‘187. The Claimants’ may seek to take an unmeritorious position on date, namely that the particular Arbitration Adjustable RAND Licence Offers were made after these claims were issued. As the Court noted in Samsung v ZTE HC at [119], however, seisin may be a factor, but it is not a trump card, and in any event is no answer to a case management stay, which is an alternative limb which Nokia advances in its Part 11 applications.’
‘The detailed arrangements arising from patents (licensing, royalties, etc.) are left to the parties concerned, as these arrangements might differ from case to case.’
“The Patent Holder is prepared to grant a license to an unrestricted number of applicants on a worldwide, non-discriminatory basis, and on reasonable terms and conditions to make, use and sell implementations of the above document.”
“the Patent Holder shall only be required to license any prospective licensee if such prospective licensee will commit to license its essential patent(s) or essential patent claim(s) for implementation of the same above document free of charge or under reasonable terms and conditions.”
“The purpose of the ETSI IPR Policy is, first, to reduce the risk that technology used in a standard is not available to implementers through a patent owner’s assertion of its exclusive proprietary interest in the SEPs. It achieves this by requiring the SEP owner to give the undertaking to license the technology on FRAND terms. Secondly, its purpose is to enable SEP owners to be fairly rewarded for the use of their SEPs in the implementation of the standards. Achieving a fair balance between the interests of implementers and owners of SEPs is a central aim of the ETSI contractual arrangements.”
‘The patent holder is willing to negotiate licences with other parties on a non-discriminatory basis on reasonable terms and conditions. Such negotiations are left to the parties concerned and are performed outside ITU-T/ITU-R/ISO/IEC.’
‘An option right gives the beneficiary the opportunity to bring about or extend a contractual relationship whose content has already been established through a unilateral declaration of intent. A contract concluded through the exercise of an option is a legal transaction subject to a condition precedent. The validity of such a contract depends solely on the subsequent declaration by the party entitled to the option that they wish to accept it. This means that the future contract must be sufficiently defined with regard to all objectively and subjectively essential contractual points even before the option right is exercised. However, it is not necessary for the contractual relationship itself to precisely define the performance from the outset; rather, the determinability of the performance to be provided is sufficient, whereby a reference to an objective criterion according to which the scope of the performance can be determined is sufficient. If the option relates to the conclusion or extension of a lease, it must therefore at least be determinable at the time the option is exercised which leased property the landlord will lease to the tenant and at what rent. However, if the parties stipulate that the amount of the rent will only be negotiated after the exercise of the granted option, there is no option in the sense described, since the unilateral declaration does not trigger what has already been agreed upon.’
‘The clear wording of the clause in this respect provides no indication that the rent should be subject to negotiation or unilateral adjustment after the exercise of the option, i.e., that it should depend on the will of one or both parties. Rather, the amount of the rent is determined solely by the objective criterion of local custom. In good faith, similar plots of land are to be understood as initially actually rented properties that are comparable in terms of type, size, development, condition and location. If an actual basis of comparison can be established in this way, the rent can be readily determined, and the contractual content is sufficiently fixed at the time of the exercise of the option. If no such basis of comparison exists, the wording of the clause, interpreted in light of the favour negotii principle, also allows for a hypothetical basis of comparisons, i.e., a customary local rent, which is to be determined based on statistical surveys or an income estimate conducted according to recognised real estate valuation methods. Thus, even in the absence of an actual basis of comparison, the rent can be assumed to be sufficiently determinable.’
‘Is FRAND a definable term? And if not, does the FRAND declaration have any relevance under contract law at all?’ and continues: ‘This addresses the question addressed in "Unwired Planet/Huawei," namely whether, in each individual case, only a very specific set of license terms (license fee amount and other license terms) is FRAND, or whether there is a range within which the terms of various license agreements can be FRAND-compliant. The High Court opted for the former,70 thus assuming the precise, objective determinability of FRAND license terms in each individual case. In my opinion, [the High Court [mistranslation] sc. the prevailing view] and the German courts rightly take a different view.71 The High Court's appellate court was also not convinced by these considerations.72 Even if the discretionary scope for determining FRAND license terms is smaller than commonly assumed,73 the determination of the license fee in particular must necessarily be based on certain assumptions and estimates. Furthermore, there is still a lack of consensus in the literature regarding the methodology for determining FRAND terms as objectively as possible. Therefore, the idea of a single FRAND contract design in individual cases is not convincing; rather, the objectified FRAND determination is only (but at least) an approximate decision, which always involves a certain degree of discretion.74 Therefore, within a certain range, various license agreements can be FRAND-compliant. This applies particularly to the initial licensing of the SEP, when no third-party license agreements can be used as a comparison.75 The ECJ also assumes, at least implicitly, that several contract arrangements can be FRAND: It would not be understandable why the implementer would have to submit a counter-offer (see IV.3.f.), if the offer submitted by the SEP holder (see IV.3.e.) already corresponded to the only FRAND- compliant license agreement.76 Thus, the terms of the license agreement to be concluded in the future cannot be determined precisely and without discretion according to objective criteria at the time of the FRAND declaration.77 Therefore, the FRAND declaration does not constitute a valid preliminary agreement for the conclusion of a license agreement.’
‘The FRAND declaration thus establishes certain contractual conduct requirements, namely the FRAND obligations [FRAND-Obliegenheiten] (see IV.), which ultimately stipulate the submission of an offer for a license agreement by the SEP holder. In effect, this is certainly not far removed from a preliminary agreement. However, these obligations [Obliegenheiten] cannot be asserted by way of legal action (with a claim for a declaration of intent, see Art. 344 Swiss Code of Civil Procedure (ZPO)), but only as a defence based on the agreement not to sue [pactum de non petendo], which, in my opinion, constitutes the actual contractual content of the FRAND declaration (see II.5.).’
‘Brunner argues that, although a genuine contract in favour of third parties arises, it is not aimed at concluding a licence agreement, but constitutes a pactum de non petendo during serious contractual negotiations (Brunner, 2019, p. 1 et seq., 9). If this view is not followed (see Straus, GRUR Int. 2011, p. 469 ff., 476; Kühnen, Handbuch der Patentverletzung, 10th ed. Cologne 2017, para. 1481), the refusal to conclude a licence on reasonable terms can be seen as a venire contra factum proprium, which makes the enforcement of the injunctive relief appear abusive (see Scharen, Mitt. 2018, p. 369 et seq., 372; Brunner, 2019, p. 1 et seq., 9)’
‘Whilst we note that the conclusion is therefore different from the UK analysis of the French law ETSI provisions, that a different result is reached is not surprising given that the wording of the provisions and the underlying laws are different. We also note that the overall outcome of this is one similar to the analyses of the German and UPC Courts infra (and CJEU itself in Huawei v ZTE, as well as WIPO, also infra) under the ETSI provisions. That is not to say that the analysis themselves are similar (they are not, and our analysis here is contractual under Swiss law, not Art. 102 TFEU) but it does indicate that at the level of principle and policy the outcome is a reasonable one, adopted by well-respected jurisdictions elsewhere in relation to other SEP disputes.’
‘Art. 1163. An obligation has as its subject-matter a present or future act of performance. The latter must be possible and determined or capable of being determined. An act of performance is capable of being determined where it can be deduced from the contract or by reference to usage or the previous dealings of the parties, without the need for further agreement.’
‘192. The general rule under Article 1163 is that, for a contractual obligation to be valid, it “must be possible and determined or capable of being determined” i.e., determinable. 193. “Determinable” means that the act of performance required can be deduced on the basis of the intent of the parties either from the terms of the contract itself or by reference to previous dealings, and in any case without the need for further agreement.’
‘To be sufficiently certain a price does not have to be capable of deterministic decision, but it does have to be capable of being assessed based on objective criteria and without further negotiation by the parties. This is very fact- and context-dependent.’
‘According to the case law of the Federal Supreme Court, an action for a declaratory judgment is admissible if the plaintiff has a substantial interest worthy of protection in the immediate determination, which need not be of a legal nature, but can also be of a purely factual nature. This condition is met in particular if the legal relationship between the parties is uncertain and the uncertainty can be resolved by the judicial determination […] As a rule, there is no interest in a declaratory judgment if an action for performance is available with which an enforceable judgment can be obtained [citation]. However, the action for declaratory judgment is not to be regarded per se as subordinate to the action for performance, so that it would always be excluded if an action for performance can be brought [citation]. Rather, even if an action for performance is possible there may be an independent interest in a judicial determination. This is case in particular if the aim is not only to obtain the performance due, but also have the validity of the underlying legal relationship established for its future execution.’
‘121. We have come to a different conclusion from that of the judge on the question whether there can be only one set of FRAND terms for any given set of circumstances. Patent licences are complex and, having regard to the commercial priorities of the participating undertakings and the experience and preferences of the individuals involved, may be structured in different ways in terms of, for example, the particular contracting parties, the rights to be included in the licence, the geographical scope of the licence, the products to be licensed, royalty rates and how they are to be assessed, and payment terms. Further, concepts such as fairness and reasonableness do not sit easily with such a rigid approach. In our judgment it is unreal to suggest that two parties, acting fairly and reasonably, will necessarily arrive at precisely the same set of licence terms as two other parties, also acting fairly and reasonably and faced with the same set of circumstances. To the contrary, the reality is that a number of sets of terms may all be fair and reasonable in a given set of circumstances.’
‘125. In our judgment this is more of a theoretical problem than a real one. If the SEP owner and prospective licensee cannot agree upon the terms and royalty rates of a FRAND licence and the question of what is FRAND falls to be decided by a tribunal, whether a court or an arbitrator, then the tribunal will normally declare one set of terms as FRAND and that will be the set of terms the SEP owner must offer to the prospective licensee. If, however, the outcome of the proceedings is that two different sets of terms are each found to be FRAND then in our judgment the SEP owner will satisfy its obligation to ETSI if it offers either one of them. It will in that way be offering an irrevocable licence of its SEPs on FRAND terms.’
‘(1) Declarations that the Challenged Patents and each of them are invalid. (2) An order that the Challenged Patents and each of them be revoked. (3) A declaration that EP 749 is not essential to the H.264 Recommendation. (4) A declaration that the Challenged Patents and each of them are not essential to the H.265 Recommendation. (5) A declaration or declarations that the acts set out in paragraph 64 would not infringe (i) the Challenged Patents or any of them, (ii) any Nokia Codec SEP. (6) A declaration or declarations that the acts set out in paragraph 67 would not infringe (i) EP 375, (ii) EP 892 or (iii) any Nokia Codec SEP which has been declared essential to the H.265 Recommendation but not the H.264 Recommendation. (7) A declaration that ASUS is a beneficiary of the Defendants’
“I am prepared to accept that if Vestel did claim to have a legally enforceable rightagainst a patentee or a licensing agent of a patentee, whereby Vestel were entitled to beoffered a FRAND licence under the UK SEPs in the HEVC Advance pool, then thesubject matter of that particular claim would be the UK SEPs. The question that claimwould be concerned with is the licence terms which are available to license those UKrights. The fact that the only licence of the UK patents which is FRAND would alsoinvolve licensing foreign patents does not alter the subject matter of the claim. The fact that UK patents in the FRAND licence were only 5% or less of the patents licensed byit would make no difference. I would hold that such a claim was one which relatedwholly or principally to property within the jurisdiction and therefore fell withingateway 11. If I am differing from the judge below in this respect it may be because inthe court below Vestel never clearly narrowed its claim to the extent it now does.”
“…the Licensing Claims relate wholly to property within the jurisdictionbecause the claims concern UK SEPs. InterDigital argue that the jurisdiction questioncannot be determined by what InterDigital characterise as the artificial framing of thedeclarations sought by Tesla, when in reality the claim on Tesla’s own case is acontractual claim to a global licence of SEPs, the vast majority of which are non-UKSEPs. While I appreciate the superficial attraction of this argument, I do not accept itfor reasons which should be familiar to students of the English courts’ jurisprudencein this field. In short, it is necessary to distinguish between the property on the onehand and the FRAND obligation which affects it on the other hand. Patents areterritorial rights, but (i) standards such as the ETSI Standards are global standardswhich are exploited globally, (ii) the FRAND obligation under clause 6.1 is a globalone and (iii) a licence on FRAND terms may well be a global one (meaning that aUK-only licence is not FRAND). Thus a licence to a single UK SEP on FRANDterms can be, and often is, a global licence to all corresponding SEPs (and indeedother families of SEPs in the same portfolio). In Nokia v OPPO this Court upheld thejurisdiction of the English courts in respect of the claim even though the UKrepresented less than 0.5% of the relevant market (which does not necessarily meanthat only 0.5% of the SEPs were UK ones, but nevertheless gives a sense of the orderof magnitude). That case concerned an infringement claim, and so the jurisdictionalanalysis was somewhat different, but nevertheless it illustrates the point. Thus theLicensing Claims relate wholly to UK SEPs even though it is Tesla’s case that theFRAND obligations attaching to those UK SEPs carry with them an obligation togrant a licence of global, and not merely UK, extent. Indeed, neither Avanci norInterDigital dispute that a licence on FRAND terms of the relevant SEPs would be a global one.” (Emphasis added)
“In my judgment, this obiter comment of Birss LJ is correct. Nokia’s argumentconfuses the subject matter of the licence that is sought with the subject matter of theclaim that is brought. The claim is one to enforce the contractual obligation of Nokiapursuant to the declarations made in respect of the two UK patents, to grant a licenceon RAND terms. That is a claim which relates wholly to property within the jurisdiction, even though the licence sought is one that covers a global portfolio ofpatents, of which the UK patents are only a small element. The legislative history ofthe rule does not, in my view, affect that conclusion. I note that Fancourt J in Tesla vAvanci[2024] EWHC 1815 (Ch) , at §45, considered that Birss LJ’s conclusion on thispoint was right in principle.”
“(i) An applicant for permission to serve proceedings outside the jurisdiction is under the duty of full and frank disclosure which applies on all applications without notice. (ii) The duty requires the applicant to make a full and fair disclosure of those facts which it is material for the court to know… Put another way, disclosure should be made of “any matter, which, if the other party were represented, that party would wish the court to be aware of”… (iii) Non-disclosure of material facts on an application made without notice may lead to the setting aside of the order obtained, without examination of the merits. It is important to uphold the requirement of full and frank disclosure. (iv) But the court has a discretion to set aside or to continue the order. Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues that were to be decided. The answer to the question whether the non-disclosure was innocent is an important, though not decisive, consideration… (v) In the context of permission for service outside the jurisdiction the court has a discretion to set aside the order for service and require a fresh application or to treat the claim form as validly served and deal with the non- disclosure by a costs order…”
“An application for permission to serve out of the jurisdiction is of a very different nature. The general principles about disclosure on without notice applications still apply, but the context is different. The focus of the inquiry is on whether the court should assume jurisdiction over a dispute. The court needs to be satisfied that there is a dispute properly to be heard (i.e. that there is a serious issue to be tried); that there is a good arguable case that the court has jurisdiction to hear it; and that England is clearly the appropriate forum. Beyond that, the court is not concerned with the merits of the case.”
“In a service out case, not only may the existence of foreign proceedings go to the issue as to whether it is an appropriate case to be tried in England, but, in particular, where there may be questions of the applicability of Articles 27 and/or 28, the existence of potentially relevant or related actions in other jurisdictions is obviously material.”
‘70. Against that background, I can now turn to the issue of principle. In my judgment, unless there is a legitimate and substantiated objection to the forum in question, it does not constitute bad faith for a SEP owner to seek to force an implementer to accept determination of FRAND terms by the SEP holder’s preferred court rather than the implementer’s preferred court. 71. If (and I emphasise if) there is a legitimate and substantiated objection to determination of FRAND terms by the forum in question, then there may (and I emphasise may) in an appropriate case be a remedy by way of an anti-suit injunction. In the present case, however, both parties have laudably refrained from seeking anti-suit injunctions: Samsung have not applied to the English courts for an injunction restraining ZTE from pursuing the proceedings in Chongqing, nor have ZTE applied to the Chongqing Court for an injunction restraining Samsung from pursuing the English proceedings. (ZTE’s application in respect of Samsung’s ETSI complaint stands in a completely different position.) 72. Whether or not anti-suit relief would be available if there were a legitimate and substantiated objection to determination of FRAND terms by the Chongqing Court, Samsung have not substantiated any legitimate objection to this. Indeed, as the judge noted, Samsung have not seriously attempted to do so. 73. If it is not illegitimate for the Chongqing Court to determine FRAND terms, I do not see how it can be bad faith for ZTE to use legal proceedings which it is not suggested are not otherwise properly open to ZTE to put pressure on Samsung to agree to that course. Such conduct is unattractive, and I should not be taken to endorse it, but that is not sufficient to constitute bad faith. 74. As I have explained in numerous judgments, a SEP portfolio will typically include patents which subsist in multiple jurisdictions. Patents are territorial, but the contractual defence provided by the FRAND obligation is global. It follows that the possibilities both of parallel SEP infringement proceedings and parallel FRAND determinations in multiple jurisdictions are inherent in the current system. The principled answer to this might be that the court first seised should determine what terms are FRAND, but that answer has a number of negative consequences. One of these is that it encourages forum shopping by pre-emptive commencement of proceedings. As the judge recognised, forum shopping is to some extent inevitable in this context, but it should be discouraged rather than encouraged. Even if the English courts consider that jurisdiction should be exercised by the court first seised, this cannot be said to be an answer that commands universal assent: as I pointed out in Nokia v OPPO, there are no internationally agreed jurisdictional rules applicable to FRAND disputes. If the principle of ceding jurisdiction to the court first seised was internationally accepted, the Chongqing Court would have declined jurisdiction as the court second seised. The fact that the English courts were first seised is therefore not a sufficient basis for a conclusion that ZTE have acted in bad faith. Given that ZTE were otherwise entitled to bring the infringement proceedings of which Samsung complain, there is nothing else to support the conclusion that ZTE have acted in bad faith. 75. I would add that another problem which this case illustrates is that, if jurisdiction is not ceded to the court first seised, the court first seised is not guaranteed to be the first to decide. As the parties agreed during the course of argument, the consequences of this will have to be worked out in due course.’
‘84. At this stage it is worth taking a step back. The concept of an interim licence is inherent in the 2015 landmark decision of the Court of Justice of the European Union C-170/13 Huawei v ZTE [EU:C:2015:477]. There at [67] the CJEU identified the idea that in some circumstances it might be for the implementer, in advance of a final resolution of the dispute between the SEP holder and the implementer, to provide appropriate security for the royalties which will end up being due in a licence agreement. Naturally, the CJEU did not need to dwell on this point in detail or work through all the possible permutations, many of which have only emerged in the decade since that decision was given. The key thing was to identify the principle. Once that principle is identified, one is then entitled to ask: what is it that the implementer is getting in return for the financial commitment they are making? Although not spelled out explicitly by the CJEU, the answer is fairly simple. The implementer is demonstrating their willingness to pay for the licence, once the terms can be agreed or resolved, and so, in the meantime the SEP holder ought not to be able to take the implementer’s products off the market by means of an injunction. In other words what the implementer gets in return for the financial commitment is, at least implicitly, a form of licence pending the final resolution of the dispute. It could be called an interim licence. Assuming the sum being committed or paid is calculated on a global basis, then the willingness of the implementer which it embodies is also global in nature. 85. I would have thought that in most cases, if it was required, a simple determination by a court of the appropriate financial terms to operate in the interim until the parties had signed a final agreement, is all that would be needed, with the sum paid (or committed as security) being taken into account appropriately in the terms of that final agreement. That would apply whether the final terms were agreed in negotiation or settled by any competent court or arbitration. No problem related to alleged bad faith or a lack of comity ought to arise. One would also have thought an interim licence settled in circumstances like these ought to be jurisdiction-neutral, e.g. by providing expressly that any competent court can take its terms into account and by not forcing jurisdiction on unwilling parties. 86. The difficulty in this case is that the terms of the interim licence itself and the declarations made are designed to seek to force one party to do something they clearly do not wish to do and have no intention of doing. [He then mentioned Ground 3 of the Appeal which was not developed and so not decided and continued]: I will only say that I believe there was scope for argument about the terms of the declarations in this case even if some form of response to what ZTE were doing was appropriate. These terms will always be highly fact-specific and I would have liked to hear full argument about the merits and proportionality of declarations designed to force a party to do or not do something they are clearly unwilling to do, even if their conduct is to be deprecated. I can see utility in a simple declaration of what the terms of an interim licence should be as between the given parties. I use the term “should” advisedly because it does not force anyone to do anything but it may help later to expose and clarify what the motives of one party really are. It might not be necessary or appropriate to go any further. I would also like to have heard full argument about declarations which refer to a willing licensee or licensor in general rather than the parties themselves, and declarations which contain conditional clauses like declaration 4. 87. The consequences of how to deal with more than one court being seised with the issue of determining what is FRAND will have to be worked out internationally over time on a case by case basis, but the helpful possibility of payment or security from the paying implementer in advance of that determination, and the interim licence implicit in it, ought not to be turned into a tool to force that issue. 88. If a party really is acting in bad faith, then it can hardly complain if the court seeks to take steps to prevent it, but there may nevertheless still be grounds for a graduated response. For example one would generally wish to avoid creating an impression of a lack of comity, even if analytically a given response does not in fact amount to that. However as I have explained, these issues do not arise in this case because, as my lord has explained and I agree, there is no bad faith here.’
‘55. From the UPC’s directions order of 14 October and from the note of the hearing of 14 November, it is clear that the UPC is concerned about the effect of final RAND relief if Amazon obtains any, and in particular if it obtains an order for specific performance requiring InterDigital to give a licence with global terms, and this is one of the matters on which InterDigital says that the AASI Order should be clarified.’
‘(3) The relief sought in these English proceedings would not prevent any foreign Court from (i) determining for itself whether or not to enforce the property right granted by that country or (ii) determining the effect of an English Court ordered licence if raised as a defence (including considerations of ordre public and the appropriate national law); nor would it prevent InterDigital from bringing any such proceedings or arguing correspondingly; and nor would the AASI have that effect, as rightly recognised by the Court (and thus, neither InterDigital nor any third party would be exposed to sanctions for breach of the AASI as there would be no breach).’
‘61. InterDigital argued that it was implicit in Amazon’s position, or the attitude of this Court, that only a UK court could deal with a claim to set global RAND terms, or that it is in some way a superior court to the German court or the UPC. This is also incorrect. It was and is not Amazon’s argument, or the attitude of this Court. Since Unwired Planet the UK courts have been willing to address global (F)RAND terms, and other courts have taken or may take similar views (see below in relation to comity). But that has not involved saying that only a UK court can do it. It is a consequence of the ETSI and ITU rules and policies not containing a dispute resolution mechanism or choice of forum that the same issues about licence scope, terms and rates might be raised in more than one court in parallel. That would be much better avoided, as Arnold LJ has often pointed out, but if it happens then there are mechanisms for seeking to address it, by lis pendens or case management stays, by one court voluntarily declining jurisdiction in favour of another, or by the operation of res judicata. It should be noted that these are all mechanisms by which a court might decide within its own procedures not to proceed with global rate setting: none is a mechanism by which one court tells another in a different jurisdiction what to do or what not to do. These are points that may to some extent be under consideration at the Jurisdiction Hearing.’
‘Although the actual offer or grant of a RAND licence is not therefore an obligation under the ITU-T contract (and could not be, as we address above), the system nonetheless forms a cohesive and coherent whole. The obligation on Nokia is to negotiate in good faith towards a RAND licence with any implementer who also meets the standards of good faith required by Swiss law. Where, therefore, both sides are behaving as required they will come to make offers which are in fact RAND, and then enter into a RAND licence. No doubt also that the making of a RAND offer can discharge the patentee’s obligation, and an implementer acting in good faith will accept it; but neither making the offer nor granting the licence is part of the obligation itself. The obligation is the journey, and the making and acceptance of the RAND offer the destination.’
‘234. At [96] to [97] Arnold LJ prays in aid the possibility, or perhaps likelihood, that a declaration as to the FRAND terms of a licence of the Avanci 5G platform would “force Avanci to reconsider its position” as to the rate charged. That again may be so, but the fact that a party may be forced to comply with an order of the court is not in itself justification for making the order.’