The Appeal in Acer v Nokia
but did
Jane Lambert
"… the Licensing Claims relate wholly to property within the jurisdiction because the claims concern UK SEPs. InterDigital argue that the jurisdiction question cannot be determined by what InterDigital characterise as the artificial framing of the declarations sought by Tesla, when in reality the claim in Tesla's own case is a contractual claim to a global licence of SEPs, the vast majority of which are non-UK SEPs. While I appreciate the superficial attraction of this argument, I do not accept it for reasons which should be familiar to students of the English courts' jurisprudence in this field. In short, it is necessary to distinguish between the property on the one hand and the FRAND obligation which affects it on the other hand. Patents are territorial rights, but (i) standards such as the ETSI Standards are global standards which are exploited globally, (ii) the FRAND obligation under clause 6.1 is a global one and (iii) a licence on FRAND terms may well be a global one (meaning that a UK-only licence is not FRAND). Thus a licence to a single UK SEP on FRAND terms can be, and often is, a global licence to all corresponding SEPs (and indeed other families of SEPs in the same portfolio). In Nokio v OPPO this Court upheld the jurisdiction of the English courts in respect of the claim even though the UK represented less than 0.5% of the relevant market (which does not necessarily mean that only 0.5% of the SEPs were UK ones, but nevertheless gives a sense of the order of magnitude). That case concerned an infringement claim, and so the jurisdictional analysis was somewhat different, but nevertheless it illustrates the point. Thus the Licensing Claims relate wholly to UK SEPs even though it is Tesla's case that the FRAND obligations attaching to those UK SEPs carry with them an obligation to grant a licence of global, and not merely UK, extent. Indeed, neither Avanci nor InterDigital dispute that a licence on FRAND terms of the relevant SEPs would be a global one."
His lordship reconsidered the matter afresh in the light of Nokia's submissions but he stuck to his reasoning. He added that the purpose of gateways was to ensure that only actions with a sufficiently close connection with England and Wales could be brought here.
"A claim is made for a declaration that the claimant is not liable where, if a claim were brought against the claimant seeking to establish that liability, that claim would fall within another paragraph of this Practice Direction (excluding paragraphs (1) to (5), (8), (12D), (15D), (17), (22) and (24) to (25))."
Lord Justice Arnold held that the implementors' claims did not pass through that gateway. In his view, the purpose of Gateway 16A was to ensure that claims for declarations of non-liability in respect of alleged torts could be brought within the jurisdiction, whether or not they passed through Gateway 9. The implementors had not pleaded a claim for a declaration of non-infringement in respect of UK SEPs based on a threat by Nokia to bring a claim for patent infringement in the UK because they could not. Since there was no threat to sue in the UK, there was no threat to obtain an injunction in the UK. It is not possible to obtain an injunction to restrain patent infringement without pleading at least a threat to infringe the patent in question.
Further, Gateway 16A excludes claims for negative declarations in respect of claims which would fall within Gateway 2, namely claims for injunctions ordering the defendant to do or refrain from doing acts within the jurisdiction.
Mr Justice Mellor had criticised Nokia's offer on the ground that the terms for the final licence offered by Nokia were not RAND because arbitration is a consensual process, the ITU-T Declaration made no provision for arbitration and Acer and Asus did not consent to arbitration. Nokia had objected to the judge's reasoning, and in Lord Justice Arnold's view, the core issue was whether Nokia's analysis was right. After some hesitation, his lordship concluded at [84] that Nokia had been. He added at [85] that the implementors were not compelled to agree to arbitration and that they did have a choice.
"For the reasons given above I conclude that Nokia's Adjustable Licence Offers are offers of licences on RAND terms which are capable of acceptance by the Claimants. Accordingly, Nokia has complied with its RAND obligation by making those offers. It follows that, if the Claimants refuse to accept those offers, they are not willing to take licences on the RAND terms offered by Nokia and cannot invoke the declaratory jurisdiction of the English courts to determine what terms are RAND. Accordingly, the RAND Claims have no real prospect of success. (On Nokia's case, the Claimants would also be in breach of their undertakings to enter into any licence determined by the English courts to be RAND; but it is not necessary to determine that question)."
Court of Appeal (Lords Justices Jackson, Arnold and Zacaroli) Acer Inc and Another v Nokia Technologies OY [2026] EWCA Civ 564 (12 May 2026)
This was an appeal by Nokia Technologies OY ("Nokia") against the order of Mr Justice Mellor in Acer Inc. and others v Nokia Technologies OY [2025] EWHC 3331 (Pat) of 18 Dec 2025 rejecting Nokia's challenge to the jurisdiction of the English courts, refusing a stay on case management grounds and granting some interim licence declarations that had been sought by Acer Inc. and Acer UK Limited ("Acer") and Asustek Computer Inc. and Asus Global Pte Ltd. ("Asus").
This was an appeal by Nokia Technologies OY ("Nokia") against the order of Mr Justice Mellor in Acer Inc. and others v Nokia Technologies OY [2025] EWHC 3331 (Pat) of 18 Dec 2025 rejecting Nokia's challenge to the jurisdiction of the English courts, refusing a stay on case management grounds and granting some interim licence declarations that had been sought by Acer Inc. and Acer UK Limited ("Acer") and Asustek Computer Inc. and Asus Global Pte Ltd. ("Asus").
The Parties
Nokia owned or had rights to license a portfolio of patents with claims that have been declared essential to the International Telecommunication Union Telecommunication Standardization Sector ("ITU-T") H.264/AVC and H.265/HEVC video decoding recommendations or standards. Those standards regulate the technology used to decode video streams which have been encoded to enable efficient transmission. Acer and Asus manufacture and supply personal computers that can encode and decode video streams. They are implementors of those ITU-T standards, that is to say, they accept that they need licences to use the patents in Nokia's portfolio.The Negotiations
For many years, the parties have tried unsuccessfully to negotiate the terms of those licences. It was common ground that those licences should be global in effect and granted on reasonable and non-discriminatory ("RAND") terms, but the parties could not agree which terms were RAND. In particular, they could not agree on how much Acer and Asus should pay for those licences.
The Litigation
On and after 28 March 2025, Nokia brought infringement proceedings against Acer and Asus in several jurisdictions. In June 2025, Acer and Asus responded by issuing proceedings in the Patents Court claiming (i) various forms of relief concerning 3 of Nokia's European Patents (UK), (ii) various forms of relief seeking in essence the determination of what terms for licences of the Nokia Portfolio would be RAND and (iii) interim licence declarations.
The Undertakings
Acer and Asus gave unconditional undertakings to the court to enter into any licence that was determined to be RAND (subject to adjustment on appeal), whether interim or final.
Jurisdiction
The implementors gained permission from the court to serve process in respect of the claim as to which licence provisions were RAND upon Nokia in Finland. Nokia challenged the jurisdiction of the Patents Court to determine that issue.
Nokia's Offer
Nokia offered Acer and Asus an interim licence, the terms of which would be subject to adjustment by an arbitral tribunal. As an alternative to challenging the jurisdiction, Nokia sought declarations that its offer was RAND, that it had complied with its obligation to offer licences on RAND terms, and that the implementors' action should be stayed because Nokia's offer meant that there was no longer a real issue to be determined.
The Hearing
Nokia's application and the implementors' cross-application for interim licences to use Nokia's portfolio came on before Mr Justice Mellor between 21 and 24 Oct 2025, with further submissions on 5 Nov 2025. A few weeks later, he delivered the judgment that I summarised in the first paragraph.
The Appeal
Lord Justice Arnold gave Nokia permission to appeal against the dismissal of its challenge to the jurisdiction and the refusal of its request for a stay on case management grounds. The appeal came before Lords Justices Jackson, Arnold and Zacaroli on 22 and 23 April 2026.
The Judgment
Their lordships handed down judgment on 12 May 2026. Lord Justice Jackson delivered the lead judgment with which the other Lords Justices agreed. By para [56] of his judgment in Acer Incorporated and Another v Nokia Technologies OY [2026] EWCA Civ 564 (12 May 2026), he dismissed Nokia's appeal on jurisdiction. By para [92], he granted the case management stay requested by Nokia. In para [93], he discharged the interim licence declarations that had been granted by Mr Justice Mellor.
Jurisdiction
Lord Justice Arnold observed at para [30] that on an application for permission to serve a foreign defendant out of the jurisdiction, a claimant has to satisfy the following requirements:
(1) There is a serious issue to be tried on the merits of the claim, that is to say, a real prospect of success on the summary judgment standard;
(1) There is a serious issue to be tried on the merits of the claim, that is to say, a real prospect of success on the summary judgment standard;
(2) There is a good arguable case that the claim falls within one of the gateways for service out specified in para 3.1 of Practice Direction 6B - Service Out of the Jurisdiction; and
(3) England and Wales is clearly or distinctly the appropriate forum for the trial of the dispute, and in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction.
The learned Lord Justice referred to para [71] of Lord Collins's speech in Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804, [2011] 1 CLC 205, [2012] 1 All ER (Comm) 319, [2011] 4 All ER 1027, [2011] UKPC 7, [2012] WLR 1804. He also referred to para [7] of Lord Sumption's judgment in Brownlie v Four Seasons Holdings Inc [2017] UKSC 80, [2018] 1 WLR 192, [2018] 2 All ER 91 in which his lordship explained that in order to have a good arguable case that the claim falls within a gateway, the claimant must have the better of the argument.
Nokia's Challenge
On appeal, Nokia did not challenge Mr Justice Mellor's finding that the first and third requirements were satisfied. It confined its challenge to requirement two, namely that the implementors' claims passed through each of gateways 11, 16A and 4A.
Gateway 11
This gateway applies where "[t]he subject matter of the claim relates wholly or principally to property within the jurisdiction". The property in this case was alleged to be the right to enforce Nokia's obligation to grant licences on RAND terms. Nokia contended that as most of the patents had been granted for jurisdictions outside the United Kingdom, the subject matter of the implementors' claims did not "relate wholly or principally to property within the jurisdiction", but to property situated very largely outside it.Lord Justice Arnold noted that Mr Justice Mellor had adopted his reasoning in para [109] of Tesla Inc v InterDigital Patent Holdings Inc. [2025] EWCA Civ 192, [2025] RPC 12:
Nokia argued that Lord Justice Arnold's reasoning in Tesla was wrong. It contended that the error was that the reasoning elevated form over substance. In form, such claims may be confined to UK patents, but as a matter of substance and reality, they are global claims in respect of property most of which is outside the UK. Contractual claims by implementors are quite different from claims by SEP owners to enforce UK patents where the FRAND obligation only arises by way of defence to the infringement claim.
His lordship reconsidered the matter afresh in the light of Nokia's submissions but he stuck to his reasoning. He added that the purpose of gateways was to ensure that only actions with a sufficiently close connection with England and Wales could be brought here.
Nokia also alleged that even if Lord Justice Arnold had stated the law correctly in Tesla, the implementors' claims extended to foreign patents in the Nokia SEP portfolio. The implementors disposed of that objection by offering to delete their claims to those patents. His lordship affirmed that Mr Justice Mellor had been right to find that RAND claims passed through Gateway 11.
Gateway 16A
This is as follows:
Further, Gateway 16A excludes claims for negative declarations in respect of claims which would fall within Gateway 2, namely claims for injunctions ordering the defendant to do or refrain from doing acts within the jurisdiction.
Gateway 4A
This applies where:
"A claim is made against the defendant which —
(a) was served on the defendant within the jurisdiction without the need for the defendant's agreement to accept such service;
(b) falls within CPR rule 6.33; or
(c) falls within one or more of paragraphs (1A), (2), (6) to (16A) or (19) to (23),
and a further claim is made against the same defendant which arises out of the same or closely connected facts."
"A claim is made against the defendant which —
(a) was served on the defendant within the jurisdiction without the need for the defendant's agreement to accept such service;
(b) falls within CPR rule 6.33; or
(c) falls within one or more of paragraphs (1A), (2), (6) to (16A) or (19) to (23),
and a further claim is made against the same defendant which arises out of the same or closely connected facts."
The implementors argued that their claims relating to the patents and their claims relating to the terms of their licence arose out of the same or closely connected facts. Mr Justice Mellor had accepted that argument, but Lord Justice Arnold did not. The claims relating to the validity of the patents had nothing to do with the licence terms.
For the above reasons, he dismissed the appeal insofar as it challenged Mr Justice Mellor's rejection of Nokia's jurisdictional challenges.
For the above reasons, he dismissed the appeal insofar as it challenged Mr Justice Mellor's rejection of Nokia's jurisdictional challenges.
Case Management Stay
Nokia argued that the court should stay the implementors' proceedings on the ground that they had no prospect of success after its offer to grant them interim licences the terms of which would be subject to adjustment by an arbitral tribunal. Nokia complained that Mr Justice Mellor had not addressed that point but Lord Justice Arnold disagreed. The judge had addressed its substance but did not accept that Nokia's offer meant that the implementors had no real prospect of success.
Before considering the argument, Lord Justice Arnold noted the following: -
- A dispute between a SEP owner and an implementor as to what licence terms are (F)RAND can be determined by arbitration. He referred to para [68] of the Court of Justice of the European Union's judgment in Case C-170/13 Huawei Technologies Co. Ltd v ZTE Corp. [2016] RPC 4, ECLI:EU:C:2015:477, [2015] EUECJ C-170/13, EU: C:2015:477, [2015] 5 CMLR 14 whch stated: "... where no agreement is reached on the details of the FRAND terms …, the parties may, by common agreement, request that the amount of the royalty be determined by an independent third party …".
- Several (F)RAND disputes have been determined by arbitration, including 2 involving Nokia.
- Where a licence on (F)RAND terms is agreed through negotiation, the licence will sometimes contain a clause stipulating that any dispute as to terms for renewal of the licence after it expires will be determined by arbitration.
- Nevertheless, there is no settled industry practice for (F)RAND disputes to be determined by arbitration.
The implementors argued that arbitration requires the consent of all parties and that they did not consent. Nokia did not dispute that arbitration was consensual but contended that the position was exactly the same as in Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd, [2020] UKSC 37, [2021] 1 All ER (Comm) 885, [2020] RPC 21, [2021] 1 All ER 1141, [2021] 4 CMLR 3, [2020] Bus LR 2422, [2021] ECC 17. The implementors had the choice of accepting Nokia's offer or facing infringement proceedings that might result in an injunction in England.
He concluded at para [91]:
He therefore granted the case management stay sought by Nokia.
Interim Licence Declarations
As the implementors' action should have been stayed, it followed that Mr Justice Mellor's interim licence declarations had to be discharged.
Consequential Issues
The Court of Appeal delivered a further judgment on 18 May 2026 on several consequential issues (Acer Inc. and Another v Nokia Technologies OY [2026] EWCA Civ 604). Again, the lead judgment was given by Lord Justice Arnold.
The main one was whether the Court's order should include a term which permits either party to contend that the arbitration should include the terms of a (F)RAND (cross-)licence in respect of any patents which the other party (or its group) owns, controls or manages within its scope, and which requires the other party to stay, withdraw or abandon (or procure the stay, withdrawal or abandonment of) any litigation concerning such patents. The implementors objected to such a provision on the ground that it would prevent them, and associated parties, from enforcing SEPs concerning mobile telephony standards pending a decision by the arbitrators as to the scope of the (cross-)licence.
Lord Justice Arnold agreed with Acer and Asus. He said at para [10] of his further judgment that the Court had determined that Nokia's offer of an interim licence in respect of its patent portfolio was RAND and that the disputed term was not RAND. A patent portfolio owner is entitled to choose between arbitration and court proceedings as a mechanism for determining (F)RAND terms. So far as patents owned or controlled by Acer or Asus were concerned, that choice lay with them and not with Nokia. It was therefore unnecessary to consider whether the implementors were in breach of their undertakings by refusing to agree to the disputed term.
The Court also considered whether Nokia was entitled to a declaration that its adjustable licence offers were RAND and that it had complied with its obligations. Their lordships refused such relief on the ground that Nokia had sought a stay and not summary judgment.
Nokia contended that the conditions on which the stay had been granted should be incorporated into the licences, while the implementors wanted to include them in the Court order. Lord Justice Arnold agreed with the implementors.
His lordship refused to permit the implementors to appeal to the Supreme Court and allowed the parties to lodge written submissions on costs by 26 May 2026.
His lordship refused to permit the implementors to appeal to the Supreme Court and allowed the parties to lodge written submissions on costs by 26 May 2026.
Comment
In this case, the Court of Appeal extends the court's jurisdiction to stay actions from temporary stays to abide the resolution of parallel proceedings to perpetual stays where it appears to the court that a party has fulfilled its obligations. It also provides guidance on Gateways 4A, 11 and 16A. Perhaps most importantly, the Court has referred a highly technical issue to arbitration.
Further Information
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