The UK High Court's latest decision in the case between Optis and Apple could have major consequences for the iPhone retailer. The court determined that Apple must take a licence on as-yet-undecided FRAND terms or face an injunction. The decision marks a continuation of the Supreme Court's case law as handed down in last year's Unwired Planet judgment.
30 September 2021 by Amy Sandys
In the third of six trials in the wide-ranging battle between Apple and non-practising entity Optis, presiding judge Richard Meade has clarified that Apple, as an implementer, must commit to enter into a court-determined FRAND licence to avoid an injunction. He also dismissed Apple’s threat to leave the UK market altogether to avoid the implications of a potential global FRAND licence.
The court has granted Apple time to consider the offer, or else offer another undertaking. At the previous technical trial, the judge found that Apple had infringed a valid Optis SEP. Now, if Apple does not commit to a court-determined FRAND licence, it could face a sales ban in the UK.
The latest trial, known as Trial F, arose due to Optis amending its pleadings to determine whether Apple is an unwilling licensee. This was due to Apple’s apparent disinclination to take a court-determined licence on FRAND terms. Optis argued that, if this was the case, Apple was disentitled from relying on Optis’ ETSI FRAND commitments. As such, Optis sought an injunction against Apple between the technical trials and next year’s upcoming FRAND trial.
The High Court has found that Apple can only rely on Optis’ undertaking to ETSI if it commits now to enter the licence determined at next year’s FRAND trial. However, the judge declined to grant an injunction against Apple until this completion. The application of a court-determined licence follows last year’s Huawei vs. Unwired Planet decision in its setting of global rates.
In 2019, Optis brought several actions against Apple. The software company claimed that Apple’s 3G and 4G devices infringed eight standard essential patents which form part of its wider PO Portfolio. The UK courts listed four technical trials, of which it has heard Trial A and Trial B.
In the first trial, presiding judge Colin Birss found now-expired patent EP 12 30 818 valid, essential and infringed. During the second trial, Richard Meade also found EP 22 29 744 B1 valid, essential and infringed. Here, the Trial F issue arose as to whether Optis is entitled to an injunction or whether Apple can assert a FRAND undertaking. However, in Trial B the judge granted Apple permission to appeal regarding validity – another court assertion made during the Unwired Planet judgment.
As such, the following two technical trials will further determine to what extent, if at all, Apple infringes the remaining other valid and/or essential Optis portfolio patents.
The next of these trials, Trial C, is scheduled to begin on 5 October 2021. Trial D begins in January 2022.
The sixth trial, Trial E, is a FRAND and competition trial scheduled by the courts to take place in June and July 2022. Following this trial, the court will also consider Apple’s claims that Optis has abused a dominant position.
Parallel proceedings are ongoing in the US, although these are not concerned with FRAND.
The London office of EIP, behind partner and leading man Gary Moss, once again acted for Optis in the proceedings. As usual, EIP relied on FRAND support and competition expertise from Osborne Clarke partner Arty Rajendra. Both teams are well-known for their co-ordination in the Supreme Court case between Unwired Planet and Huawei, for whom both acted for the NPE.
With PanOptis the parent company of Unwired Planet and Optis, the latest judgment serves to reinforce the reputation of EIP as being strong in its representation for NPEs. Apple turned to its usual advisors in the UK, WilmerHale, for the technical and FRAND aspects of the trial.
The case is by nature more focused on contractual and competition law. As such, both parties relied on barristers from Brick Court Chambers and Monckton Chambers, which specialise more specifically in competition and European law.
Brick Court Chambers (London): Sarah Ford
8 New Square (London): Isabel Jamal, Jennifer Dixon
EIP (London): Gary Moss (partner); associates: Angela Jack, Elizabeth McAuliffe, Owen Waugh, Hannah Elam, Emily Atherton, Stephanie Harris, Drew Layton
Osborne Clarke (London): Arty Rajendra (partner)
UK High Court of Justice, London
Richard Meade (presiding judge)