CA-2025-001926 - [2025] EWCA Civ 1383

Lord Justice Arnold:

Introduction

This is another appeal raising the question as to whether a willing licensor of a portfolio of patents declared essential to one or more European Telecommunications Standards Institute (“ETSI”) standards (“standard-essential patents” or “SEPs”) would grant an implementer of those standards who has undertaken to take a licence to that portfolio on the terms to be determined by the Patents Court to be fair, reasonable and non-discriminatory (“FRAND”) an interim licence pending that determination. It follows three decisions of this Court which have established the principle that, in an appropriate case, the Patents Court may make a declaration that a SEP owner would enter into such an interim licence: Panasonic Holdings Corp v Xiaomi Technology UK Ltd [2024] EWCA Civ 1143, [2005] RPC 2 (“Panasonic v Xiaomi”); Alcatel Lucent SAS v Amazon Digital UK Ltd [2025] EWCA Civ 43, [2005] RPC 6 (“Alcatel v Amazon”); and Lenovo Group Ltd v Telefonaktiebolaget Ericsson (Publ) [2025] EWCA Civ 182, [2005] RPC 11 (“Lenovo v Ericsson”). This case differs from the previous cases in that the parties agree that there should be an interim cross-licence, and even agree as to the terms of the interim cross-licence, and in particular how much should be paid for it (the amount is confidential). They disagree as to whether the terms of the interim cross-licence, and in particular the amount payable, should be subject to adjustment so as to bring them into line with the terms of the final cross-licence determined to be FRAND by the Patents Court, as the Claimants (“Samsung”) contend, or so as to bring them into line with the terms of the final cross-licence determined to be FRAND by the Intermediate People’s Court of Chongqing Municipality (“the Chongqing Court”), as the Defendants (“ZTE”) contend. The appeal raises an important issue of principle: does it constitute bad faith for a SEP owner to commence infringement proceedings in multiple courts with the objective of forcing an implementer to accept determination of FRAND terms by the SEP owner’s preferred court rather than the implementer’s preferred court? Mellor J answered that question in the affirmative for the reasons given in his judgment dated 25 June 2025 [2025] EWHC 1432 (Pat). I granted permission to appeal and expedited the appeal. I regret that, for reasons that it is unnecessary to go into, it was not possible to grant the appeal greater expedition.

The general background to disputes of this nature, basic legal principles applicable to the determination of FRAND terms and legal principles applicable to the grant of declarations

I set these matters out in my judgment in Lenovo v Ericsson at [3]-[16], [17]-[26] and [27]-[29] respectively. There is no point in repeating that exposition, and so I shall take it as read.