‘In the absence of a global dispute mechanism for determining FRAND disputes, or an ad hoc agreement to arbitration, the possibility of jurisdictional conflict is inescapable.’
‘The terms (financial and non-financial) of this Agreement are subject to adjustment and amendment so as to bring those terms into line with the terms of the final global license determined to be FRAND by the High Court of Justice of England & Wales at the UK FRAND Trial, and subject to any later adjustments or amendments following any appeals in the UK FRAND Proceedings, or the license that is otherwise agreed between the Parties. Any adjustments or repayments due to either Party, if needed, would be made following the determination of the said Court-Determined License.’
‘71…..The expression “a high degree of assurance” comes from cases in which a party applies for interim relief which is likely to cause irremediable prejudice to the defendant if wrongly granted (see National Commercial Bank Jamaica Ltd v Olint Corp Ltd[2009] UKPC 16 , [2009] 1 WLR at [18] (Lord Hoffmann)) or whose effect will for one reason or another be determinative (see, for example, Koza Ltd v Kaza Altin Isletmeleri AS[2020] EWCA Civ 1018 ,[2021] 1 WLR 170 at [77] (Popplewell LJ) (interim injunctions) and National Crime Agency v N[2017] EWCA Civ 253 ,[2017] 1 WLR 3938 at [89] (Hamblen LJ, as he then was) (interim declarations)). 72. Panasonic argues that Xiaomi’s application is for relief which is intended to be determinative of what a willing licensor in the position of Panasonic would do in the period between now and the Patents Court’s determination. Furthermore, this is not an issue which will arise at trial. Given that the application has been made by way of an application notice during the course of proceedings underCPR Part 23 , and which has not been determined by way of trial, the court is required to have a high degree of assurance that Xiaomi are entitled to the relief they seek, albeit that Xiaomi do not have to establish their case to the summary judgment standard. 73. In my judgment Xiaomi’s argument conflates two different things, which explains why their counsel’s submission to the judge was equivocal. Xiaomi is correct that the standard of proof in civil proceedings such as these is the balance of probabilities. The “high degree of assurance” test is not concerned with the standard of proof, however. It is concerned with the extent to which a court dealing with an interim application should take the merits of the parties’ substantive cases into account as opposed to considerations such as the balance of the risk of injustice. In the present case it is appropriate for a high degree of assurance to be required for the reasons given by Panasonic. For the reasons given below, however, this test is satisfied.’
‘…Lenovo have not applied for an interim declaration pursuant toCPR rule 25.1 (1)(b). They seek a declaration that will not be reconsidered at trial. Thus the application is for relief which is determinative of this particular issue. It is for this reason that a high degree of assurance is required: Panasonic v Xiaomi at [71]-[73].’
“… Amazon’s application for an interim licence will not require the court to determine most of the issues which will arise at the RAND trial. It will simply require the Court to determine (1) whether Amazon are entitled to an interim licence and (2) if so, what terms are appropriate. As can be seen from Panasonic v Xiaomi, the question of what terms are (F)RAND for an interim licence is quite different to the question of what terms are (F)RAND for a final licence, and determining such terms is a much more limited task. As Amazon submit, this is because the interim licence is only designed to hold the ring pending determination of the terms of the final licence, and the payments made pursuant to it will be adjusted to the extent necessary in consequence of the determination of the terms of the final licence.”
‘Prospective and retrospective adjustment of all terms, including the royalty, in accordance with the final determination of FRAND terms in these English proceedings.’
‘37. Naturally, the interim licence offers are confidential, but I will say that the sum payable in ZTE’s offer seems unnecessarily and unreasonably high and provides some further indication of hold up.’
‘The only material difference between the ZTE April Interim Licence Offer and the Samsung May Terms is, therefore, as to the forum that will determine FRAND terms.’
‘There is ….no legal basis for the Interim Licence Declarations sought. The Declarations would not serve any useful purpose as ZTE, having already made two offers of an interim licence adjustable by its preferred forum, has no intention of granting an interim licence on the terms sought by Samsung, which would require ZTE to give up its preferred forum. In the circumstances, the Declarations would mark this Court’s disapproval of or contempt for the Chongqing Proceedings in breach of comity.’
‘On the assumption (which we consider to be implicit in the Court’s question) that (i) the Court makes the interim licence declarations sought, (ii) ZTE offers and the parties enter into the interim licence on terms ordered by the Court within seven days of the Court’s Order, and (iii) ZTE is itself prepared to stay all parallel/foreign actions it commenced or initiated against Samsung (other than the Chongqing proceedings) until the parties’ execution of the final FRAND licence or, if this is not possible, move to dismiss them without prejudice and not re-file until such time, Samsung will apply forthwith to the relevant courts to stay (or the equivalent in local law) all parallel/foreign actions it has commenced or initiated against ZTE until the parties’ execution of the final FRAND licence or, if this is not possible, move to dismiss them without prejudice and not re-file until such time, including (for the avoidance of doubt) the Frankfurt and NDCA proceedings, with the exception (naturally) of these UK proceedings.’
‘108. In those circumstances, Lenovo contend that the central question posed by this Court in Panasonic v Xiaomi at [82] also arises here: what is the point of Ericsson pursuing the Brazilian, Colombian and US proceedings, and attempting to exclude Lenovo’sproducts from those commercially important markets, with all the massive attendant effort and expense for both parties? Lenovo argue that, just as in Panasonic v Xiaomi, there can only be one answer to that question: Ericsson wish to coerce Lenovo into accepting terms more favourable to Ericsson than the English courts will determine to be FRAND.’
‘Prospective and retrospective adjustment of all terms, including the royalty, in accordance with final determination of FRAND terms in the Chongqing Proceedings (absent earlier agreement by the parties);’
‘Parties want to litigate where they do business because they are familiar with the legal system, because they are familiar with court procedures, because the language of the litigation is familiar to them, because of the location of documents or witnesses, because of the desire not to lose management time through travel, because of relative legal costs in China compared to England.’
‘152. The first is that making the declaration sought by Lenovo would be contrary to comity because the courts and tribunals of the USA (specifically, the EDNC and the ITC) were first seised of the dispute between the parties. There is no doubt that, viewed from a jurisdictional perspective, this is an important consideration. As I explained, however, Ericsson failed in their challenge to the jurisdiction of the English courts and did not appeal. In those circumstances we must proceed on the basis that the English courts are properly seised of the FRAND dispute. Furthermore, as Lenovo point out, the English courts have exclusive jurisdiction to determine the issues concerning the 2011 MM Licence, which have a significant impact on what terms for the cross-licence are FRAND. In those circumstances, the legal centre of gravity, although not the commercial centre of gravity, of the overall dispute is in England. 153. In the absence of a global dispute mechanism for determining FRAND disputes, or an ad hoc agreement to arbitration, the possibility of jurisdictional conflict is inescapable. Leaving aside Lenovo’s point about the exclusive jurisdiction clause in the 2011 MM Licence, the principled answer to this might be that the court first seised should determine what terms are FRAND. In the present case, however, it is plain that Ericsson do not want the EDNC to determine FRAND terms for the cross-licence any more than they want the English courts to do so. If Ericsson wanted the EDNC to determine FRAND terms in preference to the English courts, they would have made the simple amendment to their claim in the EDNC I Proceedings which Richards J identified as being appropriate in his judgment on the Jurisdiction Application as long ago as18 April 2024 and would have undertaken to accept the EDNC’s determination as to FRAND terms. Ericsson have not done so. By contrast, Lenovo have offered to accept the EDNC’s determination as to FRAND terms if Ericsson drop their campaign to obtain injunctions and equivalent relief, but Ericsson have not agreed to this. On the contrary, Ericsson have vigorously pursued such relief, in particular in the ITC. This demonstrates that Ericsson’s stance is not driven by jurisdictional preference with respect to FRAND determination.It is driven by a preference for the exclusionary power of a national injunction (or equivalent relief) over FRAND determination by any court. This is hold up. 154. The second argument is that making the declaration sought by Lenovo would promote forum shopping. Since SEP owners like Ericsson forum shop every time they commence infringement proceedings against an implementer, the premise for this argument can only be that forum shopping by SEP owners is acceptable whereas forum shopping by implementers is unacceptable. When asked to justify that premise, counsel for Ericsson was unable to do so. The principled answer is that forum shopping by both SEP owners and implementers is equally to be deprecated. Regrettably, however, the potential for forum shopping is an inevitable feature of the present ETSI IPR Policy. I would also point out that Ericsson’s approach may suit large and well-resourced SEP owners, but it would not be viable for smaller, less well-resourced ones. 155. In conclusion, I entirely accept that, as counsel for Ericsson submitted, jurisdictional imperialism is to be eschewed. As I have explained, however, it is common ground in this case that a FRAND cross-licence would be global. UPSC establishes that, in such a case, the English courts have jurisdiction to determine what terms are FRAND on a global basis. A critic might argue that, to that extent, a degree of jurisdictional imperialism is already hard-wired into the English courts’ approach to these issues. The declaration sought by Lenovo is less intrusive into the jurisdictions of foreign courts and tribunals than a global FRAND determination.’
‘16 But what is to happen if the courts of more than one country are seised with proceedings concerning the SEPs in question? If more than one country’s courts proceed to determine the terms of a global FRAND licence, there is an obvious risk of inconsistent decisions (not to mention a huge waste of legal costs). The only way to avoid the risk of inconsistent decisions is to ensure that only one court determines the terms of the global FRAND licence. As a matter of principle, one might expect this to be the court first seised of the dispute, with its determination being binding on the parties (by way of res judicata) in any other proceedings. This has three potential consequences. The first is a rush by each party to the court to establish jurisdiction in a forum which is perceived to be favourable to that party’s position.’ [Arnold LJ’s second and third consequences were concerned with anti-suit injunctions and anti-anti-suit injunctions, neither of which have featured in this dispute, at least to date.] ‘17 The only sure way to avoid these problems is to use a supranational dispute resolution procedure, and the only supranational procedure currently available is arbitration. If the parties do not agree to arbitration, however, the national courts must deal with the resulting jurisdictional disputes as best they can. Because there are no bespoke jurisdictional rules applicable to such disputes, still less any internationally agreed ones, national courts must apply their ordinary jurisdictional rules. In doing so national courts must have due regard to comity (that is, the need to respect the jurisdictions and judicial systems of other nations), but national courts cannot solve the problems inherent in the present system of resolving SEP/FRAND disputes.’
“… Comity in this context means that the courts of this jurisdiction should respect the ability of courts [in other countries] to decide issues falling within their respective competencies, and should be cautious about granting any relief which might interfere with such courts’ exercise of their own jurisdictions or which might be perceived as an attempt to do so (unless there are proper grounds for the grant of an [anti-suit injunction]).”
‘38 Before the change of tack which was initiated at the hearing before Henry Carr J by ZyXEL’s indication that they no longer wished to take a RAND licence, and completed by the irrevocable waiver tendered in Mr Haargaard’s witness statement, the court’s declaratory jurisdiction was entirely properly invoked as part of resolving ZyXEL’s answer to the grant of the usual relief for patent infringement. The position in the light of the waiver is, however, very different. Insofar as the declaration seeks simply to determine the scope and terms of the licence which TQD is bound to offer to the two ZyXEL parties, it would no longer serve a useful purpose, because those parties have said that they have no interest in deploying such a licence, whatever its terms would ultimately prove to be, to prevent the grant of that relief. For the same reason, they have no interest in a determination by the court as to whether TQD are obliged to grant them a licence for the purposes of resisting that relief. As a consequence, relief has been granted in respect of the 268 patent, and ZyXEL have offered to pay the full amount of the damages claimed (if the RAND trial does not go ahead). 39 The judge appears to have accepted the position as I have summarised it in the last paragraph, but to have regarded the waters as muddied by arguable concerns over the effect of the waiver.’
‘52 These considerations force me strongly to the conclusion that the questions on which the court’s declaratory judgment is sought are far better decided in the foreign court where those questions arise, if they ever do. It would be an exercise in jurisdictional imperialism to foist this court’s view as to whether ZyXEL were unwilling licensees, or holding-out on an unknown foreign jurisdiction. Far less can it be said that it is in the interests of justice for it to do so.’