UK Court Rules Apple Must Unconditionally Commit To A FRAND License To Avoid An Injunction

• Published date: 13 October 2021
• Subject Matter: Intellectual Property, Media, Telecoms, IT, Entertainment, Mobile & Cable Communications, Patent
• Law Firm: J A Kemp LLP
• Author: Mr Dominic Forsythe and Mark Roberts

In a recent judgment (Optis Cellular Technology LLC & Ors v Apple Retail UK Ltd & Ors [2021] EWHC 2564 (Pat), 27 September 2021), Meade J, sitting in the England and Wales High Court, gave a decision in a series of trials relating to eight of Optis's patents in the field of telecommunications. Each of these patents is asserted to be a standard-essential patent (SEP) and was declared to the European Telecommunications Standard Institute (ETSI).

In two of the earlier trials (Trials A and B), it was found that Apple did indeed infringe two of Optis's SEPs. The present decision (Trial F) is concerned with Optis seeking an injunction to restrain Apple from continuing to infringe Optis's patents. A further trial, Trial E, to determine the FRAND terms themselves, is set to take place in June/July 2022.

In the present trial, Optis argued that Apple was an 'unwilling licensee' because Apple was not prepared to unconditionally commit to a license on FRAND terms that would be determined by the court. This is because Apple had only given an undertaking that they would enter into a Court-Determined Licence subject to a number of conditions. Meade J summarised these conditions as 'Apple undertakes to take the Trial E licence unless its undertaking is found to be unnecessary, or too late.'

Optis argued that an implementer wanting to take advantage of the requirement for a SEP holder to give a FRAND undertaking must engage constructively in negotiations, and if no agreement is reached must commit to take a licence on terms decided by a Court. If they do not, they are not a willing licensee, and thus should lose the right to a FRAND licence (and thus not be able to rely on the possibility of a FRAND licence as a defence to an injunction).

Apple's counter argument was that clause 6.1 of the ETSI IPR policy (which sets the requirement for an SEP holder to offer FRAND licences) does not restrict when Apple must commit to a FRAND licence. Accordingly, Apple argued that it could wait for the Court's decision about what FRAND terms are and then make a decision.

For the most part, Meade J sided with Optis, and held that 'the right interpretation of clause 6.1 is that any...