The High Court has granted – but stayed pending appeal – a new type of injunction, known as a “FRAND injunction”. In a previous judgment, Mr Justice Birss had decided in principle to grant an injunction prohibiting Huawei from infringing two Standard Essential Patents.
The High Court has granted – but stayed pending appeal – a new type of injunction, known as a “FRAND injunction”. In a previous judgment, Mr Justice Birss had decided in principle to grant an injunction prohibiting Huawei from infringing two Standard Essential Patents. In his latest judgment dated 7 June 2017, Birss J considered the precise terms of the appropriate injunction in a FRAND context. Recognising that this raises some “new problems” (para 13), Birss J decided that the “…correct form of a final injunction in respect of patents the subject of a FRAND undertaking … when the court has settled a FRAND licence but the defendant has not entered into it” would be as follows (para 20):
“A FRAND injunction should be in normal form to restrain infringement of the relevant patent(s) but ought to include a proviso that it will cease to have effect if the defendant enters into that FRAND licence. If as in this case, the FRAND licence is for a limited time, shorter than the lifetime of the relevant patents then the injunction should also be subject to an express liberty to either party to return to court in future to address the position at the end of the term of the FRAND licence. In any case the FRAND injunction should also be subject to an express liberty to apply in the event the FRAND licence ceases to have effect for any other reason.”
The Judge recognised that this was an unusual form of final injunction, but held that it was one which (para 21):
“…reflects the finding that what the patentee is entitled to today, bearing in mind its FRAND undertaking, is a licence on FRAND terms but if the defendant has the ability to take the licence and does not do so, then an injunction is appropriate for as long as the defendant does not enter into that licence. If the defendant enters into the FRAND licence there should be no injunction at all. The fact the FRAND licence is limited in time does not justify an injunction continuing into the future. The court should not pre-judge at this stage what should happen if or when the FRAND licence ceases to have effect.”
The Judge furthermore granted permission to appeal to the Court of Appeal on all three of the grounds advanced by Huawei (see paras 62-66), which concern (1) the Judge’s finding that an injunction was appropriate unless Huawei entered into a global licence, including under foreign patents which have not been litigated or are currently in litigation in the relevant countries, on terms set by the Court, (2) the Judge’s finding that there is no “hard-edged discrimination” component to the FRAND obligation, and (3) the Judge’s rejection of Huawei’s defence based upon the CJEU’s decision in Huawei v ZTE. The FRAND injunction is stayed pending this appeal.
The Judgment can be found here.
James Segan acted for Huawei, as he has throughout the case since early 2014.