Conversant Wireless Licensing SARL v Huawei Technologies Co. Ltd & Ors

Factual and Procedural Background

This judgment concerns two main issues: whether Company A and Company B should be granted permission to appeal, and if so, whether further progress in the claims should be stayed pending the resolution of any appeal. The appeal concerns questions of justiciability, forum conveniens, and, in the case of Company A, permission to appeal a decision permitting amendment of the Particulars of Claim. The case involves allegations relating to standard essential patents (SEPs) and the licensing obligations under FRAND (Fair, Reasonable and Non-Discriminatory) terms. The defendants challenge the English court's jurisdiction to determine global FRAND terms and rates, with ongoing disputes about the appropriate forum and procedural steps pending appeal.

Legal Issues Presented

1. Whether Company A and Company B should be granted permission to appeal on the issues of justiciability, forum conveniens, and amendment of the Particulars of Claim.
2. Whether further progress in the claims should be stayed pending the resolution of any appeal, particularly considering the implications of jurisdictional challenges.
3. The interpretation and application of CPR Part 11 regarding submission to jurisdiction and the effect of acknowledgments of service in the context of jurisdiction challenges.
4. The appropriate directions for trial dates and management of proceedings pending appeals on jurisdiction.

Arguments of the Parties

Company A and Company B's Arguments

• Permission to appeal should be granted on justiciability grounds because the Court of Appeal is already considering related issues in a parallel case, making the point ripe for consideration.
• The forum conveniens decision involves a discretion which might not have been correctly applied, warranting appellate scrutiny.
• Proceedings should be stayed pending appeal because continuing steps might constitute submission to jurisdiction, potentially rendering the appeal nugatory.

Respondent's Arguments

• The Court of Appeal's decision in the parallel case will resolve the issues, making the appeal in the present case potentially hopeless regardless of outcome.
• The undertaking given by the claimant that steps taken will not constitute submission to jurisdiction should prevent prejudice to the defendants.
• CPR Part 11 should be interpreted to allow procedural steps to continue without constituting submission to jurisdiction, except where a second acknowledgment of service is filed.
• Granting a stay would unduly prejudice the claimant by delaying resolution and income from patent licensing, especially given the problem of hold-out by implementers.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Carrier UK Ltd v KME Yorkshire Ltd [2012] EWCA Civ 169	Risk of submission to jurisdiction by taking procedural steps pending jurisdiction challenge; grounds for stay.	Used to illustrate that a stay may be justified to avoid irreparable harm if procedural steps would render appeal nugatory, but no automatic stay is required.
Deutsche Bank v Petromena [2015] EWCA Civ 226	Interpretation of CPR Part 11 and Article 24 Lugano Convention on submission to jurisdiction and acknowledgments of service.	Guided the court to interpret CPR Part 11 strictly: first acknowledgment of service does not constitute submission, but a second one does; procedural steps may be ordered without causing submission.
Sage v Double A Hydraulics Ltd and Chambers v Starkings [1992]	“Disinterested bystander” test to determine if defendant’s actions are inconsistent with a jurisdictional challenge.	Referenced in contrasting approaches to submission to jurisdiction but ultimately the court preferred the statutory interpretation in Petromena.
Hoddinott v Persimmon Homes (Wessex) Ltd [2008] 1 WLR 806	Statutory interpretation of CPR Part 11 on submission to jurisdiction; filing acknowledgment of service without timely challenge implies acceptance of jurisdiction.	Preferred by the court as the correct approach, resolving conflicts with Sage/Chambers.
Goldman Sachs v Novo Banco SA [2016] EWHC 346 (Comm)	Jurisdiction to make case management directions pending appeal against jurisdiction challenge.	Supported the proposition that procedural steps can be ordered pending jurisdiction appeal without rendering the appeal nugatory.
Elefanten Schuh GmbH v Jacqmain [1981] ECR 1671	Interpretation of Article 24 of the Lugano Convention regarding entry of appearance and jurisdiction.	Used to support the view that contesting jurisdiction while contesting merits is permissible and does not amount to submission.
Huawei v ZTE (CJEU)	Framework for SEP infringement and FRAND obligations; injunctions and hold-out problem.	Referenced in support of the court’s view on hold-out and the appropriateness of injunctions in cases of SEP infringement and refusal to license on FRAND terms.
Deutsche Bahn v Morgan Advanced Materials [2013] EWCA 1484	Risk of submission to jurisdiction by taking steps in proceedings and contesting jurisdiction simultaneously.	Supported the conclusion that taking steps under court direction does not necessarily amount to submission to jurisdiction.
Harada Limited v Turner [2003] EWCA Civ 1695	Permissibility of contesting jurisdiction while taking procedural steps on merits.	Referenced to affirm that contesting jurisdiction and merits simultaneously is permissible.
Chugai v UCB [2017] EWHC 444	Fixing trial dates pending jurisdictional challenges to avoid undue delay.	Supported the court’s power to fix trial dates despite pending jurisdictional appeals to prevent unacceptable delay.

Court's Reasoning and Analysis

The court first considered permission to appeal on justiciability, forum conveniens, and amendment of the Particulars of Claim. It granted permission to appeal on justiciability and forum conveniens, noting that the Court of Appeal was already considering related issues in a parallel case, making the matter suitable for appellate consideration. Permission to appeal the amendment decision was refused as it raised no issue of law or principle and had no real prospect of success.

Regarding a stay pending appeal, the court examined relevant authority, particularly the interpretation of CPR Part 11 and the risk of submission to jurisdiction. It concluded that the first acknowledgment of service does not amount to submission, but a second acknowledgment would. The court rejected the defendants’ submission that all procedural steps must be stayed pending appeal, reasoning that such an interpretation would lead to automatic stays regardless of justice or prejudice.

The court considered the commercial prejudice to the claimant from delay, including the problem of hold-out by implementers of standard essential patents, the costs of maintaining a patent portfolio, and the risk of patent expiry before resolution. It found that a stay would cause significant prejudice to the claimant, whereas refusing a stay would not cause irreparable harm to the defendants if the time to file a second acknowledgment of service was extended.

Drawing on authority, including the Goldman Sachs case, the court held that it had jurisdiction to make case management orders pending appeal and that such orders would not render the appeal nugatory. It accepted the claimant’s undertaking that procedural steps would not constitute submission to jurisdiction and incorporated this into the order.

Finally, the court fixed trial dates for two technical trials and a subsequent FRAND hearing, balancing the need for expedition with adequate preparation time and the possibility of incorporating results from foreign proceedings. The court rejected the parties’ estimate of 21 days for the FRAND hearing, instead fixing 15 days, subject to revision after further pleadings and the parallel appeal.

Holding and Implications

The court granted permission to appeal on justiciability and forum conveniens but refused permission to appeal the amendment decision.

The court refused to stay the proceedings pending the appeal on jurisdiction. It ordered that trial dates be fixed for the technical and FRAND issues and extended the time for filing a second acknowledgment of service until after resolution of the appeal.

The court’s decision allows the proceedings to progress without undue delay, preventing prejudice to the claimant caused by hold-out tactics and patent portfolio depreciation. The ruling clarifies that procedural steps (other than filing a second acknowledgment of service) do not amount to submission to jurisdiction, thus enabling case management and trial preparation to continue during jurisdictional appeals. No new precedent was established beyond the application of existing authority to the facts.