Standard Essential Patents: UK High Court

John Schmidt looks at an Interesting judgment by the UK Patents Court involving Huawei, Samsung and Ericsson. 

10 August 2015

Interesting judgment by the UK Patents Court involving Huawei, Samsung and Ericsson (all well known in connection with SEP issues - see my post of 16 July) as well as Unwired Planet (a patent assertion entity).  The ruling involves a strike out application in respect of three distinct competition law issues.  The strike out was successful only in respect of the first issue:

The first competition law argument says that Ericsson's transfer of SEPs to Unwired Planet constitutes a breach of a FRAND commitment.  The court struck out that part of the claim as the transfer agreement contained an obligation on Unwired Planet to make a FRAND commitment to ETSI, the standard setting agency.  Therefore the competition argument had no prospect of success.

The second competition law argument says that by splitting its SEPs and transferring some to Unwired Planet whilst retaining some may result in higher (excessive prices).   The judge refused to strike out this part as it was an arguable point in a legal area which is developing and with little precedent.  Therefore it was an issue to be determined at trial.

The third competition law argument says that the agreement splitting the SEPs between Ericsson and Unwired Planet contains elements of price fixing: Unwired Planet has to pay a minimum percentage of the net sales to Ericsson and is restricted on the terms on which it licenses the relevant SEPs.  Again, the judge ruled that these were issues that should be determined at trial and refused the strike out.

An additional twist in this is that this was a dispute between Unwired Planet on the one hand and Samsung and Huawei on the other.  Ericsson sought to join that litigation at a later stage and by doing so without precluded its ability to rely on an arbitration clause.

See the full judgment