Context: Panasonic is suing OPPO and Xiaomi over standard-essential patents (SEPs) in the Unified Patent Court (UPC) as well as the Mannheim and Munich I Regional Courts. OPPO brought a FRAND counterclaim in the UPC, but it could be deemed inadmissible (June 27, 2024 ip fray article). There is, however, also a FRAND rate-setting case involving the same parties that is pending in the England & Wales High Court.
What’s new: Today Mr Justice Richard Meade informed Panasonic, OPPO and Xiaomi that he expects to hand down a FRAND decision (further to a fall trial) before Christmas. Interestingly, Mr Justice Meade intends to write a letter to his UPC and German colleagues so they can factor the forthcoming FRAND decision from the UK into their case management decisions.
Direct impact: The parties now have the opportunity to raise objections, though Mr Justice Meade believes he does not need their consent to do so, and may “make submissions about the manner in which the information is passed.” But it’s difficult to predict what impact those letters from London will actually have. At least in InterDigital v. Lenovo, a UK FRAND ruling didn’t dissuade a German court from ordering an injunction. To the extent that InterDigital argues it’s entitled to a higher royalty rate on 5G than on 4G devices, the numbers actually suggest the opposite (July 17, 2024 ip fray article).
Wider ramifications: The current situation in Germany is that the courts don’t want to make FRAND determinations themselves, yet decline to rely on UK decisions to that effect. The UPC is new to this and has yet to pronounce its interpretation, and develop its application, of Huawei v. ZTE. Germany’s Sisvel v. Haier framework is not binding on the UPC.
What Mr Justice Meade told Panasonic, OPPO and Xiaomi today does not come as a surprise. In a November 8, 2023 judgment (PDF), he expressed his disappointment at a “U-turn” by Panasonic, whose counsel initially expressed his client’s wilingness to promise not to enforce any German or UPC injunctions against Xiaomi based on Xiaomi’s irrevocable and binding commitment to take a license on the terms to be determined in the UK proceedings.
That judgment noted that there was no objective justification for Panasonic wanting to enforce injunctions against a clearly willing licensee. It’s true that Panasonic would not have weakened its position in the German and UPC litigations at all: a party that obtains an injunction is under no obligation to enforce it.
Mr Justice Meade’s concern at the time was that he might accelerate the FRAND proceedings in his court, thereby slowing down other cases, only to find out that Panasonic actually intends to resolve the dispute by forcing Xiaomi into a license agreement based on German and/or UPC injunctions.
Today’s communication by Mr Justice Meade to Panasonic, OPPO and Xiaomi tells us that the FRAND trial will indeed take place this fall (Xiaomi would have preferred July, which suited neither Panasonic nor OPPO) and that the decision will come down not long thereafter. It appears unlikely that Panasonic can dissuade the judge from writing to his colleagues. If InterDigital v. Lenovo is any indication, the risk of German injunctions coming down and getting enforced regardless of a UK FRAND determination being on the table or in the making is high. If the proceedings result in a binding license agreement (at least between Panasonic and Xiaomi, not necessarily Panasonic and OPPO, given that the letter is seeking a FRAND determination in the UPC for certain markets and in China for others), that will put an end to any enforcement. But in this kind of dispute, it’s a given that the losing party will appeal. In that case, there will be a first-instance decision from the UK before the end of the year, but not a binding license agreement.