SEP licences

Conversant defeats attempt to move FRAND case to China

A claim by Huawei and ZTE, that Chinese, rather than English courts should hear claims by non-practicing entity Conversant, has been rejected by the Courts of Appeal. Following last week's judgment, Conversant is yet to grant licences to the manufacturers on FRAND terms (case ID: A3/2018/1274, A3/2018/1278).

4 February 2019 by Amy Sandys

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Conversant also included in its initial claim a request for the High Court to determine Huawei and ZTE’s FRAND rate. However the Court of Appeal hearing saw Huawei and ZTE state this as untenable, given that the dispute relates to the validity of Conversant’s foreign patents which they argued was not a matter for an English court.

The second challenge saw appellants claim that the Chinese, not the UK courts, were the most appropriate location for a hearing. This was rejected in a judgment by presiding Courts of Appeal judge Christopher Floyd.

Garry Moss

The first jurisdictional challenge regarding the appropriateness of UK courts to hear global FRAND determinations was not pursued by Huawei and ZTE. This is following the Unwired Planet judgment of October 2018, where judge Colin Birss’ High Court decision to offer Huawei a global FRAND licence was upheld.  However, unlike in the Unwired Planet judgment, Huawei and ZTE challenged the UK High Court to determine a global FRAND licence on jurisdictional grounds.

Conversant, which acquired patents from Nokia in 2005, has been previously unsuccessful in attempts to licence its portfolio of SEPs in the telecommunications arena. Given the upholding of the High Court decision, Huawei has sought an appeal against the judgment. While this has so far been rejected by the Supreme Court, the technical case is going ahead.

UK: global FRAND policeman?
For some commentators, the judgment further cements the UK courts as increasingly friendly towards patent owners who want global FRAND determination despite being domiciled in the UK, says one partner at a London IP firm.

So far, it has been solely telecommunications cases concerning the courts with SEPs and FRAND. But as industries reliant on standard essential patents evolve, such as the Internet of Things and smart homes, it is likely that court cases concerning the geographical remit of FRAND licences will increase. Whether these emerging industries have the capacity and expertise to deal with these challenges, and the courts the willingness to expand their litigations, remains to be seen.

No decision yet in Germany

A large part of the international dispute, with cases also ongoing in China, France and the USA, is raging before the German courts. Here Conversant had asserted three European patents (EP 1 797 659, EP 1 173 986 and EP 1 878 177) against LG, Huawei and ZTE. The mobile phone manufacturers are threatened with injunctions and damages due to patent infringement.

The proceedings against LG (case IDs: 7 O 3277/18, 7 O 3892/18 and 7 O 3893/18) is being brought before the Munich Regional Court, where the first of at least two oral hearings took place in January.

The complaints against Huawei (case ID: 4b O 30/18) and ZTE (case ID: 4b O 31/18), on the other hand, will only be heard by the Düsseldorf Regional Court on the 14 and 28 November.

In the meantime, the mobile phone manufacturers have filed nullity suits against two patents at the German Federal Patent Court. An opposition with the EPO is lodged against the third.

The proceedings against LG in France concerning a global licence have made further progress. A first instance decision here has been appealed. The case will be heard at the Appeals Court on 4-6 March.

Broad involvement

In London, the respondent Conversant was represented by the London office of IP law firm EIP Legal, probably the best known firm for NPE clients, having also acted for Unwired Planet. Partner Gary Moss led the team, alongside Robert Lundie-Smith, Catherine Howell, Tom Brazier. EIP worked alongside in-house counsel for Conversant, Scott Burt.

Conversant retains EIP in Germany as well, supported by Ampersand partner Hosea Haag and patent attorney David Molnia of df-mp Dörries Frank-Molnia & Pohlman. The three law firms have cooperated before in the German lawsuits for Unwired Planet.

ZTE has been represented since July 2017 by the London office of Bristows, led by partner Andrew Bowler on the patent litigation side, and Sophie Lawrance for competition law and antitrust. The London office of Allen & Overy advocated for Huawei in a team led by Neville Cordell and Mark Heaney, both partners at the firm.

In Germany Huawei, LG and ZTE are represented by their regular advisors Preu Bohlig & Partner, Taliens and Wildanger Kehrwald Graf v. Schwerin & Partner.

For Conversant
8 New Square (London): Adrian Speck, Thomas Jones
Brick Court (London): Colin West
EIP Legal: Gary Moss (lead), Robert Lundie-Smith, Catherine Howell, Tom Brazier
In-house: Scott Burt (chief intellectual property officer, general counsel)

For Huawei
20 Essex Street (London): Alexander Layton
One Essex Street (London): Henry Forbes Smith
Allen & Overy (London): Neville Cordell (lead), Mark Heaney

For ZTE
Blackstone Chambers (London): Michael Bloch
Bristows: Andrew Bowler (lead), Sophie Lawrance; associate: Luke Maunder

Courts of Appeal, London
Christopher Floyd (presiding judge), Julian Flaux, Nicholas Patten