Context: In November, after approximately a year of litigation, Mr Justice Jonathan Richards of the High Court of Justice for England & Wales (EWHC) denied Lenovo’s request for a declaration that it is entitled to an interim license from Ericsson (November 19, 2024 ip fray article). At the time, he was particularly unconvinced of Ericsson seeking injunctions in bad faith, given that a neutral third party – the U.S. International Trade Commission’s (USITC) Office of Unfair Important Investigations (OUII) – deems Ericsson to have discharged its FRAND licensing obligation while raising concerns over Lenovo’s demands for a license to its own patents. Lenovo appealed against this ruling and a hearing was held in the England & Wales Court of Appeal (EWCA) last week (February 18, 2025 ip fray article).
What’s new: In a judgment handed down remotely today (PDF below), Lord Justice Newey, Lord Justice Arnold, and Lady Justice Falk of the EWCA revoked the lower court’s decision, siding with Lenovo. They declared that Lenovo is in fact entitled to an interim license and that, in seeking injunctions against the licensee around the globe, Ericsson is in breach of its obligation of good faith FRAND obligations. It is using such tactics to “coerce” Lenovo to accept terms that may exceed what is FRAND in English courts, they held.
Direct impact: This is not an order for Lenovo and Ericsson to enter into an interim license agreement per se, so it does not formally obligate the licensor to grant a license on any particular terms. But it is still a significant development – and one that has swung the pendulum back in Lenovo’s favour in its global SEP dispute against Ericsson (in the UK anyway).
Wider ramifications: However, as reported earlier this month, there are several ways in which the Unified Patent Court (UPC), German and other national courts could respond to this declaration (and effectively protect their jurisdiction) (February 4, 2025 ip fray article). We explore them more in detail in the article, but a decision as massive as this could lead to any (or a combination) of the following responses: ex parte preliminary injunctions against infringement in response to interim license requests; analogous application of anti-antisuit injunctions; sanctions; or non-recognition of forcible licenses and even of withdrawals of complaints.
This is the full judgment:
In summary, the judges concluded that Ericsson’s conduct, including the way it aimed to “coerce” Lenovo into accepting non-FRAND (according to English courts) terms should be “unequivocally and publicly condemned.” In so doing, “Ericsson are in breach of their obligation of good faith”, the judges stated.
They added that a willing licensor “in the position of Ericsson” would enter into an interim license with Lenovo pending that determination, and FRAND terms for that license would be those set out in the preceding paragraph:
“…the sum payable by Lenovo by way of royalty should be the mid-point Judgment Approved by the court for handing down. The sum paid under the interim licence should be adjustable in accordance with the Patents Court’s determination of FRAND terms for the final cross-licence.”
In a statement today, Lenovo’s Chief Legal Officer, Laura Quatela, said:
“Lenovo is grateful for the Court’s careful and objective analysis of the issues related to this case and welcomes this landmark ruling and its broader implications for global SEP licensing and the technology industry. This judgment not only confirms that Lenovo is a willing licensee but strengthens and reaffirms our commitment to advocating for transparency and fairness in global FRAND licensing on behalf of our customers and the industry.”
Counsel
Lenovo was represented by Kirkland & Ellis’s Nicola Dagg, Jin Ooi, Peter Pereira, Oscar Robinson, Ashley Grant, and Andrew Marks.
Ericsson was represented by Taylor Wessing LLP and Pinsent Masons LLP.