UK: UK High Court Issues Important Ruling On Licensing Of Standard Essential Patents

On April 5, 2017, the High Court of Justice in the UK ruled that if a patent holder claims that a patent is essential under the ETSI IPR Policy, it must license that patent to third parties on fair, reasonable, and non-discriminatory (FRAND) terms, and the licensee must accept the FRAND terms or face the threat of an injunction barring product sales for items taking advantage of such technology. [2017] EWHC 711 (Pat).

In Unwired Planet v. Huawei Technologies, a dispute arose during a nontechnical trial regarding several standards essential patents (SEPs) owned by NPE Unwired, whose robust global patent portfolio includes numerous SEPs declared essential to various telecom standards (including 2G, GSM, 3G, UTMS and 4G LTE). In March 2014, Unwired sued Huawei, Samsung and Google for infringement of six of its UK patents. During the course of the litigation, Unwired offered to license its entire global portfolio (both SEPs and non-SEPs) to the defendants. The defendants refused this offer and argued that they did not infringe and that the SEPss were both invalid and nonessential. Unwired then made another offer to license its SEPss, but the defendants argued that this offer was not FRAND. Google and Samsung eventually settled, leaving Huawei to litigate the dispute to trial.

Huawei was found to be infringing. What remained for the High Court to determine in this decision were the following issues: (i) what FRAND royalty rate should apply to the Unwired SEPs, (ii) whether Unwired abused a dominant position during FRAND negotiations with Huawei by failing to adhere to the relevant procedural requirement set by the European Court of Justice in Case C-170/13, Huawei Technology Co. Ltd v ZTE Corp., ZTE Deutschland GmbH and (iii) whether injunctive relief against Huawei was appropriate should it refuse to accept global FRAND terms. Unwired advanced that if each side makes a FRAND offer, then the patentee should be entitled to seek injunctive relief on the basis that it discharged its FRAND obligations by making the offer. In opposition, Huawei argued that if each side makes a FRAND offer, then the injunction should fail since the patentee was refusing to accept a licensee's FRAND terms, and the very purpose of FRAND is to benefit those that would wish to implement the technology.

The High Court offered an extensive explanation of the purpose of FRAND and its principles under the applicable European law. The governing standards setting organization, European Telecommunications Standards Institute (ETSI), requires that patent holders agree to license on FRAND terms if they wish to participate in the standards setting process. ETSI requires, as part of the ETSI IPR Policy, that its members inform it of any essential intellectual property rights in a timely fashion. Since by definition an SEP is essential, an SEP owner must give an irrevocable written undertaking to ETSI that it will grant irrevocable licenses on FRAND terms. This system rewards innovators for their contributions, but also prevents said innovators from taking advantage of those wishing to make use of the innovation by charging unreasonable or unfair licensing fees. Moreover, FRAND terms prevent a licensee from unnecessarily dragging out the negotiation process with a patentee, creating a situation where a patent owner must accept an unfair royalty rate out of necessity.

The High Court ultimately held that a patentee must agree to license its technology on FRAND terms, and that those licenses must be global for global players, instead of limiting a license to a single jurisdiction on a country-by-country basis. In this case, since Huawei participated in the global market, it was essential that it accept a global license rather than a UK license. The High Court also held that there can be only one FRAND royalty rate applicable to any given set of SEPs, as opposed to a FRAND range in which there can be more than one set of rival license terms, both compliant with FRAND. To hold otherwise would not only run contrary to economics (the FRAND rate should be the rate which parties in a given set of circumstances would agree upon), but would not assist courts in determining what rate actually applies to a particular dispute. This is not to say that parties lack the room to negotiate a royalty rate. Neither a breach of contract nor a competition claim for abuse of dominance will succeed unless an SEP holder's offer is significantly above the true FRAND rate, in which cause the royalty rate would conflict with applicable competition laws.

The High Court was clear that formerly negotiated licenses cannot be disputed since parties have been bound to their own contractual agreement, so long as the agreement does not contravene competition law. In the dispute at hand, the High Court relied upon comparable licenses from the industry to determine that neither Unwired nor Huawei had made an offer compliant with FRAND terms; consequently, the High Court looked to comparable licenses as a basis for determining a FRAND-compliant royalty rate.

The High Court also ruled that the "nondiscrimination" portion of FRAND does not employ a "hard-edge" test. Instead, the High Court applied the "general" nondiscrimination test, whereby the FRAND rate is derived by examining all factors playing into the intrinsic value of the portfolio, independent of any one specific licensee, and is applicable to all licensees seeking the same kind of license. Consequently, Unwired was not required to offer the same rates to Huawei as it did to other licensees. By rejecting the "hard-edge" test favored by Huawei, a licensee is limited in challenging FRAND terms on the basis that another similarly situated party had been granted a lower rate, so long as competition between the two licensees is not distorted.

Finally, the High Court held that if a patentee refuses to offer a license on FRAND terms, it breaches its FRAND undertaking with the ETSI. If a defendant is found to infringe a patent and refuses to accept the valid FRAND terms of a license, then an injunction may be awarded in hopes of encouraging both sides to enter into a license on FRAND terms. In this case, should Huawei not heed the High Court's ruling and agree to a global license with Unwired, then Unwired will be entitled to injunctive relief.

It remains to be seen what impact this milestone decision will have on courts outside of the UK, especially in the United States. However, the decision is still important to patent holders across all jurisdictions, as it will likely incentivize the enforcement of patent portfolios in Europe.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.