## Facts

- Unwired Planet held a global portfolio of patents declared essential to 2G, 3G, and 4G telecommunications standards and had given an ETSI undertaking to license on fair, reasonable, and non-discriminatory (FRAND) terms.
- Huawei manufactured and sold standard-compliant telecommunications equipment and devices worldwide.
- Unwired Planet sued Huawei for infringement of five UK-designated standard-essential patents (SEPs) and sought injunctive relief and FRAND licensing relief.
- After staged trials, the Patents Court held two UK SEPs valid and essential, found two invalid, and one was not pursued.
- The Patents Court determined that a FRAND licence for the parties in these circumstances would be a worldwide portfolio licence, set global royalty rates and terms, and granted a UK injunction unless Huawei entered into the court-determined global FRAND licence (stayed pending appeal).
- Huawei appealed, challenging (i) the propriety of conditioning a UK injunction on acceptance of a global licence, (ii) the application of FRAND non-discrimination in light of a lower-rate Samsung licence, and (iii) the absence of abuse-of-dominance under Article 102 TFEU given alleged noncompliance with the negotiation framework in Huawei v. ZTE.

## Issues

1. Whether an English court, after finding infringement of UK SEPs, may determine the terms of a worldwide FRAND portfolio licence and condition a UK injunction on acceptance of that global licence.
2. Whether FRAND non-discrimination imposes a “hard-edged” entitlement to terms no worse than those given to similarly situated licensees (i.e., a rate-matching right).
3. Whether failure to follow the Huawei v. ZTE negotiation sequence necessarily constitutes an Article 102 TFEU abuse that bars injunctive relief.

## Decision

- The Court of Appeal dismissed Huawei’s appeal in full and upheld the injunction conditional on Huawei entering into the court-set worldwide FRAND licence.
- The court held that, on the facts, a worldwide portfolio licence was FRAND and that it was a proper exercise of the court’s remedial powers to settle global FRAND terms to resolve UK infringement litigation.
- The court rejected the view that there is only one “true” FRAND rate; multiple sets of terms may fall within a FRAND range, though the terms set by the Patents Court remained FRAND.
- The court rejected a “hard-edged” non-discrimination rule requiring automatic matching of a lower Samsung rate; differential rates could be consistent with FRAND absent competitive distortion.
- The court treated Huawei v. ZTE as a safe-harbor framework: noncompliance did not automatically establish abuse of dominance, and the record did not show abusive conduct warranting denial of an injunction.

## Legal Principles

- A court adjudicating infringement of domestic SEPs may, where commercially appropriate and consistent with the ETSI undertaking, determine the terms of a worldwide FRAND portfolio licence and condition domestic injunctive relief on acceptance of that licence.
- FRAND is not a single mandatory rate; a range of different licensing terms may satisfy FRAND, and offering any set within that range can discharge the SEP holder’s FRAND obligation.
- FRAND non-discrimination is a general, effects-focused obligation aimed at preventing competitive distortion; it is not a de facto most-favored-licensee requirement.
- A SEP holder may agree to rates below a FRAND benchmark for particular counterparties (e.g., settlement-driven discounts) without automatically owing those rates to other implementers.
- The Huawei v. ZTE process functions as a safe harbor for avoiding Article 102 TFEU liability when seeking an injunction; deviation from its sequence does not, by itself, bar injunctive relief.

## Conclusion

The Court of Appeal affirmed that a UK court can set worldwide FRAND terms for a SEP portfolio and grant a UK injunction unless the implementer accepts a court-determined global licence, while clarifying that FRAND permits a range of compliant terms, that non-discrimination does not mandate rate-matching, and that Huawei v. ZTE is not an inflexible precondition to injunctions under Article 102 TFEU.


Unwired Planet Int’l Ltd. v. Huawei Techs. Co., [2018] EWCA (Civ) 2344 (Eng.)