It is “simply untrue” that courts in England and Wales would become global licensing forums if the Unwired Planet v Huawei rulings were upheld, counsel for Unwired Planet said yesterday as he dismissed claims by Huawei on the potential ramifications of the case.
In response to Huawei’s arguments on Monday, Adrian Speck QC, of 8 New Square, said there is “complete confusion” about what the Chinese company is arguing.
“This court is not being asked to decide if the UK court can become a de facto licensing forum,” said Speck, adding that courts in other countries also grant injunctions, including in cases where a global licensing offer is made by a patent owner.
“Where a FRAND licence is available to the implementer and they don’t take a licence, the court may properly grant an injunction [unless the defendant enters into a global licence],” he said.
Speck also addressed claims by Huawei and said the idea that licensing a portfolio would require patent-by-patent determination is “a big error”.
“Parties enter into licences knowing that some patents would turn out to be valid and infringed and some would not – that is, if it was ever possible to litigate all of them,” he said.
He added: “In patent law you often see a royalty on a patent that’s been through litigation being worth more than one that hasn’t, but determining FRAND terms does not involve adjudicating on the validity of any given patent.”
The case is being heard across four days, with the Supreme Court being asked to rule on several questions regarding Mr Justice Birss’s 2017 ruling and the Court of Appeal’s decision to uphold it. The court has consolidated this case with Conversant v Huawei and ZTE.
If upheld, it will have huge implications for owners of standard essential patents (SEPs), but the court could also cast aside one of the most significant judgments in years.
‘Overwhelming’ the courts
Yesterday, Mark Howard QC, for Huawei, said there were “egregious” points in the lower courts’ rulings that needed rectifying.
“First, an English injunction should not be used to obtain worldwide royalties,” Howard said.
He added: “It’s no answer to say the courts are merely settling a contract. The courts are failing to recognise the importance of local court adjudication on both validity and value of SEPs. This distorts competition in both the UK and China.”
He added that the cost of litigating in separate jurisdictions – something Huawei deemed would be an acceptable solution – had been “overstated”.
“The main jurisdiction here is China, where litigation is a fraction of the cost it is here. It is unlikely you will need to litigate in many more countries than just the key markets.”
He said: “Determining total royalties paid for SEPs, you have to decide the appropriate royalty for those patents in relation to the average price for selling a phone. The approach in different jurisdictions may well be different.”
Howard added that UK courts are going to find themselves “inundated with these types of claims” if the lower courts’ rulings are upheld.
“At the moment, there is only one patents judge who can try these types of case [Birss]. If this approach is upheld, one can see that companies’ splintering off of their portfolios will become an attractive game that will completely overwhelm the English courts.”
In response, Lord Justice Briggs said that would not be the case “if other countries followed suit”.
Closing arguments – and Huawei’s response to Unwired Planet’s submissions – are due to take place tomorrow.
Huawei is being represented by Powell Gilbert and has instructed Brick Court Chambers’ Mark Howard QC, Daniel Alexander QC and Andrew Lykiardopoulos QC, both of 8 New Square, Henry Forbes Smith, of One Essex Court, and James Segan of Blackstone Chambers.
Unwired Planet and Conversant are being represented by EIP and Osborne Clarke, which have instructed Adrian Speck QC, Isabel Jamal and Thomas Jones of 8 New Square, and Sarah Ford QC of Brick Court Chambers.
ZTE is being represented by Bristows, which has instructed Michael Bloch QC of Blackstone Chambers.
