Ottawa, Canada, April 19, 2018 – Conversant Wireless Licensing S.à r.l., a subsidiary of Conversant Intellectual Property Management Inc., announced today that the High Court of Justice in London has rejected a challenge by defendants Huawei and ZTE to the jurisdiction of the English court over Conversant’s claim for infringement of its UK patents, where as part of its relief Conversant is asking for the determination of a global FRAND license for its standard essential patent (SEP) portfolio. Conversant Wireless Licensing S.A.R.L. v. Huawei Technologies Co Ltd,  EWHC 808 (Pat). Conversant Wireless licenses its worldwide portfolio of wireless patents and patent applications that cover technologies used in a wide range of mobile communications devices and services, such as handsets, cameras, tablets, and laptops. The Conversant Wireless portfolio includes many declared SEPs that Conversant seeks to license on FRAND terms.
In its complaint, Conversant Wireless alleged that each defendant’s mobile handsets infringe four of Conversant’s SEPs, European Patent (UK) No. 1,031,192, No. 0,978,210, No. 1,797,659, and No. 1,878,177. Conversant asked the Court to declare that Conversant had made a fair, reasonable, and non-discriminatory (FRAND) offers to license its SEP portfolio to each defendant, or alternatively to determine the FRAND terms for such a license to each defendant. In a previous judgment in the UK in 2017 Mr. Justice Birss had determined the global FRAND rate for a portfolio of SEPs, Unwired Planet International Ltd v Huawei Technologies Co Ltd,  EWHC 2988, and Conversant is seeking a similar determination in its case.
Huawei and ZTE responded to the Conversant Wireless complaint by arguing, first, that the English court had no jurisdiction to decide the claims, because, according to the defendants, they were in effect claims for infringement of foreign patents of disputed validity. The defendants argued in the alternative that the English court should decline to hear the case because China, not England, is the proper or appropriate forum to decide the claims.
After a four-day hearing, Mr. Justice Henry Carr rejected both of the defendants’ arguments. As for the English court’s jurisdiction, he agreed with Mr. Justice Birss in Unwired Planet, and concluded that the English court has jurisdiction over the UK patent infringement claims and consequently the global FRAND license remedy for infringement of those patents. The Judge accepted the importance of one court, in this instance the English court, deciding the FRAND license issue on a global basis. Otherwise the purpose of the FRAND regime would be frustrated, because:
no patentee will be able to have a determination of what terms would be FRAND for its global portfolio, without agreement from the defendants and subject to conditions imposed by the defendants, despite being bound by the obligation to offer a FRAND licence in order to be granted relief from patent infringement. The same arguments advanced by the Defendants on these applications could be advanced in every country in the world. The Huawei and ZTE Defendants would be able to say that any claim for infringement of local standards essential patents was non-justiciable locally, insofar as such a claim sought determination of a global FRAND licence. The effect would be that Conversant would need to seek separate licences for each individual country where it held SEPs, by commencing separate litigation in each such territory. Conversant characterised this as a “hold-out charter” which would enable continued infringement without payment of royalties. I agree.
Conversant Wireless EWHC 808 (Pat) at ¶28 (emphasis added).
As for whether England or China is the proper or appropriate forum, Mr. Justice Henry Carr ruled that the evidence established that the courts in China could not adjudicate the infringement of Conversant’s UK patents, and could not determine a global FRAND license:
In conclusion, in my judgment, China is not an alternative available forum in which infringement of the UK patents can be determined, nor in which the terms of a global FRAND licence can be set.
Conversant Wireless EWHC 808 (Pat) at ¶64.
In the coming weeks there will be another hearing to determine the consequential orders. Conversant intends to seek repayment of its costs incurred in connection with these failed applications. Huawei and ZTE have indicated that they intend to seek permission to appeal the ruling – whether they are granted permission is within the discretion of the Court.
“We are pleased that the court has rejected the latest hold-out tactics of Huawei and ZTE while they continue to infringe Conversant Wireless’ global SEP portfolio without paying a FRAND royalty,” said Boris Teksler, President and CEO of Conversant. “Conversant Wireless has been negotiating for years with both defendants. We have repeatedly explained to each of the defendants how they are using our SEPs and made clear Conversant’s willingness to negotiate and conclude a FRAND portfolio license in accordance with our FRAND undertakings and offered arbitration to resolve the dispute. But neither Huawei nor ZTE has accepted any of Conversant’s offers, leaving Conversant no choice but to continue to enforce our patent rights in court. We look forward to adjudicating the Conversant Wireless portfolio and will abide by their decisions.”
Conversant Intellectual Property Management Inc. is a global intellectual property management company known for its principled approach to patent licensing. With a portfolio of thousands of patents and patent applications under management, Conversant has special expertise in semiconductors and communications technology. For more information, please visit www.conversantip.com. Conversant Wireless Licensing S.à.r.l. is a subsidiary of Conversant Intellectual Property Management Inc. that is focused on licensing a major portfolio of about 1,000 wireless patents and patent applications covering technologies used in a wide range of mobile communications devices and services. For more information, please visit www.conversant-wireless.com/.
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