Huawei could face UK handset injunction after landmark court ruling

The case of Unwired Planet vs Huawei regarding the latter’s licensing of FRAND patents has been decided in favour of the former, a decision that could have global implications.

Patent litigation is hardly a sexy business but in an industry that relies so heavily on countless enabling technologies, IP owners need to be protected if R&D is to be encouraged. The patents in this case, while currently owned by Unwired Planet, appear to have been acquired from Ericsson in 2013. They cover a bunch of wireless technologies that Huawei is accused of using but not paying sufficiently for.

Today’s judgment is the result of possibly the most in-depth judicial investigation of such patents, specifically the concept of FRAND. This concerns the fair, reasonable and non-discriminatory licensing of standard-essential patents, a frequent consideration with each generation of wireless tech. Ultimately it calls for those patents to be licensed, but also to protect implementers of the patents from being charged excessive amounts.

We spoke to Gary Moss, head of EIP Legal, who led the team representing Unwired Planet, and he explained that one of the key precedents set by this ruling concerns the ability of the patent holder to demand a worldwide license be taken, rather than just one for the specific country where the legal action takes place.

“As well as being a significant decision, and validation for Unwired Planet’s licensing approach, this decision will be of great interest to the telecoms sector in general,” said Moss. “Until now there has been a view that even if the infringing party is successfully sued, at the end of the day they would have to pay no more than the royalty rate they would have had to pay anyway, and only for the countries in which they were sued.

“That gave an incentive for implementers to hold out in the hope of achieving a more favourable royalty rate. Today’s judgment confirms that this need not be the case, and that the English court will take a commercially sensible, “real-world” approach to such issues.  Mr Justice Birss’ judgment is an important contribution to the world-wide body of case law in this area.”

If you’ve got a fair bit of time to kill you can read the full judgment here. The remedies commence from paragraph 792 (page 160), and they reveal that while the court concluded an injunction should be granted, it has also given Huawei one last chance to do the decent thing before it starts getting its mobile phones banned from being sold in the UK.

At paragraph 805 the Judge helpfully points out this is a very long judgment and thus summarises the findings. Even that is pretty long, but the key bit seems to be paragraph 807 (18), which is reproduced below.

Since Unwired Planet have established that Huawei have infringed valid patents EP (UK) 2 229 744 and EP (UK) 1 230 818, and since Huawei have not been prepared to take a licence on the terms I have found to be FRAND, and since Unwired Planet are not in breach of competition law, a final injunction to restrain infringement of these two patents by Huawei should be granted.

The final hearing in this long-running case is likely to be in a couple of months’ time. Huawei seems to be faced with a pretty straight choice: come to a worldwide license agreement with Unwired Planet or get chucked out of the UK mobile phone market. Other stakeholders on both sides of the mobile patent fence will view this judgment with interest as it seems to have set a worldwide precedent in favour of patent-holders.