Rapid Reaction: InterDigital v Lenovo FRAND Insights on the decision of the High Court of England and Wales
Join us on the 24th of March 2023 | 15.30 GMT
Insights OxFirst Webinar: Interdigital v Lenovo
Mr Justice Mellor’s judgement on InterDigital v Lenovo was published on 15th March. It is a substantial document, running to 225 pages, and has been expected for some time now. Only the second FRAND license determination in the UK, the English Court once again exercised the ability established in Unwired Planet v Huawei to set terms for a global FRAND license.
The Court determined Lenovo must pay $138.7m to InterDigital as a lump-sum at a rate of $0.175 per device to cover the period between 2007 and the end of 2023. Both parties had previously offered the other lumpsum royalty rates, neither of which were FRAND. InterDigital had sought a license fee of $337m whilst Lenovo sought $80m (±15%). Per device, these sums calculate to $0.498 and $0.16 respectively. The substantial difference between these two rates likely explains, in part, why this was not settled outside of court as is common in FRAND disputes.
The rate determination was made on the basis of comparable license assessment and substantial detail is attached to this in the judgement. The Court rejected twenty licenses relied upon by InterDigital and instead relied principally on one of the seven licenses put forward by Lenovo. The Court found there to be no utility to either of InterDigital’s top-down analyses, but did not dismiss the utility of top-down analysis as a cross check (as performed in Unwired v Huawei) in general terms.
InterDigital was found to be an unwilling licensor as a result of the supra-FRAND rates offered to Lenovo, who “for the most part” were found to have conducted themselves as a willing licensee.
Reception to the decision is likely to be mixed. On the one hand, the Court’s determination of the licensing rate is closer to Lenovo’s proposal than that of Interdigital. InterDigital have already indicated they intend to appeal elements of the decision. One the other hand side several features indicate the English Court is keen to avoid hold-out, such as the determination that past sales should be paid at the FRAND rate without discount and the prospect of interest, which is yet to be determined.
The judgement reaffirms the English Court’s ability to impose a global FRAND rate, but simultaneously recognises this role is not unique and that courts in other jurisdictions will make similar determinations. It remains to be seen what happens should these courts disagree.
The judgement is available in full at: https://caselaw.nationalarchives.gov.uk/ewhc/pat/2021/3192.
See OxFirst recent webinar with Bristows LLP discussing the Interdigital v Lenovo judgement: https://www.youtube.com/watch?v=UbAWgRTpnK0
About the Speakers
Sophie is joint head of Bristows’ EU and UK competition law practice. She specialises in disputes and investigations, as well as advisory work, and has a particular interest in matters where competition law and IP intersect, and frequently works for technology-rich companies or companies operating in such sectors. Alongside her specialist case load, she has particular experience in working on FRAND issues, from the perspective of both licensor and licensee, advising on negotiation and valuation issues, and handling disputes before the English courts. Previous mandates in this area include for Samsung (claim by Unwired Planet dispute) and ZTE (claim by Conversant, which progressed up to the UK Supreme Court).
Myles is joint head of patent litigation. While his practice covers the full range of intellectual property rights it has focused in recent years upon high-tech patent litigation for multinational companies. Myles is also part of Bristows’ competition department with experience of handling competition disputes before the UK courts and the European Commission. His work within this department has given him considerable experience in the interface between IPRs and anti-trust issues, particularly in the telecoms sector.
Myles is a member of AIPPI and is the President of the Board of The European Patent Lawyers Association (EPLAW), a non-profit making Association of experienced patent lawyers in the European community with the aim of promoting the equitable and efficacious handling of patent disputes across Europe. His practice has an international nature, with the vast majority of cases in the last 20 years including the co-ordination of parallel cases in jurisdictions throughout the EU and the US. He has closely followed the development of the pan-European Unified Patent Court (UPC) throughout its development.
Luke specialises in intellectual property disputes in the technology sector, with a significant number of his cases involving multi-jurisdictional disputes over standard essential patents and FRAND terms. He acted in the lead cases brought by Unwired Planet and by Conversant Wireless Licensing, and more recently acted for Philips in its disputes with Vestel and with Xiaomi. Alongside those disputes, he has a busy advisory practice relating to FRAND issues.
Luke also has extensive experience of a wide gamut of interim applications at all levels of the Court system (including the UK Supreme Court). He has a particular interest and expertise in jurisdiction challenges and anti-suit relief, which frequently arise in the context of FRAND disputes. He has degrees in both computer science and law, and is the secretary of the IP Enterprise Court Users’ Committee.