Anonymized Summary of the Opinion

Factual and Procedural Background

This appeal concerns a dispute between two multinational technology groups, referred to throughout this summary as Company A (the Claimant/Appellee) and Company B (the Defendant/Appellant). The core dispute arises from competing assertions about the terms of a global cross-licence covering portfolios of patents declared essential to telecommunications standards (standard-essential patents, "SEPs") and about which national court should determine the final FRAND (fair, reasonable and non-discriminatory) terms for that cross-licence.

In July 2021 the parties entered a global patent cross-licence covering SEPs for earlier-generation standards (the "2021 Agreement"). That licence expired on 31 December 2023 but included a covenant not to sue until 31 December 2024. In mid-2023 negotiations began about a successor cross-licence extending to 5G SEPs; the parties remained unable to agree and it is agreed that Company A would be the net payer under any new cross-licence, placing Company A in the role of an implementer for present purposes.

Company A issued English proceedings on 19 December 2024. Those proceedings included allegations that Company B had infringed a number of UK SEPs, requests for FRAND-related declarations and an undertaking by Company A to take the licence on terms determined by the English Patents Court (subject to appeals). On 23 December 2024 Company B commenced proceedings in the local court in the relevant Chinese city seeking determination of global FRAND cross-licence terms. Company B also commenced litigation in multiple other jurisdictions (including German courts, a unified patents court forum, Brazilian courts and another Chinese local court). Company A commenced additional proceedings in other jurisdictions as well.

Both parties exchanged offers for an interim cross-licence (an upfront payment from Company A to Company B was common to the offers) and both later proposed amended interim licence terms. By the time of the hearing before the Patents Court most differences as to scope and payment had narrowed; the single remaining material difference concerned which court's FRAND determination should be treated as the basis for adjusting the interim licence (the English Patents Court, per Company A, or the Chinese local court, per Company B).

Company A applied to the Patents Court for a declaration that Company B would enter into an interim licence on specified terms pending final FRAND determination by the English court. The Patents Court (Mellor J) granted declarations finding Company B in breach of its ETSI IPR Policy obligations of good faith and declared that a willing licensor in Company B's position would enter into the interim cross-licence on defined terms (including a confidential sum), subject to adjustment to align with the final cross-licence terms determined by the Patents Court. Company B appealed against those declarations to the Court of Appeal. The appeal was expedited.

Legal Issues Presented

1. Whether a willing licensor of SEPs would grant an interim licence to an implementer that has undertaken to take a licence on terms to be determined by the Patents Court, pending that determination.
2. Whether it constitutes bad faith for a SEP owner to commence or pursue infringement proceedings in multiple jurisdictions with the objective of forcing an implementer to accept FRAND determination by the SEP owner's preferred court rather than the implementer's preferred court.
3. When an interim licence declaration should be granted by the Patents Court: specifically (as framed in the judgment below) (i) whether the SEP owner has breached its obligation to negotiate FRAND terms in good faith; (ii) whether the declaration would serve a useful purpose; (iii) whether the declaration would be contrary to comity with foreign courts; and (iv) what terms for an interim licence would be FRAND.
4. Whether the fact that the English courts were first seised of the dispute is a decisive factor in determining bad faith or the appropriateness of interim licence declarations.

Arguments of the Parties

Company A's Arguments (Claimant / Respondent)

• Company A proposed an interim licence and sought a declaration from the Patents Court that Company B would enter into an interim licence on terms to be adjusted by the Patents Court's final FRAND determination (the "English Court-Determined Licence").
• Company A contended that Company B's wave of injunctive proceedings in multiple jurisdictions was designed to force Company A to accept FRAND determination in Company B's preferred Chinese court and thus amounted to conduct contrary to Company B's ETSI good-faith obligations.
• Company A emphasised that the English courts were first seised of the dispute over what terms would be FRAND and that the Patents Court was a suitable, neutral and experienced forum for FRAND determination.
• Via a respondents' notice, Company A further submitted that (a) international commercial arbitration practice supports selection of a neutral forum and thus disfavour insistence on a home-court determination, and (b) Company B's proposed interim licence terms effectively seek to achieve a forum non conveniens outcome without a formal application.

Company B's Arguments (Defendant / Appellant)

• Company B disputed the finding of bad faith and argued that it was entitled to bring proceedings in its chosen fora (including the Chinese local court) and that doing so does not, without more, constitute bad faith.
• Company B described practical reasons for preferring the Chinese court: large local market, substantial local portfolios, experience of rate-setting, and lower litigation costs in China. Those reasons were explained through evidence from a solicitor (referred to in the judgment).
• Company B challenged the proposition that being first seised in England makes any litigation it commenced improper; it maintained that the Chongqing (local) proceedings were properly brought and that Company A's challenge to jurisdiction in that court had failed.
• Company B argued that the Patents Court's declarations (particularly declarations allowing adjustment only to follow the Patents Court's determination) interfered with the jurisdiction and functioning of the foreign court and raised comity concerns.

Other notable positions and procedural offers

• Both sides made standstill and arbitration offers at different times: Company B invited Company A to accept determination by the Chinese local court and offered to stay other global litigation; Company A proposed a global litigation standstill pending English determination; both offers remained open and were not accepted.
• Both sides made proposals to arbitrate, each offering a neutral composition for any tribunal, but the parties were unable to agree arbitration terms before the Patents Court hearing.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court in This Opinion
Company C v Company D [2024] EWCA Civ 1143 (referred to as Panasonic v Xiaomi)	Established at this appellate level that the Patents Court may, in an appropriate case, make a declaration that a SEP owner would enter into an interim licence pending final FRAND determination; explained aspects of the good-faith obligation and proposed approach to interim royalty (midpoint method).	The court treated this authority as binding for the proposition that the Patents Court has jurisdiction to make an interim licence declaration, and accepted its exposition of the good-faith obligation and the midpoint approach as a useful precedent, while distinguishing the present facts from those earlier cases.
Company E v Company F [2025] EWCA Civ 43 (referred to as Alcatel v Amazon)	Concerned with the underlying principle that interim licence declarations can be an appropriate remedy (the earlier case dealt principally with principle).	The court noted that this authority was concerned with the principle only and treated it as forming part of the trilogy of authority recognising the Patents Court's power to grant interim licence declarations.
Company G v Company H [2025] EWCA Civ 182 (referred to as Lenovo v Ericsson)	Reinforced the approach to interim licence declarations, discussion of jurisdictional conflict and the role of the court first seised in FRAND disputes.	The court relied on that decision for exposition of general FRAND principles and jurisdictional points, and analysed whether the "first-seised" concept carried decisive weight in the present factual matrix.
Company I v Company J [2022] EWCA Civ 947; [2023] FSR 11 (referred to as Nokia v OPPO)	Discussed the problems of multi-jurisdictional FRAND disputes: risk of inconsistent decisions, incentives to forum shop, and the observation that the court first seised might be expected to determine the global FRAND licence.	The court applied the analysis from this authority to explain the background risk of parallel proceedings and forum shopping, and used it as a contextual reference when assessing whether parallel proceedings by Company B amounted to bad faith.
Company K v Company L [2011] UKPC 7 (referred to as Altimo Holdings v Kyrgyz Mobil)	Stated that allegations of bias or procedural unfairness must be made in clear terms and supported by cogent evidence.	The court invoked this authority to justify rejecting inadequately evidenced criticisms of the Chinese courts and to require cogent evidence before accepting allegations of bias.
Company M v Company F [2024] UKSC 8 (referred to as Lifestyle Equities v Amazon UK Services)	Addressed standards for interference with evaluative assessments by lower courts; cited in relation to the proper approach to appellate review of findings of fact and evaluative judgements.	The court observed that some of the issues on appeal involved evaluative assessments and noted the standards articulated in this authority when considering the appropriate appellate approach to the Patents Court's bad-faith finding.
Company N v Company O [2025] UKSC 25 (referred to as Iconix Luxembourg v Dream Pairs)	Another authority on appellate review and the limited scope for disturbing evaluative assessments made by trial judges.	The court referenced this authority alongside the Lifestyle Equities decision in framing the standard of appellate review applicable to the bad-faith finding.
Company P v Company B C‑170/13 [EU:C:2015:477] (referred to as Huawei v ZTE)	CJEU decision identifying that, in some circumstances, an implementer may provide security for royalties and that the SEP holder should not be permitted to deprive the implementer of the market by injunction while the dispute is resolved — the decision underpinning the concept of an interim licence.	The court used this authority to explain the conceptual basis for interim licences and the idea that an implementer’s provision of financial security can carry an implicit right to continue market activity pending a final determination.

Court's Reasoning and Analysis

The Court of Appeal's reasoning proceeded in structured stages. The following summarises the principal analytical steps taken by the lead judgment (Arnold LJ) and the concurring observations of the other members of the panel.

1. Preliminary points and binding authority

The court accepted that the trilogy of appellate decisions (the entries in the table above corresponding to Company C v Company D, Company E v Company F and Company G v Company H) established that the Patents Court has jurisdiction to make interim licence declarations in appropriate cases. Company B reserved the right to argue otherwise to the Supreme Court, but for present purposes the appellate trilogy was treated as binding authority on jurisdiction.

2. The factual question of bad faith

The Patents Court below had concluded that Company B acted in bad faith by pursuing a broad set of injunctive proceedings internationally with the purpose of forcing Company A to accept FRAND determination in Company B's preferred Chinese court. The judge's reasoning rested on a view that the parallel injunctive campaign was unnecessary given Company A's willingness to take a licence and that the purpose of the litigation was to coerce forum choice.

On appeal the lead judge examined that conclusion critically. He accepted that Company B may have aimed to have the Chinese court determine FRAND, and accepted several practical reasons why a party might prefer its home courts (e.g., market significance, litigation familiarity, litigation cost). The appellant court found that those reasons, standing alone and absent a legitimate and substantiated objection to the Chinese forum, do not amount to bad faith. The court emphasised that taking litigation steps legitimately open to a party — including commencing proceedings in a forum that accepts jurisdiction — is not per se bad faith.

3. The role of "first seised" and jurisdictional conflict

The appellate judgment revisited the "first seised" theme discussed in earlier authorities. The lead judge held that while being first seised can be a principled tie-breaker in some cases, it is not an automatic trump card that converts otherwise legitimate forum selection into bad faith. The court reiterated that there is no internationally agreed bespoke jurisdictional rule for FRAND disputes and that the existence of parallel proceedings is an inevitable consequence of the territorial nature of patents absent agreement to arbitrate.

4. Evidence and the standard for alleging bias or unfairness in a foreign forum

The appellate court accepted the Patents Court's approach in requiring cogent evidence before concluding that a foreign court was unsuitable or that a party alleging misuse of process was justified in objecting to proceedings in that foreign forum. The court observed that the criticisms of the Chinese courts raised by Company A were inadequately supported by expert or cogent evidence and therefore could not sustain a finding of bad faith.

5. Comity and useful purpose of declarations

The Patents Court below had found that a declaration would serve the useful purpose of persuading Company B to reconsider and thereby relieve foreign courts of duplicative litigation; it also held that such a declaration would not offend comity because foreign courts could decide for themselves how to react. On appeal the lead judge acknowledged that comity is a real concern, and indicated that declarations designed effectively to coerce a party to abandon proceedings in another competent court raise delicate comity issues. The lead opinion did not decide the appeal on comity grounds (it allowed the appeal on bad-faith grounds) but recorded that comity warranted careful attention.

6. Conclusion on bad faith and remedial scope

The Court of Appeal concluded that, absent a legitimate and substantiated objection to a forum, it is not bad faith for a SEP owner to pursue determination of FRAND terms in the SEP owner's preferred court rather than in the implementer's preferred court. Because Company B's choice of fora was not shown to be illegitimate or substantiatedly objectionable, the appellate court allowed the appeal on the principal grounds (bad faith and overreliance on first-seised).

7. Remedial consequences and procedural directions

The appellate judgment allowed the appeal. The court considered whether all of the Patents Court declarations should be set aside or only some. The lead judge observed that one of the declarations (the declaration reflecting the parties' agreement about the interim licence terms) simply recorded what the parties had already agreed and was jurisdictionally neutral; accordingly the court invited the parties to file brief written submissions on whether that particular declaration should nevertheless be set aside. The appellate court did not make a final determination on that limited question but provided a procedural route for the parties to be heard.

8. Concurring observations

A concurring judge agreed with the lead judgment and emphasised the conceptual basis of interim licences (derived from the CJEU decision in Company P v Company B) and cautioned against turning interim licences into tools to force forum choice. The concurring judge observed that a jurisdiction-neutral approach to interim licence terms is often preferable, and that declarations designed to force parties to accept a particular final forum can raise proportionality and comity concerns. Another judge simply concurred.

Holding and Implications

Core Ruling: The Court of Appeal allowed the appeal and concluded that, in the absence of a legitimate and substantiated objection to a forum, it does not constitute bad faith for a SEP owner to seek FRAND determination in its preferred court rather than in the implementer's preferred court. The appellate court therefore overturned the Patents Court's principal bad-faith-based declarations. The court invited the parties to file brief submissions on whether one remaining declaration (the one reflecting agreed interim licence terms) should be left standing.

Implications:

• The decision clarifies that the mere act of commencing proceedings in multiple jurisdictions with the aim of obtaining a preferred forum for FRAND determination will not automatically be bad faith where the foreign forums are competent and no cogent evidence shows procedural unfairness or illegitimacy.
• The judgment reinforces the need for cogent evidence before a court will accept allegations that a foreign forum is unsuitable or biased; unsupported criticisms of a foreign court will carry little weight.
• The Court reaffirmed existing appellate authorities recognizing the Patents Court's ability to grant interim licence declarations but emphasised that such declarations must be carefully tailored and that their use to coerce forum choice raises comity and proportionality issues.
• The court left open the narrower procedural question whether a declaration that merely records agreed interim terms should remain in place; the parties were given an opportunity to make submissions on that limited issue.
• No broader international rule was laid down: the opinion emphasises practical limits of national courts in resolving multi-jurisdictional FRAND disputes and underlines arbitration as the only existing supranational alternative (as noted in the authorities cited in the opinion).

This summary has been prepared solely from the content of the provided opinion and replaces identifiable party and person names with anonymised placeholders (for consistency: Company A = the original Claimant identified in the opinion; Company B = the original Defendant identified in the opinion; Judges and attorneys are identified only by role and surname as required). No other facts or outcomes have been added beyond those expressly stated in the reasoning and orders in the provided text.