Lenovo Group Limited & Ors v Telefonaktiebolaget LM Ericsson (publ) & Anor
[2024] EWHC 846 (Ch)
Lenovo Group Limited & Ors v Ericsson Limited & Anor
19 November 2024
[2024] EWHC 2941 (Pat)
High Court
Lenovo and Ericsson are fighting over patent licenses. Lenovo wanted a judge to say they *should* agree to a temporary license while they figure out a permanent one. The judge said no because Lenovo didn't prove the temporary deal was fair or that Ericsson was being unfair.
Key Facts
- •Lenovo and Ericsson own standard-essential patents (SEPs) and are obligated to license them on FRAND (Fair, Reasonable, and Non-Discriminatory) terms.
- •Both companies need cross-licenses of each other's SEPs but haven't agreed on terms.
- •Both have sought injunctions against each other in various jurisdictions (Brazil, Colombia, US ITC, EDNC, UK).
- •Lenovo seeks a declaration that a willing licensor and licensee would agree to a short-term cross-license pending a final FRAND determination by either the English court or the EDNC.
- •The short-term license includes a significant royalty payment from Lenovo to Ericsson with a 'true-up' mechanism to adjust terms based on the final FRAND determination.
- •Ericsson argues the short-term license is not FRAND and that Lenovo's declaration is solely to influence foreign court decisions.
Legal Principles
The court has discretion to grant declaratory relief, considering factors outlined in Rolls-Royce plc v Unite the Union.
Rolls-Royce plc v Unite the Union [2009] EWCA Civ 387
A declaration should only be granted if it is correct in fact and law and serves a useful purpose; it shouldn't solely influence foreign court decisions.
Teva UK Ltd v Novartis AG [2022] EWCA Civ 1617
A high degree of assurance is needed on key matters before granting a declaration. The standard is not the summary judgment standard unless the declaration is truly interim.
Panasonic Holdings Corporation v Xiaomi Technology UK Limited [2024] EWCA Civ 1143; British Airline Pilots’ Association v British Airways Cityflyer Limited [2018] EWHC 1889 (QB)
SEPs are subject to a FRAND commitment, creating a contractual right to a license enforceable by implementers. The commitment requires both a FRAND outcome and a good faith negotiation process.
ETSI IPR Policy, Clause 6.1; Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd [2020] UKSC 37; Huawei Technologies Co Ltd v ZTE Corp Case C-170/13
French law, including Article 1104 of the French Civil Code, requires good faith in contract performance, which can modify contractual rights.
Article 1104 of the French Civil Code; Panasonic CA [48], [77]
English courts have jurisdiction to determine global FRAND cross-licenses, but cannot compel parties to enter into them. Injunctions are the court's primary enforcement tool.
Unwired Planet SC; Optis Cellular Technology LLC v Apple Retail UK Ltd [2022] EWCA Civ 1411
The principles from Panasonic CA apply beyond cases where both parties have undertaken to accept the court's FRAND determination; however, comity and utility are key considerations.
Panasonic CA
Outcomes
Lenovo's application for a declaration is refused.
The court lacked a high degree of assurance that the proposed short-term license was FRAND, that Ericsson's actions breached its good faith obligation, and that granting the declaration would serve a useful purpose without undermining comity.
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