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You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> Optis Cellular Technology LLC & Ors v Apple Retail UK Ltd & Ors [2019] EWHC 3538 (Pat) (17 December 2019) URL: https://www.bailii.org/ew/cases/EWHC/Patents/2019/3538.html Cite as: [2019] EWHC 3538 (Pat) |
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2019] EWHC 3538 ( Pat) | ||
2019-00006 |
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIS (ChD)
PATENTS
COURT
Fetter Lane London, EC4A 1NL |
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2019 |
B e f o r e :
____________________
| (1) OPTIS CELLULAR TECHNOLOGY LLC (A company incorporated under the laws of the State of Delaware) (2) OPTIS WIRELESS TECHNOLOGY LLC (A company incorporated under the laws of the State of Delaware) (3) UNWIRED PLANET INTERNATIONAL LIMITED (A company incorporated under the laws of the Republic of Ireland |
Claimants |
|
| - and - |
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| (1) APPLE RETAIL UK LIMITED (2) APPLE DISTRIBUTION INTERNATIONAL (A company incorporated under the laws of the Republic of Ireland) (3) APPLE INC (A company incorporates under the laws of the State of California) |
De fe ndants |
____________________
2nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP.
Telephone No: 020 7067 2900. Fax No: 020 7831 6864 DX 410 LDE
Email: info@ marte nwa lshc he rer.co m
Web: www. marte nwa lshc he rer.co m
MR. MICHAEL BLOCH QC and MS. RACHEL JONES (instructed by Wilmer Cutler Pickering Hale & Dorr LLP) appeared for the Defendants
____________________
Crown Copyright ©
MR. JUSTICE NUGEE :
patents
("SEPs") to seek to enforce its rights. The vehicle by which that is done, as is well-known, is an action for infringement of UK
patents;
and in this case the Particulars of Claim plead seven UK
patents
which are referred to as the Asserted
Patents.
Among the matters pleaded in the Particulars of Claim is a recognition that the claimants (who I will refer to collectively as Optis) have given undertakings to the standard setting organisation in Paris, ETSI, under which they were obliged to offer a licence on fair, reasonable and non-discriminatory or FRAND terms. In the Particulars of Claim, the claimants allege that they have at all times been willing to offer the defendants a licence to the Asserted
Patents
that is held by this court to be FRAND.
Patents
to the defendants and a declaration that such terms are FRAND; and then an injunction which is expressed, not to have effect, or to cease to have effect, if the defendants enter into a licence on FRAND terms.
EWHC
2988 (
Pat),
and a lengthy decision of the Court of Appeal given by Lord K itchin at [2018] EWCA 2344; and the other the Conversant case (Conversant Wireless Licensing SARL v Huawei Technologies Co Ltd) in the decision of Henry Carr J at [2018]
EWHC
808 (
Pat)
and in the Court of Appeal in the judgment given by Floyd LJ at [
2019]
EWCA Civ 38. It is not necessary for me to yet again explain the background to standard essential
patents,
to FRAND licences and the standard setting organisations, and the effect of the undertaking given to ETSI, because as I say it is all set out in those judgments.
patents.
2019,
in which he permitted the claimants to serve the proceedings on Apple Inc. out of the jurisdiction at an address in California.
"...Article 102 TFEU must be interpreted as meaning that the proprietor of an SEP, which has given an irrevocable undertaking to a standardisation body to grant a licence to third parties on FRAND terms, does not abuse its dominant position, within the meaning of Article 102 TFEU, by bringing an action for infringement seeking an injunction prohibiting the infringement of itspatent
or seeking the recall of products for the manufacture of which that
patent
has been used, as long as:
- prior to bringing that action, the proprietor has, first, alerted the alleged infringer of the infringement complained about by designating thatpatent
and specifying the way in which it has been infringed, and, secondly, after the alleged infringer has expressed its willingness to conclude a licensing agreement on FRAND terms, presented to that infringer a specific, written offer for a licence on such terms, specifying, in particular, the royalty and the way in which it is to be calculated ..."
"We have come to the firm conclusion that the CJEU was not laying down mandatory conditions at [70] of its judgment such that non-compliance will render the proceedings a breach of Article 102 TFEU and that the judge's interpretation of the CJEU's judgment is in this respect entirely correct."
"Accordingly, the proprietor of an SEP which considers that that SEP is the subject of an infringement cannot, without infringing Article 102 TFEU, bring an action for a prohibitory injunction or for the recall of products against the alleged infringer without notice or prior consultation with the infringer, even if the SEP has already been used by the alleged infringer."
I have assumed that the reference in [268] and [269] of Lord Kitchin's judgment in Unwired Planet in the Court of Appeal to [70] of the CJEU's judgment are to the paragraph that appears in the report I have as [71], which I read earlier.
patent
litigation of this type is conducted in the UK, and he told me that
patent
litigation in certain other countries is conducted in a different way. That characterisation of the exercise that the court is engaged on, when considering the question of abuse of dominant position, was not as I understood it disputed by Mr. Bloch.
Patents",
which includes all
patents
claimed, declared or otherwise asserted by the owner to be (effectively) essential. There is a definition of "
Patents",
which includes claims of licensable
patent
applications. He says that the effect of that is that the claimants only have to acquire
patent
applications and assert them to be essential for Apple to be in a position where it cannot, in practice, avoid paying the back royalties in respect of them and that given the way in which the definition of Major Markets and Other Markets is defined -- and Major Markets for 4G means a market in which there are three or more Licensed
Patents
-- it would be possible by acquiring 1, 2 or 3 Licensed
Patents
in a country to move it from being an Other Market into a Major Market.
patents;
and there appears to be no mechanism in the licence for Apple, even if successful in invalidating, or showing not to be essential,
patents
that have been brought into this licence, to recover the back payments for the previous six years (plus interest) which will by then have been paid.
2019,
it was not possible for Apple to have challenged and taken proceedings for invalidity in relation to any particular
patents,
by reason of some terms of the arrangements entered into between the claimants and Apple, the details of which are confidential and which I need not go into, but which had the practical effect during the negotiating period that Apple was not in a position to challenge the validity of any
patents.
patents
at all, are all features which make this unreasonable, as is the definition of "Licensee" which is defined as referring to all three of the defendants. The effect of that is that because the royalties have to be paid by the Licensee, it thereby makes all three defendants jointly liable. The total sums estimated to be payable under a licence in this form, being as I say some $8 billion, are, says Mr Bloch, in excess of anything that the first two defendants could reasonably be expected to undertake liability for.
patents
that they have a dominant position. He accepted on the authorities that the relevant market is the market in the licences for those
patents,
and since Optis are the only people who own those
patents
and the only people who can license them, they have 100% of that market; nevertheless, he said, that does not necessarily mean the claimants are in a dominant position. He pointed to the decision of Birss J, again upheld by the Court of Appeal, in Unwired Planet, where the decision was not open and shut, but regarded as turning on the facts. Birss J came to his conclusion really on the basis that Unwired Planet had not put forward a positive case that they were not in a dominant position, at which point a number of presumptions could be relied upon. It is also apparent from his judgment that he heard a considerable amount of expert evidence on the question. Mr. Speck may be right that there will be a real question in this case as to whether there is or is not a case of the claimants being in a dominant position, although it has to be said that I was not pointed to anything specific in the evidence which indicates the grounds on which the claimants will dispute the dominance of their position.
patent,
and only at that stage will consider the question of whether the terms that have been put forward on either side are FRAND or not. Until it has resolved the question of whether they are FRAND or not, the English court's practice is not to grant an injunction, with the result that the implementer can continue to sell its technology in the UK, despite the finding of infringement which, by then, will have taken place. It is only at the stage at which the court has settled the FRAND terms, or they have been agreed, that the question arises whether the implementer will take a licence on those terms or not, it being recognised that there is no legal obligation on the implementer, however much there may be in practice a commercial one, to take a licence on the terms settled by the court.
"The relevantpatents have been found valid and infringed. Unwired Planet wish to enter into a worldwide licence. Huawei is willing to enter into a UK portfolio licence but refuses to enter into a worldwide licence. However a worldwide licence is FRAND and Unwired Planet are entitled to insist on it. In this case a UK only licence would not be FRAND. An injunction ought to be granted because Huawei stand before the court without a licence but have the means to become licensed open to them."