Apple reaches the UK Supreme Court today after the High Court and Court of Appeal took sharply different approaches to the global FRAND licence payable to Optis for mobile telecommunications standard essential patents.
Apple Retail UK Ltd, Apple Distribution International Ltd and Apple Inc are appealing in two linked cases brought by Optis Cellular Technology LLC, Optis Wireless Technology LLC and Unwired Planet International Ltd.
The appeals concern the correct approach to fair, reasonable and non-discriminatory licensing terms for mobile telecommunications standard essential patents, the Court of Appeal’s decision to determine the FRAND rate itself, royalties on past sales, and the effect of parallel foreign patent infringement proceedings.
The case places Apple and Optis in a dispute with wider market consequences because the licensing methodology adopted by the UK Supreme Court may influence how global royalty rates are argued in future technology disputes.
Intel Corporation, Qualcomm Incorporated, the Motion Picture Association Inc, HMD Global, Acer Incorporated, Acer U.K. Limited, ASUSTeK Computer Inc, ASUS Global PTE Ltd, the Fair Standards Alliance and Tunstall Group Holdings Ltd are listed as interveners, underlining the commercial reach of the appeal beyond the immediate parties.
The litigation follows the Supreme Court’s earlier ruling in Unwired Planet v Huawei, where the court confirmed that UK courts can determine FRAND terms for global licences to multinational portfolios of standard essential patents.
In the present case, Optis owns patents declared to the European Telecommunications Standards Institute as essential to mobile telecommunications standards, while Apple sells products including iPhones that implement those standards.
At first instance, the High Court set a lump sum licence fee of $56.43mn plus interest. The Court of Appeal later adopted a different methodology and determined a $502mn lump sum payment to Optis, plus interest.
For solicitors, barristers and in-house counsel, the immediate issue is not only the size of the award but the method by which a court can move from technical patent findings to global commercial licence terms.
Patent litigators will need to watch whether the Supreme Court endorses or limits the Court of Appeal’s comparables-based approach, whether past sales back to 2013 remain within the calculation, and how UK proceedings should interact with US patent litigation.
Technology companies, patent owners and implementers will also need to revisit licence negotiation records, expert valuation evidence and settlement comparables before bringing or defending FRAND claims in London.
Lord Reed, Lord Briggs, Lord Leggatt, Lady Simler and Lord Kitchin are listed to hear the three-day appeal, leaving Apple, Optis and future SEP litigants facing a judgment that could redraw how English courts price global technology licences.