Abstract
Judgements handed down by the UK High Court, Chancery Division, Patents Court in the Unwired Planet v Huawei case in April and June 2017 provided significant new precedents in the field of fair, reasonable, and non-discriminatory (FRAND) licensing of standards-essential patents (SEPs). Mr. Justice Birss applied the CJEU’s broad procedural guideposts in its 2015 Huawei v ZTE decision for determining whether the conduct of a negotiation for patent licenses results, in fact, in a FRAND license. However, the Huawei v ZTE decision was incomplete in some key respects. Now the UK High Court has built on the CJEU guideposts and announced some new standards:FRAND license is by definition a global license; how, specifically, should the royalty rates should be calculated; whether a ‘FRAND’ royalty rate is a finite number or a range of possible rates; clarification of the parties’ obligations with respect to the negotiation process; and what the contents of a FRAND license agreement should be. In addition, the UK High Court has added further clarification as to how FRAND law should be analyzed in the context of prevailing competition law. As technology relies more heavily on standards-based implementations, the need for transparent, predicable and reasonable licensing becomes ever more critical. In cellular telecommunications the efficient roll-out of 5G technology will be enhanced by licensing rules that exist today but did not when earlier technologies hit the markets. Unwired Planet reflects major progress in instructions to licensors and licensees, but some points remain open. Future courts will have to provide further clarification in order to bring about a more orderly licensing environment.
Highlights
Professors, pundits, patentees and practitioners around the world have spent nearly a year trying to decipher the significance of the UK High Court’s judgements in the Unwired Planet v Huawei case.1 No one can seriously doubt that Mr Justice Birss, who presided over both the technical and economic trials in the Unwired Planet cases, has added helpfully to the corpus of common law relating to FRAND licensing
2.2 Commencement of Licensing Campaign by Unwired Planet In January 2013, The two companies eventually negotiated the terms of a Master Sale Agreement under which Unwired Planet purchased over 2,000 Ericsson patents, with additional patents to be added annually to the list of sold patents and/or swapped with Unwired Planet
The Modified Numeric Proportionality Approach (MNPA) was originally constructed by Unwired Planet for the purpose of determining what a reasonable royalty rate proposal would be for purposes of licensing discussions prior to the filing of any litigation
Summary
Professors, pundits, patentees and practitioners around the world have spent nearly a year (as of the publication of this book) trying to decipher the significance of the UK High Court’s judgements in the Unwired Planet v Huawei case. No one can seriously doubt that Mr Justice Birss, who presided over both the technical and economic trials in the Unwired Planet cases, has added helpfully to the corpus of common law relating to FRAND licensing. Some of the most interesting and provocative analysis of the Unwired Planet judgements come from commentators who are much better versed in antitrust economics than this author Those authors possibly are not aware, or have not considered, some of the nuances that inform how Justice Birss approached his reasoning and reached his conclusions in the two judgements. Building on the author’s perspective as General Counsel of Unwired Planet as the economic case was developed, this chapter lays out in Part two the context leading up to the economic trial, presents in Part three an analysis of the High Court’s two judgements after the economic case, and contends in Part four that the court is mostly right but in parts wrong on how FRAND, as matter of patent licensing practice and competition law, should be applied going forward. In Part five, the author suggests the ultimate significance of the Unwired Planet judgements and evaluates other published critiques
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