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The long-running dispute over patents has concluded with Huawei’s appeals dismissed, cementing the UK courts’ position at the heart of international patent litigation

The UK’s Supreme Court today ruled against Huawei as it appealed to be given the rights to use standards-essential patents (SEP) owned by Unwired Planet without agreeing a worldwide licence and royalties. 
 
As their name suggests, SEPs are common technology patents, with their corresponding technology integral to the current global standards. As a result, any mobile device, for example, will naturally be forced to include patented technologies from a variety of users.
 
Of course, to use these mandatory SEP technologies vendors will have to pay licence fees to the patent holder. As a result, the licences offered by the patent holders are forced to abide by a principle called FRAND, ensuring that their terms are Fair, Reasonable And Non-Discriminatory.
 
It is here that the dispute between Huawei and Unwired Planet originated. Huawei sought a UK-only licence from Unwired, while the SEP-holder refused to offer anything but a worldwide licence. The waters were further muddied by the fact that Unwired had previously offered Samsung access to the same patents at a cheaper rate, which Huawei claimed was unfair.
 
However, the UK Supreme Court ruled in favour of Unwired Planet, saying that Unwired’s conditions were not in breach of FRAND stipulations and that they should not be obligated to make competitors the same deal.
 
In a second appeal, Conversant took on Huawei and ZTE for the infringement of four of its UK patents. Here, Huawei and ZTE argued that the English Courts did not have jurisdiction to rule on the validity of foreign patents, but this was overruled, with the Court reiterating that it did have such powers under the patent framework agreed by the mobile industry.
 
“The court holds that as a result of the contractual arrangements in the ETSI [intellectual property rights] policy, the courts of England and Wales have jurisdiction and may properly exercise a power, without the parties’ agreement, to grant an injunction to restrain infringement of a UK patent that is a SEP unless the implementer enters into a global licence of a multinational patent portfolio, and to determine the royalty rates and returns of that licence,” said Supreme Court judge Lord Hodge.
 
Unwired Planet and Conversant were, naturally, delighted by this outcome, with the latter’s CEO, Boris Teksler saying: “We are obviously extremely pleased at the decision of the UK Supreme Court on a topic fundamental to how IP is licensed in the Telecoms sector. The decision reflects the court’s deep understanding of the issues that affect our sector and encourages us to drive this industry forward.”
 
This decision could have greater legal ramifications for the UK itself, meaning that the country’s courts will continue to determine FRAND licences that apply worldwide. While this is certainly good news for lawyers, it could actually serve to drive some business away from the UK, according to some experts.
“While this decision means UK FRAND litigation may thrive, it could have a negative knock-on effect for UK consumer choice if companies opt to abandon or avoid the UK market, as this could result in a much-reduced range of products on sale compared with other countries,” explained , John de Rohan-Truba, Managing Associate at Marks & Clerk Law. “This would be especially disappointing when considering the potential technologies which could become prevalent with 5G.”
 
For now, this decision will be celebrated as a win for David over Goliath, giving the smaller companies in the telecoms sector some footing on which to fight back against their domineering rivals.
 
“This helps level the playing field when small companies are trying to license SEP portfolios to global giants with seemingly limitless litigation resources,” said Teksler.
 
 
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