Managing IP is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Court of Appeal upholds landmark Apple v Optis ruling

AdobeStock_417477963 (1).jpeg

Implementers must agree in advance to pay what the court determines as FRAND, the England and Wales Court of Appeal has ruled

Technology manufacturers must accept a court-determined royalty for standard-essential patents or face an injunction, the England and Wales Court of Appeal ruled in Apple v Optis yesterday, October 27.

The judgment, written by Lord Justice Richard Arnold, was issued just over a week after the final hearing in the dispute. It affirmed High Court judge Richard Meade’s landmark decision in September 2021.

In a notable postscript to the judgment, Arnold bemoaned what he described as the “dysfunctional state” of SEP dispute resolution.

In the 2021 ruling, Meade told Apple it must agree to pay whatever terms the court later deemed fair, reasonable, and non-discriminatory (FRAND) for a royalty to Optis’s SEP portfolio.

If Apple didn’t make that undertaking, it would be hit with a so-called FRAND injunctio that would bar the sales of infringing devices in the UK.

Apple committed to take a licence but later appealed against the judgment, on the grounds that implementers must be able to see the terms of a deal before they agreed to pay.

Optis filed its own cross-appeal, in which it argued that Meade’s proposed FRAND injunction was too generous to Apple.

Optis said Apple should be subject to an unqualified injunction, which would stop the smartphone maker from using the patented technology even after it had made the FRAND undertaking.

The Court of Appeal dismissed both appeals and instead endorsed Meade’s approach.

In his postscript, Arnold said each side had “adopted its position in an attempt to game the system in its favour”.

He added: “The only way to put a stop to such behaviour is for standard-development organisations like the European Telecommunications Standards Institute to make legally enforceable arbitration of such disputes part of their intellectual property rights policies.”

Optis was represented by EIP and Osborne Clarke. WilmerHale acted for Apple.

more from across site and ros bottom lb

More from across our site

The IPO must change its approach and communicate with IP owners about its attempts at clearing up the trademark register
Counsel are looking at enforceability, business needs and cost savings when filing for patents overseas
James Perkins, member at Cole Schotz in Texas, reveals how smaller tech companies can protect themselves when dealing with larger players
We provide a rundown of Managing IP’s news and analysis coverage from the week, and review what’s been happening elsewhere in IP
The EUIPO management board must provide the Council of the EU with a performance assessment before it can remove the executive director
The European Commission confirmed that plans for a unitary SPC will be published in April alongside reforms to the SEP system
The court held that SEP implementers could be injuncted or directed to pay royalties before trial if they are deemed to be unwilling licensees
Patentees should feel cautious optimism over the EPO Enlarged Board of Appeal’s decision in G2/21, say European patent attorneys
Significant changes to the standard of law are unlikely, say sources, who note that some justices seemed sceptical that the parties disagreed on the legal standard
Sources say the High Court of Australia’s ruling that reputation is immaterial in trademark infringement cases could stop famous brands from muscling out smaller players