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InterDigital vs Lenovo: UK High Court Hands Down Global FRAND Rate Decision

By Greg Ward, Partner

The second global FRAND (Fair, Reasonable And Non-Discriminatory) licensing rate decision has been handed down by the UK courts. As a reminder, the first global FRAND decision was handed down in the Autumn of 2020; the UK Supreme Court landmark decision in Unwired Planet v Huawei (see here for additional discussion of this decision). The Unwired Planet v Huawei decision confirmed the ability of the UK courts to set terms for global FRAND licenses; in InterDigital v Lenovo the courts have exercised this ability.

It is common for disputes around FRAND rates to settle out of court; that the dispute between InterDigital and Lenovo did not do so appears at least in part to have resulted from how far apart the two companies rate offers were. The court ultimately rejected the rates suggested by both sides as falling outside the FRAND range, therefore requiring Mr Justice Mellor to determine a FRAND rate for the InterDigital patent portfolio in question.

The judgement, which is available here, contains substantial discussion of the conduct of the parties during the FRAND negotiation. InterDigital sought to portray Lenovo as an unwilling licensee; the court generally rejected this argument (see paragraphs 929 to 932), whilst also finding that “by consistently seeking supra-FRAND rates, InterDigital did not act as a willing licensor” (see paragraph 928). The FRAND rate determined by the court was $0.175 per device (see paragraph 813), ultimately resulting in a total of $138.7 million to be paid by Lenovo as a lump sum and to cover the period between 2007 and the end of 2023. The FRAND rate determined by the court is far closer to the rate offered by Lenovo (of $0.16 per device) than the effective rate offered by InterDigital (of $0.498 per device).

In respect of the FRAND rate determination, the decision is likely to be seen as a licensee friendly one (InterDigital have already indicated an intent to appeal aspects of the decision). However, the decision also contains several more patentee friendly points, including how the decision accounts for past sales (which the court found should be paid at the calculated FRAND rate, without discount). Ultimately, the InterDigital v Lenovo seems likely to solidify the position of the UK courts as arguably the pre-eminent forum for global FRAND dispute resolution.

This is for general information only and does not constitute legal advice. Should you require advice on this or any other topic then please contact or your usual HLK advisor.

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