Whether standard implementers will keep their momentum in the UK should be readily apparent tomorrow, when Lenovo and Ericsson converge in London for a hearing on Lenovo’s request for a short-term license to Ericsson’s standard essential patents, or SEPs. Look to the UK Court of Appeal, led by Judge Richard Arnold, to hold its ground — and to let Lenovo “hold the ring,” as the dispute over Ericsson’s 5G SEP portfolio proceeds this spring.
The UK Court of Appeal is poised to hear Lenovo’s challenge of a ruling last fall by UK High Court Judge Jonathan Richards that it cannot seek a short-term, or interim, license to various Ericsson-owned standard essential patents, which its laptops and smartphones stand accused of infringing.The case will be presented tomorrow, with approximately four-and-a-half hours allotted for argument. The UK Court of Appeal has faced heat in some circles for even agreeing to Lenovo’s appeal — let alone entertaining the possibility — of setting a global, interim fair, reasonable and non-discriminatory, or Frand, rate to SEPs. But one of its members, Judge Richard Arnold, may have recently shed light on his court’s rationale.
After giving an overview of the dispute between Panasonic and Xiaomi, where the parties mutually agreed to allow the UK courts to determine final Frand license terms, Arnold noted that once Panasonic was found to have breached its “good faith” obligation by pursuing injunctive relief against Xiaomi elsewhere (see here), the parties agreed to an interim license on the terms set by the appellate court.
Soon thereafter, Panasonic and Xiaomi entered into a global settlement.
“What this demonstrates,” Arnold said at an event last month*, is that when “an independent and impartial body, be it a court or some other independent and impartial body, tells the parties ‘how much’ — the likelihood is they will accept it.”
Arnold will be a member of tomorrow's panel, along with Judges Sarah Falk and Guy Newey.
— Not satisfied —
The parties began talks more than a decade ago over the need to cross-license patents declared essential to the 2G WiFi standard under Frand terms, as required by ETSI, the European Telecommunications Standards Institute. As those negotiations stalled and ultimately failed, the relevant WiFi standard has progressed from 3G, to 4G, and now rests with 5G.
Richards found in November 2024 that, were he to grant Lenovo’s request for an interim license, it would interfere with principles of comity (see here), by negating injunction requests Ericsson has made elsewhere.
Lenovo and Ericsson are locked in battle not only in the UK, but also in the US in the US District Court for the Eastern District of North Carolina and before the US International Trade Commission, as well as in courts in Brazil and Colombia.
Richards indicated agreement with Ericsson that entry of an interim license would be akin to “an attempt to influence” those foreign proceedings by “offering an unsolicited opinion on matters that overseas courts and bodies need to consider for themselves.”
On the question of whether the UK should entertain Lenovo’s request, Richards said he found “no evidence that short-term licenses of the kind that Lenovo seeks are typical or prevalent,” and that he was “not satisfied to a high degree” that “Lenovo’s desired outcome truly is Frand.”
— Step up to the plate —
But last month, neither atypicality nor principles of comity stood in the way of the UK Court of Appeal. In reinstating a request by Amazon for an interim license from Nokia in a different SEP dispute, Arnold (see here) downplayed concerns that first determining entitlement to an interim license and then declaring interim license terms introduces unnecessary complexity to an already complex process.
An interim license, Arnold wrote for the three-judge panel, is a “much more limited task” than assessing final Frand terms.
“As Amazon submit,” he added, “this is because the interim license is only designed to hold the ring pending determination of the terms of the final license, and the payments made pursuant to it will be adjusted to the extent necessary in consequence of the determination of the terms of the final license.”
So it seems unlikely that tomorrow’s panel will depart from that logic so soon — especially on the heels of Arnold’s comments last month (see here) that in the absence of a global dispute resolution system for SEPs, the “next best” option would be “for more courts to step up to the plate and determine Frand terms.”
The two cases may be at a similar procedural posture but differ in several key respects — most notably, Ericsson’s alleged reliance on Lenovo’s own SEP portfolio to conduct its infrastructure business, which Lenovo accuses Ericsson of infringing.
Thus, unlike in Amazon v. Nokia, questions in Lenovo v. Ericsson over infringement liability and Frand go both ways. How much that factors into the appellate court’s disposition of the request by Lenovo for an interim license — a request not made by Ericsson in kind — should be readily discernible at tomorrow’s hearing.
— Requirement met —
Meanwhile, global litigation between the two has continued largely unabated.
The Eastern District of North Carolina entered a stay in one of the cases in deference to the USITC in February 2024, but the companion case has only been stayed in part, with counterclaims for infringement of Lenovo subsidiary Motorola Mobility’s US Patent 11,284,466 still active.
When the latter case resumes in full, Judge Terrence W. Boyle must revisit his earlier holding that Lenovo cannot pursue an order in the US pausing the parties’ litigation in Colombia, where Lenovo was hit with an injunction in December 2023, and Brazil, where Lenovo was enjoined one month earlier.
That directive came from the US Court of Appeals for the Federal Circuit in October 2024, which said Boyle had committed a legal error in denying Lenovo’s request. Led by US Circuit Judge Sharon Prost, the Federal Circuit said that “the ‘dispositive’ requirement of the foreign-antisuit-injunction framework is met” where ETSI’s Frand commitment bars Ericsson from pursuing SEP-based injunctions without first proving it negotiated in good faith.
“Accordingly, if the court determines that Ericsson has not complied with that obligation, that determination will dictate the impropriety of Ericsson’s pursuing its SEP-based injunctive relief,” the Federal Circuit ruled.
At the USITC, both sides have notched wins and losses.
In December (see here) Administrative Law Judge MaryJoan McNamara found all four Ericsson-asserted patents in one of the investigations initiated by Ericsson valid and infringed by Motorola Mobility, in a violation of Section 337 of The Tariff Act. That holding is currently under review by the commission, with a final determination expected in April.
But in the other Ericsson-initiated investigation, proceedings were terminated in mid-January when the commission agreed with Administrative Law Judge Cameron R. Elliot that there was no violation of Section 337 as it relates to two different Ericsson patents, because those patents are either invalid, ineligible or not infringed.
* “Modernizing SEP Licensing,” organized by Charles River Associates and Max Planck Institute for Innovation and Competition, Brussels, Jan. 28, 2025.
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