A win for the patent Davids in a tussle over FRAND

• Several years and several courts involved 
• Victors claim the case will prove a turning point for the telecoms industry
• It prevents technology implementers from holding out against ‘innovators’ (the holders of patents)

Today the Supreme Court in London handed down its judgement on Huawei v. Unwired Planet, claimed by EIP, the law firm acting on behalf of Unwired Planet, a mobile technology firm, as one of the most important intellectual property cases that the UK has seen in decades. No small claim.

In fact the case has been stuttering on for several years through the UK  High Court and Court of Appeal, and now in the Supreme Court. Today appears to have resulted in a conclusive judgement.and a conclusive victory for the IP Davids and a defeat for the Goliaths, in this case Huawei. 

EIP claims the ruling will enable standards essential patent  (SEP) holders to insist that implementers, like Huawei, take out global licences covering all of their portfolios. If they fail to do this, they risk being subject to injunctions restricting their ability to access the UK market.

The practical effect is that implementers cannot insist on SEP holders proving their patents in every jurisdiction in the world, something which would be both practically and economically prohibitive for smaller companies, claims EIP. Otherwise, as the Supreme Court observed, “implementers who were infringing the patents would have an incentive to continue infringing”.

 According to Andrew Sharples, a partner at EIP, "the case revolved around the UK court's application of FRAND" and the argument boiled down to “whether a UK court had the jurisdiction to set the terms of a global license including a royalty rate and to order an injunction against a party that wasn’t prepared to enter into that global license. The supreme court said 'yes', and the reason that that’s important is that it prevents implementers from holding out against ‘innovators’ (the holders of patents). Up to now (hopefully changing since the judgement) implementers have been able to actually use a standards essential technology but tie patent owners down in lengthy litigation to avoid paying royalties (or paying as much “as might be considered fair).”

“That’s partly because there was a thought that to enforce your portfolio you would have to go country by country, which is just impractical.”

So presumably this goes beyond the behaviour of Huawei and ZTE? 

“Yes, it’s fair to say this is a widespread issue,” says Andrew, who pointed out that in this case, Apple intervened in support of Huawei while Ericsson intervened against. 

 “The key takeaway is that the judgement handed down today provides a means for patent owners to get a fair return on their patents where previously large companies (implementers) had been inclined to hold out. It’s about striking that balance between access to technology and, on the other hand, fair returns for patent owners.