Kirkland & Ellis has helped Lenovo secure an important victory in a patent dispute with Ericsson after the UK Court of Appeal ruled it is entitled to an interim cross licence to use Ericsson’s portfolio of 5G and 4G standard essential patents (SEPs)
A unanimous decision handed down on 28 February by Lord Justice Richard Arnold (with Lord Justice Newey and Lady Justice Sarah Falk agreeing) overturned Mr Justice Jonathan Richards’ refusal in November to grant Lenovo an interim licence.
The appeal court judges concluded that Ericsson was in breach of its obligation of good faith under the standard-setting organisation the European Telecommunications Standards Institute’s (ETSI’s) policy by pursuing claims for injunctions in the UK and equivalent remedies in foreign courts.
It noted that Lenovo had undertaken to enter into a licence on the terms determined by the English court to be fair reasonable and non-discriminatory (FRAND), and in parallel proceedings had offered to accept the Eastern District Court of North Carolina’s determination of FRAND terms if Ericsson dropped its “campaign to obtain injunctions and equivalent relief”.
The court concluded that a “willing licensor in the position of Ericsson would enter into an interim licence with Lenovo pending that determination” and that granting the licence should not be refused on the grounds of comity and would “serve a useful purpose”. It settled on a figure for the interim licence that was midway between Lenovo’s and Ericsson’s offer.
Commenting on the court’s decision, 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.”
She added that Lenovo continues to “welcome resolution with Ericsson and invites Ericsson to engage with the multiple FRAND offers Lenovo has made”.
The court pointed out that this is the third appeal on similar issues to come before it in quick succession. In October, it granted Xiaomi, also advised by Kirkland, an interim licence in a dispute with Panasonic.
And in January, in Alcatel Lucent SAS v Amazon Digital, the court held that implementer Amazon had a real prospect of success on its claim for a declaration that a willing licensor in Nokia’s position would grant Amazon an interim licence to use SEPs in the Nokia Video Portfolio.
Bird & Bird partner Katharine Stephens noted that implementers are increasingly viewing the UK as a favourable jurisdiction for them. Lenovo has initiated proceedings against not just Ericsson in the UK courts but InterDigital and most recently ZTE.
Discussing what might happen next, she added that pending the outcome of an Ericsson appeal, the decision will “ensure that implementers continue to see the UK as a good place to bring proceedings. That does not just relate to rates, but because the English court is willing to grant declarations for an interim licence, it signals that it is willing to protect them from injunctions granted by courts in other countries in situations where the SEP owner is found not to have acted in good faith in accordance with its undertaking to ETSI (or other standard setting organisation)”.
Lenovo was represented by 8 New Square’s Andrew Lykiardopoulos KC, Blackstone Chambers’ James Segan KC and 11 South Square’s Kathryn Pickard, instructed by the Kirkland & Ellis team led by London-based partners Nicola Dagg, Jin Ooi, Peter Pereira and Oscar Robinson, and associates Ashley Grant and Andrew Marks.
Ericsson was represented by Monckton Chambers’ Meredith Pickford KC and Nikolaus Grubeck, and 8 New Square’s Edmund Eustace (instructed by Taylor Wessing and Pinsent Masons).
Lenovo initiated proceedings in the UK against Ericsson in 2023. However, the global patent dispute, with parallel proceedings in the US, dates back 16 years.
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