The Supreme Court has ruled against Huawei and ZTE in a case that could have significant implications worldwide for licensing of intellectual property in telecoms.

Two cases, Unwired Planet v Huawei and Conversant Wireless v Huawei & ZTE, will help define the licensing of patented technology considered essential to the international standards for previous and future generations of wireless telecommunications technology.

The cases were the subject of a joint hearing before the Supreme Court in October 2019. Both concern the licensing of patents essential to the international standards for 2G, 3G and 4G mobile telecommunications, namely Standard Essential Patents (SEPs). In addition, Apple, Ericsson and Qualcomm were permitted to intervene in the appeals.

The ruling upholds the previous decisions of the High Court and Court of Appeal which had ruled, firstly, that in appropriate circumstances, UK courts do have the power to require that a company - which intends to implement standard technology in the UK - enters into a worldwide portfolio licence of a patent holder’s SEPs. And secondly, that the UK is an appropriate forum in which to determine those disputes.

The most immediate effect will be that Huawei will need to enter into the licence with Unwired Planet, which the UK Patents Court previously decided was fair and reasonable. Should it fail to do so, then the company will risk being subject to an injunction restraining its further activities in the UK.

Holders of SEPs must agree to license their technology to third parties on Fair, Reasonable and Non-Discriminatory (FRAND) terms. The ruling will also enable SEP holders to insist that implementers, like Huawei, take out global licences covering all of their portfolios. If they fail to do this, they risk being subject to injunctions restricting their ability to access the UK market.

The practical effect is that implementers cannot insist on SEP holders proving their patents in every jurisdiction in the world, something which would be both practically and economically prohibitive for smaller companies. Otherwise, as the Supreme Court observed, “implementers who were infringing the patents would have an incentive to continue infringing”.

Intellectual property specialist law firm EIP represented both Unwired Planet and Conversant in the appeals brought by Huawei and ZTE.

Gary Moss, head of EIP Legal, said: “Many in the industry thought that what we were attempting was crazy and hopeless, but we and our clients have held firm; along the way we have gone through 12 major trials and appeals and innumerable interim court hearings."

A spokesperson from Unwired Planet said: “We are pleased with the UK Supreme Court's decision, which fully affirms the rulings of the UK appellate court and Mr Justice Birss.

"Unwired Planet and its other PanOptis related companies believe that global licensing is the most efficient and effective solution for both licensors and licensees - we look forward to continue working with other manufacturers to offer licenses to our patents under this global FRAND framework and conclude negotiations in a timely manner."

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