Standard essential patents

All eyes on Paris in major SEP dispute

The European patent community is looking towards Paris. One of the most important French hearings on SEPs for mobile communication will be held before the Court of Appeal, starting this afternoon. Non-practising entity Conversant Wireless has sued electronics company LG over five of its standard essential patents. As JUVE Patent understood Conversant has asked the court for a licence fee for all LG mobile phones (case-ID: RG 15/17037). The judgment has the potential to have an impact on the proceedings in the UK and Germany.

4 March 2019 by Konstanze Richter

Palais de Justice, Paris The ancient Palais de Justice was until 2017 the home of the Paris patent court and is still the seat of the Cour d'appel. ©Wikmedia/Nitot

The disputed patents (EP 1 031 192 B 1, EP 881 786 BI, EP 950 330 BI, EP 978 210 Blet and EP 1 548 973 BI) are used in mobile communication standards GSM (2G), UMTS (3G) and LTE (4G).

The French procedure is part of a global dispute between Conversant Wireless and Korean mobile electronics producer LG. In addition to the lawsuit before the Paris Court of Appeal, there have also been parallel proceedings in the US. German proceedings against LG are pending before the Munich Regional Court (case IDs: 7 O 3277/18, 7 O 3892/18 and 7 O 3893/18). The first of at least two oral hearings took place in January.

In early February the London Courts of Appeal rejected a claim by Huawei and ZTE, that Chinese, rather than English courts should hear claims by non-practicing entity Conversant. Following the judgment, Conversant is yet to grant licences to the manufacturers on FRAND terms (case ID: A3/2018/1274, A3/2018/1278).

Essential or otherwise

In France, Conversant Wireless, then known as Core Wireless, had claimed before the Tribunal de Grande Instance (case-ID: 14/14124), asking it to set a licence fee for the patents at a minimum of €1.25 per sold mobile phone. The claimant also asked for a licence fee with retrospective effect to include all LG mobile phones sold since 2011, as well as the payment of damages.

In 2015 the Court of First Instance ruled that there was no consistent proof of the essentiality of either disputed patent. Therefore it dismissed the claim.

The court also rejected the counterclaims of the defendant LG Electronics France and its Korean parent company, which was to establish licences for the patents according to the FRAND rule. It was not proven that the patents in dispute were SEPs, and therefore a FRAND licence was not applicable.

The judges decided that the plaintiff had to pay the legal costs and the court ordered Conversant Wireless to pay €30,000 to LG. Conversant appealed against the decision.

Extended claims

At first instance, the question of whether the patents were SEPs and how the licence could be determined according to FRAND rules was at the centre of the dispute. However in the appeal the claims are significantly extended. The afternoon of the third day of proceedings, Wednesday 6 March, will see a discussion of the question of validity of the patents and a possible infringement.

Denis Monégier du Sorbier

Denis Monégier du Sorbier

Nevertheless, the issue of FRAND remains at the centre of the hearing. Today, proceedings will be held on this issue as well as on antitrust issues. Tuesday will focus on which method is suitable for determining the licence. A part of the proceedings will be in camera, for the protection of trade secrets − a first for a commercial lawsuit in France where so far only parts of criminal cases have been conducted in camera.

It is only recently that the British Court of Appeal in London caused a sensation with its decision in the Unwired Planet against Huawei case, whereby a global FRAND licence for the SEPs of Unwired Planet was determined.

Shortly afterwards, and in reference to this decision, the Higher Regional Court Düsseldorf found this approach FRAND-compliant, but stated it was not a benchmark for all subsequent licence agreements. The Düsseldorf court thus stands in opposition to the London patent courts.

Accordingly, the French decision is eagerly awaited by the European patent community. Come Monday, the visitors bench of Hall 1 (Department 5) might be a little crowded. So far, French judges have been known for their patent-user-friendly decisions. But since the ranks of IP judges have recently seen many newcomers, including several at the Court of Appeal, there is a feeling among the patent community that a shift to more patent-owner-friendly decisions is imminent.

Cyrille Amar patent litigator Paris

Cyrille Amar

For Conversant Wireless
Hoyng Rokh Monégier (Paris): Denis Monégier du Sorbier, Benoît Strowel

For LG
Amar Goussu Staub (Paris): Cyrille Amar

Court of Appeal, Paris, Department 5, chamber 1
David Peyron (presiding judge), Isabelle Douillet, François Thomas

Dates of the oral hearing at the Court of Appeal in Paris: Monday 4 March and Tuesday 5 March at 2pm, Wednesday 6 March at 1:30pm