Notes to accompany the TMT and FRAND Overview Slides

TMT: A SEP and FRAND Overview
Jane Lambert1
13 Aug 2024 16:00 - 16:45
1. Terminology
ETSI2
“European Telecommunications Standards Institute”, the SSO for mobile telecoms
FRAND Fair reasonable and non-discriminatory
Hold out Abuse by an implementer: using a SEP in order to comply with a standard but not
paying for such use
Hold up Abuse by a patentee: requiring an implementer to take a licence it does not want or on
unacceptable terms
Implementer User of a standard
PAE Patent assertion entity, also known as a non-practising entity, a business that acquires
SEP and licenses their use but does not necessarily take part in any other commercial
activity
RAND Reasonable and non-discriminatory (essentially the same as FRAND)
SEP Standard Essential Patent: a patent the use of which is essential for compliance with a
standard;
SSO Standard Setting Organizations such as ETSI and the ITU (International
Telecommunications Union) which sets technical standards for TMT
TMT Technology, media and telecommunications, the sector
Other glossaries are to be found at the IPO’s SEPs Resource Hub3
and proposed EU
regulation on SEP licensing.
3
2
https:https://www.gov.uk/guidance/glossary-of-terms//www.etsi.org/
1
4-5 Gray’s Inn Square, London, WC1R 5AH, Tel +44 (0)20 7404 5252 jane.lambert@nipclaw.com, www.nipclaw.com

2. Basic Principles
(1) Birss J said at para [83] of his judgment in Unwired Planet International Ltd v Huawei
Technologies Co. Ltd and another [2017] EWHC 711 (Pat) (5 April 2017)4
:
“The point of FRAND in standard setting is fairly easy to understand. Standards exist so that
different manufacturers can produce equipment which is interoperable with the result that the
manufacturers compete with one another. So the phone makers compete in the market for
phones and the public can select a phone from any supplier and be sure (for example) that if
it is a 4G phone, it will work with any 4G network. As a society we want the best, most up to
date technology to be incorporated into the latest standards and that will involve
incorporating patented inventions. While the inventor must be entitled to a fair return for the
use of their invention, in order for the standard to permit interoperability the inventor must not
be able to prevent others from using the patented invention incorporated in the standard as
long as implementers take an appropriate licence and pay a fair royalty. In this way a
balance is struck, in the public interest, between the inventor and the implementers. The
appropriate licence is one which is fair, reasonable and non-discriminatory. That way a
standard can safely incorporate the invention claimed in a patent without giving the inventor
or his successors in title unwarranted power over those who implement the standard. Thus
the public interest is served because telecommunication standards can be set using the best
and most up-to-date technical expedients available and the inventor’s private interest is
served because the FRAND undertaking ensures they or their successors will obtain a fair
reward for their invention."
(2) Lord Justice Arnold gave a more detailed explanation between paras [6] and [15] of
InterDigital Technology Corporation and others v Lenovo Group Ltd and others [2024] EWCA
Civ 743 (12 July 2024)5
:
[6] Standards exist so that different manufacturers can produce equipment which is
interoperable. This has a number of advantages, of which the following are probably the
most important. First, it enables different manufacturers to produce different components of a
system. This spreads the investment required and enables specialisation. Secondly, it
enables additional types of device to be connected to a system, producing network effects.
Thirdly, it means that manufacturers of the same type of device can compete with each other
on both quality and price. Fourthly, it gives users of devices that comply with the standard
the confidence that they will work anywhere. Standards are central to the development of
modern technology, and their advantages are now familiar to many people worldwide
through the development of telecommunications standards from 2G to 5G. As this example
shows, standards have enabled major technological advances to be rapidly developed and
commercialised in recent years. This has required huge investments to be made in research
and development.
[7] Standards are set by standards-development organisations ("SDOs"), also known as
standards-setting organisations ("SSOs"), such as ETSI. SDOs such as ETSI typically have
an intellectual property rights ("IPR") policy which requires companies participating in the
development of a new standard to declare when technical proposals they contribute are
covered by SEPs (or, more usually at that stage, applications for SEPs). A patent is said to
5
https://www.bailii.org/ew/cases/EWCA/Civ/2024/743.html
4
https://www.bailii.org/ew/cases/EWHC/Patents/2017/711.html

be standard-essential if implementation of the standard would necessarily involve
infringement of the patent in the absence of a licence. Once a proposal is declared to be
covered by a SEP, the patentee is required to give an irrevocable undertaking to grant
licences of the SEP on FRAND terms. If the patentee declines to give such an undertaking,
the proposal is not incorporated into the standard and some other technology is used
instead. In this way a balance is struck between the interests of patentees and of
implementers. Patentees are ensured a fair reward for the use of their inventions, and
implementers are guaranteed access to those inventions at a fair price. This balance is in
the public interest, because it encourages patentees to permit their inventions to be
incorporated into standards and it encourages implementers to implement those standards.
Because standards are global in nature, and are implemented by businesses which trade
globally, the obligation to license SEPs on FRAND terms is also a global one.
[8] In order to make IPR policies involving the licensing of SEPs on FRAND terms fully
succeed, there are two particular potential evils that must be avoided. Although terminology
is not entirely consistent, these evils are generally known as "hold up" and "hold out"
respectively. In simple terms, "hold up" occurs if a patentee is able to ensure that a SEP is
incorporated into a standard and implemented by implementers in circumstances which
enable the patentee to use the threat of an injunction to restrain infringement to extract
licence terms, and in particular royalty rates, which exceed the reasonable market value of a
licence of the patented invention (i.e. treating the SEP as akin to a "ransom strip" of land).
"Hold out" occurs if an implementer is able to implement a technical solution covered by a
SEP without paying the reasonable market value for a licence (or perhaps anything at all). It
will be appreciated that the FRAND undertaking is designed to prevent hold up by giving the
implementer a defence to a claim for infringement and hence to an injunction, while the
patentee's ability to obtain an injunction to restrain infringement of a SEP by an implementer
which is an unwilling licensee should prevent hold out.
[9] Avoidance of hold up and hold out depends upon the existence of a well-functioning
dispute resolution system, because it is in the interests of patentees to maximise the royalty
rates they can obtain for licensing their SEPs, while it is in the interests of implementers to
minimise the royalty rates they pay. In the absence of a negotiated agreement between a
patentee and an implementer as to the terms of a FRAND licence, which may be facilitated
but cannot be guaranteed by mediation, a dispute resolution system is required to resolve
disputes. The IPR policies of SDOs such as ETSI do not provide for any international
tribunal to determine such disputes. It follows that, in the absence of an agreement to
arbitrate, the only dispute resolution systems available to such parties are the national courts
competent to adjudicate upon patent disputes.
[10] It is generally accepted, however, that patents are territorial. That is to say, they are
proprietary legal rights created by the law of a nation state which confer a monopoly within
the territory of that nation state, but not outside it. (The unitary EU patent now confers a
monopoly within the territory of the participating EU Member States, but that does not detract
from the basic principle.) Thus an inventor wishing to patent their invention must apply for a
patent in every state in which they wish to obtain a monopoly: in any state where they do not
obtain a patent, the invention may be freely used by other parties. It follows that patentees
typically own families of corresponding patents in many countries of the world, although the
costs of patenting everywhere are generally prohibitive.
[11] The competence of the courts of one state to adjudicate upon a claim for infringement of
a patent granted by another state is a complex and contested question, but it is generally
accepted that, even if they have jurisdiction over the parties because of e.g. domicile, the

courts of state A are not competent to adjudicate upon a claim for infringement of a patent
granted by state B at least if the validity of that patent is in issue. This principle is enshrined,
for example, in Articles 24(4) and 27 of European Parliament and Council Regulation
1215/2012/EU of 12 December 2012 on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters (recast). Since it is commonplace for a claim for
patent infringement to be met with a defence and/or counterclaim that the patent is invalid,
the practical reality is that, for the most part, the courts of the state where the patent was
granted have exclusive jurisdiction over the enforcement of that patent. It follows that SEPs
must be enforced territory by territory.
[12] This gives implementers who wish to (as the patentee would put it) hold out against
taking a licence or (as the implementer would put it) resist exorbitant demands for a licence
an important tactical weapon, which is to require the patentee to sue in every jurisdiction
where the implementer exploits a patent family (or at least in a significant number of such
jurisdictions). This places a significant burden on patentees. Although it also places a similar
burden on implementers, the result is a war of attrition which tends to favour implementers
because it leads to delay in enforcement and hence the potential to starve patentees of
income from licensing.
[13] Patentees have reacted to this problem by seeking determinations that FRAND terms
are global, enabling the courts of one country to set the terms of a global FRAND licence
which the implementer must either accept or face exclusion from that country's market by an
injunction to restrain patent infringement. In recent years the courts of an increasing number
of countries have held that they have jurisdiction to determine the terms of a global FRAND
licence either with the consent of both parties or, in some cases since the precedent set in
Unwired Planet, without such consent. If the courts of a single country determine the terms
of a global FRAND licence, then that should (at least in theory) avoid the necessity for patent
enforcement proceedings in multiple countries (whether it will actually have that result
depends on whether the implementer is willing to forego exploitation of the patented
inventions in that territory in order to avoid having to take a licence on those terms). This
approach by patentees frequently gives rise to jurisdictional issues, but happily no such
issues have been raised in the present litigation.
[14] In addition to seeking determinations of FRAND terms on a global basis, it is common
for patentees to seek determinations as to the FRAND terms of a licence of a portfolio of
SEPs. Since it is often impracticable for the proprietor of such a portfolio to sue on all the
patents in the portfolio even though the claim is limited to the patents subsisting in the
country where the claim is brought, it is common for the patentee to select a handful of
patents to enforce. Although the real issue between the parties is as to the FRAND terms for
a licence of the portfolio, it is in the interests of the implementer where possible to challenge
validity, essentiality and infringement of the selected patents. Unless and until the patentee
can establish that at least one patent is valid, essential and has been infringed by the
implementer, the patentee cannot obtain an injunction to enforce the patent and thus cannot
prevent hold out by the implementer.
[15] This leads to a problem of how to case manage the litigation in an efficient and effective
manner. Trying all issues together in one trial would be very burdensome and impractical
both for the parties and for the court. Accordingly, until recently, the practice in England and
Wales has been to split the claim into a number of separate trials: first, a number of
"technical trials" to determine issues of validity, essentiality and infringement of the selected
patents, and then a "FRAND trial" to determine the FRAND terms for a licence of the
portfolio after all or some of the technical trials. As explained in more detail below, this is the

course that was adopted in the present case; but the large sums of money expended on the
technical trials turned out to have been wasted once Lenovo made a crucial concession.”
3. ETSI
3.1. ETSI is the standards-setting organization ("SSO") for telecommunications in the
European Union. Like similar SSOs in other parts of the world, it has an IP Rights
Policy.6
3.2. Art 6.1. of that Policy provides:
"When an ESSENTIAL IPR relating to a particular STANDARD or TECHNICAL
SPECIFICATION is brought to the attention of ETSI, the Director-General of ETSI shall
immediately request the owner to give within three months an irrevocable undertaking in
writing that it is prepared to grant irrevocable licences on fair, reasonable and
non-discriminatory terms and conditions under such IPR to at least the following extent:
● MANUFACTURE, including the right to make or have made customized components
and sub-systems to the licensee's own design for use in MANUFACTURE;
● sell, lease, or otherwise dispose of EQUIPMENT so MANUFACTURED;
● repair, use, or operate EQUIPMENT; and use METHODS.”
The above undertaking may be made subject to the condition that those who seek licences
agree to reciprocate."
4. Competition Law
(a) USA
§ 2 Sherman Act 1890
“Every person who shall monopolize, or attempt to monopolize, or combine or conspire with
any other person or persons, to monopolize any part of the trade or commerce among the
several States, or with foreign nations, shall be deemed guilty of a felony [. . . ] “
(b) EU
Art 102 Treaty on the Functioning of the European Union (“TFEU”):

“Any abuse by one or more undertakings of a dominant position within the internal market or
in a substantial part of it shall be prohibited as incompatible with the internal market in so far
as it may affect trade between Member States.

Such abuse may, in particular, consist in:
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading
conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties,
thereby placing them at a competitive disadvantage;
6
https://www.etsi.org/images/files/IPR/etsi-ipr-policy.pdf

(d) making the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage,
have no connection with the subject of such contracts.”
(c) UK
S.18 Competition Act 1998
"(1) Subject to section 19, any conduct on the part of one or more undertakings which
amounts to the abuse of a dominant position in a market is prohibited if it may affect trade
within the United Kingdom.
(2) Conduct may, in particular, constitute such an abuse if it consists in—
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading
conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties,
thereby placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage,
have no connection with the subject of the contracts.
(3) In this section—
'dominant position' means a dominant position within the United Kingdom; and
'the United Kingdom’ means the United Kingdom or any part of it.
(4) The prohibition imposed by subsection (1) is referred to in this Act as ‘the Chapter II
prohibition.’”
5. The Orange Book Case
Judgment of the Bundesgerichtshof (Federal Supreme Court) KZR 39/06 6 May 2009.7
This was a patent infringement action. D argued that it had a defence on the ground that it
had offered to take a licence on non-discriminatory and non-restrictive terms.

Held: D was entitled to such a defence but it had to promise to take a licence on those terms
and abide by them.
6. Huawei v ZTE
In Case C‑170/13 Huawei Technologies Co. Ltd. v ZTE Corp and another [2015] 5 CMLR 14,
EU: C:2015:477, [2016] RPC 4, [2015] EUECJ C-170/13, ECLI:EU: C:2015:477(16 July
2015)8
Huawei Technologies Co. Ltd. ("Huawei"), was the proprietor of a SEP for the
"long-term evolution standard". Huawei indicated its willingness to grant a licence on FRAND
terms to users of the standard. ZTE Corporation and its German subsidiary ZTE
Deutschland GmbH (“ZTE”). ZTEundertook to take a FRAND licence but argued over the
royalty rate and other terms. It started to supply goods that complied with the standard
before it had reached an agreement with, or indeed paid any money to, Huawei.
8
https://curia.europa.eu/juris/document/document.jsf?docid=165911&doclang=en or
https://www.bailii.org/eu/cases/EUECJ/2015/C17013.html
7
http://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=en&sid=acea256584d0e420272381a9
d0c7a57a&nr=48134&pos=0&anz=1

Huawei sued ZTE for patent infringement in the Dusseldorf Landgericht seeking injunctions
and other relief.
As part of its defence, ZTE pleaded that the claimant's refusal to grant a licence on terms
that were acceptable to it amounted to an abuse of a dominant position. Relying on the
Bundesgerichtshof’s decision in the Orange Book case, Huawei argued that the ZTE
companies were not entitled to that defence because they had not complied with the
conditions set by the Bundesgerichtshof in the Orange Book.
The Landgericht referred the following questions to the Court of Justice of the European
Union under art 267 of the Treaty on the Functioning of the European Union:
“(1) Does the proprietor of [a SEP] which informs a standardisation body that it is willing to
grant any third party a licence on [FRAND] terms abuse its dominant market position if it
brings an action for an injunction against a patent infringer even though the infringer has
declared that it is willing to negotiate concerning such a licence?

Or Is an abuse of the dominant market position to be presumed only where the infringer has
submitted to the proprietor of the [SEP] an acceptable, unconditional offer to conclude a
licensing agreement which the patentee cannot refuse without unfairly impeding the infringer
or breaching the prohibition of discrimination, and the infringer fulfils its contractual
obligations for acts of use already performed in anticipation of the licence to be granted?
(2) If abuse of a dominant market position is already to be presumed as a consequence of
the infringer’s willingness to negotiate:
Does Article 102 TFEU lay down particular qualitative and/or time requirements in relation to
the willingness to negotiate? In particular, can willingness to negotiate be presumed where
the patent infringer has merely stated (orally) in a general way that it is prepared to enter into
negotiations, or must the infringer already have entered into negotiations by, for example,
submitting specific conditions upon which it is prepared to conclude a licensing agreement?
(3) If the submission of an acceptable, unconditional offer to conclude a licensing agreement
is a prerequisite for abuse of a dominant market position:
Does Article 102 TFEU lay down particular qualitative and/or time requirements in relation to
that offer? Must the offer contain all the provisions which are normally included in licensing
agreements in the field of technology in question? In particular, may the offer be made
subject to the condition that the [SEP] is actually used and/or is shown to be valid?

(4) If the fulfilment of the infringer’s obligations arising from the licence that is to be granted
is a prerequisite for the abuse of a dominant market position:

Does Article 102 TFEU lay down particular requirements with regard to those acts of
fulfilment? Is the infringer particularly required to render an account for past acts of use
and/or to pay royalties? May an obligation to pay royalties be discharged, if necessary, by
depositing a security?

(5) Do the conditions under which the abuse of a dominant position by the proprietor of [a
SEP] is to be presumed to to apply also to an action on the ground of other claims (for
rendering of accounts, recall of products, damages) arising from a patent infringement?"
The CJEU replied:
"1. Article 102 TFEU must be interpreted as meaning that the proprietor of a patent essential
to a standard established by a standardisation body, which has given an irrevocable
undertaking to that body to grant a licence to third parties on fair, reasonable and
non-discriminatory (‘FRAND’) terms, does not abuse its dominant position, within the
meaning of that article, by bringing an action for infringement seeking an injunction
prohibiting the infringement of its patent or seeking the recall of products for the manufacture
of which that patent has been used, as long as:
● prior to bringing that action, the proprietor has, first, alerted the alleged infringer of the
infringement complained about by designating that patent and specifying the way in
which it has been infringed, and, secondly, after the alleged infringer has expressed its
willingness to conclude a licensing agreement on FRAND terms, presented to that
infringer a specific, written offer for a licence on such terms, specifying, in particular,
the royalty and the way in which it is to be calculated, and
● where the alleged infringer continues to use the patent in question, the alleged
infringer has not diligently responded to that offer, in accordance with recognised
commercial practices in the field and in good faith, this being a matter which must be
established on the basis of objective factors and which implies, in particular, that there
are no delaying tactics.
2. Article 102 TFEU must be interpreted as not prohibiting, in circumstances such as those in
the main proceedings, an undertaking in a dominant position and holding a patent essential
to a standard established by a standardisation body, which has given an undertaking to the
standardisation body to grant licences for that patent on FRAND terms, from bringing an
action for infringement against the alleged infringer of its patent and seeking the rendering of
accounts in relation to past acts of use of that patent or an award of damages in respect of
those acts of use."
7. Unwired Planet Litigation
Unwired Planet International Ltd. is a PAE. In 2013 it acquired 2,185 patents or patent
applications from Ericsson, many of which are SEPs for ETSI’s 2G, 3G and 4G mobile
networks. Unwired licenses its patents to phone makers and telecoms companies. Unwired
Planet invited Huawei, Samsung and Google to take a licence for 5 patents which it alleged
to be essential for compliance with ETSI. There was an exchange of offers and
counter-offers but the parties were unable to reach agreement on the terms. Huawei denied
that those patents were valid, essential for compliance with the standard or that they had
been infringed. On 10 March 2014 Unwired Planet issued proceedings for patent
infringement.
8. Case Management
Birss J ordered:

● separate trials on whether Unwired’s patents had been infringed, whether they were
essential to ETSI standard and whether the patents were valid during 2015 and 2016
known as “the technical trials”, and
● a further trial on whether the terms offered by each side were FRAND and whether
there had been an infringement of art 102 TFEU known as “the non-technical trial”,
All those trials were docketed before Birss J.
Unwired won 2 of those technical trials and Huawei won the others.
9. The Non-Technical Trial
The purpose of the non-technical trial was to determine the parties’ rights in respect of the
patents that Birss J had found to be valid and essential to ETSI’s standards and likely to
have been infringed.
The issues were whether:
● either party’s terms were FRAND; and
● whether Unwired Patent had infringed art 102 TFEU by taking these proceedings.

Birss J delivered two judgments:
● Unwired Planet International Ltd v Huawei Technologies Co. Ltd and another [2017]
EWHC 2988 (Pat), [2017] RPC 19, [2018] 4 CMLR 179
and
● Unwired Planet International Ltd v Huawei Technologies Co Ltd and another [2017]
EWHC 1304 (Pat) (7 June 2017).[2017] RPC 20, [2017] EWHC 1304 (Pat)10
in April and June 2017 respectively.
10. The April Judgment
In a judgment that was 807 paragraphs long, Birss J held that he had jurisdiction to grant
worldwide licences on FRAND terms because of the patentees’ undertakings to ETSI. He
could compel implementors to accept those terms because he could restrain them from
working the UK patents if they refused. He decided that neither Unwired’s offer of 24 April
2014 nor Huawei’s counter-offers was FRAND. He also said that competition law was
irrelevant because his jurisdiction derived from art 6.1 of the ETSI IPR Policy and not from
art 102 TFEU.
11. The June Judgment
Having decided that neither Unwired nor Huawei had offered FRAND terms Birss J drafted
his own licence a copy of the licence appears at the end of the judgment. He restrained
Huawei from infringing Unwired’s patents which were essential and valid unless Huawei
accepted the judge’s licence.
12. Huawei’s Appeal in Unwired Planet
10
9

Huawei appealed to the CA against both the April and June judgments on the grounds that:
● a UK court cannot settle worldwide patent licences;.
● Huawei should have been offered a licence on the same terms as the one that
Unwired Planet had offered to Samsung and anything else was discriminatory, and
● Huawei had a defence under art 102 TFEU to Unwired’s patent infringement action.
In Unwired Planet International Ltd and another v Huawei Technologies Co Ltd and another
(Rev 1) [2018] RPC 20, [2018] EWCA Civ 2344 (23 Oct 2018),11
CA upheld Birss J and
dismissed the appeal.
CA held that the judge had not erred in granting a worldwide licence. Huawei had impliedly
undertaken to accept such a licence in order to use Unwired Planet’s portfolio. Birss J was
merely determining the meaning and effect of the undertaking.
As to the second ground, the circumstances in which the Samsung licence had been granted
were different from those of the present case. The licence offered to Huawei was therefore
not discriminatory,
The CA did not believe that Unwired had abused a dominant position in seeking an
injunction without following the procedure set out by the CJEU in Huawei v ZTE. The CJEU
had expressly recognized that account must be taken of the actual circumstances of the
case when determining whether a course of conduct such as bringing infringement
proceedings without following the steps set out in Huawei. Courts in other member states
had reached a similar conclusion.
13. Conversant Wireless Litigation
Conversant Wireless Licensing SARL12
is another PAE, It describes itself as follows on its
website:
“Conversant Wireless Licensing (formerly Core Wireless) holds one of the world’s largest
patent portfolios related to mobile communications networks. With patents filed in more than
20 jurisdictions, this premier portfolio has more than 350 patents and applications that have
been declared to be essential to the operation of 2G, 3G and emerging 4G Long-Term
Evolution (LTE) mobile networks, and 500 wireless implementation patents that are used in a
range of wireless systems and products. All 900 patents and applications were originally filed
by Nokia, a renowned innovator and widely acknowledged key contributor to the
development of mobile telephony.”
Conversant offered Huawei and ZTE licences to work the SEP in its portfolio on FRAND
terms. When those companies refused the offer it brought patent infringement proceedings
against them.
14. Huawei’s Challenge to the Jurisdiction
12
http://www.core-wireless.com/
11

in Conversant Wireless Licensing SARL v Huawei Technologies Co. Ltd and others [201]
8RPC 16, [2018] EWHC 808 (Pat)(16 April 2018)13
challenged the jurisdiction of the English
courts on the following grounds:
● “The English court has no jurisdiction to decide these claims which are, in substance
and effect, claims for infringement of foreign patents, the validity of which is in dispute.
● Alternatively, the court should decline to exercise jurisdiction to decide the claims,
because England is not the proper or appropriate forum (forum non conveniens) and
China is the natural forum.
● Huawei China and ZTE China had not been validly served in England.
● Applications by Conversant for permission to serve out of the jurisdiction on Huawei
China and ZTE China and for substituted service should be refused.”
Henry Carr J rejected the challenge and set out his reasons at [117] of his judgmentL

“i) the Defendants' application to dismiss these claims on the basis that they are
non-justiciable is rejected;
ii) England is clearly and distinctly the most appropriate forum in which to bring these claims.
Accordingly, the Defendants' application to stay the claims on the basis of forum non
conveniens is rejected;
iii) Huawei China and ZTE China have not been served in England;
iv) the claims are within at least Gateways 2 and 11 of PD6B 3.1;
v) there is a serious question to be tried on the merits;
vi) I give permission for service out of these proceedings and a mechanism for substituted
service has been agreed;
vii) accordingly, these claims shall continue in this jurisdiction.”

15. Huawei’s Appeal in Conversant
Huawei appealed to CA in Huawei Technologies Co, Ltd v Conversant Wireless Licensing
S.A.R.L. [2019] EWCA Civ 38, [2019] RPC 6 (30 Jan 2019)14
on the following grounds which
Floyd LJ set out in para [2] of his judgment:
“First, they say that the claim brought against them is not justiciable in the English court.
That is because the dispute, in addition to raising issues concerning the validity and
infringement of Conversant's UK patents in suit, also relates to the validity of Conversant's
foreign patents, and the validity of foreign patents is not justiciable subject matter in the
English court. Secondly, they say that the English court is not the natural or an appropriate
forum for the claims against them. They contend that the Chinese court is the natural and
appropriate forum and that the English court ought to refuse service out of the jurisdiction on
Huawei China and ZTE China and stay the proceedings against Huawei UK and ZTE UK on
the ground of forum non conveniens.”
CA could find no fault with Carr J’s reasoning and dismissed the appeal.
16. The Appeals to the Supreme Court
14
13

Huawei appealed to the UK Supreme Court against the CA’s judgments in Unwired Planet
and Conversant Wireless. ZTE also appealed against the judgment in Conversant
Wireless. The Court heard all three appeals between 21 and 24 Oct 2019 and delivered
judgment in Unwired Planet International Ltd and another v Huawei Technologies (UK) Co
Ltd and another [2020] Bus LR 242, [2020] UKSC 37 (26 Aug 2020).15
The Court set out the issues in para [1] of its judgment:
"The first (in all three appeals) is whether a court in the United Kingdom (“UK”) has
jurisdiction and may properly exercise a power, without the agreement of both parties, to (a)
grant an injunction to restrain the infringement of a UK patent where the patented invention
is an essential component in an international standard of telecommunications equipment,
which is marketed, sold and used worldwide unless the implementer of the patented
invention enters into a global licence of a multinational patent portfolio, and (b) determine
royalty rates and other disputed terms of such a global licence. Secondly, there is a dispute
(in the Conversant appeals: ........) whether England is the appropriate forum to determine
those matters. Thirdly, (in the Unwired appeal: ........) there is a question as to the nature of
the requirement that the licence, which the owner of a Standard Essential Patent (“SEP”)
must offer to an implementer, be non-discriminatory. Fourthly, (again in the Unwired appeal)
there is a question whether the court should refuse to grant the owner of such a SEP an
injunction on the ground that it has breached EU competition law because it has not
complied with the guidance given in the judgment of the Court of Justice of the European
Union (“CJEU”) in Huawei v ZTE (Case C-170/13) EU:C:2015:477; [2015] 5 CMLR 14;
[2016] RPC 4. Fifthly, the appeals raise a more general question as to the circumstances in
which it is appropriate for an English court to grant a prohibitory injunction or to award
damages instead."

"Issue 1: Whether the English courts have jurisdiction and may properly exercise a
power without the agreement of both parties (a) to grant an injunction restraining the
infringement of a UK SEP unless the defendant enters into a global licence on FRAND
terms of a multinational patent portfolio and (b) to determine royalty rates and other
disputed items for a settled global licence and to declare that such terms are FRAND."
(paras [50] - [91])
The Court listed Huawei's objections to the lower courts' finding that an implementer must
take a worldwide licence on FRAND terms to avoid an injunction against infringing a SEP
designating the UK:
1. It is unfair to deprive an implementer of the right to challenge the validity, essentiality
and infringement of a foreign patent.
2. English courts fix terms for licensing foreign patents which the courts of the countries
concerned might not necessarily set.
3. English courts are out of step with the decisions of courts in other
4. The policy limits the remedies available to the patentee because the consideration for
a FRAND licence is in lieu of all other remedies including injunctions and heavier
damages.
15
https://www.bailii.org/uk/cases/UKSC/2020/37.html

5. The remedy of an injunction excluding an implementer's goods from the UK market is
disproportionate.
ZTE supported Huawei's submissions but added that purporting to offer worldwide terms for
the licensing of foreign patents usurped foreign courts' jurisdiction.
At para [58] the Court acknowledged:
"(a) that questions as to the validity and infringement of a national patent are within the
exclusive jurisdiction of the courts of the state which has granted the patent and (b) that in
the absence of the IPR Policy an English court could not determine a FRAND licence of a
portfolio of patents which included foreign patents. It is the contractual arrangement which
ETSI has created in its IPR Policy which gives the court jurisdiction to determine a FRAND
licence and which lies at the heart of these appeals."
The Court rejected Huawei and ZTE's argument as unbalanced. It was too favourable to
implementers and did not take full account of the rights of patentees. Confining the
jurisdiction of the English courts to the licensing of UK or European patents designating the
UK would contradict the policy of ETSI which is to make the patented technology available to
every implementer while ensuring every patentee a reasonable return. The English courts
are not usurping the jurisdiction of foreign courts because they are enforcing a contract and
making no finding of the validity of the foreign patents or whether they have been infringed.
The Supreme Court reviewed the judgments of foreign courts and found no disparity
between the approach of those courts and the approach of Mr Justice Birss and the Court of
Appeal.
Huawei had criticized the involvement of PAEs that exploit vast patent portfolios for
inventions that they did not create for products that they do manufacture, The European
Commission had expressed concern over such entities as had the US courts. The Court
said at para [90] that it was aware of the possibility of abuse. However, it added:
"In our view, however, the rights which PAEs acquire through the transfer by assignment of
patents are the same as those which the assignor patent owners had held: assignatus utitur
iure auctoris - that which is assigned possesses for its use the rights of the assignor or
cedent. In some cases, the assignment of rights to a PAE and the reservation of a share of
the royalties which it negotiates or obtains through litigation may be the most straightforward
means by which a SEP owner can obtain value from its intellectual property which is the fruit
of its research and innovation, and if the rights are treated as qualified in the hands of the
PAE the consequence will be that the SEP owner will not receive the reward which its
investment merits. In the exercise of those rights in pursuit of a FRAND licence the assignee
PAE, like the assignor patent owner, must act fairly and reasonably as FRAND is an
obligation which governs the process of negotiation as well as the outcome of the
determination of a FRAND licence. There is no legal basis under the general law for treating
PAE owners of SEPs differently from other SEP owners unless they have different interests
which merit different remedies. In so far as the risk of the grant of injunctions may be
necessary to achieve the balance which the IPR Policy promotes, it is not evident that a PAE
should necessarily be treated differently from a SEP owner who manufactures and sells

telecommunications equipment. SEP owners have an interest in making sure that the ETSI
regime is enforced."
In any event, the point was irrelevant to the question of jurisdiction.
Issue 2: Whether England is the appropriate forum to determine those matters (paras
[92] - [105])
Huawei and ZTE contended that even if the English courts had jurisdiction to determine a
worldwide FRAND licence the proceedings should be stayed on the grounds that China was
a more appropriate forum. Alternatively, they argued that an English court should not grant
an injunction in the English proceedings until a Chinese court had ruled on the issues in
dispute.
The Court rejected both contentions. The litigation was essentially about the enforcement of
UK patents to which acceptance of a licence on FRAND terms was a possible defence. The
terms of a licence might conceivably fall within the jurisdiction of the Chinese courts but the
validity of a UK patent and whether it had been infringed certainly could not. Furthermore,
Henry Carr J could find no evidence that the Chinese courts had jurisdiction to determine the
terms of a global licence without the agreement of all parties. English courts, on the other
hand, did have jurisdiction to determine that issue.
The question over the injunction fell within the trial judge's discretion. It could not be
interfered with unless it was wrong. The Supreme Court at [103] said that CA's approach
on the question (and by implication the court below) could not be faulted.
Issue 3: FRAND and non-discrimination (paragraphs [106] - [127])
This issue is better explained by the Supreme Court's website:
"What is the meaning and effect of the non-discrimination component of the FRAND
undertaking and does it mean that materially the same licence terms as offered to Samsung
must be offered to Huawei in the circumstances of the Unwired case?"
On 28 July 2016, Samsung was offered a licence at a lower royalty than Birss J had set in
the draft agreement at the end of his judgment of 7 June 2017 (see Unwired Planet
International Ltd v Huawei Technologies Co Ltd and another [2017] EWHC 1304 (Pat),
[2017] RPC 20). Huawei argued that a licence at a higher royalty than Samsung could not,
by definition, be non-discriminatory.
The Supreme Court rejected that contention. They agreed with Birss J and CA that a duty
not to discriminate should not be viewed in isolation. The principles of fairness,
reasonableness and non-discrimination had to be considered together. It was possible for
an agreement to be less favourable than a previous one in a particular regard such as
royalty rates but still be FRAND. There was evidence that ETSI had contemplated a
requirement that licences should be offered on "the most favourable terms" but that idea was
dropped.

Issue 4: Competition law and the CJEU’s judgment in Huawei v ZTE (paras [128] -
[158])

Huawei argued that Unwired Planet had not complied with the conditions set out by CJEU in
Huawei v ZTE and that the courts had no jurisdiction to grant an injunction.
There had been negotiations between Unwired Planet and Huawei on the terms of a
possible licence in accordance with ETSI's policy before Unwired Planet launched
proceedings against Huawei but Huawei objected to the validity of several of Unwired
Planet's patents and questioned whether they were essential to ETSI's standard and
whether they had been infringed. Huawei also objected to the terms of the licence that it had
been offered.
In Unwired Planet International Ltd v Huawei Technologies Co. Ltd and another [2017]
EWHC 711 (Pat) Birss J held that the Court of Justice's conditions had been complied with
and that Unwired Planet's action was not an abuse of a dominant position. CA agreed with
him. The Supreme Court held at [149] that the courts below had interpreted the Court of
Justice's ruling correctly.
In reaching their decision, the Supreme Court acknowledged at [150] that:
"Bringing “an action for a prohibitory injunction … without notice or prior consultation with the
alleged infringer” will amount to an infringement of article 102, as para 60 of the CJEU’s
judgment sets out. In that paragraph, the language used is absolute: the SEP owner
“cannot” bring the action without infringing the article."
However, "the nature of the notice/consultation that is required must depend upon the
circumstances of the case."
Such an approach was consistent with the Court's decision in Case C-209/10, Post Danmark
A/S v Konkurrencerådet EU:C:2012:172, ECLI:EU:C:2012:172, [2012] EUECJ C-209/10 and
the Commission's decision in Motorola (Summary of Commission Decision of 29 April 2014
relating to a proceeding under Article 102 of the Treaty on the Functioning of the European
Union and Article 54 of the EEA Agreement (Case AT.39985 — Motorola — Enforcement of
GPRS standard essential patents) (notified under document number C(2014) 2892 final) OJ
C 344, 2.10.2014, p. 6–8. The Supreme Court concluded at paragraph [158]:
"Given that we share Birss J’s interpretation of the CJEU’s judgment, we see no reason to
interfere with his assessment that Unwired had not behaved abusively. He found that
sufficient notice was given to Huawei before the injunction application was made. He
properly evaluated the course of the negotiations between the parties in light of what the
CJEU had said. There was no mandatory requirement that Unwired itself make an offer of
terms which coincided with those that were ultimately determined by the court to be FRAND.
Apart from the more general points that we have made earlier, in rejecting the argument that
the CJEU’s scheme was mandatory, such an absolute requirement to hit the target precisely
with an offer could not sit easily alongside para 68 of the CJEU’s judgment, which
contemplates determination of the amount of the royalty by an independent third party. What
mattered on the facts of this case was that Unwired had shown itself willing to license

Huawei on whatever terms the court determined were FRAND, whereas Huawei, in contrast,
had only been prepared to take a licence with a scope determined by it."
Issue 5: The equitable jurisdiction to award a prohibitory injunction (paras [159] - [169])
The fifth issue was whether it was appropriate in all the circumstances of the case to award
an injunction. It was an argument that was raised for the first time before the Supreme Court.
Huawei contended that Unwired Planet and Conversant Wireless were patent assertion
entities whose primary interest is maximizing the revenue from their portfolio. An award of
damages based on the appropriate patent licence fee could satisfy that need far better than
a patent which would disrupt Huawei's business in the UK. The Supreme Court rejected that
argument. Although discretionary, an injunction is the usual remedy for patent infringement.
In a FRAND case, it is the only tool by which a court may leverage an implementer into
accepting a licence and this refrain from holding out.
Conclusion (paras [170] to [171])
For all these reasons the Court dismissed the appeals.
17. TQ Delta, LLC v Zyxel Litigation
In July 2017 TQ Delta sued Zyxel Comms for the infringement of EP1453268 and
EP1792430 which TQ Delta declared to be SEPs. Zyxel denied infringement and challenged
the validity and essentiality of the patents but undertook in their defence to accept RAND
licences if the patents were held to be valid and infringed.
On 21 Nov 2017 Henry Carr J ordered a technical trial to determine whether EP1453268 and
EP1792430 were valid, essential and infringed and a non-technical trial to determine the
terms of any licence agreement.
In TQ Delta, LLC v ZYXEL Communications Ltd and another [2019] EWHC 562 (Pat) (11
March 2019)16
Henry Carr J found that EP1453268 was valid and infringed but EP1792430
was invalid. As EP1453268 had only a few months to run the Zyxel companies decided they
did not need a licence and were prepared to accept an injunction and inquiry as to damages.
Henry Carr J granted C an injunction and enquiry as to damages even though EP1453268
had only a few months to run in TQ Delta LlC v Zyxel Communications Ltd and another
[2019] EWHC 745 (Pat) (18 March 2019)17
Immediately after the Zyxel companies had refused its offer of a licence, TQ Delta issued
new patent infringement proceedings. The Zyzel companies applied unsuccessfully to Birss
J to strike out the new proceedings on grounds of res judicata and vacate the non-technical
trial in TQ Delta, LLC v Zyxel Communications UK Ltd and another [2019] EWHC 1089 (Pat)
(17 April 2019).18
18
17
16

CA allowed TQ’s appeal and vacated the trial in TQ Delta, LLC v Zyxel Communications UK
Ltd and another [2019] EWCA Civ 1277 (18 July 2019)19
18. Asustek’s Application
In Koninklijke Philips NV v Asustek Computer Inc and others [2020] EWHC 29 (Ch) (17 Jan
2020)20
The first three defendants offered to submit to an injunction and enquiry and applied
to Marcus Smith J to release it from a non-technical trial on the grounds that it had only a
small market in the UK and could live without Philips’s patent.
The judge refused the application. He distinguished CA’s decision in TQ Delta, LLC v Zyxel
Communications UK Ltd and another [2019] EWCA Civ 1277 on the grounds that damages
were a live issue in Philips’s case and these could only be determined by a trial on the
damages payable pursuant to a FRAND licence.
19. Nokia Technologies v Oneplus Technology
In Nokia Technologies OY and another v Oneplus Technology (Shenzhen) Co., Ltd and
others (Rev1) [2021] EWHC 2952 (Pat),21
Judge Hacon refused to stay infringement
proceedings in England to abide by the outcome of proceedings in China to determine the
terms of a FRAND licence for the claimants' patent portfolio on the basis that China was the
more appropriate forum.
The defendants appealed on the grounds that Unwired Planet was no longer good law in
view of the decision of the Chinese Supreme Court in Guangdong OPPO Mobile
Telecommunications Corp. Ltd v Sharp Corporation (2020) Zui Gao Fa Zhi Min Xia Zhong
No. 51722
that the Chinese courts had jurisdiction to grant FRAND licences and that the
Brussels Recast Regulation no longer applied to the UK. In Nokia Technologies OY and
another v Oneplus Technology (Shenzhen) Co Ltd and others [2022] EWCA Civ 947,23
CA
upheld Judge Hoacon’s decision in that the case had been characterized correctly as a
patent infringement action.
20. A Second FRAND Judgment
In Interdigital Technology Corp and others v Lenovo Group Ltd and others [2023] EWHC 1578
(Pat)24
Mellor J was asked to settle the terms on which the Lenovo Group Ltd and other
defendants should take a licence from InterDigital Technology Corp and the other claimants'
to use patents that had been declared essential to ETSI’s 3G, 4G and 5G standards This
was only the second time that an English court had been called upon to determine what
terms were fair, reasonable and non-discriminatory in a licence between SEP holders and
implementers.
24
23
22
https://www.chinajusticeobserver.com/law/x/sharp-corp-v-guangdong-oppo-mobile-telecommunications-20210819
21
20
https://www.bailii.org/ew/cases/EWHC/Ch/2020/29.html
19

21. The InterDigital Technical Trials

The court had directed 5 technical trials lettered 'A' to 'E and a FRAND trial.. Trials A and B,
took place before the FRAND trial, and two technical trials took place afterwards, Trials C
and D. InterDigital prevailed in Trial A ([2021] EWHC 2152 (Pat)) and on appeal ([2023]
EWCA Civ 34). Lenovo prevailed in Trial B ([2022] EWHC 10 (Pat)), but InterDigital
succeeded on appeal ([2023] EWCA Civ 105). InterDigital prevailed in Trial C ([2023] EWHC
172 (Pat)), and Lenovo did not appeal. After Mellor J had circulated his draft judgment in
the FRAND trial, the parties agreed that he did not need to deliver judgment in Trial D or try
Trial E. That was because Lenovo undertook to take a licence to InterDigital's portfolio on
such terms as the court might ultimately determine to be FRAND.
22. The InterDigital FRAND Trial
The trial proceeded on the basis that there was at least one patent that was valid, essential
to at least one of the standards and likely to be infringed through compliance with at least
one of the standards. InterDigital had offered worldwide licences for the use of its patents
(including past infringements at $US 337 million. Lenovo counter-offered a lump sum of
$80m +/-15% for all sales in the 6-year term to the end of 2023 with a full release for all past
sales for no additional consideration.
The judge assessed the lump sum for a FRAND licence to the end of 2023 at $138.7 million
plus accrued compound interest at 4%. He held that neither InterDigital’s 5G offer nor
Lenovo’s lump sum offer mentioned above was FRAND or within the FRAND range. He
granted Interdigital an injunction against infringing its SEPs subject to Lenovo's paying the
lump sum and taking a FRAND licence.
23. Future Conduct of FRAND Litigation in England
The InterDigital trial took place over 17 days with an allocated 4 days of pre-reading, 2 of
which were interspersed between hearing days. The judge was supplied with over 50
bundles of documents, with further bundles of cross-examination materials. The opening
skeleton arguments and annexes comprised over 360 pages, with the closing skeleton
arguments a further 400.
To save time and costs in future, Mellor J made the following recommendations:
● The parties should make every effort to ensure that forensic experts use the same data
source(s). The use of different data sources by the experts had given rise to
considerable and unnecessary complications. Data sources should be identified at an
early stage and the parties should endeavour to agree them. If they could not agree,
then the Court could rule.
● There should be much tighter case management. Experiments like the top-down
cross-check should be recognized for what they were and an informed decision could
be reached as to whether they were justified.
● The pre-trial review should identify the issues and make adequate provisions for
dealing with them. The PTR in this case had lasted only half a say which proved to be
inadequate.
● Estimates should be kept under review and updated from time to time.

● Litigants must endeavour to focus only on issues which really matter.
● Early in the litigation, parties to a FRAND action should agree:
○ early disclosure of potentially comparable licences under a court-monitored
confidentiality regime and
○ a stay of the action to allow the parties to negotiate on the basis of the
information then available, and
○ if those negotiations do not succeed after a limited time, then the action may
continue.
Also, in para [18] of his judgment, Mellor J said that the decisions as to the validity and
essentiality of the patents considered in the technical trials had played no part in his
assessment of FRAND terms. So long as the claimant has at least one patent that is valid,
essential to the standard and infringed, it is no longer necessary for the courts to direct these
expensive preliminary trials.
24. The InterDigital Appeal
Both InterDigital and Lenovo appealed against Mellor J’s judgment. InterDigital contended
that the consideration for the licence was too low because the judge had taken a per unit
rate that had been heavily discounted. It sought a lump sum of $388.5 million. Lenovo
argued that the finding was too high because it should have taken account of the limitation
period and should not have included interest.
The appeal came on before Arnold, Nugee and Birss LJJ. It will be recalled that Birss LJ
drafted the FRAND licence that had been annexed to his judgment in Unwired Planet
International Ltd v Huawei Technologies Co Ltd and another [2017] EWHC 1304 (Pat) (7
June 2017).[2017] RPC 20, [2017] EWHC 1304 (Pat).
Their lordships handed down judgment in InterDigital Technology Corporation and others v
Lenovo Group Ltd and others [2024] EWCA Civ 74325
which it handed down on 12 July
2024.

CA allowed InterDigital’s appeal to the extent that it increased the lump sum from $138.7
million to $178.3 million.

It dismissed Lenovo’s appeal on the ground that limitation was irrelevant to the determination
of the appropriate licence fee for the use of a patent within a defined period on the basis that
the negotiation was between a willing patent owner and a willing implementor negotiating in
good faith at arm's length. The court was not awarding damages but making a
determination, It agreed that there was no statutory or power in equity or common law to
award interest but interest was something that a willing implementor would be prepared to
pay,

25. FRAND Litigation in China
25

In Guangdong OPPO Mobile Telecommunications Corp. Ltd v Sharp Corporation (2020) Zui
Gao Fa Zhi Min Xia Zhong No. 51726
the Chinese Supreme Court held that the Chinese
courts had jurisdiction to grant worldwide FRAND licences.
26. FRAND Litigation in India
The Delhi High Court delivered India’s first FRAND determination in Lava International Ltd. v
Telefonaktiebolaget L M Ericsson (28 March 2024).27
It held that several of Ericsson’s
patents were valid and infringed and that Lava was liable to Ericsson in the sum of Rs. 2.4
billion (Rs. 244,07,63,990/-).
27 European Commission’s Proposed Regulation for SEP Licensing
The Commission has announced that it is working on a new framework for SEP. A
consultation took place between 14 Feb and 8 May 2022. There were 157 responses which
have been published on the Commission website.
On 27 April 2023, the Commission published its proposal for a Regulation of
the European Parliament and of the Council on standard essential patents and amending
Regulation (EU)2017/1001.
The proposed Regulation would consist of 72 articles divided into 10 Titles:
● Title I determines the subject matter and the scope of the proposal:
○ enhanced transparency with regard to information necessary for SEP licensing;
○ registration of SEPs;
○ procedure for evaluating the essentiality of registered SEPs; and
○ a procedure for the determination FRAND terms and conditions for a SEP
licence.
● Title II establishes a “competence centre” within the European Union Intellectual
Property Office (“EUIPO”) to administer databases, a register and the procedures for
essentiality checks of SEPs and the FRAND determination. The competence centre
will also provide training, support and general advice on SEPs to SMEs and raise
awareness of SEP licensing.
● Title III provides a process for notifying standards and aggregate royalty, registration of
SEPs and expert opinion on aggregate royalty. It also includes provisions concerning
the information and data that the competence centre would include in the register and
databases. Registration will be subject to a fee.
● Title IV contains rules for the selection of candidate evaluators and conciliators to carry
out tasks assigned to them in proceedings under the proposed regulation.
● Title V provides for essentiality checks of SEPs. Determining whether a patent is
essential to a standard is a very difficult technical task which is usually achieved in
England by technical trials. Essentiality checks are very important to ensure the quality
of the register and also to prevent abuse. Essentiality checks will be subject to a fee
27
https://dhccaseinfo.nic.in/jsearch/judgement.php?path=dhc/ABL/judgement/03-04-2024/&name=ABL28032024SC652016_2134
06.pdf
26
https://www.chinajusticeobserver.com/law/x/sharp-corp-v-guangdong-oppo-mobile-telecommunications-20210819

payable by the SEP holders whose SEPs are checked and by the implementers who
request such checks.
● Title VI establishes procedures for determining FRAND terms and conditions. The
FRAND determination must be initiated by either a SEP holder or an implementer
before initiating respective court proceedings in the EU.
● Title VII contains special provisions for micro-enterprises and SMEs. The competence
centre will offer training and provide support on SEP-related matters for such
businesses free of charge.
● Title VIII provides rules on fees and charges for the services of the competence centre.
● Title IX of the proposal contains final provisions such as amendments of the EU Trade
Mark Regulation (Regulation (EU) 2017/1001).
28. IPO Consultation
The IPO carried out a consultation on SEP licensing between 7 Dec 2021 and 1 March
2022. A list of respondents appears on page 88 of A Summary of Responses to the Call for
Views which was published on 5 Aug 2022. I discussed the responses in Consultation on
SEPs and Innovation: The Responses on 13 Aug 2022. The IPO received 56 responses
expressing a wide range of divergent views from both SEP holders and implementers. On 21
March 2023, the IPO launched a SEPs questionnaire for SME, small-cap and mid-cap
businesses which I discussed in IPO Consults SMEs on SEP Licensing28
on 24 March 2023
in NIPC News.
According to its Guidance Standard Essential Patents (SEPs) explained 28 the IPO had
heard that new entrants and SMEs often lack the experience and knowledge to enter
negotiations on alevel playing field. It also heard that those companies do not take part in the
standard-setting process which may mean they do not know whether a patent is essential to
a standard and therefore whether a licence is required. Some respondents to the previous
consultation stated that some of these issues might cause barriers to innovation and
scale-up of new entrants. The IPO received 47 responses on 4 July 2023 of which 7 were
disregarded. I discussed the responses in Responses to the Questionnaire for SME,
Small-Cap and Mid-Cap Businesses.29
Over two-thirds of the responses came from businesses employing 9 persons or fewer.
A further 2 came from businesses employing 10 or more but less than 50 and 5 from
businesses employing 50 but or more but less than 250, Only 6 responses came from
businesses with 250 or more employees.
Perhaps the most interesting parts of the summary were the responses to the following
questions:
● "Do you have sufficient information on pricing of SEPs that you license or may license
in future?" 83% of the respondents said "no" and the rest "don't know". Nobody said
"yes"
● "Do you believe you were offered a licence on FRAND (Fair, Reasonable And Non
Discriminatory) terms?" 83% said "no" and only one said "yes". There was one "don't
29
https://nipcnews.blogspot.com/2023/07/responses-to-ipo-consultation-on-seps.html
28
https://nipcnews.blogspot.com/2023/03/ipo-consults-smes-on-sep-licensing.html

know." "Have you disagreed with the terms of a licence or the rate that has been
offered to you for a licence?" Here the overwhelming majority said "yes", one "no" and
the rest preferred not to say.
● Rather worrying is that 66$ of the disputes remain unresolved. Of the 9 disputes that
were resolved 6 were resolved directly with the licensor and 6 involved litigation. None
involved ADR.
● In response to the question "Is there sufficient information on whether the patent you
are licensing is essential to the technical standard you rely on?" 7 of the 9 said "no", 2
"don't know" and none said "yes".
● All 9 were concerned at the threat of a court-imposed injunction but none seemed to
have removed a product from the market.

In the absence of any clear consensus, the IPO took time for reflection and assessment.
On 27 Feb 2024, the IPO published a guidance document entitled Standard Essential
Patents: 2024 forward look30
in which it announced that it had reported its findings to
Ministers and had agreed the following key objectives concerning SEPs:
● "helping implementers, especially SMEs, navigate and better understand the SEPs
ecosystem and Fair Reasonable and Non-Discriminatory (FRAND) licensing
;
● improving transparency in the ecosystem, both pricing and essentiality; and
● achieving greater efficiency in respect of dispute resolution, including arbitration and
mediation,"

The guidance announced that the IPO is aiming to launch an online SEP Resource Hub by
May 2024 which will be a repository of tools, guidance and other material designed to help
SMEs navigate what the IPO calls "the SEPs ecosystem." Guidance may include
signposting to dispute resolution procedures, information on patent pools, and court
processes in the event of disputes.
The IPO also promised international collaboration and enhanced engagement with SSOs.
Such collaboration appears to be "an increase in the pace and visibility of our discussions
with other patent offices on global ecosystem challenges."
Other proposals to help improve SEP licensing would require yet another consultation later
in 2024 The sanction on implementers that refuse to accept a FRAND licence is an
injunction to restrain them from working the relevant SEPs in this country. As the UK is not
a large market in comparison to the USA, China or the EU several implementers have
decided to quit the country rather than accept licences drafted by a British judge that
increases their costs of selling to those larger markets. According to the guidance, HM
government had considered legislation to narrow the use of injunctions in SEP disputes but
"after careful consideration of the evidence, operation of relevant legal frameworks and
international obligations" it has decided not to do so.
29. Resource Hub
30
https://www.gov.uk/government/publications/standard-essential-patents-2024-forward-look/standard-essential-patents-2024-for
ward-look

The resource hub that had been promised in May was launched on 22 July 2024. It may be
accessed at https://www.gov.uk/government/collections/seps-resource-hub. According to
the IPO press release One-stop SEPs Resource Hub launched by UK IPO of 22 July 2024.
It states:
● "The SEP Resource Hub aims to be a ‘one stop shop’ for businesses in the UK
seeking guidance on how to navigate the SEPs ecosystem
● guidance includes Technical Standards and Standard Development Organisations,
Standard Essential Patent Licensing, and Dispute Resolution and Remedies in SEP
Licensing
● the Hub has been developed in collaboration with industry. It is an evolving resource
and will continue to be developed over time to include additional guidance and support
● the Hub is the starting point to address information asymmetry and transparency
concerns within the market. It forms part of a package of non-regulatory actions from
the UK IPO to address challenges in the SEPs ecosystem."
the hub is divided into 4 parts and the press release contains the following links to them:
● "Guidance on Technical Standards and Standard Development Organisations
● guidance on Standard Essential Patent Licensing
● guidance on Dispute resolution and remedies in SEP Licensing
● additional resources including a UK SEPs case law tracker, glossary of terms and
international SEPs-specific resources which may be useful to UK businesses trying
to navigate the SEPs ecosystem."

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