Unwired Planet International Ltd. v. Huawei Technologies Co. Ltd. Case No. Hp-

2014-000005 (2017)

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Nature of the Case

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Facts

Unwired (P) has a patent portfolio that includes numerous patents that have been declared essential to various telecommunications standards (2G GSM, 3G UMTS, and 4G LTE). Most of the relevant portfolio was acquired from Ericsson. P is in the business of licensing those patents to companies who make and sell telecommunications equipment. P sued Huawei (D), Samsung and Google for infringement of six UK patents from their portfolio. Five were claimed to be SEPs. Part of the process of standardization involves holders of patents which are essential to an international telecommunications standard declaring them as essential to the relevant standards body. In Europe, that body is the European Telecommunications Standards Institute (ETSI). ETSI requires that a patentee declaring patents as essential to a standard commits to licensing those patents on FRAND terms. FRAND stands for Fair Reasonable And Non-Discriminatory. P made an open offer to D to license its entire global portfolio (SEPs and non-SEPs). Ds denied infringement and contend the patents were invalid, counterclaiming for revocation. They also contended that P’s offer was not FRAND. After the first offer in April, P made a further offer in July 2014. It encompassed the SEPs and Ds rejected it as not FRAND. The global rates of 0.2% for 4G/-LTE and 0.1% for other standards (i.e. GSM/UMTS). The percentages related to the average selling price (ASP) for mobile devices and revenue for infrastructure. In June 2015 each side made open offers of licensing terms. D’s June 2015 proposal was for a per-patent license limited to the UK SEPs in suit. The rates for all five SEPs together were 0.034% for LTE, 0.015% for UMTS and zero for GSM. P had won two and lost one of the technical trials. In the summer of 2016 Samsung settled. On 1st August 2016, each side made new offers. P’s offers were on the same terms as before but with lower rates. The global SEP portfolio rate for 4G/LTE in this offer was 0.13%. The corresponding rates for GSM /UMTS were 0.065%. The main dispute to be resolved is about whether and to what extent various terms on offer are or would be FRAND. P contends that they have established that they hold valid and essential SEPs (winning technical trials and that they have made offers of a license on FRAND terms. P submits that D is not willing to take this FRAND license and is an unwilling licensee. Accordingly, the court should grant an injunction restraining D. If the court decides that P is not entitled to insist on a global license then P has offered a UK portfolio license and will accept such a license at a rate and on terms set by the court. D contends that P’s 2014 offers were not FRAND. D contends that P’s commencement of this action was an abuse of their dominant position and contrary to the CJEU’s judgment in Huawei v ZTE. D claims a complete defense to any claim for an injunction. D contends that only a UK portfolio license would be FRAND and D will accept any royalty rate set by the court.