The multijurisdictional standard essential patent (SEP) dispute between patent owner Ericsson and implementer Lenovo has spilled beyond the courts in the wake of a notable appellate ruling. In late February, the UK Court of Appeal held that a willing licensor in Ericsson's position would have offered Lenovo an interim license prior to the court's determination of a final fair, reasonable, and nondiscriminatory (FRAND) license. After Ericsson opted not to offer that license by the March 10 deadline later set by the Court of Appeal, the court automatically found under the conditions of the order setting the deadline that the company had breached its FRAND obligations and acted as an "unwilling licensor". In response, Lenovo has reportedly turned to the European Telecommunications Standards Institute (ETSI), the standard-setting organization (SSO) to which the relevant FRAND commitments were made, filing a dispute invoking a clause of the ETSI intellectual property rights (IPR) policy concerning "[n]on-availability of licenses" (clause 8.2).
As detailed in RPX's prior coverage, the parties' dispute first hit the courts in October 2023, when Ericsson filed a trio of US lawsuits in the Eastern District of North Carolina, including one seeking a FRAND determination; and a pair of investigations before the US International Trade Commission (ITC). The ITC proceedings are significant due to a September 2024 filing by the Office of Unfair Import Investigations (OUII) (which participates in ITC investigations as a party representing the public's interest) that suggested a possible shift in the policy toward the issuance of exclusion orders (or import bans) in SEP investigations at the ITC. While the Commission has not issued a final exclusion order in a SEP case since 2013 (when the Obama administration vetoed one such order under a policy then in effect that disfavored SEP injunctions), the OUII here issued a nonbinding recommendation that the ITC issue such an exclusion order, having found that Ericsson appeared to have complied with its FRAND obligation by negotiating in good faith, had not been shown to have "engaged in hold-up", and that no showing had been made that an injunction would adversely affect the public interest. Administrative Law Judge (ALJ) MaryJoan McNamara has set an April 4, 2025 for her recommendation on the proper remedy; this is typically done the same day that the ALJ issues a final initial determination (or FID, which covers other aspects of the case including infringement and the domestic industry requirement), but upon issuing her FID, ALJ McNamara took the relatively unusual step of delaying that recommendation.
Lenovo has already been subjected to injunctions through additional litigation brought by Ericsson in Latin America. In Brazil, the State Court of Rio de Janeiro imposed a preliminary injunction against Lenovo that was upheld on appeal in 2024, as well as a penalty for continued sales that has been stayed pending appeal. Ericsson also won a series of preliminary injunctions in Colombia, and in December sought a ruling expanding those decisions to all Lenovo 5G products. Per the court, Lenovo has alleged that Ericsson rejected its offer to pay the full royalties sought in those actions in exchange for lifting the injunctions in both countries. In the US litigation, Lenovo also filed a motion asking the Eastern District of North Carolina for an anti-suit injunction, leading to a notable ruling by the Federal Circuit that lowered a key threshold requirement for such motions.
The parties' UK litigation was initiated by Lenovo, which also filed claims against Ericsson before the Unified Patent Court (UPC). That distinction—that Lenovo filed the UK action, which in part argued that Ericsson had breached its FRAND commitment by seeking an injunction from the ITC, and sought a FRAND determination as to the relevant Ericsson patents—would become a key issue on the interim license issue. This was because the Court of Appeal's first-ever decision holding that a SEP owner would grant such an interim license did so in a case, in Panasonic v. Xiaomi, where it was the patent owner (Panasonic) that had invoked the UK court's jurisdiction, and had agreed to accept the terms of a court-determined FRAND license. In contrast, Ericsson was the defendant here, and had not make a similar undertaking to accept such a license.
While the High Court had denied Lenovo's interim license request in November 2024, the Court of Appeal reversed—holding that despite Ericsson's less "egregious" conduct here, the same reasoning applied as in Panasonic: that "any rational SEP owner would want to be paid sooner rather than later" and "would positively want the implementer to enter into an interim licence so that the SEP owner could receive at least partial payment for the final licence more quickly, and then get the remainder later". In light of Ericsson's refusal of a "nine-figure dollar payment" from Lenovo, the court found that the answer to a key question—what Ericsson hoped to achieve through the ITC proceedings—was "to achieve a better outcome than a determination by the English courts would provide (or indeed . . . than a determination by any court would provide)", based on its perception of "at least a material risk" that the court would find its offer to be non-FRAND and set FRAND terms "closer to those offered by Lenovo". This strategy, per the court, "is hold up" (defined earlier in the decision as behavior where a SEP owner threatens an injunction in order to seek rates that "exceed the reasonable market value of a licence").
As a result, the Court of Appeal held that Lenovo was entitled to an interim license and held that the rate for that license should be the midpoint between the parties' offers.
On March 3, the Court of Appeal then issued an order setting a one-week deadline for Ericsson to offer that license, establishing that that the court would find that "Ericsson are in breach of their FRAND commitments under the ETSI IPR Policy and are unwilling licensors" if, within seven days of the order (i.e., through March 10), the company either refused to offer an interim license outright or to abide by the terms of the license along with Lenovo (including payment terms) pending the outcome of Ericsson's request for permission to appeal to the UK Supreme Court. Per that order, any money paid to Ericsson would be returned in the event that the "appeal is allowed" (or, in US parlance, if the appeal succeeded).
Two days later, Ericsson indicated in a filing to the ITC that it would appeal the UK Court of Appeal's decision, doing so in a response to Lenovo's notice of supplemental authority alerting the ITC to that decision. Ericsson identified certain alleged legal errors underpinning that UK judgment and underscored that because the UK appellate court held that Ericsson was "'free to decline to accept the terms determined by the [UK] Court' in the eventual FRAND ruling, and . . . that the UK court could not require Ericsson to offer an 'interim license'" (emphasis in original), the UK decision was "completely advisory".
On March 11, Lenovo issued a press release stating that Ericsson had "refused to accept the interim licence terms", such that Ericsson had been deemed to have breached its FRAND commitments to ETSI and was an "unwilling licensor" as a result of the UK Court of Appeal's March 3 order. That same day, Ericsson reiterated its intent to appeal the decision in statements to the press (see, e.g., here).
Lenovo initiated its dispute with ETSI on March 11 as well, as subsequently reported by IAM, invoking clause 8.2 of the ETSI IPR policy in a letter sent that day by Lenovo Chief IP Officer John Mulgrew to ETSI Director-General Jan Ellsberger. The company asserts that because Ericsson has been "in breach of its good faith obligations since 3 March and to be an unwilling licensor since 11 March" (as paraphrased by IAM) as found in the UK Court of Appeal's recent decisions, licenses had not been available from Ericsson as required by clause 6.1. As a result, Lenovo stated that it was seeking "commencement of the procedure in accordance with clause 8.2 of the ETSI IPR Policy to remove Ericsson's IPRs from any given standards and technical specifications relating to 4G and 5G" (quote from letter in IAM article).
This refers to a possible outcome of an investigation under clause 8.2, which provides that when "ETSI becomes aware" that licenses are not aware from a SEP owner under clause 6.1, the Director-General is to request information on license non-availability from both the implementer invoking the clause and the patent owner. If the patent owner refuses the request or does not respond within three months, ETSI's General Assembly can vote on whether to have the appropriate committee modify the applicable standard such that the patent owner's relevant SEPs are no longer essential. IAM reports that clause 8.2 "has rarely if ever been invoked by an implementer".
Per IAM, Lenovo "has asked for an expedited/adapted version of this procedure, presumably because it is the subject of numerous preliminary injunctions in Brazil and Colombia as part of the same dispute and faces the prospect of a US exclusion order being imposed as early as June 2025".
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