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UK – Huawei & ZTE v Conversant Wireless Licensing

06 Feb 2019

(1) Huawei Technologies Co., Ltd (2) Huawei Technologies (UK) Co., Ltd (3) ZTE Corporation & (4) ZTE (UK) Limited v Conversant Wireless Licensing S.A.R.L. (30 January 2019, Court of Appeal, UK, Case Nos. A3/2018/1274 and A3/2018/1278)

The UK Court of Appeal (“CA”) dismissed an appeal by Huawei and ZTE’s Chinese and UK companies against the rejection of their jurisdiction challenge – at first instance, the UK Court had found that it had jurisdiction to determine an action involving UK SEP infringement allegations and the determination of a global FRAND licence.

The primary ground of appeal was forum non conveniens. The appellants argued that China (where separate proceedings were ongoing) was the natural and appropriate forum because it was the major focus of their business activities.

For the purposes of making this argument, the appellants generalised Conversant’s claim as a claim for infringement of a “local” patent and enforcement of a global portfolio right. The CA did not agree with this characterisation and viewed the disputes in China and the UK (which involved different patent rights and families) as different. Evidence that the Chinese Court would also be willing to determine a global FRAND licence (in particular, new guidelines from the Chinese Court on adjudicating SEP disputes) was not conclusive and did not assist the appellants’ arguments.

The suggestion that the UK companies were being used as anchor defendants was also rejected. The CA found that the UK companies had a real and substantial business in the UK and the Chinese defendants were facing a properly arguable case of direct infringement in the UK.

A separate justiciability ground had originally been raised by the appellants – challenging the UK Court’s jurisdiction to determine a global licence because it related to the validity of foreign patents. However, this argument had already been dismissed by the CA in Unwired Planet v Huawei [2018] EWCA Civ 2344 (handed down after the appellants had filed their grounds in this appeal) and was no longer arguable before that court. This ground was therefore not considered further except as an alternative request to make a reference to the CJEU on the issue (which was refused).

The CA also considered the admissibility of evidence which had not been considered at first instance (the Chinese SEP guidelines). Reliance on this evidence was allowed based on the narrow facts involved in this particular case – where the guidelines had not been received by the parties’ litigation solicitors in time and the evidence warranted general consideration by the CA.

Read the judgment (in English) here.

Headnote: John de Rohan-Truba, Marks & Clerk Solicitors LLP