Summary:
1.Courts in the UK have jurisdiction, without the agreement of the parties, to grant an injunction against the infringement of a UK standard essential patent (SEP) when a defendant fails to enter into a global licence on FRAND terms of a multinational patent portfolio if the SEP holder is bound by an intellectual property policy of a standard-setting organization that is intended to have international effects.
2.Courts in the UK have jurisdiction to determine the terms of a licence involving disputed or potentially disputed foreign patents, when agreeing to a licence of a portfolio of patents – regardless of whether each patent is valid or infringed – is part of the commercial practice in the industry. Such a determination does not amount to a judgment on the validity of foreign patents. The parties can still reserve the right to adjust royalty rates based on subsequent determinations of invalidity.
3.When an implementer enters into a worldwide licence of untested patents it is purchasing from the SEP owner, who has a sufficiently large portfolio of international patents, it has the certainty to be able to legally manufacture and sell products that comply with the standard on a worldwide basis. As a consequence, it is not disproportionate to grant an injunction for infringement in the UK when the implementer fails to enter into a global license agreement.
4.The rights which patent assertion entities (PAEs) acquire through the assignment of patents are the same as those which the assignor patent owners had held. Therefore, regarding requests for injunctive relief, there is no legal basis under the general law for treating PAE owners of SEPs differently from the original SEP owners unless they have different interests which merit different remedies.
5.In the context of a FRAND commitment, the choice between interpreting the non-discrimination obligation as ‘general’ (i.e. the royalty rate is set by reference to the value of the licensed SEPs as made available to all the interested market participants) or ‘hard-edged’ (i.e. the royalty rate should be comparable to similarly situated implementers) is a matter of interpretation of the FRAND undertaking of the SEP owner. When such an undertaking is made in a way that fair, reasonable, and non-discriminatory obligations are not distinguished from each other, the three terms should be considered as a whole. In such a case, a FRAND commitment can be interpreted to have a general, rather than a hard-edged, character.
6.In addition, when the purpose of the standard-setting organization is clearly to avoid ‘most favourable licence’ obligations, the FRAND undertaking should be interpreted to be a general one. Furthermore, in view of the prevalence of competition laws in the major economies around the world, it is to be expected that any anti-competitive effects from differential pricing would be most appropriately addressed by those laws.
7.Bringing an action for a prohibitory injunction without notice or prior consultation with the alleged infringer is an infringement of Art. 102 TFEU. The nature of the notice and consultation required depends on the specific circumstances of the case. In this regard, the judgment of the CJEU in Huawei v ZTE (C-170/13) cannot be interpreted to require a FRAND offer in all cases prior to seeking injunctive relief to avoid an infringement of Art. 102 TFEU.
Supreme Court, judgment of August 26, 2020 - [2020] UKSC 37, GRUR Int. 2021, 174
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