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Acer Incorporated & Anor v Nokia Technologies OY
Factual and Procedural Background
The Defendant (Company E) owns or controls a portfolio of standard-essential patents declared essential to the ITU-T H.264/AVC and H.265/HEVC video decoding recommendations ("the Nokia Codec SEP Portfolio" in the source). Two groups of implementers (the Plaintiffs) manufacture devices that implement those Standards and accept they require licences. Years of negotiation produced no agreed RAND terms. From 28 March 2025 the Defendant commenced infringement proceedings in multiple jurisdictions (including Germany, the UPC, the USA, Brazil and India). In June/July 2025 the Plaintiffs issued proceedings in the Patents Court seeking (i) various declarations and relief in relation to three European patents ("the Challenged Patents"), (ii) determinations of what licence terms would be RAND ("Final RAND Licence Claims") and (iii) interim licence declarations ("RAND Claims"). The Plaintiffs gave undertakings to enter any licence determined to be RAND. The Defendant challenged jurisdiction for the RAND Claims and, in parallel, made "Adjustable Licence" offers: interim licences whose terms are subject to adjustment by an arbitral tribunal to determine final RAND terms. At first instance the judge (Judge Mellor) rejected the Defendant's jurisdictional challenge, refused a case management stay and made some interim licence declarations. The Defendant appealed limited grounds to the Court of Appeal. The Court of Appeal (Judges Arnold, Jackson and Zacaroli) dismissed the appeal on jurisdiction but allowed the appeal on the case management stay, holding that the Adjustable Licence offers were offers of licences on RAND terms capable of acceptance and accordingly granting a case management stay (with conditions described below) and discharging the interim licence declarations.
Legal Issues Presented
- Whether the English courts had jurisdiction to determine the RAND Claims (in particular whether the claims satisfied gateways 11, 16A or 4A for service out).
- Whether the proceedings should be stayed on case management grounds in light of the Defendant's Adjustable Licence offers (interim licences subject to adjustment by arbitration).
- Whether the court should make interim licence declarations (including the effect of an offer of an interim licence whose final terms are to be fixed by arbitration).
Arguments of the Parties
Appellant's (Defendant's) Arguments
- The Defendant contended it had offered each Plaintiff an immediate global interim licence whose terms are capable of acceptance; those terms are RAND because the final terms will be whatever an independent arbitral tribunal determines to be RAND.
- The Adjustable Licence offers therefore satisfied the Defendant's RAND obligation and, if refused, meant the Plaintiffs were unwilling licensees who could not invoke the English court to determine RAND terms; accordingly the RAND Claims lacked a real prospect of success and a case management stay should be granted.
- The Defendant relied on arbitration (ICC Rules) as an acceptable mechanism to determine final RAND terms and proposed procedures to address transparency and enforceability concerns (seat, arbitrators, disclosure, public summary).
Respondents' (Plaintiffs') Arguments
- The Plaintiffs argued arbitration is consensual and the ITU-T Declaration contains no arbitration mechanism; they did not consent to ad hoc arbitration and it would be contrary to principle to allow the Defendant to force arbitration by making an adjustable-offer.
- The Plaintiffs submitted the English courts had jurisdiction to determine RAND terms and should do so; the Defendant's offers did not remove a real prospect of success on the RAND Claims.
- The Plaintiffs highlighted an apparent inconsistency in the Defendant's conduct in other litigation where it accepted English-court determination and interim licences, contending that the Defendant should not be permitted to pick forum or procedure to suit its commercial interests.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Lenovo Group Ltd v Telefonaktiebolaget LM Ericsson (Publ) [2025] EWCA Civ 182, [2025] RPC 11 | General background and basic legal principles applicable to determination of FRAND/RAND terms and the grant of declarations. | The court assumed familiarity with the principles summarized there and relied on that framework in addressing this appeal. |
| Samsung Electronics Co Ltd v ZTE Corp [2025] EWCA Civ 1383, [2026] Bus LR 465 | Principles applicable to interim licence declarations. | The court summarised and assumed the principles there (as to interim licence declarations) were known and applied them where relevant. |
| Case C-170/13 Huawei Technologies Co. Ltd v ZTE Corp [EU:C:2015:817] | Where no agreement is reached on FRAND terms, parties may by agreement request an independent third party determine royalty amount. | Used to support the proposition that FRAND disputes can be determined by arbitration by agreement of the parties. |
| Alcatel Lucent SAS v Amazon Digital UK Ltd [2025] EWCA Civ 43, [2025] RPC 6 | Distinction between what is RAND for an interim licence and what is RAND for a final licence; interim licences hold the ring pending final determination and payments may be adjusted. | The Defendant relied upon this authority to show interim adjustable licences can be RAND for interim purposes; the court accepted the distinction in its analysis. |
| Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd [2020] UKSC 37, [2020] Bus LR 2422 | Power in rare/circumstances to stay English proceedings where parallel proceedings elsewhere would better serve interests of justice; relevant to stays in FRAND contexts. | The court applied the doctrine (and related authorities) when considering whether to stay proceedings in favour of arbitration/proceedings elsewhere. |
| Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7, [2012] 1 WLR 1804 | Source for the requirements to serve a foreign defendant out of the jurisdiction (three-part test including good arguable case that claim falls within a gateway). | The court applied the established service-out requirements when assessing jurisdictional challenges. |
| Brownlie v Four Seasons Holdings Inc [2017] UKSC 80, [2018] 1 WLR 3683 | Clarification of the standard for having the better of the argument when asserting a gateway for service out. | The court applied the standard (the claimant must have the better of the argument) when considering gateway issues. |
| Vestel Elektronik Sanayi Ve Ticaret AS v Access Advance LLC [2021] EWCA Civ 440, [2021] 4 WLR 60 | Consideration (obiter) of the applicability of gateway 11 to FRAND claims by implementers. | The court noted and relied on the obiter observations when addressing gateway 11. |
| Tesla Inc v InterDigital Patent Holdings Inc [2025] EWCA Civ 192, [2025] RPC 12 | Reasoning that licensing claims relate to UK SEPs and that FRAND obligations affecting UK SEPs can justify jurisdiction despite global character of portfolio. | The court adhered to and applied the reasoning in Tesla to conclude gateway 11 was satisfied for the RAND Claims. |
| In re Harrods (Buenos Aires) Ltd [1992] Ch 72 | Availability of a particular remedy does not affect the proper characterisation of the dispute. | The court relied on this to reject the argument that availability of specific performance under ITU-T altered the characterisation of the claims. |
| Attorney General for Canada v Ritchie [1919] AC 999 | Distinction between mere fear of being sued and an actual threat to sue. | The court used this authority to reject the Plaintiffs' contention that absence of an undertaking amounted to a threat to sue; mere fear is not sufficient. |
| K.S. Paul Ltd v Southern Instruments Ltd [1964] RPC 118 | Similar authority on fear versus threat to sue. | Applied alongside Attorney General for Canada v Ritchie to the same point. |
| Amazon.com Inc v InterDigital VC Holdings Inc [2025] EWHC 3334 (Pat) | Observation that ownership of a patent in the UK provides a sufficient connection to justify jurisdiction. | The court relied on this observation to support the conclusion that claims concerning UK patents can found jurisdiction here. |
| Nokio v OPPO | Authority (as cited) where jurisdiction was upheld despite the UK representing a very small share of the market. | Used to illustrate that jurisdiction can be appropriate even where UK market share is small. |
| Nokia Technologies Oy v OnePlus Technology (Shenzhen) Co., Ltd [2022] EWCA Civ 947 | Context for differences in jurisdictional analysis where SEP owners enforce UK SEPs. | Referenced to distinguish implementer-led contractual FRAND claims from SEP-owner enforcement claims. |
| Warner Bros v Nokia | Referenced as litigation in which the Defendant accepted English-court determination and interim licences (as to conduct inconsistency). | Mentioned as factual background regarding the Defendant's conduct in other proceedings; used by Plaintiffs to challenge the Defendant's approach. |
| Paramount v Nokia | Similar factual reference to Defendant's conduct in other proceedings. | Used with Warner Bros v Nokia to highlight the Defendant's differing stances across litigations; considered but not determinative. |
Court's Reasoning and Analysis
The court analysed jurisdiction first. It applied established service-out principles and gateway tests and adhered to the reasoning in Tesla v InterDigital: the RAND Claims were contractual claims concerning rights in UK patents and thus passed gateway 11. The court rejected the Plaintiffs' reliance upon gateway 16A (no pleaded UK threat to sue; mere fear is insufficient) and rejected gateway 4A (the Patent Claims and RAND Claims did not arise out of the same or closely connected facts). Accordingly, the court dismissed the appeal on jurisdiction.
On the case management stay the court considered whether the Defendant's Adjustable Licence offers eliminated any real prospect of success on the RAND Claims. The central question was whether an interim licence whose final terms are to be determined by an arbitral tribunal can constitute an offer of a licence on RAND terms capable of acceptance. The court accepted (i) that arbitration may be an appropriate mechanism by agreement (citing Huawei v ZTE and prior arbitral practice), (ii) that the ICC Rules and the Defendant's proposed procedural safeguards (seat, disclosure, public summary) were acceptable in principle, and (iii) that arbitration is consensual but an implementer may choose to accept an offer that incorporates arbitration.
The court concluded that the Adjustable Licence offers were offers of licences on RAND terms capable of acceptance: the Defendant was offering an immediate interim licence on objectively RAND terms because the final RAND terms would be whatever an independent tribunal determined to be RAND. If a Plaintiff refused the offer it was refusing an offer of a RAND licence and thereby demonstrated unwillingness to take the RAND terms offered; an unwilling implementer cannot invoke the English court's declaratory jurisdiction to determine RAND terms. On that basis the RAND Claims lacked a real prospect of success and a case management stay was appropriate. The stay was imposed on the condition that, if a Plaintiff accepted the Adjustable Licence, materials and statements of case from the English proceedings be carried into the arbitration and costs treated as costs in the arbitration, to minimize wasted costs. Because the stay was granted, the interim licence declarations made by the judge were discharged.
Holding and Implications
Appeal dismissed on jurisdiction; appeal allowed on case management stay.
Holding: The Court of Appeal held that (1) the English courts had jurisdiction over the RAND Claims (gateway 11) and dismissed the Defendant's jurisdictional appeal; and (2) the Defendant's Adjustable Licence offers amounted to offers of licences on RAND terms capable of acceptance, such that refusal of those offers rendered the RAND Claims without a real prospect of success and justified a case management stay. The interim licence declarations made at first instance were discharged as a consequence.
Implications: Direct consequences for the parties are (i) the RAND Claims are stayed subject to conditions facilitating arbitration if accepted, and (ii) interim licence declarations previously made are discharged. The court recognised and decided the novel question whether an offer of an interim licence adjustable by arbitration can satisfy a SEP owner's RAND obligation, concluding that such an offer can be a RAND offer capable of acceptance when the arbitration mechanism and proposed safeguards are acceptable; the decision therefore affects how adjustable/arbitration-linked interim offers may be treated in future FRAND/RAND disputes.
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