The Vestel Appeal: Vestel Elektronik v Access Advance
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Court of Appeal (Lords Justices Nugee and Birss and Lady Justice Laing) Vestel Elektronik Sanayi Ve Ticaret A.S. and another v Access Advance LLC and another  (26 March 2021)  WLR(D) 178,  EWCA Civ 440
Many of the tellies that are sold in this country under such brands as Toshiba, Hitachi, Telefunken and Panasonic are actually made in Turkey by Vestel Elektronik Sanayi Ve Ticaret A.S. and distributed by the Vestel group's British company Vestel UK Ltd. In this article, "Vestel" refers to both Vestel companies. Access Advance LLC administers the HEVC patent pool. HEVC is a video compression technology which is defined by the International Telecommunication Union H.265 recommendation. One of the members of that pool is Koninklijke Philips NV.
Vestel applied to Access Advance for a licence to use Philips's patents under Access Advance's Patent Portfolio Licence Agreement. Access Advance offered a licence at a licence fee of US$1.33 per unit. Vestel replied that that term was not FRAND because a similar licence was available from another patent pool for 20¢. Vestel brought proceedings against Access Advance and Philips for abuse of a dominant position under art 102 of the Treaty on the Functioning of the European Union and s.18 of the Competition Act 1998.
Service outside the Jurisdiction
As Philips was domiciled in an EU member state Vestel served process upon it under art 7 (2) of the Jurisdiction and Judgments Regulation (Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters OJ L 351, 20.12.2012, p. 1–32). As Access Advance was a Delaware company Vestlel applied for and was granted permission to serve that company outside the jurisdiction under para 3.1 of Practice Direction 6B.
Application to set aside Service
Access Advance and Philips applied to set aside service on the ground that the English courts had no jurisdiction over them. The application was heard by Judge Hacon sitting as a judge of the High Court in Vestel Elektronik Sanayi VE Ticaret AS and another v HEVC Advance LLC and another  EWHC 2766 (Ch) (21 Oct 2019). The learned judge granted the application which I discussed in Jurisdiction to hear Abuse of Dominant Position Claims relating to FRAND - Vestel Elektronik Sanayi Ve Ticaret A.Ş. and another v HEVC Advance LLC and another on 25 Oct 2021.
With the leave of Judge Hacon and Lord Justice Floyd, Vestel appealed to the Court of Appeal. However, just before the appeal was due to be heard, those companies applied for far-reaching amendments of their particulars of claim and grounds of appeal. The appeal came on before Lords Justices Nugess and Birss and Lady Justice Laing on 2 and 3 March 2021. The Court permitted those amendments. By their judgment in Vestel Elektronik Sanayi Ve Ticaret A.S. and another v Access Advance LLC and another  EWCA Civ 440 (26 March 2021), the appeal against Judge Hacon's judgment was dismissed.
The Jurisdiction and Judgments Regulation
Art 4 (1) of that Regulation provides:
"Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State."
However, that rule is certain to a number of exceptions one of which is provided by art 7 (2):
"A person domiciled in a Member State may be sued in another Member State:
(2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur,"
"14 It appears from this brief review of the IPR Policy in its context that the following conclusions may be reached.
First, the contractual modifications to the general law of patents are designed to achieve a fair balance between the interests of SEP owners and implementers, by giving implementers access to the technology protected by SEPs and by giving the SEP owners fair rewards through the licence for the use of their monopoly rights.
Secondly, the SEP owner's undertaking, which the implementer can enforce, to grant a licence to an implementer on FRAND terms is a contractual derogation from a SEP owner's right under the general law to obtain an injunction to prevent infringement of its patent. […]"
"58 In addressing the submissions set out above, we recognise, as is undisputed, (a) that questions as to the validity and infringement of a national patent are within the exclusive jurisdiction of the courts of the state which has granted the patent and (b) that in the absence of the IPR Policy an English court could not determine a FRAND licence of a portfolio of patents which included foreign patents. It is the contractual arrangement which ETSI has created in its IPR Policy which gives the court jurisdiction to determine a FRAND licence and which lies at the heart of these appeals. We therefore address first the fourth of Huawei's submissions concerning the interpretation of the IPR Policy."
".......... The English courts have jurisdiction to rule upon whether the UK patents in suit are valid and have been infringed, and also have jurisdiction to rule on the contractual defence relied upon by the implementers based upon the true meaning and effect of the irrevocable undertaking the SEP owners have given pursuant to the ETSI regime. …"
Civil Procedure Rules
"In any proceedings to which rule 6.32 or 6.33 does not apply, the claimant may serve a claim form out of the jurisdiction with the permission of the court if any of the grounds set out in para 3.1 of Practice Direction 6B apply."
"Claims in tort
(9) A claim is made in tort where –
(a) damage was sustained, or will be sustained, within the jurisdiction; or
(b) damage which has been or will be sustained results from an act committed, or likely to be committed, within the jurisdiction."
"Claims about property within the jurisdiction
(11) The subject matter of the claim relates wholly or principally to property within the jurisdiction, provided that nothing under this paragraph shall render justiciable the title to or the right to possession of immovable property outside England and Wales."
On appeal, Vestel confined its claim to a declaration that the licence terms in respect of the British patents were not FRAND. It contended that the limitation of its claim brought it within the wording of subparagraph (11). Access Advance and Phillips argued that Vestel could not bring its claim within this gateway because no legal right was involved. The licence on offer was a worldwide one for the whole patent portfolio and not just the British patents.
The Court dismissed the gateway 11 ground of appeal because no legal claim was involved at all. Moreover, any action that might exist would be dismissed on the ground that it would have no prospect of success.
"The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where
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