Standard essential patents

Powell Gilbert and Kirkland alongside for Xiaomi against IPCom

For now, Xiaomi can still sell its UMTS-enabled devices in the UK. IPCom had sought a preliminary injunction for the infringement of its 100A patent. But at the UK High Court, the non-practising entity failed against mobile phone manufacturer Xiaomi.

26 November 2019 by Mathieu Klos

The UK High Court has ruled against IPCom's 100A patent, which concerns UMTS technology ©vectorfusionart/ADOBE STOCK

The High Court ruled against the Munich-based NPE’s injunction claim in mid-November, stating “there would be no irreparable harm suffered by IPCom in the absence of an interim injunction.” This case also sees Powell Gilbert and Kirkland & Ellis co-counselling the client, where previously Kirkland acted alone.

In addition, the court noted a risk that an injunction would cause excessive damage to Xiaomi’s UK operations. In the case of non-infringement, the damages would be impossible to compensate.

IPCom requested that, unless Xiaomi agreed to conclude a FRAND licence, the UK and French Xiaomi entities and distributor Mytech be prohibited from disposing of or offering UMTS mobile devices in the UK.

The patent in question is EP 1 841 268 (UK), better known to experts as IPCom’s 100A patent. In two other cases the Court of Appeal held that EP ‘268 is valid and essential to the UMTS standard. EP ‘268 expires on 14 February next year.

Playing for time

Currently, in Paris and London, IPCom is exerting pressure on Xiaomi, Lenovo, Vodafone and HTC. The NPE is attempting to force the manufacturers to conclude a licence before the 100A patent expires.

Xiaomi launched its products in the UK market at the end of 2018. Licensing negotiations with IPCom followed but ultimately failed. As a result, both companies reciprocally submitted FRAND offers. IPCom then sued the Chinese company for patent infringement last summer in an attempt to force the conclusion of a licence at the UK High Court. The NPE has not yet ask the court to set a global licence.

In response, Xiaomi wants the court to determine whether IPCom has the jurisdiction to decide on a global licence. This issue will be heard by the High Court in January. The court has not yet set a date for the hearings on licensing and infringement.

The hearings are unlikely to take place before the 100A patent expires. This is because the Supreme Court is yet to clarify whether a UK court is entitled to order a global FRAND licence for a national patent.

Looking to the Supreme Court

This is precisely what the High Court did in Unwired Planet’s lawsuit against Huawei. The High Court also calculated a corresponding licence fee. Huawei appealed and the case was ultimately referred to the highest court in the UK. The hearing took place at the end of October. However, it is not yet clear when the Supreme Court will announce a verdict. Until it does, the lower courts are reluctant to rule on FRAND.

But this delay plays into the hands of defendants like Xiaomi. Once the patent has expired, a judgment in IPCom’s favour will be less effective. The NPE will no longer be able to pressure Xiaomi into taking a licence by threatening the company’s sales. Instead, IPCom will only be able to receive compensation for past infringements.

IPCom has therefore accused Xiaomi of playing for time. According to the NPE, Xiaomi has merely feigned interest in negotiating a FRAND licence while continuing to infringe the patent without paying a fee. With the expiry date looming, IPCom saw the preliminary injunction as a final resort at convincing Xiaomi to enter into a licence agreement.

With a view to the impending Supreme Court decision, the NPE has not yet ask the High Court to set a global licence in the dispute.

Two anti-anti-suit injunctions

It is not all doom and gloom for IPCom, however. A few days before the preliminary injunction ruling, the High Courts in Paris and London granted IPCom anti-anti-suit injunctions against Lenovo. The Paris court has demanded that Lenovo withdraw its lawsuit in the US, threatening the company with a fine of €250,000 per day.

Alex Wilson, Powell Gilbert and Kirkland

Alex Wilson

The UK court has not gone as far as its French counterpart, denying only Lenovo’s UK company the right to take action against IPCom in the US. The main proceedings can now take place, but a date is yet to be announced.

So far, JUVE Patent understands that there have been hearings in the US – but no decision. The US response to the European judgments is thus unclear.

Proceedings concerning the 100A patent, this time against Vodafone, are currently under way in London. The case is due to resume in November, although no date has been listed as yet.

The Paris patent court will hold a hearing on a preliminary injunction against Lenovo and Xiaomi on 2 December.

Powell Gilbert and Kirkland co-counsel

For Powell Gilbert, the preliminary injunction dispute with IPCom was a tailor-made debut. According to JUVE Patent’s information, the London IP boutique has been involved with Xiaomi for just a few weeks. It also represents the company in the infringement proceedings, and advises Xiaomi’s sister company Lenovo in another dispute with the NPE.

Nicola Dagg, Kirkland & Ellis, Powell Gilbert and Kirkland

Nicola Dagg

Xiaomi had originally relied entirely on the patent team around Nicola Dagg, partner at Kirkland & Ellis.

Dagg, regarded as a highly-skilled rainmaker, moved to Kirkland in autumn 2018 with a large team from Allen & Overy, and is currently building a European patent practice. The team’s representation of Xiaomi against IPCom as well as Sisvel is a remarkable testament to its rapid development.

However, it is unknown why Xiaomi also turned to Powell Gilbert for the preliminary injunction case. The roles of the IP boutique and the US law firm are most accurately described as co-counsel. On the other hand, Kirkland continues to steer the case against Sisvel alone.

Changing silks

IPCom has made only minimal changes to its counsel. Bristows has been the NPE’s go-to law firm in the UK for many years, with the preliminary injunction case no exception. However, IPCom did change its barrister.

In recent proceedings, Iain Purvis and Brian Nicholson of 11 South Square had taken the lead. In the latest case against Xiaomi, Andrew Lykiardopoulos of 8 New Square took over the trial.

Myles Jelf, Bristows, Powell Gilbert and Kirkland

Myles Jelf

For IPCom
8 New Square: Andrew Lykiardopoulos
Bristows (London): Myles Jelf, Richard Pinckney, Nicholas Round
In-house
(Munich): Pio Suh

For Xiaomi
8 New Square: James Abrahams
Powell Gilbert (London): Alex Wilson, Zoe Butler

UK High Court
Richard Hacon (presiding judge)

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