Analysis of the UK Supreme Court’s Decision in Unwired Planet v Huawei

On 26 August, 2020, the UK Supreme Court decided a standard-essential patent dispute between Huawei and Unwired Planet.

The Supreme Court held that an English court can (a) enjoin infringement of a UK SEP where the infringer is willing to take a UK license, but refuses to take a worldwide licence on “fair, reasonable and non-discriminatory” terms, and (b) set the royalty rates and terms of such a license. The judgment clarifies other SEP licensing issues, including the interpretation of the non-discrimination component of FRAND and how an SEP holder seeking to enforce its IP rights can avoid Article 102 TFEU.  Some commentary to date has suggested the judgment strengthens SEP holders’ position, but the necessary corollary that any nation’s courts can set worldwide FRAND rates is expected to lead to forum shopping, inconsistent outcomes, and anti-suit injunctions.

The other central holdings of the judgment are as follows:

• No discrimination issues arise so long as SEP owners offer a fair and reasonable price list available to all, and refrain from adjusting royalties based on individual licensee characteristics.The court accepts there may be commercial reasons to offer below-FRAND terms to some licensees without making those terms also available to others.
• An SEP holder does not breach Article 102 TFEU by seeking an injunction if it has given the infringer prior notice, and otherwise showed itself willing to license on FRAND terms, even if it does not strictly follow the steps set out by the CJEU in Huawei/ZTE.
• Injunctions are normally a proportionate remedy for SEP infringement by unwilling licensees.  But courts may depart from this—including, possibly, in the context of patent assertion entities.

Please click here to read the full alert memorandum.