FSA views on the appeal proceedings before the UK Supreme Court in Unwired Planet vs. Huawei and Conversant vs. Huawei and ZTE

21 October 2019. These appeals raise a number of issues of principle as to the enforcement of national patents that read on standardized technologies implemented in products distributed around the world, going beyond the telecommunications standards with which the parties to these appeals are concerned.

Companies that declare patents to be standard essential and provide a voluntary commitment to license them on fair, reasonable, and non-discriminatory (“FRAND”) terms limit their rights to enforce those patents. They do so in order to encourage the adoption of the standard (which gives the owners of patents essential to that standard monopoly power) and benefit from the widespread adoption of the standardized technology, for which they can seek royalties. Declaring a patent essential to a standard does not alleviate the burden on a patent holder to prove that their patents are valid and infringed. Nor can the patent owner’s declaration compel a potential licensee to forgo the right to challenge national patent rights in national court proceedings.

Merely by declaring a UK patent to be standard essential, a patent holder should not gain the right to insist that a potential licensee of that UK patent can be required to take a licence to the declarant’s entire portfolio of declared SEPs on a worldwide basis. Rather, to demand a license to any of the other patents in its portfolio, the patent holder should be required to show that those additional patents in its portfolio are themselves valid and infringed.

 

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