Unwired Planet International Ltd & Anor v Huawei Technologies (UK) Co Ltd & Anor [2020] UKSC 37

The UK Supreme Court held that English courts have jurisdiction to determine global FRAND licence terms for Standard Essential Patents and grant injunctions restraining UK patent infringement unless implementers accept such licences. The appeals by Huawei and ZTE against Unwired Planet and Conversant were dismissed.

Facts

These conjoined appeals concerned disputes between owners of Standard Essential Patents (SEPs) for telecommunications technology (Unwired Planet and Conversant Wireless) and implementers (Huawei and ZTE). The SEP owners held portfolios of patents declared essential to ETSI telecommunications standards (2G, 3G, 4G) and had given irrevocable undertakings under the ETSI IPR Policy to license them on fair, reasonable and non-discriminatory (FRAND) terms.

Unwired acquired its portfolio (276 patents/applications across 42 countries) from Ericsson in 2013 and sued Huawei in England for infringement of UK patents. Conversant acquired approximately 2,000 patents from Nokia in 2011 and sued Huawei and ZTE. Birss J at first instance held one Unwired UK patent valid and essential, determined a worldwide FRAND royalty rate, and granted an injunction conditional on Huawei’s refusal to accept the global licence. The Court of Appeal upheld this. In the Conversant proceedings, Henry Carr J rejected jurisdictional challenges and the Court of Appeal affirmed.

Issues

The Supreme Court addressed five issues:

1. Whether English courts have jurisdiction to grant injunctions restraining UK patent infringement unless an implementer accepts a global FRAND licence, and to determine the terms of such a licence.
2. Whether England is the appropriate forum (forum non conveniens) in the Conversant appeals.
3. The meaning of the non-discrimination limb of FRAND.
4. Whether Unwired had breached EU competition law under Huawei v ZTE (Case C-170/13) so as to preclude injunctive relief.
5. Whether damages in lieu of an injunction were the appropriate remedy.

Arguments

Implementers (Huawei/ZTE)

Huawei argued the English courts could not require an implementer to take a global licence to avoid a UK injunction, as this compromised rights over foreign patents whose validity and infringement were justiciable only in their national courts. English courts were setting themselves up as a global licensing tribunal out of step with other jurisdictions. The IPR Policy, properly construed, limited SEP owners to monetary compensation. Huawei contended FRAND’s non-discrimination limb was “hard-edged”, requiring like licensees (such as Samsung) to be offered equivalent terms. It argued Unwired had abused its dominant position under Article 102 TFEU by failing to comply with the mandatory steps in Huawei v ZTE. Finally, damages in lieu of injunction were appropriate and proportionate.

ZTE supported Huawei and additionally argued forum non conveniens in favour of China.

SEP Owners (Unwired/Conversant)

The respondents contended the ETSI IPR Policy, in context, supported global licensing consistent with industry practice; the non-discrimination obligation was unitary and “general”, ensuring rates reflected portfolio value rather than requiring matching of every prior licence; and Huawei v ZTE established a safe harbour rather than rigid mandatory conditions.

Judgment

Issue 1: Jurisdiction

The Court held that English courts have jurisdiction to determine the terms of a global FRAND licence and to grant an injunction against UK patent infringement where the implementer refuses such a licence. The ETSI IPR Policy, governed by French law, creates a contractual framework balancing protection against “hold-up” (clause 3.1) with protection against “hold-out” and ensuring fair reward to SEP owners (clause 3.2). The Policy contemplates that commercial practice — which overwhelmingly favours global portfolio licensing — informs what is FRAND. The English courts were not adjudicating foreign patent validity or infringement but enforcing contractual obligations. Review of US, German, Chinese, Japanese and European Commission authorities showed Birss J was not out of step internationally.

Issue 2: Forum non conveniens

The challenge failed because China was not shown to be an available alternative forum with jurisdiction to determine global FRAND terms absent party consent, which Conversant had reasonably refused. The case management challenge also failed given the speculative prospect of Chinese determination and the age of Conversant’s patents.

Issue 3: Non-discrimination

The Court upheld the “general” interpretation. The FRAND phrase is unitary; a single royalty rate reflecting the true value of the portfolio, available to all similarly situated licensees, satisfies the obligation. ETSI had deliberately rejected a “most-favoured licensee” clause in 1994. Price discrimination is common in IP licensing and not presumptively harmful. The Samsung licence, granted when Unwired was in financial distress, did not dictate the FRAND rate for Huawei.

Issue 4: Competition law

Birss J and the Court of Appeal correctly interpreted Huawei v ZTE. Only the notice/consultation requirement in paragraph 60 is mandatory; the remaining steps in paragraphs 63–69 constitute a safe harbour, and compliance is assessed in light of the specific legal and factual circumstances (paragraph 56). Unwired gave sufficient notice and showed willingness to grant a licence on court-determined FRAND terms, whereas Huawei only agreed to take a licence on its own preferred terms. No Article 102 abuse was established.

Issue 5: Injunctive relief

The Court rejected Huawei’s new argument that damages should be awarded in lieu of an injunction. The concerns expressed by Kennedy J in eBay Inc v MercExchange 547 US 388 (2006) did not arise because the SEP owner could only enforce rights if it had offered FRAND terms. Confining patent holders to monetary remedies country by country would be impractical and encourage hold-out. An injunction was necessary to do justice.

Implications

The decision confirms that English courts can, in appropriate cases, determine the terms of a global FRAND licence covering multinational SEP portfolios and can grant injunctions restraining UK patent infringement conditional on the implementer accepting such a licence. The judgment grounds this jurisdiction firmly in the contractual ETSI IPR Policy rather than any assertion of extraterritorial patent jurisdiction — English courts do not adjudicate foreign patent validity or infringement but enforce a contractual regime that industry participants designed to reflect global commercial practice.

The Court made clear that FRAND is a unitary obligation: non-discrimination does not operate as a “most-favoured licensee” clause, preserving commercial flexibility for SEP owners, including first-mover discounts and distressed pricing. This protects against the devaluation of portfolios by reference to atypical prior licences.

On competition law, the decision confirms that Huawei v ZTE does not impose a rigid protocol: compliance is assessed contextually, with only the prior notice/consultation requirement being absolute. This offers practical guidance to SEP owners and implementers negotiating licences.

By upholding injunctive relief, the Court emphasised that damages alone would incentivise hold-out and make global enforcement impractical. An implementer retains the choice to accept a court-determined FRAND licence or exit the market.

The judgment is significant for the global telecommunications industry, Patent Assertion Entities, manufacturers, and standards bodies. It acknowledges but does not resolve concerns about forum shopping and potentially conflicting judgments between jurisdictions, noting that SSOs could themselves adopt international dispute resolution mechanisms if desired. The limits of the decision include that it does not determine all the detailed FRAND terms in every case, leaves scope for implementers to reserve rights to challenge samples of foreign patents with royalty adjustment mechanisms, and leaves open questions about the reflexive application of the Brussels Regulation in future cases.

Verdict: The Supreme Court dismissed all three appeals. The English courts have jurisdiction to determine the terms of a global FRAND licence and to grant injunctions restraining UK patent infringement where an implementer refuses to enter into such a licence. England was the appropriate forum in the Conversant proceedings. The non-discrimination element of FRAND is “general” rather than “hard-edged”. Unwired had not abused its dominant position contrary to Article 102 TFEU. An injunction, rather than damages in lieu, was the appropriate remedy.

Source: Unwired Planet International Ltd & Anor v Huawei Technologies (UK) Co Ltd & Anor [2020] UKSC 37