UK Trends and Developments Contributed by: Nicola Dagg, Jin Ooi, Ray Cheng and Nevyn Fournel, Kirkland & Ellis
The Court of Appeal (Arnold, Nugee & Birss LJJ) slightly increased the per-unit FRAND rate to InterDigital’s portfolio of cellular patents from (USD) 17.5 cents to 22.5 cents, which was still significantly lower than the 49 cents rate effec- tively sought by InterDigital at first instance. The Court broadly accepted the first instance Judge’s reasoning, agreeing that comparable licences were “the best guide”, but found that he had failed to take into account non-FRAND factors when considering comparable licences. In arriving at the 30 cents per-unit rate, Arnold LJ stressed that the Court’s task in setting a FRAND rate “is not a task that admits of the kind of mathematical precision which the Judge applied”. The Court’s first-instance finding also confirmed that UK statutory limitation periods do not apply to exclude liability for past sales. Interest was also awarded with respect to the liability incurred for past sales. Interim licences – Panasonic v Xiaomi In 2024, the English Courts have been grappling with curly issues arising where an implementer has given an unconditional undertaking to be bound by the FRAND terms to be determined by an English Court, but the patentee is none- theless seeking and/or obtaining injunctive or similar relief in parallel foreign proceedings. One mechanism sanctioned by the Court of Appeal in Panasonic v Xiaomi to address this situation is an interim licence, which, if entered by the parties, would govern the period during which the UK FRAND rate-setting process is underway. This is a developing area of jurisprudence, and the extent to which the English courts will act to preserve the integrity of the UK FRAND rate- setting process by awarding interim licences or other mechanisms remains to be seen. In anoth- er case ( Lenovo v Ericsson ), the first instance
Judge recently rejected an application for an interim licence, but the decision is on appeal. In Panasonic v Xiaomi , the saga took a decisive and final turn in the UK after the Court of Appeal overturned the first instance judgment and ruled in favour of Xiaomi, granting them the first-ever interim FRAND licence. Xiaomi filed applications for a FRAND-first trial listing and expedition and successfully obtained an expedited pure-FRAND first trial. Xiaomi also elicited an unconditional undertaking from Panasonic to be bound by the UK FRAND determination. This is of particular importance in a context where the UK action was commenced alongside a series of actions in the UPC, Germany, and China. Panasonic was ini- tially prepared to give another undertaking not to enforce any injunctions obtained in parallel pro- ceedings in Germany or the UPC but changed its position shortly after. In these circumstances, the Court noted that Panasonic’s clear intention to seek an injunction from the German courts or the UPC in order to reach a negotiated set- tlement with Xiaomi – rather than waiting for the FRAND rate to be established in the UK – was not in line with its commitment to FRAND principles. In any case, Xiaomi had offered to take an interim licence to Panasonic’s portfolio pending the English Court’s FRAND determi- nation so that Panasonic would not incur any loss. Based on these facts, the Court decided that Panasonic was not acting in good faith as required by Clause 6.1 of the ETSI policy, which paved the way for a declaration of an interim licence. Shortly after that Judgement, the parties announced that they had settled their case, and the FRAND trial due to start in October 2024 was subsequently vacated.
530 CHAMBERS.COM
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