UK Supreme Court to assess whether an injunction is appropriate for Standard Essential Patents (SEPs)

The UK Supreme Court has publicly confirmed that it will hear the appeal in Apple Retail UK Ltd and others (Appellants) v Optis Cellular Technology LLC and others (Respondents) concerning Standard Essential Patents (SEPs) and whether it is appropriate for an implementer to be put to the election between an injunction and committing to take the Court’s FRAND terms as soon as there is a finding of infringement of an SEP.

Green light for appeal

The Supreme Court has given permission for the appeal in Apple Retail UK Ltd and others (Appellants) v Optis Cellular Technology LLC to proceed. (The court granted leave on 6 April 2023, although this was not published on its website until 30 May 2023.)

Court of Appeal’s ruling: quick recap

In August 2021, the Court of Appeal upheld the Patent Court’s decision that that the owner of a standard essential patent (Optis) was entitled to an injunction in a qualified FRAND form (against Apple) after the patent had been found valid, essential and infringed, even though the trial to set the terms of the appropriate FRAND licence had not yet taken place.  This question was considered at first instance by Meade J in Optis ‘Trial F’.  The practical implication of Meade J’s decision was that Apple would have to undertake to take a global licence to Optis’s portfolio on terms determined to be FRAND by the English Court, or face a UK FRAND injunction, a form of injunction which is now often referred to as an ‘Optis F Injunction’

Both parties appealed this decision.  Optis sought an unqualified injunction if Apple would not give the undertaking, on the basis that it had waived its right to a FRAND defence.  Apple argued that it was entitled to see the FRAND determination before being put to the election between taking the licence or leaving the UK market.

Arnold LJ, who gave the leading judgment in the Court of Appeal, analysed the case law on injunctions and SEPs.  He concluded that Meade J was right to find that Optis was entitled to a FRAND injunction, following a finding of patent infringement, and dismissed both parties’ appeals.

For further details of the Court of Appeal’s decision see our earlier article.

Ramifications of the Court of Appeal’s decision

The Court of Appeal’s ruling was widely welcomed by patent owners in the SEP field. The judgment showed that SEP holders were able to obtain early certainty of whether an English FRAND action would resolve a dispute.  This would avoid the risk of incurring the costs of a FRAND trial, for an implementer to only then decide that it would not take a licence on FRAND terms.

Analysis

While Smith J’s recent judgment of the Optis v Apple FRAND trial is likely to receive significantly more coverage than the Supreme Court’s decision to hear the appeal of the ‘Optis F injunction’, our initial analysis is that Smith J’s decision is very much the result of the facts in the case and seems likely to be appealed on multiple grounds.  However, the ‘Optis F injunction’ has much wider applicability, being relevant to nearly all FRAND trials. 

As a result, this appeal to the Supreme Court is likely to be watched with great interest by patentees and implementers alike.  Patentees will, no doubt, hope that the Supreme Court maintains the status quo, while some implementers are likely to hope that the Supreme Court may overturn the lower courts and remove a powerful tool in resolving FRAND disputes in the UK. 

One question is whether this appeal is moot, given that a FRAND judgment has now been given and Apple can unequivocally say whether it will take a license on the Court’s determined FRAND terms.  However, given the likelihood that the final decision will be appealed, and the wider applicability of the point, and the number of FRAND disputes currently before the English Courts, there seems to be a reasonable chance that the Supreme Court will decide to go ahead with the appeal.

Next steps

We do not yet know when the Supreme Court would hear this appeal but, if it goes ahead, it is unlikely to be before spring 2024. Stay tuned for further information!