The UK’s Role as a Venue for FRAND Litigation: Have the UK Courts Gone Far Enough?

The licensing of SEPs for cellular mobile technology is a global matter — standards, technologies, and the scope of many licensees’ operations are global or at least multi-national. Unfortunately, there is no unified global adjudicatory system that would enforce the rights of IP owners when licensing negotiations fail. Patent owners must enforce their patent rights by litigating over specific patents in specific jurisdictions. This raises the costs of enforcement and favors hold-out strategies by implementers. The Unwired Planet series of judgments upholding UK courts’ ability to determine FRAND terms for global licenses, offers some hope that courts could provide something close to the unitary global adjudicatory mechanism that matches the global nature of the technology market. However, some implementers have reacted to this development by submitting themselves to injunctions on their relatively modest UK sales in order to avoid taking a license on court determined FRAND terms, and have argued that they are then at best liable for damages on past sales in the UK only. If the courts agree that damages should be metered only on UK past sales and at a rate close to the FRAND rate for global licenses, this will give implementers strong incentives to engage in such strategies.

By Kalyan Dasgupta & David J. Teece¹

I. INTRODUCTION

For more than two decades, the system of licensing standards-essential technology pertaining to mobile cellular devices has skir