The Court of Appeal has allowed Lenovo’s appeal against the refusal to make a declaration for an interim licence in its ongoing standard-essential patent (SEP) dispute with Telefonaktiebolaget LM Ericsson in Lenovo Group Ltd and others v Telefonaktiebolaget LM Ericsson (PUBL) and another [2025] EWCA Civ 182.
The case involves a long-standing dispute between Lenovo and Ericsson over the terms of a global cross-licence for SEPs essential to the 4G and 5G telecommunications standards. Lenovo, having undertaken to enter into a licence on terms determined by the Patents Court to be FRAND, sought a declaration that a willing licensor in Ericsson’s position would grant an interim licence pending the final determination of FRAND terms. The High Court had previously refused this application, prompting Lenovo’s appeal.
The Court of Appeal allowed the appeal for the following reasons:
Good faith obligation
The Court of Appeal found that Ericsson’s pursuit of injunctions and equivalent remedies in foreign jurisdictions, despite Lenovo’s undertaking to enter into a FRAND licence, constituted a breach of Ericsson’s obligation to negotiate in good faith under clause 6.1 of the ETSI IPR Policy. The court emphasised that the SEP regime is designed to avoid delays by ensuring that implementers can obtain licences on FRAND terms, and that SEP owners must negotiate these terms in good faith.
The court concluded that Ericsson’s primary purpose in pursuing foreign injunctions was to coerce Lenovo into accepting terms more favourable to Ericsson than those likely to be determined by the English courts. This was deemed inconsistent with the obligation of good faith, as it sought to leverage the threat of exclusionary relief to secure supra-FRAND terms.
Useful purpose
The Court of Appeal held that making the declaration would serve a useful purpose by forcing Ericsson to reconsider its position. The court noted that there was a realistic prospect that Ericsson would change its stance in light of the declaration, thereby avoiding further burdensome and wasteful litigation in multiple jurisdictions.
Comity
The court addressed concerns about comity, noting that the declaration would not interfere with the jurisdiction of foreign courts and tribunals. Instead, it would allow those courts to make their own assessments of the parties’ conduct. The court also highlighted that the English courts have jurisdiction to determine FRAND terms on a global basis, as established in previous case law.
FRAND terms for interim licence
The court adopted a “split the difference” approach, setting the royalty payable by Lenovo at the mid-point between the parties’ respective offers plus interest.
