Huawei loses landmark patent cases at the UK Supreme Court.
Huawei has lost an appeal in a landmark Supreme Court decision over technology licenses that could turn London into a center for global patent litigation.
On Wednesday, the UK‘s highest court ruled that English courts had the right to compel telecommunications firms and smartphone manufacturers to take out a global patent license or face an injunction by the UK court.
The decision has been celebrated in recent years as one of the most important intellectual property decisions because it offers patent holders an edge and could result in steeper licensing costs for mobile device manufacturers such as Apple and Samsung as well as Huawei.
Huawei brought the long-running court case in 2014 when it was charged with violating intellectual property belonging to U.S. firm Unwired World, which had won a patent clutch covering Ericsson’s wireless networking in 2013.
In 2017, the High Court ordered the Chinese corporation to pay a global licensing fee for violating two UK patents or it will face an injunction. Huawei appealed to the Supreme Court against the ruling, arguing that it should pay only licensing fees for the technology in the UK, which is a relatively small market, rather than for its global sales.
Huawei‘s appeal was rejected by Lord Patrick Hodge, deputy president of the Supreme Court. Lord Hodge reported on Wednesday that the courts had the power to issue an injunction to prevent a UK patent infringement if a corporation refuses to take out a global multinational patent portfolio license.
Lord Hodge also rejected an appeal brought by Huawei and ZTE against the US group Conversant where the two Chinese firms had argued that the English courts were not the proper venue for assessing the validity of international patents.
The decision would require every tech business in the UK selling products to pursue global agreements with patent holders including Unwired World, which has a long history of lawsuits against the likes of Apple, Google, and Samsung.
Linklaters partner Yohan Liyanage said more litigation would follow. “Numerous similar cases are still pending in the UK and today’s decision will undoubtedly lead to more telecoms conflicts being brought into the UK,” he said. In order to avoid being exposed to global patent licensing fees, some device makers may even consider withdrawing from the UK market altogether, Mr. Liyanage added.
The ruling comes as a further blow to Huawei, who is still under fire because of its suspected ties to the Chinese government and has been barred by the UK government from supplying new equipment to Britain’s 5 G cell phone networks on national security grounds from next year. It now faces Unwired Planet licensing, or it will face an injunction.
David Knight, a partner at Fieldfisher law firm, said the decision could be a “final blow” to Huawei and its ability to do business in the UK.
The ruling that the English courts can make worldwide licensing decisions has future consequences for any business that uses important 5 G patents, especially with regard to the Internet of Things and connected vehicles.
Gary Moss, head of EIP Legal, who was in the case representing Unwired Earth and Conversant, said the decision would be closely watched. “This region is at the forefront of the English courts and it is a very important decision,” he said.
Planet Unwired accepted the decision. “We look forward to continuing to collaborate with other manufacturers in this global environment to give licenses to our patents,” it added.
A Huawei spokesman said the company “has already made payments to Unwired Planet according to the UK court agreement, and has agreed with the parent company of Unwired Planet, PanOptis. Therefore, as a result of this ruling, no additional amounts fall due.
