The UK Supreme Court today, dismissed two appeals filed by Chinese telecom equipment manufacturers Huawei and ZTE. These appeals concerned two patent infringement cases brought by Unwired Planet International and Conversant Wireless.
The cases concern the licensing of crucial mobile technologies and are related to Standard Essential Patents (SEPs). A SEP ensures that fair prices are maintained and customers benefit from the technology or patent.
Holders of SEPs can't withhold the technology. Instead, SEP holders, mandated by law, license their technology to third parties.
In 2013, Unwired Planet International brought the first case against Huawei. The intellectual property company alleged that Huawei infringed on 5 UK patents belonging to Unwired Planet.
Incidentally, Unwired Planet International had acquired these patents from the Swedish telecom giant, Ericsson. Previously, the English court ruled that two of Unwired Planet's patents were valid. The court had also ruled that Unwired's license terms were fair and legally enforceable.
On the other hand, Conversant Wireless brought forth its legal action case against both, Huawei and ZTE. Conversant Wireless alleged that Huawei and ZTE infringed on four of its UK patents. Conversant acquired these patents from the Finnish telecom major, Nokia.
Incidentally, these patents cover 3G, 4G, and 5G mobile service technologies. The patents also cover other yet-to-be-developed mobile service technologies.
Britain's Supreme Court has upheld previous decisions while quashing the appeals from Huawei and ZTE. The Supreme Court judgment makes it mandatory for companies like Huawei and ZTE to procure global licenses from SEP holders for the complete portfolio.
UK Supreme Court Dismissed Huawei & ZTE Appeals
In their appeals, the Chinese telecom majors argued that the UK courts did not have jurisdiction over foreign patents. Huawei and ZTE based the whole appeal on the argument that the UK Supreme Court could not arbitrate and determine the validity of foreign global patents.
However, the UK Supreme court quashed the argument. The Court stated that it has jurisdiction under an international patent framework. As per the trial Judge, the mobile industry has already agreed upon this international patent framework.
Consequently, Huawei and ZTE will have to sign licensing agreements with Unwired Planet International and Conversant Wireless. In case the telecom companies fail to acquire these licenses, they will be subject to injunctions. These potential injunctions will severely limit their access to the UK market.
This compounds Huawei's uphill battle in the US and other countries.
However, there is another significant consequence of this judgment. The UK Courts can now arbitrate global patent cases.
As such, the impact of this judgment is far-reaching. Telecom manufacturers will need to acquire global licenses for the complete portfolio of a SEP holder. Also, the manufacturers cannot legally insist that the SEP holder proves their patents in every jurisdiction globally.