FRAND licence disputes did not lead to more cases at UK patent courts

The UK High Court and Court of Appeal have established themselves globally as the go-to courts for determining FRAND rates between SEP holders and implementers. Many UK lawyers had hoped this would attract more cases and business to London firms. However, according to the UK civil justice statistics, this did not materialise in 2024.

The UK High Court recorded slightly fewer cases than in 2023, dropping from 46 to 44 new patent cases. The court reached its peak in 2016 and 2017, with 71 and 85 new cases respectively. Numbers then fell to 40 and have since hovered around 50 new cases per year. After falling to 35 in 2022, cases recovered by 31% to 46 in 2023.

Many UK lawyers saw this as evidence that the UK’s position outside the UPC was benefiting its patent courts. They had hoped this trend would continue. However, these hopes were dashed, particularly in the final two quarters of 2024 when new cases notably declined. The High Court, with permanent judges Richard Meade and James Mellor, recorded only nine new cases in each of these quarters, compared to ten and 16 in the first two quarters.

IPEC maintains upward trend

Like the High Court, the Intellectual Property Enterprise Court saw its highest number of cases in 2017, with 242 new IP cases. The IPEC, a specialist subdivision within the Business and Property Courts of the UK High Court, has since consistently recorded fewer than 200 cases annually.

Over the past twelve months, new IP cases totalled 141, up 6.9% from 132 in 2023. This marks the second consecutive year of growth. While the UK statistics do not specify how many IPEC cases relate to patents, experts believe technical property rights make up the majority.

Combined, both first-instance courts saw seven more cases than the previous year. The number of new cases at the Court of Appeal, which handles second-instance patent cases, is not yet known.

While the IPEC primarily serves UK companies in patent disputes, the High Court has established itself as an international forum. Only nine High Court cases involve UK companies, compared to 95 at the IPEC.

Most new High Court cases pit UK companies against foreign entities. In three High Court cases and two IPEC cases, neither party is UK-based. In four High Court cases, neither the claimant nor defendant was based in the UK or EU.

Bucking continental trends

The UK figures are the first to be published this year. JUVE Patent is currently researching case numbers at continental courts.

Unlike their European counterparts, UK courts appear unaffected by the UPC’s launch. German and Dutch courts saw sharp declines in new patent cases in 2023. The Paris Judicial Court saw a slight increase of 3% in 2023, though 2024 figures are not yet available.

The Netherlands has not yet published figures, but patent litigators and judges report a dramatic decline last year, primarily attributing this to the UPC.

Germany’s seven main patent courts recorded 601 new patent cases in 2023 – a 23.6% decline from the previous year. This downward trend continues in 2024, albeit less dramatically. JUVE Patent will publish the latest figures in the coming weeks.

Pharma revocations and FRAND determinations

The UK courts have developed two key specialties: pharmaceutical revocation actions and FRAND-rate determinations. In pan-European pharmaceutical disputes over blockbuster drugs, generic drug companies often turn to the UK High Court to challenge patents or SPCs. The court’s relatively swift rulings invalidating such rights frequently influence proceedings in other European countries.

The UK High Court dismissed a nullity action brought by Accord, Sandoz and Teva against Astellas’ patent in 2024. In October, Pfizer’s nullity suit against GlaxoSmithKline’s RSV vaccine patent succeeded. Additionally, the court ruled in favour of Novartis and Genentech, upholding the British part of EP 3 805 248, in the dispute over the asthma drug omalizumab.

The UK patent courts are drawing international attention for their approach to SEP and FRAND disputes. The UK High Court regularly determines FRAND rates — currently London is the only jurisdiction worldwide to do so. In July 2024, the UK Court of Appeal affirmed the courts’ jurisdiction over such FRAND rate disputes but ordered Lenovo to increase its payment to InterDigital.

Interim licence disputes gain prominence

In September 2024, the Court of Appeal’s order for an interim licence in the Panasonic vs Xiaomi dispute led to a swift settlement. As a result, a scheduled UPC hearing did not take place. Since then, interim licence proceedings have gained prominence.

In late February, the court ruled that Lenovo is entitled to an interim cross-licence from Ericsson. The FRAND dispute between NPE Optis and Apple has also recently come before the UK Court of Appeal. A ruling is expected within weeks.

However, the UK courts have taken a more cautious approach to setting rates for pool licences. In the dispute between Tesla and Avanci and its licensor InterDigital, the courts have so far denied Tesla a 5G pool licence. Last Friday the Court of Appeal handed down a judgment upholding a first-instance ruling in favour of Avanci and InterDigital.

Recently, Samsung and ZTE initiated a major SEP dispute spanning the UK High Court, UPC and a German court. Looking ahead, experts anticipate proceedings will increasingly focus on semiconductors and wi-fi patents.

Future outlook

This year’s case numbers will partly depend on how UPC judges approach FRAND-rate determination. So far, they have not competed with the UK High Court in this area.

Furthermore, the impact of the UPC’s new long-arm jurisdiction approach on UK proceedings remains unclear. In the Fujifilm and Kodak dispute, Düsseldorf’s local division recently ruled it has jurisdiction to hear cases regarding the UK part of a patent-in-suit when defendants are based in UPC member states.

Additionally, the CJEU recently revived the European cross-border injunction. Its effect on UK cases remains to be seen. Above all, the current uncertain economic and geopolitical climate could negatively impact case numbers across all European courts.