FRAND

Game over in Unwired Planet and Huawei dispute in Germany

Panoptis, the parent company of Unwired Planet, and Huawei have reached a settlement which ends their litigation in the US and Germany. The battle between the non-practising entity and Huawei has been the root of FRAND discussions across Europe. But the high-stakes patent dispute came to an early end before Germany's highest court could release its decision. The UK Supreme Court is still able to decide on the case.

27 April 2020 by Mathieu Klos

Unwired Planet and Huawei Unwired Planet and Huawei have reached a settlement which ends all litigation in Germany ©ldprod/ADOBE STOCK

According to sources close to Unwired Planet and Huawei, the parties have recently reached a settlement. The intensive talks between Panoptis, the parent company of the NPE, and Huawei became public knowledge at the end of January. Now it seems the parties have reached a conclusion.

The two opponents have apparently agreed to end their patent disputes in the US and Germany. These include the dispute between non-practising entity Unwired Planet and Huawei in Germany. Meanwhile, Germany’s highest civil court, the Federal Court of Justice, confirmed that the parties withdrew the pending FRAND case (case ID: 10 ZR 33/19). According to other sources, other claims at lower courts have also been withdrawn.

However, the parties have given JUVE Patent no further details of the agreement. The editorial team did not receive a response from their requests to Panoptis and Huawei.

Unlike JUVE Patent suggested in an earlier report, the Supreme Court case between Unwired Planet and Huawei appears to remain unaffected (case ID: UKSC 2018/0214). Meanwhile, a Supreme Court spokesperson confirmed that the parties have not withdrawn the case, as reported by IP magazine IAM.

The Supreme Court spokesperson says, “The parties would need to submit an application in order to withdraw the case. The Supreme Court has not received such an application. If an application is received, it will be for the justices to decide how the Court should proceed and whether a judgment will still be issued.”

One source told JUVE Patent that the interactions with the parallel case between Conversant and Huawei/ZTE could not be resolved. Therefore, the Unwired Planet case will continue and a Supreme Court judgment on this important FRAND case is extremely likely.

Supreme speculation

Almost three years on, the case in London is at an advanced stage. The Supreme Court heard the case in November 2019, with a verdict expected at the beginning of 2020. The UK Supreme Court judges had to examine whether a UK court may order a licence on the basis of a UK patent in conjunction to setting a licence rate. This was the ruling of the UK High Court under presiding judge Colin Birss. The judgment was largely upheld by the Court of Appeal.

Sources have confirmed to JUVE Patent that the judges are indeed expected to release a judgment in the case. However, it is unclear when the Supreme Court judges will decide on the case. Lawyers expected a judgment quickly due to the importance of the FRAND issues at stake. This especially given the parallel Conversant and Huawei/ZTE case which also examines, and will have an effect on, important FRAND issues.

Huawei and ZTE claim that Chinese, not UK, courts should hear FRAND claims by non-practising entity Conversant. Both parties had also offered Conversant global FRAND determinations in China. However, the late Henry Carr rejected these suggestions at the High Court. The reasoning was that the case concerns UK patents and is thus untenable on Chinese terms, despite the appellants advocating for a separate UK infringement judgment. The Court of Appeal upheld the decision.

Game over in Germany

The Federal Court of Justice will no longer decide the case after the settlement between Panoptis and Huawei, even though the case touches on fundamental FRAND issues. Indeed, many patent experts hoped that the decision of the highest German civil court would unify the FRAND case law of Germany’s patent courts. Now the settlement means that, under German law, the court no longer has the authority to decide on the issues at stake.

Nevertheless, the Federal Court of Justice could soon unify German FRAND case law. Since 2015, the CJEU’s FRAND guidelines have been interpreted differently by the patent courts at Düsseldorf, Mannheim and Munich. The Federal Court of Justice in Karlsruhe has not yet had the opportunity to interpret CJEU case law. But two more cases are still pending before the court in Karlsruhe. One is the dispute between Philips and Wiko (case ID: X ZR 101/19), the other the case between Sisvel and Haier.

The case between Sisvel and Haier is likely to produce the first verdict. The Federal Court of Justice had scheduled an oral hearing for 31 March, but the court postponed this until 5 May due to the coronavirus pandemic (case ID: K ZR 36/17).

Non-compliance

The case between Unwired Planet and Huawei began in 2014, after Unwired Planet acquired six patents from Ericsson. Unwired Planet classified five of the patents as essential for mobile radio standards GSM, UMTS and LTE. Initially, in the UK, Unwired Planet accused Samsung, Google and Huawei of violating these patents. In Germany, the patent holder also sued HTC and LG.

While Samsung, Google and LG reached a settlement with Unwired Planet, HTC and Huawei continue to fight the suits in Düsseldorf and London respectively. However, the dispute between Unwired Planet and HTC is ongoing despite the settlement with Huawei.

In Germany, the Düsseldorf Higher Regional Court has already issued an important decision. In April 2020, the court ruled that Huawei infringed the Unwired Planet patent. However, the court also called for clear FRAND rules to ensure the transfer of SEPs does not discriminate against licencees (case ID: I-2 U 31/16).

In April, the court found that the licensing behaviour of Unwired Planet and its co-litigant Ericsson during the transfer of the patent might not be FRAND-compliant. According to the court, Unwired Planet does not have the full right to claim damages.

Long list of advisors

During the seven years of litigation, both Unwired Planet and Huawei have held firm to their teams. The actions were originally filed by EIP Europe around London partner Gary Moss.

Benjamin Grzimek, Fieldfisher, Unwired Planet patent

Benjamin Grzimek

In Germany, responsibility lay with Düsseldorf EIP partner Benjamin Grzimek, who moved to Fieldfisher while the case was ongoing. David Molnia from df-mp Dörries Frank-Molnia & Pohlman assisted Grzimek.

A Freshfields Bruckhaus Deringer team around Frank-Erich Hufnagel represented co-litigant Ericsson.

As in many other German proceedings, Huawei banked on a team consisting of patent attorney Friedrich Emmerling from Braun-Dullaeus Pannen Emmerling and Christian Donle, litigator with Preu Bohlig & Partner.

In the UK, Powell Gilbert partner Simon Ayrton and his team usually represent Huawei. (Co-author: Amy Sandys)

Update: JUVE Patent updated the article on 29 April 2020 due to new information about the Supreme Court case in UK.

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