Patents: UK jurisdiction over global FRAND licence

Background

The European Telecommunications Standards Institute (ETSI) sets standards for mobile telephones. Members are obliged to inform ETSI about any essential intellectual property rights (IPRs) which they own, known as standard essential patents (SEPs). They must agree to license these rights to users of the standard on FRAND terms.

Persons domiciled in an EU member state shall, whatever their nationality, be sued in the courts of that member state (Article 4(1), recast Brussels Regulation (1215/2012/EU)). In proceedings concerning the registration or validity of patents, the courts of the member state in which the registration was applied for have exclusive jurisdiction (Article 22(4), recast Brussels Regulation).

The Court of Appeal recently confirmed the English High Court's jurisdiction to award a licence rate for a global patent portfolio, and also to order an injunction in respect of unlicensed infringements for SEPs (Unwired Planet International Ltd v Huawei Technologies Co Ltd, see Briefing "Patent licensing and FRAND: a new approach", www.practicallaw.com/w-011-0614).

Facts

C sued UK and Chinese companies (together, H) for infringement of the UK designations of four of its European patents, and sought a determination of FRAND terms for its global SEP portfolio. H manufactured and sold in China and also to a lesser extent sold in the UK.

H applied to dismiss or alternatively to stay the claim. H challenged jurisdiction on the basis that the English courts did not have jurisdiction, and that the UK was forum non conveniens. H argued that as most of its profits were generated in China, if a global portfolio licensing rate was to be determined, the Chinese patents in C's global portfolio would be disproportionately significant in value compared to the UK elements. By asking for a licence fee for a global portfolio to be determined in the UK, C's claim amounted to an allegation of infringement and request for relief in respect of foreign patents. As the jurisdiction of the English courts is limited to deciding on validity and infringement of UK patents, there was no jurisdiction to hear this claim.

The High Court rejected both challenges to its jurisdiction, and dismissed both the application to dismiss and the application to stay.

H appealed on the forum non conveniens point only, in light of Unwired, and applied for new evidence of Chinese law to be admitted in the appeal. H also proposed that if the appeal failed on this point, questions should be referred to the European Court of Justice (ECJ).

Decision

The court dismissed the appeal. It refused H's request to refer questions of EU law to the ECJ.

The proper characterisation of the dispute was particularly important here. The claim could not be characterised simply by looking at C's claim, but at the overall dispute between the parties including how it was answered by H. The dispute characterised as a whole still involved questions of essentiality, infringement and validity of the UK patents.

Different answers to the forum conveniens questions might result from the level of generality at which the dispute was characterised. To define a dispute as focusing on the relief which would be granted in the English court was too narrow. But to define it so generally that C was left to pursue a claim based on a different property right and different underlying facts in the foreign forum was too broad.

C's claim here was closely analogous to the claim advanced in…