when handling the FRAND licensing matters.
2. Whether the English Court should hear the FRAND License disputes
The lower courts have been dealing with whether the dispute needs to be characterized as one on the terms of a global FRAND license or an issue of validity and infringing English patents with FRAND issues coming from the basis of a contractual defence. Hence, the Supreme court would state that it was not a strict necessity for the English Court to make decisions since the forum non-conveniens challenge failed. This doctrine required the English Court decision on whether it or a recommended foreign court with jurisdiction would be a more appropriate forum to determine the dispute between the parties., Huawei and ZTE had suggested that the Chinese courts were more appropriate. The proof presented did not show that the Chinese courts did have the jurisdiction to establish the terms to the global FRAND license. At this point, the English Courts did have the jurisdiction, and since no alternative was available, it was deemed appropriate for it to exercise it.
The Supreme Court found it unnecessary to consider other jurisdictional matters such as the Owusu principle and applying Article 24 of the Brussels 1 Regulation or the recent decision from the Lungowe case. Suppose there is further clarity that a different court will adopt a similar approach to the global FRAND similarly to the English court’s actions, indicating the availability of an alternative forum. In that case, a future jurisdiction challenge could be returned to the Supreme Court on the matters.
3. The non-discrimination issue on whether the Unwired Planet did discriminate in its SEP Licensing.
This matter came from the initial appeal where Unwired Planet did give another SEP infringer, Samsung, a more favourable license in the initial proceedings. Huawei indicated the Unwired Planet needs to provide similar terms to all licensees for SEPs, except there are objective reasons to have them treated differently. Instead, Unwired Planet could offer Samsung a license with comparable terms to those of Samsung, which if not, it would be acting in a discriminatory manner.
Nevertheless, the Supreme Court did uphold the lower courts’ decisions stung that they did right to find the non-discrimination aspect in the FRAND undertaking. Following the rationale provided by the ETSI IPR Policy, license terms need to be availed in a fair, reasonable, and non-discriminatory manner. One royalty price list is to be provided to all participants depending on the SEP’s market value for one to qualify for FRAND. No adjustments are to be made to the traits of the individual licensees. Huawei’s interpretation of the non-discriminatory element of FRAND would have an impact of imposing SEP owners to provide a more favourable license was intentionally excluded from the ETSI IPR Policy. To this effect, Huawei’s challenge to Unwired Planet’s license proposal being discriminatory and not FRAND was dismissed.
4. On the competition issue, whether competition law does prevent the imposition of an injunction against Huawei?
Huawei argued that Unwired’s claim for the injunction needed to be considered abuse to the dominant position, which contrasts Article 102 of the TFEU. This is because Unwired did not heed the guidelines given by the CJEU in the Huawei v ZTE case. For failing to make a FRAND license offer before the litigation proceedings for the injunctive relief, Huawei stated that Unwired’s remedy needed to be limited to damages only. The Supreme Court disagreed with the argument and endorsed the conclusion adopted in the lower courts, which is the nature of the notice needed to rely on the case’s circumstances. Since the CJEU’s reference to prior consultation, notice has not clearly defined the form of communication to be taken. The court would further assert that the opinion failed to inform whether the SEP owner falling to complying with the steps will abuse its dominant position.
5. The remedies matter on whether the nature of SEPs had prohibited the equitable jurisdiction of awarding injunctions.
Huawei indicated that desp[ite its infringement on Unwired and the Conversant’s SEP, the court needed not to grant an injunction to cease the violation from ongoing. Instead, it was a more proper and proportionate remedy to award damages depending on the royalties agreed upon for the license to be infringed U.K. patents. The Supreme Court handled this issue that the lower court has not considered, stating that the damages were not a sufficient alternative to an injunction since it only gave the implementers the incentive to hold out different countries until they are pushed to pay damages to every affected country. There was also no risk that Unwired and the Conversant could utilize the injunction threat as a way to charge exorbitant fees considering they could not enforce the rights except when they had offers on licensing SEPs on terms which the court has been satisfied to be FRAND.
From this case, it was evident that English courts were not shying away from decisions with extensive consequences, including the grant and determination of the terms within a global FRAND license. Therefore, it is possible to use UK SEPs to get an international FRAND license for the SEP portfolio, potentially extending the U.K. actions past their locality.

UKSC, ‘New Judgment: Unwired Planet International Ltd And Another) V Huawei Technologies (U.K.) Co Ltd And Another [2020] UKSC 37’ (UKSCBlog, 2020) accessed 20 February 2021
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Tang S, ‘Unwired Planet V Huawei [2020] UKSC 37: The U.K. Supreme Court Declared Competence To Determine Global FRAND Licensing Rate’ (Conflict of Laws, 2020) accessed 20 February 2021
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Zembek R and others, ‘Dealing With Unavoidable Uncertainty – U.K. Supreme Court Rules U.K. Courts Can Set Global FRAND Rates For Seps’ (Norton Rose Fulbright, 2020) accessed 20 February 2021
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Lawrance, Sophie, Francion Brooks, and James Batsford. “Unwired Planet v Huawei, Conversant v Huawei & ZTE: U.K. Supreme Court confirms Global FRAND licensing.” Journal of European Competition Law & Practice 11, no. 9 (2020): 516-523.