Unwired Planet Act 2: The Return of the FRAND Range

Abstract

On 23 October 2018 the Court of Appeal of England and Wales delivered its judgement on Unwired Planet v Huawei Technologies. Even though the claims brought by Huawei were rejected, the Court reached a different conclusion from that of Mr Justice Birss on the question of whether there can be only one set of FRAND terms for any given set of circumstances. Namely, the Court noted that “concepts such as fairness and reasonableness do not sit easily with such a rigid approach” and “a number of sets of terms may all be fair and reasonable in a given set of circumstances.” Indeed, 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. Hence, 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.

The European Commission, the CJEU and national courts all share the view that parties to a SEP licensing agreement are in the best position to determine the terms most appropriate to their specific situation. Nevertheless, the Unwired saga has shown that different views on the way the parties should negotiate are always just around the corner.

The ongoing debate about the formula used to calculate FRAND royalties falls outside the scope of this paper, which instead aims at analysing how the Unwired decisions are linked to the legal interpretation of the Huawei licensing etiquette as far as the dichotomy between the single rate approach and FRAND range determination is concerned.

Keywords: Antitrust, Standards, Standard Essential Patent, FRAND Terms

JEL Classification: K21, L15, L41, O34