Order For Alternative Service In A Hague Service Convention State Unjustified And Set Aside

• Published date: 28 July 2021
• Subject Matter: Intellectual Property, Patent
• Law Firm: Wiggin
• Author: Georgina Hart

In a recent ruling relating to a UK patent dispute about the grant of licences to use standard essential patents (SEPs) on terms that are fair, reasonable and non-discriminatory (FRAND), the Patents Court set aside an order permitting service of the UK proceedings by alternative means, on the ground that there were no exceptional or special circumstances to justify derogation from the Hague Service Convention (HSC).

Background

Godo (a Japanese company) had been involved in negotiations with the three companies in the Huawei Group (two incorporated in China and one in the UK) since February 2015, in relation to the grant of a licence in respect of some its SEPs. During the negotiations, each side had made offers of terms which they asserted to be FRAND. However, upon failing to agree a FRAND rate for the SEPs, Godo brought proceedings in January 2021 against the three Huawei companies in both Germany and the UK, alleging infringement of the German and UK designations of certain SEPs and seeking an injunction on the basis that the defendants were not willing licensees and as such were not entitled to enforce the claimant's FRAND obligations or to the grant of a licence.

After the German and UK actions were commenced the two Chinese Huawei companies (the first and second defendants) commenced proceedings against the claimant in China seeking a determination of a FRAND royalty rate for Godo's Chinese SEPs.

An order was made in the UK action on 22 February 2021, after a without notice hearing, permitting Godo to serve the UK proceedings on the two Chinese defendants out of the jurisdiction and also permitting Godo, in place of service pursuant to the provisions of the HSC, to serve those defendants in the UK by alternative means at the UK registered office address of the Huawei UK subsidiary (the third defendant) and the London offices of Huawei's UK solicitors.

The first and second defendants applied to set aside the parts of the order that permitted service on them by alternative means.

The application to set aside the order

Nicholas Caddick QC (sitting as a Deputy High Court Judge) summarised the authorities on service by alternative means on a defendant in a country (such as China) that is a signatory to the HSC as follows:

• Where the court gives permission to serve a claim form out of the jurisdiction, it also has power, by reason of CPR r.6.37(5)(b)(i) and r.6.15(1), to make an order permitting service by an alternative method or at an alternative...