Should the UK courts grant a declaration that a willing licensor would agree to enter into, and would enter into, an interim licence of a portfolio of Standard Essential Patents (SEPs)? This is a question which had not been asked in the numerous FRAND disputes before the UK courts in recent years, but is one that has now been considered by the Court of Appeal three times in the last six months, with the judgments highlighting the court's willingness to award this new form of relief.
The issue first came before the Court of Appeal in Panasonic Holdings Corporation v Xiaomi Technology UK Limited & Ors, in October last year.
Those proceedings were part of a global dispute between the parties relating to Panasonic's global portfolio of 3G and 4G SEPs. Despite both parties giving unconditional undertakings to the court to enter into a court-determined licence, Panasonic continued to pursue parallel proceedings in Germany seeking to obtain an injunction, in order to then achieve a negotiated settlement. The Court of Appeal labelled Panasonic's conduct in this regard as "indefensible", noting that "FRAND is a process and not merely an end-point". It found as a result that Panasonic was not complying with its obligation to negotiate a licence with Xiaomi in good faith.
By a majority decision, the Court of Appeal granted Xiaomi its requested declaration of an interim licence.
More recently, the Court of Appeal has heard two other cases asking it to assess whether the principles in Panasonic have wider applicability, or whether they are confined to the specific facts of that case.
The first was between Alcatel Lucent and Amazon, a case relating to H.264/AVC and H.265/HEBC video standards. The case invoked the ITU's (International Telecommunication Union) RAND obligations, rather than ETSI's (European Telecommunications Standard Institute) FRAND obligations – though nothing turns on this.
In that case, Alcatel-Lucent (part of the Nokia group of companies) sued Amazon for infringement of three "NEPs" (Non-Essential Patents). Amazon counterclaimed (introducing other Nokia entities as Part 20 Defendants) seeking a RAND licence, which it said should include SEPs belonging to Nokia. Actions were also brought in Brazil, Germany, the US International Trade Commission (ITC), the Unified Patent Court (UPC), India, and Delaware.
Amazon sought permission to amend its statements of case to include a claim to an interim RAND licence. This was denied at first instance (in a decision delivered before the Court of Appeal's decision in Panasonic), but was then heard on appeal.
At that appeal, Nokia sought to differentiate the decision in Panasonic, arguing that, unlike Panasonic: (1) it had not commenced proceedings in the Patents Court seeking the determination of (F)RAND terms; (2) it had not undertaken to the Patents Court to enter into a licence of its SEPs on the terms determined by the Patents Court to be (F)RAND; and (3) it was seeking to enforce NEPs against Amazon.
As this related only to whether Amazon should have permission to make an amendment to introduce this case, the court did not need to make a final decision on whether a declaration should be granted. It was enough to find that Amazon had a real prospect of establishing that any factual differences with Panasonic were immaterial, and the court therefore allowed the amendments.
The most recent case was between Lenovo and Ericsson. Once again, this case formed part of a global dispute (with other actions in the Eastern District of California, the US ITC, Brazil and Columbia).
Lenovo, seeking a FRAND cross-licence covering both parties 4G and 5G portfolios, asked the court for a declaration that a willing licensor and willing licensee in the situation of the parties would agree to, and enter into, an interim licence. Once again, this case reached Lord Justice Arnold in the Court of Appeal, following the High Court's decision to refuse the declaration sought.
Lenovo's position was that, as in Panasonic, the purpose of the foreign proceedings was to coerce Lenovo into accepting terms that were more favourable to Ericsson than the English courts would determine to be FRAND.
However, Ericsson argued that a declaration could not serve a useful purpose because, even if it were made, Ericsson would not offer an interim-licence, and would instead accept being branded as an unwilling licensor. The appeal also touched on issues of comity. Arnold LJ accepted that "jurisdictional imperialism is to be eschewed". However, following the Supreme Court's decision in Unwired Planet, the English courts had decided they had jurisdiction to determine what terms are
FRAND on a global basis. As a result, "a degree of jurisdictional imperialism is already hard-wired into the English courts' approach to these issues".
Effect of the decisions
Although correlation does not always equal causation, the immediate aftermath of these decisions has been noteworthy:
In Panasonic v Xiaomi, the Court of Appeal's decision on 19 September 2024 was followed by the case settling in all jurisdictions, including the UPC, with the parties agreeing the terms of a global FRAND licence in October 2024.
In A-Lucent v Amazon, the decision on 28 January 2025 was followed by a licence agreement settling all litigation worldwide in March 2025.
Finally, despite Ericsson's claims that a declaration would not serve a useful purpose, Arnold LJ appears to have been proved right in concluding that a declaration would force it to reconsider its position. Following the 28 February 2025 decision, it has now been reported that the parties have settled their global SEP litigation.
Summary
Taken together, the three decisions provide some clarity on the English courts' approach to interim licences in SEP disputes. In cases such as Panasonic and Lenovo, where the patentee is seeking relief in other jurisdictions, the English court will almost certainly make a declaration for an interim licence. Although Alcatel-Lucent was only an application about permission to amend Amazon's statement of case, the Court of Appeal's guidance in that case suggests that, even outside of those circumstances, the court may be minded to make such a declaration. The global settlement of the three cases may further persuade the courts that doing so would provide a useful purpose.