Introduction

The Judgment in Lenovo Group Ltd & Ors v Telefonaktiebolaget LM Ericsson (PUBL) & Anor ([2025] EWCA Civ 182) represents a seminal decision by the England and Wales Court of Appeal in addressing the complexities inherent in disputes involving standard‐essential patents (SEPs) and licensing obligations under FRAND (fair, reasonable and non-discriminatory) terms. The case arises from a long‐running dispute between two global technology giants – Lenovo, a manufacturer of consumer electronics and devices, and Ericsson, a leading provider of telecommunications infrastructure – both of whom possess extensive portfolios of patents declared essential to the ETSI 4G and 5G standards.

At the heart of the dispute is whether a willing licensor (in this case, Ericsson) must grant an interim cross‐licence to a willing licensee pending determination by the Patents Court of precise FRAND terms. The case is highly significant as it revisits issues previously addressed in Panasonic Holdings Corp v Xiaomi Technology UK Ltd and Alcatel Lucent SAS v Amazon Digital UK Ltd, further clarifying the scope of the FRAND obligations under the ETSI IPR Policy. The Judgment involves intricate questions regarding the interplay between national patent enforcement, international jurisdictional boundaries, and the negotiation process in SEP licensing.

Summary of the Judgment

In a complex and meticulously reasoned decision, the Court of Appeal addressed multiple issues including the validity of interim licences, the principle of good faith in negotiations, and the tension between national jurisdiction and global SEP enforcement. The key findings are:

• Good Faith and FRAND Negotiations: The court concluded that Ericsson, as a SEP owner, breached its obligation of good faith under clause 6.1 of the ETSI IPR Policy by pursuing injunctive and exclusionary relief in foreign fora, rather than negotiating an interim cross‐licence on FRAND terms;
• Interim License Determination: The judgment endorsed the view that a willing licensor would grant an interim licence pending the final determination of FRAND terms, with the terms of such an interim licence being set at a value that effectively “splits the difference” between the competing offers submitted by the parties;
• Jurisdiction and Comity: The decision clarified that while global SEP disputes naturally raise jurisdictional issues, the English courts have a role in determining FRAND terms on a global basis, respecting the principle of comity with other international forums such as the ITC, Brazilian courts, and jurisdictions addressing similar disputes;
• Utility of a Declaration: The Court held that the declaration sought by Lenovo—to the effect that a willing licensor in Ericsson’s position would agree to an interim cross‐licence—is useful and would pressure Ericsson to reconsider its stance, despite Ericsson’s reservations based on concerns of judicial overreach and forum shopping.

Analysis

Precedents Cited

The Judgment builds on established case law and prior decisions. Central to its reasoning are:

• Unwired Planet International Ltd v Huawei Technologies Co Ltd [2020] UKSC 37 (“UPSC”): This Supreme Court decision is critical in framing the contractual nature of the ETSI IPR Policy and establishing the binding nature of the FRAND undertaking. The court reiterated that the SEP holder’s obligations to grant licenses on FRAND terms create enforceable rights for implementers.
• Panasonic Holdings Corp v Xiaomi Technology UK Ltd [2024] EWCA Civ 1143: In this earlier decision, the court declared that an interim licence must be granted by a willing licensor. Ericsson’s argument that the previous decision was fact‐specific was rejected; the underlying reasoning is viewed as broadly applicable.
• Alcatel Lucent SAS v Amazon Digital UK Ltd [2025] EWCA Civ 43: This case further explored the willingness of licensors and licensees and emphasized that FRAND is a process, not a mere endpoint, requiring both parties to negotiate in good faith.

The Court’s reference to these cases reinforces the principle that the FRAND commitment includes not only a determination of licensing terms but also mandates that both parties engage in earnest negotiation to avoid strategies of hold out and hold up.

Legal Reasoning

The court’s legal reasoning spans several interconnected dimensions:

• Good Faith Obligations: Drawing on French law principles as interpreted in Nokia Technologies OY v OnePlus Technology (Shenzhen) Co Ltd and the detailed analysis in Panasonic v Xiaomi, the court concluded that Ericsson’s aggressive global enforcement strategy—through jurisdiction in the USA, Brazil, Colombia, and beyond—amounted to a breach of the obligation to negotiate in good faith. Even though Ericsson maintained that it was merely exercising its legal rights, the court found that any strategy designed to force more favourable terms, at the expense of negotiated compromise, disproportionately harms the FRAND equilibrium.
• Interim Licensing and Global FRAND Determination: The court highlighted that, in the absence of a global dispute resolution mechanism, national courts must occasionally step in to determine global licensing terms. It underscored that interim licences, though temporary, must be preset to encourage both parties to eventually settle on a final cross‐licence that respects non-discrimination and equitable payment for SEPs.
• Jurisdictional Concerns and Comity: A significant portion of the reasoning was devoted to balancing the risks of jurisdictional overreach with the necessity of resolving global patent disputes. The court recognized that while entities like the US International Trade Commission and courts in Brazil or Colombia may have concurrent proceedings, the ultimate determination by the English courts remains authoritative on global FRAND issues, so long as comity is preserved.
• Interim Declaration as a Pressure Mechanism: The judgment noted that a declaration confirming that a willing licensor would grant an interim licence serves a useful purpose by compelling Ericsson to reconsider its enforcement strategy, even if it does not cause an immediate change. This measure is seen as a key pressure tool designed to discourage coercive tactics that undermine the FRAND process.

Impact on Future Cases

This Judgment is poised to have far‐reaching implications in the domain of SEP litigation and FRAND licensing:

• It reinforces the notion that SEP holders must negotiate in good faith and cannot rely solely on injunctive relief in multiple jurisdictions to extract higher royalties—a stance likely to influence both litigation strategy and settlement negotiations globally.
• The decision serves as guidance for courts faced with parallel proceedings in different jurisdictions, encouraging them to recognize the value of interim FRAND declarations to avoid excessive litigation and prevent abuse of provisional remedies.
• In industries where SEPs are critical to technology standards (such as telecommunications), the judgment offers a framework for resolving complex cross-licensing disputes in a manner that respects both national territoriality and the global nature of modern technology.

Complex Concepts Simplified

The Judgment employs several complex legal doctrines and interpretations that can be distilled into simpler concepts:

• FRAND as a Process: Rather than being a fixed outcome, FRAND is understood as an ongoing process where both the SEP holder and the implementer must negotiate in earnest. This means that initial licensing offers may be subject to adjustments once an independent determination is made.
• Hold Up vs. Hold Out: “Hold up” refers to seeking excessive royalties after a patent becomes essential to a standard, whereas “hold out” involves trying to implement a standard without paying appropriate licensing fees. The judgment clarifies that the FRAND commitment is designed to mitigate both strategies.
• Interim Licences: These are temporary agreements ensuring that, while the final terms of a licence are being determined, the implementer continues to pay royalties. The calculated royalty is typically based on a midpoint between the competing offers, ensuring a fair outcome for both parties.
• Jurisdiction and Comity: Although patents are territorial by nature, the global importance of technical standards necessitates a broader view. The English courts’ willingness to set global FRAND terms, while respecting other jurisdictions’ roles, is central to this decision.

Conclusion

The Judgment in Lenovo Group Ltd & Ors v Telefonaktiebolaget LM Ericsson (PUBL) & Anor marks a significant advance in the jurisprudence on FRAND licensing and cross‐licensing in SEP disputes. By underscoring the necessity of good faith in negotiations, and clearly articulating the obligations of SEP holders, the court has provided much‐needed clarity on how interim licences should be determined and enforced, even amid multi‐jurisdictional disputes.

For future litigation, this decision reinforces that SEP holders must refrain from engaging in tactics that leverage multiple forum proceedings in order to secure supra‐FRAND terms. Instead, they must accept that any interim cross‐licence—set at a level reflective of both parties’ offers—will eventually lead to a global settlement framed by impartial court determination. In doing so, the Judgment not only curtails excessive and burdensome litigation but also preserves the delicate balance between innovation incentives for patentees and market access for implementers.

Overall, the case sets an important precedent by affirming that global FRAND determinations and the corresponding interim licensing framework are essential tools to mitigate hold up and hold out strategies, serve the public interest, and promote consistency in international patent enforcement.