InterDigital V Lenovo: The Latest FRAND Judgment

• Jurisdiction: European Union
• Law Firm: Marks & Clerk
• Subject Matter: Intellectual Property, Media, Telecoms, IT, Entertainment, Mobile & Cable Communications, Patent
• Author: Mr Tom Taylor
• Published date: 31 March 2023

On 16 March 2023, Mr Justice Mellor handed down the latest FRAND judgment: InterDigital v Lenovo [2023] EWHC 539 (Pat).

The case concerned a dispute between InterDigital and Lenovo as to the terms on which Lenovo should take a licence to InterDigital's portfolio of patents which had been declared essential to the European Telecommunications Standard Institute (ETSI) Standards. The wider proceedings involved five technical trials and a single FRAND trial to which the judgment relates. The purpose of the FRAND trial was to identify what licence terms are Fair, Reasonable And Non-Discriminatory.

Mellor J explained that there were essentially two issues to be determined at trial. First, whether InterDigital's "5G Extended Offer" was FRAND and if not, what terms were FRAND for such a licence. Second, the appropriate remedy and whether InterDigital was entitled to an injunction in respect of the asserted patents held to be valid and essential. In relation to the second issue, it was necessary to assess whether Lenovo acted as a "willing licensee".

Like other landmark FRAND judgments, the judgment is substantial and stands at 225 pages including detailed analysis of various offers made between the parties and proposed royalty rates. However, the main conclusions of the judgment can be found at paragraphs 944-947 which set out that: (a) Lenovo must pay InterDigital $138.7m for a FRAND licence; (b) neither InterDigital's "5G Extended Offer" nor "Lenovo's Lump Sum Offer" (another offer considered in the case) were FRAND; and (c) InterDigitial's case on Lenovo's conduct was largely rejected and Lenovo will be put to their election (on whether to pay the licence fee or be subject to an injunction). It is suggested that failure to pay the licence fee (determined to be FRAND) would indicate an unwilling licensee.

In relation to the size of the licence fee, whist initially it might appear that a ruling that Lenovo should pay $138.7m would be unwelcome news, John Mulgrew (VP and deputy general counsel) in a statement issued by Lenovo is quoted as...