Conversant Wireless Licensing S.A.R.L. v Huawei Technologies Co. Ltd - 2020

“Courts can determine global FRAND terms when standard-essential patents are used worldwide.”

Short Description

This case, decided alongside Unwired Planet, reaffirmed that UK courts hold jurisdiction to set global FRAND licensing terms for Standard-Essential Patents (SEPs). Conversant, a licensing company owning a large SEP portfolio, sought a global licence from Huawei and ZTE. The implementers resisted, arguing the UK had no authority to impose worldwide terms. The Supreme Court rejected this view and confirmed that global licensing is often the industry norm in telecommunications. Thus, UK courts may resolve worldwide disputes where the parties operate globally.

Facts

Conversant Wireless acquired SEPs relating to 2G, 3G, and 4G technologies and initiated infringement proceedings against Huawei and ZTE in the UK. Conversant sought a single global FRAND licence, asserting that the defendants sold devices across the world and benefited from global standards. Huawei and ZTE argued that China was the proper jurisdiction because most patents and sales related to that market. They also contended that a UK court could only determine FRAND terms for UK patents, not foreign portfolios. The case moved through the High Court and Court of Appeal before reaching the UK Supreme Court.

Findings / Reasoning

The UK Supreme Court held that:

⦁ Licensing SEPs on a global basis is commercially rational and widely adopted across the mobile industry.

⦁ Because Huawei and ZTE sold devices worldwide, a UK court may determine worldwide FRAND terms when infringement of UK SEPs is established.

⦁ Jurisdiction is appropriate where the dispute substantially connects to the UK—such as infringement of UK patents—irrespective of where other patents are located.

⦁ The concern about “foreign sovereignty” was overstated: the UK court was not ruling on the validity of foreign patents, only their licence terms.

⦁ Fragmented, country-specific licences would undermine FRAND obligations and complicate SEP negotiations.

Thus, the Court reinforced the practicality and fairness of global licensing in line with global markets and global standards.

Suggestions / Observations

This judgment solidifies the UK as a significant forum for SEP-FRAND litigation, especially for companies engaged in worldwide sales. It encourages implementers to negotiate in good faith and prevents strategic delays based on jurisdictional objections. The decision promotes uniformity in SEP licensing, reduces negotiation disputes, and offers predictability for SEP holders. Companies must understand that refusing a global licence when it reflects industry practice may categorize them as unwilling licensees, creating the risk of injunctions.

Judgment & Date

The UK Supreme Court upheld jurisdiction and confirmed that Conversant was entitled to seek a global FRAND licence from Huawei and ZTE.

Judgment Date : 26 August 2020