High Court judge declares Acer, ASUS, Hisense entitled to interim licenses from Nokia despite arbitration offer, but Nokia will appeal

Here’s what a Nokia spokesperson said:

“Our goal is to ensure fair compensation for the use of our inventions in Acer, Asus, and Hisense devices. This will allow us to continue investing in the development of future technologies that benefit everyone. Nokia has not initiated any legal proceedings against Acer, Asus, and Hisense in the UK, and we do not believe the United Kingdom is the appropriate jurisdiction for this matter. Instead, we believe binding arbitration in a neutral, internationally recognized forum would be a more constructive way to resolve this commercial dispute. We will be appealing the Court’s decision.”

The decision repeats some notorious fallacies of UK decisions on interim-license requests, among them the following two:

• It says, contrary to commercial common sense, that a willing licensor will welcome interim payments and should therefore be satisfied. That is a position one can only take by never having worked in the real economy and ignoring those who accurately describe how things work. To be fair, Mr Justice Mellor is bound by an outlandish EWCA holding on that question:
  • Neither a publicly traded nor a privately held company can actually use money it may have to repay without taking the risk of a liquidity problem.
  • Such revenues cannot be recognized, which has obvious implications for publicly traded company and also creates problems for privately held companies that are not 100% management-owned.
  • To the extent that implementers suggest (in or out of court) that there are accounting principles allowing the recognition of disputed revenues or at least parts thereof, they ignore that
    • those providing professional opinions on the recognition of disputed revenues have to take extremely conservative positions with a view to their own professional liability;
    • even an opinion that is conservative enough that a professional is prepared to provide a formal opinion still comes with a lot of risk for company management, which may lose investor confidence if subsequent adjustments are needed; and
    • if it was really all that easy to identify the recognizale part of an interim payment, the courts could to it as well (without personal liability risks). But in today’s decision, Mr Justice Mellor himself says he just took the middle between $0.03 and $0.70 (Nokia argued the latter number is supported by dozens of real-world license agreements) because either party could be right or the truth could be somwhere in between.
• It argues that interim licenses do not compromise the jurisidiction of foreign courts over infringement cases involving the patents at issue. But:
  • The resistance by the UPC’s Mannheim Local Division (LD) and the Munich I Regional Court to the pursuit of interim-license declarations is not based on a holding that those are identical to antisuit injunctions. Anti-antisuit case law is applied analogously because of the interference with intellectual property rights enforceable in the UPC or a German court.
  • The interference theory is based on the coercive effect. Coercion does not only mean a straightforward prohibition. Coercion also includes other scenarios in which a party’s free will is compromised. It’s coercive if a party is declared in breach with its FRAND licensing obligations and may suffer various consequences as a result, among them damages claims. If the English courts explicitly ruled out that those obtaining an interim-license declaration can ever base any UK claims on the patentee’s refusal to grant such an interim license with effect outside the UK, there would be no problem related to coercion.

The single most interesting aspect of this set of cases that sets it apart from some earlier decisions is the central role that Nokia’s arbitration offer plays, which is also reflected by the Nokia statement we quoted further above. Mr Justice Mellor’s decision today essentially says that Nokia is in breach of its (F)RAND pledge because Acer, ASUS and Hisense are willing to take a license on UK court-determined terms, so they are willing licensees.

He also appears to be unconvinced of arbitration because, in his observation, it is proposed by the patentee side. Actually, at a recent EWCA hearing there was a visible reaction by a solicitor for an implementer to LJ Arnold’s comments on arbitration (the solicitor obviously did not speak at the hearing; that is for the barristers) indicating that arbitration is more popular on the implementer side than Mr Justice Mellor thinks. We have also had private conversations with implementers in connection with different disputes where they mentioned they had proposed arbitration to the SEP holder.

It is just that those implementers who seek interim-license declarations will reject any alternative to a UK FRAND trial, whether it amounts to judicial or out-of-court dispute resolution. They have tactical reasons (causing delay and driving up costs) for that. Amazon told Mr Justice Meade that it wanted a UK court ruling, not arbitration (December 4, 2025 ip fray article).

LJ Arnold’s pro-arbitration statements

Mr Justice Mellor notes in his decision that he is aware of LJ Arnold’s positive view of binding arbitration, but he distinguishes those statements from the questions he had to resolve here. Whether Nokia’s arbitration offer could be rejected in favor of pushing for a UK interim-license declaration will now have to be decided by the appeals court.

Here’s an overview of what we’ve been able to find from LJ Arnold on arbitration (partly because we found references in Nokia’s skeleton argument for the hearing):

• Nokia v Oppo [2022] EWCA Civ 947, para. 17:
  “The only sure way to avoid these problems is to use a supranational dispute resolution procedure, and the only supranational procedure currently available is arbitration. … national courts cannot solve the problems inherent in the present system of resolving SEP/FRAND disputes.”
• Optis v Apple [2022] EWCA Civ 1411, para. 115:
  “The only way to put a stop to such behaviour is for SDOs like ETSI to make legally enforceable arbitration of such disputes part of their IPR policies.”
• Lenovo v Ericsson [2025] EWCA Civ 182, para. 153:
  “In the absence of a global dispute mechanism for determining FRAND disputes, or an ad hoc agreement to arbitration, the possibility of jurisdictional conflict is inescapable.”
• He has also expressed the same opinion outide of court proceedings. In his editorial “The EU’s WTO complaint against China can only be resolved by establishing legally enforceable global arbitration of SEP disputes”, he stated that “[t]he answer to this problem must involve a supranational procedure for resolving these disputes which is acceptable to all interested parties. No national court can provide that. The obvious answer is global arbitration.”
• He expressed similar views in the article “SEPs, FRAND and Mandatory Global Arbitration”.
• It has been said that he expressed the same opinions in his presentation to a recent meeting of the IPR Special Committee of the European Telecommunications Standards Institute (ETSI).

It will now be interesting to see whether he applies the same principle to this case, and if so, whether he finds at least one other panel member to join him.

Counsel

Acer and ASUS: Andrew Lykiardopoulos KC, Isabel Jamal and Joshua Marshall; instructed by Morgan, Lewis & Bockius.

Hisense: Kathryn Pickard KC and Ligia Osepciu; instructed by Kirkland & Ellis.

Nokia: Mark Chacksfield KC and Edmund Eustace; instructed by Bird & Bird.