On Aug. 26, 2020, the United Kingdom Supreme Court issued a decision in Unwired Planet International Ltd & Anor v Huawei Technologies (UK) Co Ltd & Anor  UKSC 37 that changes the landscape for patentees seeking to enforce standard essential patents, which are patents claiming inventions that must be used to comply with a technical standard. The U.K. Supreme Court held that U.K. courts have the jurisdiction to determine the terms of a global license directed at standard essential patents, including the royalty rates.
The decision involved appeals from three different actions involving standard essential patents relating to the telecommunications standards for 2G (GSM), 3G (UMTS) and 4G (LTE) telecommunications equipment and devices. The patents at issue were determined to be standard essential for the 2G, 3G and 4G standards set forth by the European Telecommunications Standards Institute (ETSI), which is the recognized standard-setting organization in the European Union for the telecommunications sector. Once a standard is adopted, the ETSI requires its members to identify standard essential patents. Under the ETSI’s intellectual property right (IPR) policy, owners of standard essential patents are required to give licenses to such patents on “fair, reasonable and non-discriminatory” (FRAND) license terms. Thus, the telecommunications industry can implement the standards while a patent owner is compensated for use of the standard essential patent.
The U.K. Supreme Court determined that for cases involving standard essential patents, U.K. courts have the jurisdiction and, even without the parties’ agreement, the power to grant an injunction against infringement of a U.K. standard essential patent unless the implementer of the patented invention enters into a global license of a multinational patent portfolio, and to determine the royalty rates and other terms of such a license. Recognizing the territorial nature of patents, the U.K. Supreme Court noted “(a) that questions as to the validity and infringement of a national patent are within the exclusive jurisdiction of the courts of the state which has granted the patent and (b) that in the absence of the IPR Policy an English court could not determine a FRAND licence of a portfolio of patents which included foreign patents.” Nevertheless, the Court determined that such an exercise of jurisdiction and power was appropriate in view of the contractual arrangement of ETSI. “It is the contractual arrangement which ETSI has created in its IPR Policy which gives the court jurisdiction to determine a FRAND licence.”
As a result of the decision, U.K. courts are now able to construe licenses for global patent portfolios containing standard essential patents and determine the appropriate global royalty rate. Therefore, patent owners seeking to enforce standard essential patents may be able to obtain a determination of the appropriate global royalty rate without necessarily having to resort to patent enforcement proceedings in multiple jurisdictions. The decision makes the U.K. an attractive venue for such litigations and ensures that each case involving standard essential patents will always have an equivalent U.K. case. Thus, it is possible the U.K. will become the go-to-jurisdiction when patentees are seeking to enforce standard essential patents.