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After success in Germany, InterDigital’s FRAND battle with Lenovo shifts to London

Post Time:2024-05-17 Source:JUVE Patent Author:Mathieu Klos Views:

In early May, InterDigital achieved a spectacular victory with an injunction against Lenovo from Munich Regional Court. Now, the epicentre of the global battle has shifted to London, where two FRAND trials are pending. In June, the UK Court of Appeal will review the far-reaching FRAND ruling by High Court judge James Mellor.

On 2 May, Munich Regional Court ruled Lenovo may no longer sell mobile devices in Germany that infringe InterDigital’s European patent EP 2 127 420 B1. The court also classified Lenovo as an unwilling licensee, despite the Chinese company having submitted a licence offer. Now, the two opponents will face eachother once more with a FRAND trial soon to begin in London.

First-instance win for InterDigital

The first-instance ruling constitutes a remarkable success for InterDigital, given this is the only lawsuit the company has filed against Lenovo in Germany. InterDigital has not yet enforced the judgment. If it does, Lenovo will no longer be allowed to sell tablets, smartphones and PCs with 4G and 5G capability in Germany. The Chinese company would also have to pay damages.

InterDigital is expected to take this step in order to increase the pressure on Lenovo. Furthermore, Munich Regional Court presiding judge Oliver Schön set a low security deposit of €1 million for smartphones and €3 million for tablets and PCs.

Experts assume that, in the event of enforcement, Lenovo will apply to the Higher Regional Court Munich for a stay of execution so that it may continue selling its devices in Germany.

InterDigital’s crown jewel

EP 420 is becoming one of InterDigital’s most valuable patents on 4G and 5G technology. In September 2023, the Federal Patent Court upheld the German part of InterDigital’s EP 420 with restrictions in the nullity action filed by Oppo (case ID: 4 Ni 54/22). EP 420 protects a method for controlling discontinuous reception, DRX, in a wireless transmit/receive unit, with devices like smartphones using the technology. When a consumer operates a device in DRX mode, this is intended to reduce battery consumption.

InterDigital appealed the validity judgment, with Lenovo then joining the appeal. Shortly before Christmas 2023, however, the 7th Civil Chamber at Munich Regional Court found that Oppo and OnePlus products infringed the patent and ordered the defendants to cease and desist (case ID: 7 O 17302/21).

The recent judgment against Lenovo, also from the 7th Civil Chamber, is thus the second victory for InterDigital concerning this patent. Both companies reacted imediately, with InterDigital stating in a press release, “Following the court’s finding that Lenovo’s behaviour constitutes hold-out, we hope Lenovo reverses course and finally takes a fair and reasonable licence.”

In its own press statement, Lenovo says, “We respect the Munich Court’s decision but do not agree with it given our belief that InterDigital has violated its own legal obligations to license its technology on FRAND terms to either Lenovo or our third-party suppliers.” Lenovo announced that the company will continue to fight for transparency in licensing negotiations and against companies seeking excessive rates for their patent portfolios. “We look forward to the next stage of the proceedings and our appeal.”

Next round at UK Court of Appeal

The next major clash between the two opponents will take place in London on 10 June. The UK Court of Appeal will then hear InterDigital’s appeal against the well-known ruling by UK High Court judge James Mellor from 2023.

In March 2023, Mellor handed down his decision on FRAND-rate setting, which saw the court order Lenovo to pay a FRAND rate of $138.7 million. The judgment also declared both parties’ previous offers as non-FRAND. Later in 2023, presiding judge James Mellor released two further decisions in which he declared Lenovo the “overall winner” of the FRAND trial.

Ultimately, there were several reasons for this. The court found a per unit rate of $0.175 as much closer to Lenovo’s proposal of $0.16, and a “long way” from InterDigital’s contention of a blended rate of $0.53. In addition, the court found the payable lump sum “substantially lower” than InterDigital’s offer of $337 million. Furthermore, the judges found Lenovo the winner regarding comparables, and Lenovo successful on the “top down” and “conduct” aspects of the case.

JUVE Patent understands that the court has scheduled the appeal hearing for Monday 10 June and it is expected to last a week.

Second FRAND trial

While James Mellor’s ruling relates to a licence offer from InterDigital for the cellular patent portfolio until the end of 2023, and thus now only has retroactive effect, Lenovo has initiated a second FRAND trial in the battle.

Lenovo has now asked the UK High Court to set a global licence rate for InterDigital’s entire portfolio, which includes implementation patents as well as SEPs. The court is to calculate the FRAND rate from 2024 onwards.

InterDigital challenged the jurisdiction of the UK High Court, but the court under presiding judge Jonathan Richards dismissed InterDigital’s jurisdictional challenge at the end of April (case ID: HP-2023-000031).