Case Nos: CA-2024-000489, CA-2024-000498, - [2025] EWCA Civ 1263

The jurisdiction to settle the terms of a FRAND licence in a SEP dispute is well established (see Unwired Planet v Huawei [2020] UKSC 37 in the Supreme Court followed in the Court of Appeal in InterDigital v Lenovo [2024] EWCA Civ 743 and in the May 2025 judgment in this case (above)). The main question to be settled is the royalty rate to be paid by the licensee to the licensor. This may be a single rate for the world for all standards or it may involve a mix of rates. One important source of evidence relevant to the rate is evidence of the terms of other licences which have been entered into by one or other of the parties. Disclosure of some of them will be given. Each side will select the licences it contends are the best comparable licences. Evidence will be given about these licences including, if need be, accountancy evidence which “unpacks” the licence terms to make the comparison more reliable. This might involve converting a licence expressed as a single lump sum payment into a sum expressed as a percentage of sale price per unit (a so called ad valorem royalty) or as a fixed sum per unit (DPU or dollar per unit). Evidence about the comparability of the licences, which may involve the situation of the parties, the other licence terms and the degree of hold out or hold up involved, may also be given.

The court’s conclusion about the rate is likely to be based on a so called “bottom up” approach starting from what the judge decides is the best comparable licence (or licences). The judgment may also involve a cross-check based on a “top down” approach starting from a figure to be paid as an overall licence for a notional stack of all relevant patents essential to a given standard and taking a view about what the licensor’s share of that stack might be. For the purpose of this appeal these concepts do not require further elaboration. More details in the context of this case are in the judgment in the main May 2025 appeal (above) - see the introductory paragraphs at [1] to [21] and also [34]-[42] and [90]-[92].