A Valuation Perspective on the Proportionality of the FRAND Injunction issued in Unwired Planet vs Huawei

A Valuation Perspective on the Proportionality of the FRAND Injunction issued in Unwired Planet vs Huawei

On August 26 2020 the UK Supreme issued a landmark decision in the matter of Unwired Planet vs Huawei. The decision revolutionised the debate on standard essential patents as the Court confirmed that a Global FRAND (fair reasonable and non- discriminatory) rate can be sanctioned with an injunction in the U.K. To assess whether the issuance of an injunction was proportional to the value of the infringed standard essential patents, the article builds upon the valuation approaches contained in the judgment itself. It does so, by comparing the value of the injunction to the implied value of the patents that caused the British injunction. Only a slight adjustment to the Court accepted valuation approach suggests that the value of the infringed 4G Patent with the patent number EP2229744A1 (EP’744) would be 0.0319% for handsets and 0.008% for infrastructure respectively and the hypothetical rate for the infringed 3G Patent EP1230818B1 (EP’818) would be 0.0319% for handsets and 0.008% of net sales for infrastructure across all major markets; including the United Kingdom.  Comparing this to the direct value of the injunction, for which a proxy indicator of 1% of gross sales is assumed, shows that the direct value of the injunction significantly outweighs the estimated value of the infringed patents. Whether this is commensurate with the proportionality factors set out under English law should be further examined.