The Appeal - InterDigital Technology v Lenovo
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Court of Appeal (Lords Justices Arnold, Nugee and Birss) InterDigital Technology Corporation and others v Lenovo Group Ltd and others [2024] EWCA Civ 743 (12 July 2024)
This was an appeal by the claimants, InterDigital Technology and others ("InterDigital") and a cross-appeal by the defendants, Lenovo Group Limited and others ("Lenovo") against the order of Mr Justice Mellor in InterDigital Technology Corporation and others v Lenovo Group Ltd and others [2023] EWHC 1578 (Pat) (27 June 2023). That order implemented his lordship's judgment in InterDigital Technology Corporation and others v Lenovo Group Ltd (FRAND Judgment - Public Version) [2023] EWHC 539 (Pat) (16 March 2023) which I discussed in Patents - Interdigital Technology Corporation and others v Lenovo Group Ltd. and others on 21 March 2023. Mr Justice Mellor required Lenovo to pay a lump sum of $138.7 million to InterDigital for a licence covering sales by Lenovo from 1 Jan 2007 to 31 Dec 2023 together with $46.2 million accrued interest. InterDigital complained that the lump sum was too low. It claimed a lump sum of $388.5 million together with $129.3 million accrued interest. Lenovo argued that the award was too high and that the judge should have computed a lump sum of $108.9 million without any interest or interest at a lower rate and for a shorter period.
The Dispute
In Patents - Interdigital Technology Corporation and others v Lenovo Group Ltd. and others I wrote:
"At para [4] of his judgment in Interdigital Technology Corp and others v Lenovo Group Ltd and others [2023] EWHC 539 (Pat) 16 March 2023), Mr Justice Mellor described the action as essentially a dispute over the terms on which the Lenovo ...... should take a licence from InterDigital ...... to use patents that had been declared essential to the 3G, 4G and 5G standards of the European Telecommunications Standards Institute ("ETSI")."
Lord Justice Arnold added the following details in para [16] of his judgment in InterDigital Technology Corporation and others v Lenovo Group Ltd and others [2024] EWCA Civ 743 (12 July 2024):
"Lenovo started selling devices compliant with the 3G standard in 2007. The first contact between the parties to discuss a licence of InterDigital's portfolio took place in late 2008 when InterDigital sent Lenovo an initial letter. After intermittent negotiations over the course of over ten years, InterDigital commenced these proceedings on 27 August 2019 seeking conventional relief for infringement of five patents unless Lenovo took a licence on FRAND terms, which InterDigital contended would be a global licence. Lenovo did not concede that it needed a licence to InterDigital's portfolio. On the contrary, Lenovo denied infringement and challenged the validity of the patents asserted by Lenovo. Lenovo did not, however, dispute that a licence on FRAND terms would be a global one. As outlined below, however, the parties were a long way apart as to the royalty which should be paid by Lenovo."
The Technical Trials
As I noted in my previous article:
"The court had directed 5 technical trials lettered 'A' to 'E and the FRAND one. A 'technical trial' determines whether or not a patent is valid, essential to a standard and infringed. A 'FRAND' trial decides the terms on which an implementer may use SEPs."
Lord Justice Arnold stated what had happened in the technical trials in para [17]:
"The first technical trials, Trials A and B, took place before the FRAND trial, and two technical trials took place afterwards, Trials C and D. InterDigital prevailed in Trial A ([2021] EWHC 2152 (Pat)) and on appeal ([2023] EWCA Civ 34). Lenovo prevailed in Trial B ([2022] EWHC 10 (Pat)), but InterDigital succeeded on appeal ([2023] EWCA Civ 105). InterDigital prevailed in Trial C ([2023] EWHC 172 (Pat)), and Lenovo did not appeal."
When the FRAND trial commenced, InterDigital had established that at least one of the patents in suit was valid, essential and infringed subject only to Lenovo's entitlement to a licence on FRAND terms. InterDigital's position was only strengthened by the later trials. By showing that at least one patent was valid, essential and infringed, InterDigital had established its right to a FRAND determination. As Mr Justice Mellor also explained in para [18] of his judgment in Interdigital Technology Corporation and others v Lenovo Group Ltd and others [2023] EWHC 539 (Pat), the decisions as to the validity and essentiality of the patents considered in the technical trials played no part in his assessment of FRAND terms.
The FRAND Trial
The FRAND trial started on 13 Jan 2022 and finished on 1 March 2022 taking up 17 days. In addition, Mr Justice Mellor had 4 days of pre-reading time. The judge was supplied with over 50 bundles of materials, including 23 statements from 10 witnesses of fact, 30 reports from 14 experts and 760 pages of written submissions. There was extensive oral evidence, including cross-examination of the parties' valuation experts for 2 days each. At the judge's request, further written expert evidence was filed by the parties in Dec 2022 and further written submissions in Jan 2023. Some of the evidence turned out to be unnecessary, in particular evidence on Chinese, French and US law. After Mr Justice Mellor had circulated his draft judgment in the FRAND trial, the parties agreed that he did not need to deliver judgment in Trial D or try Trial E. That was because Lenovo undertook to take a licence to InterDigital's portfolio on such terms as the court might ultimately determine to be FRAND.Basic Principles
Lord Justice Arnold noted at para [21] of his judgment on the appeal that there was little if any, dispute either before Mr Justice Mellor or the Court of Appeal as to the basic legal principles applicable to the determination of FRAND terms. The starting point was clause 6.1 of ETSI's Intellectual Property Rights ("IPR") Policy. Lord Justice Arnold said in para [22] that the context and purpose of that policy in general and clause 6.1 in particular, had been authoritatively analysed by the Supreme Court in paras [7] to [14] of its judgment in Unwired Planet International Ltd and another v Huawei Technologies (UK) Co Ltd and another [2020] RPC 21, [2021] 4 CMLR 3, [2021] 1 All ER 1141, [2021] ECC 17, [2020] UKSC 37, [2020] Bus LR 2422, [2021] 1 All ER (Comm) 885 which he quoted in full. He said in para [23]
"It can be seen from the Supreme Court's analysis that clause 6.1 must be interpreted and applied in a manner which avoids both hold up by the SEP owner and hold out by an implementer. Hold up by the SEP owner will be avoided by ensuring that the SEP owner is held to its undertaking. Hold out by the implementer will be avoided by allowing the SEP owner to enforce its normal right under the general law to obtain an injunction to prevent infringement of the SEP by the implementer save to the extent that this would be inconsistent with the SEP owner's undertaking."
"It can be seen from the Supreme Court's analysis that clause 6.1 must be interpreted and applied in a manner which avoids both hold up by the SEP owner and hold out by an implementer. Hold up by the SEP owner will be avoided by ensuring that the SEP owner is held to its undertaking. Hold out by the implementer will be avoided by allowing the SEP owner to enforce its normal right under the general law to obtain an injunction to prevent infringement of the SEP by the implementer save to the extent that this would be inconsistent with the SEP owner's undertaking."
Having undertaken to take a licence of InterDigital's portfolio of SEPs on the terms determined to be FRAND by the English courts, Lenovo was seeking to enforce InterDigital's undertaking to grant licences on FRAND terms. Having accepted that it was obliged by that undertaking to grant Lenovo a licence on FRAND terms subject to the issue as to whether InterDigital had always been a willing licensor, the dispute was about what terms were FRAND. As the parties had been unable to agree on that issue, they agreed that the court should determine it for them. It was also common ground that, in determining what terms were FRAND, the court should take into account the context and purpose of clause 6.1 of the IPR Policy as analysed by the Supreme Court. Lord Justice Arnold noted in para [25] that the Supreme Court had drawn several conclusions and made several statements of legal principle which were relevant to the appeals. He set them out between paras [26] and [33] of his judgment. Lord Justice Arnold restated at [39] that there was a duty upon SEP owners not to behave in a manner that promotes hold-ups and upon implementors not to behave in a manner that promotes hold-outs. Both parties should attempt in good faith to negotiate terms that are FRAND.
Before considering Mr Justice Mellor's judgment, Lord Justice Arnold made two preliminary points. First, he said at para [40] that it was immaterial whether the SEP owner in question was willing to license on FRAND terms or whether the implementer was in fact willing to take a licence on those terms because such willingness only affects the availability of an injunction once the court has determined what terms are FRAND. It was even less relevant that the SEP owner or implementer had previously acted as a willing licensor or licensee. Secondly, the learned lord justice said at [41] that although it was well established that, in seeking to determine what terms would be agreed by a willing licensor and a willing licensee of an IP right, the best guide, where it was available, was a comparable licence for the right in question, there were three common problems with that exercise. One was that the different ways of expressing licence terms in different licences might make it difficult to compare the licences' economic effects. Another was that previously agreed licences might not be precisely comparable to the agreement under consideration. A third was that a proposed comparable might not have been entered into by truly willing licensors and willing licensees, or at least not by willing licensors and willing licensees who were appropriately situated.
Lord Justice Arnold reviewed Mr Justice Mellor's decision between para [42] and para [156]. Between para [157] and para [165], Lord Justice Arnold reviewed Mr Justice Mellor's judgment in InterDigital Technology Corporation and others v Lenovo Group Ltd and others [2023] EWHC 1578 (Pat) (27 June 2023). I have already covered many of those matters in my previous article. It would lengthen and complicate this case note to discuss them again here.
Lord Justice Arnold reviewed Mr Justice Mellor's decision between para [42] and para [156]. Between para [157] and para [165], Lord Justice Arnold reviewed Mr Justice Mellor's judgment in InterDigital Technology Corporation and others v Lenovo Group Ltd and others [2023] EWHC 1578 (Pat) (27 June 2023). I have already covered many of those matters in my previous article. It would lengthen and complicate this case note to discuss them again here.
Grounds of Appeal
InterDigital appealed on the following grounds:
A: The judge derived the wrong dollar per unit rate from the LG 2017 licence because he failed to correct for non-FRAND effects which he found had affected past sales;
B: The judge did not correctly adjust the dollar per unit rate he derived from LG 2017 when determining the FRAND rate for Lenovo;
C: The judge was wrong to reject the simpler of the two top-down cross-checks relied upon by InterDigital as being of value when determining the FRAND rate for Lenovo; and
D: The judge should have found, and declared, that InterDigital was a willing licensor.
LG2017 was a licence agreement that Lenovi had proposed as a comparable because it was granted in consideration of a lump sum payment rather than a periodic royalty. Lord Justice Arnold noted at [137] that Mr Justice Mellor considered that agreement to be "the best comparable and the best place to start".
Lenovo's grounds of appeal were that the judge was wrong to require Lenovo to pay:
Lenovo's grounds of appeal were that the judge was wrong to require Lenovo to pay:
- royalties in respect of sales prior to the third quarter of 2013 because the right to recover those royalties was statute-barred; and
- interest on the lump sum either at all or at a high rate.
The Appeal
The appeal was heard between 10 and 14 June 2024. The hearing was filmed and videos of the proceedings can be viewed on the Court of Appeal's Court 63 YouTube page,
The Court found it convenient to address Lenovo's grounds of appeal first.
Referring to paras [46] to [50] of the judgments of Lord Briggs and Lord Kitchin in Lifestyle Equities CV v Amazon UK Services Ltd [2024] WLR(D) 105, [2024] 3 All ER 93, [2024] Bus LR 532, [2024] UKSC 8, Lord Justice Arnold remarked at [168] of his own judgment that Mr Justice Mellor's decisions were multifactorial evaluations of a kind that a trial judge is peculiarly well placed to carry out whereas an appeal court is inevitably at a disadvantage. Accordingly, where no question of principle is involved, an appellate court should be very cautious in differing from the trial judge's evaluation. That does not mean that the appeal court is powerless to intervene where the judge has fallen into error. It may intervene if he or she has made a significant error of principle, or if the judge's decision was wrong by reason of an identifiable flaw in his or her treatment of the question to be decided, such as a gap in logic, a lack of consistency, or a failure to take into account some material factor that undermines the cogency of the conclusions.
The Court found it convenient to address Lenovo's grounds of appeal first.
Referring to paras [46] to [50] of the judgments of Lord Briggs and Lord Kitchin in Lifestyle Equities CV v Amazon UK Services Ltd [2024] WLR(D) 105, [2024] 3 All ER 93, [2024] Bus LR 532, [2024] UKSC 8, Lord Justice Arnold remarked at [168] of his own judgment that Mr Justice Mellor's decisions were multifactorial evaluations of a kind that a trial judge is peculiarly well placed to carry out whereas an appeal court is inevitably at a disadvantage. Accordingly, where no question of principle is involved, an appellate court should be very cautious in differing from the trial judge's evaluation. That does not mean that the appeal court is powerless to intervene where the judge has fallen into error. It may intervene if he or she has made a significant error of principle, or if the judge's decision was wrong by reason of an identifiable flaw in his or her treatment of the question to be decided, such as a gap in logic, a lack of consistency, or a failure to take into account some material factor that undermines the cogency of the conclusions.
Limitation
Lenovo argued that Mr Justice Mellor's decision to order it to pay for all past sales was unprecedented and wrong. He should have held that no payment was required in respect of sales made more than 6 years before the commencement of proceedings as that was the relevant limitation period in many jurisdictions. In any event, he could and should have ruled as to the irrelevance of limitation only prospectively. As a result, the judge should have awarded a lump sum of only $108.9 million.
Lenovo made the following submissions on limitation:
- Limitation periods are a feature of most legal systems. They ensure legal certainty and finality. They protect potential defendants from stale claims which might be difficult to counter and to prevent the injustice which might arise if courts were required to decide upon events which took place in the distant past on the basis of evidence that might have become unreliable and incomplete because of the passage of time. Lenovo relied on para [49] of the European Court of Human Rights's judgment in Stubbings v United Kingdom [1997] Fam Law 241, 1 BHRC 316, (1996) 23 EHRR 213, [1997] 3 FCR 157, (1997) 23 EHRR 213, 23 EHRR 213, [1997] 1 FLR 105, [1996] ECHR 44 and para [12] of Lord Justice Mummery's judgment in Ashe v National Westminster Bank plc [2008] EWCA Civ 55, [2008] 1 WLR 710.
- Limitation periods recognize that the onus is on a claimant to enforce a valid cause of action as Lord Atkinson noted in Board of Trade v Cayzer, Irvine & Co [1927] AC 610 at 628. A claimant can stop time running by commencing proceedings.
- Negotiations do not stop time from running even if they prevent the claimant from bringing his or her claim on time (Hewlett v LCC (1908) 72 JP 136 and Deerness v John R Keeble & Son (Brantham) Ltd [1983] 2 Lloyd's Rep 260)
- Limitation periods are necessarily blind to the merits of a given case except in the case of claimants under a disability.
- English courts apply foreign limitation periods when dealing with causes of action arising under a foreign law. In some jurisdictions, limitation periods extinguish the right in question, rather than simply bar the exercise of a particular remedy.
Lord Justice Arnold held at [186] that Mr Justice Mellor had been correct to rule that limitation periods have no part to play in the assessment of FRAND terms for the reasons he gave between paras [521] and [533] of his judgment which were supported by his reasoning between paras [540] and [545]. He was therefore right to require Lenovo to pay royalties in respect of all past sales. He explained why at [187]:
"The starting point is that the court is determining what terms are FRAND for a licence of InterDigital's SEP portfolio to Lenovo. An implementer such as Lenovo requires a licence from the first day it implements the relevant standard(s). FRAND terms are the terms that would be agreed between a willing licensor not intent upon hold up and a willing licensee not intent upon hold out. The ETSI Guide and FAQs page make it clear that a willing licensee would not sit back and wait for demands from SEP owners, but would pro-actively contact SEP owners (whose identities can readily be ascertained from ETSI), and would put money aside for the payment of royalties (see paragraphs 34-38 above). It follows that, in an ideal world, the parties should be able to agree terms not long after the implementer has started implementing the standard, or at all events before the expiry of six years from that date. Recognising that the world is not ideal, a willing licensor and a willing licensee would begin by negotiating a standstill agreement in order to ensure that the passage of time during the course of negotiations did not affect the substantive terms ultimately agreed. On that basis, the relevant date for the purpose of determining what terms were FRAND would at the latest be the date of first contact between the parties (as InterDigital contends by a respondent's notice)."
"The starting point is that the court is determining what terms are FRAND for a licence of InterDigital's SEP portfolio to Lenovo. An implementer such as Lenovo requires a licence from the first day it implements the relevant standard(s). FRAND terms are the terms that would be agreed between a willing licensor not intent upon hold up and a willing licensee not intent upon hold out. The ETSI Guide and FAQs page make it clear that a willing licensee would not sit back and wait for demands from SEP owners, but would pro-actively contact SEP owners (whose identities can readily be ascertained from ETSI), and would put money aside for the payment of royalties (see paragraphs 34-38 above). It follows that, in an ideal world, the parties should be able to agree terms not long after the implementer has started implementing the standard, or at all events before the expiry of six years from that date. Recognising that the world is not ideal, a willing licensor and a willing licensee would begin by negotiating a standstill agreement in order to ensure that the passage of time during the course of negotiations did not affect the substantive terms ultimately agreed. On that basis, the relevant date for the purpose of determining what terms were FRAND would at the latest be the date of first contact between the parties (as InterDigital contends by a respondent's notice)."
His lordship dismissed Lenovo's appeal against the trial judge's decision that limitation is irrelevant to the determination of FRAND and that the lump sum should therefore reflect all past sales by Lenovo.
Lord Justice Nugee agreed. He found Mr Justice Mellor's arguments on limitation compelling, He said at para [289]:
"We know that what is FRAND is what a willing licensee would agree. It seems to me that an implementer that was a willing licensee would agree to pay for the use it has made of the SEP owner's patents from the day when it first implements the relevant standard (day 1), and would therefore agree to pay a reasonable licence fee from day 1. That I would have thought was self-evidently fair and reasonable, and indeed one only has to state the converse (that it is fair and reasonable for the implementer to pay nothing for the use it has made of the SEPs from day 1 to a point in time 6 years ago (whatever "6 years ago" means in this context – 6 years before when?)) to see that it cannot be right. The fact that other implementers may have avoided doing so in practice simply illustrates that if so they have managed to get away with not paying a fair and reasonable price – or indeed anything – for their historic use of the SEP owner's patents."
Interest
Lord Justice Nugee agreed. He found Mr Justice Mellor's arguments on limitation compelling, He said at para [289]:
"We know that what is FRAND is what a willing licensee would agree. It seems to me that an implementer that was a willing licensee would agree to pay for the use it has made of the SEP owner's patents from the day when it first implements the relevant standard (day 1), and would therefore agree to pay a reasonable licence fee from day 1. That I would have thought was self-evidently fair and reasonable, and indeed one only has to state the converse (that it is fair and reasonable for the implementer to pay nothing for the use it has made of the SEPs from day 1 to a point in time 6 years ago (whatever "6 years ago" means in this context – 6 years before when?)) to see that it cannot be right. The fact that other implementers may have avoided doing so in practice simply illustrates that if so they have managed to get away with not paying a fair and reasonable price – or indeed anything – for their historic use of the SEP owner's patents."
Interest
Lenovo argued that there was no power to award interest in a case of this kind. Even if there was such power it would not be FRAND to make an award in this case. Further, if an award could and should have been made it should have been at a much lower interest rate.
Lord Justice Arnold noted that all parties agreed that the statutory and equitable bases for the award of interest were inapplicable. Lord Hope had observed at para [5] of his speech in Sempra Metals Ltd v Inland Revenue Commissioners [2007] [2008] 1 AC 561, [2007] BTC 509, [2008] Bus LR 49, [2007] 4 All ER 657, [2008] Eu LR 1, [2007] 3 WLR 354, [2007] UKHL 34, [2008] AC 561, [2007] STC 1559 that there was no power at common law to award interest as compensation for the late payment of a debt or damages in the absence of agreement. It was common ground that Lenovo had not agreed to pay interest.
In the absence of any jurisdictional basis in statute, equity or contract, the only basis upon which the power to award interest could have arisen was that it was what a willing licensor and a willing licensee would agree. Mr Justice Mellor had found that that would have been the case for the reasons he gave between paras [15] and [29] of his judgment in InterDigital Technology Corporation and others v Lenovo Group Ltd and others [2023] EWHC 1578 (Pat).
Lord Justice Arnold noted that all parties agreed that the statutory and equitable bases for the award of interest were inapplicable. Lord Hope had observed at para [5] of his speech in Sempra Metals Ltd v Inland Revenue Commissioners [2007] [2008] 1 AC 561, [2007] BTC 509, [2008] Bus LR 49, [2007] 4 All ER 657, [2008] Eu LR 1, [2007] 3 WLR 354, [2007] UKHL 34, [2008] AC 561, [2007] STC 1559 that there was no power at common law to award interest as compensation for the late payment of a debt or damages in the absence of agreement. It was common ground that Lenovo had not agreed to pay interest.
In the absence of any jurisdictional basis in statute, equity or contract, the only basis upon which the power to award interest could have arisen was that it was what a willing licensor and a willing licensee would agree. Mr Justice Mellor had found that that would have been the case for the reasons he gave between paras [15] and [29] of his judgment in InterDigital Technology Corporation and others v Lenovo Group Ltd and others [2023] EWHC 1578 (Pat).
Lenovo criticized his lordship's finding on the basis that there was nothing about interest in the ETSI IPR Policy or the ETSI Guide. Lord Justice Arnold acknowledged that that was the case but said that it was immaterial as those documents say nothing about what terms are FRAND.
Lenovo argued that no provision had been made for interest in any of the comparables. Lord Justice Arnold explained that was because of heavy discounting which resulted from uncertainty as to whether licences would be available globally or territorially and whether limitation periods would apply. The trial judge had found that neither of these factors should be reflected in FRAND terms. If past sales were rapidly discounted and then written off as irrecoverable for those reasons, it was not surprising that no interest was levied either. Further, there was no settled industry practice that no interest should be paid for past sales.
Lord Justice Arnold gave the following reasons why a willing licensee would pay interest to a willing licensor at para [214]: (i) implementers need a licence from day 1, (ii) in principle terms should be agreed with effect from that date and (iii) there should be no incentive for implementers to delay.
Lenovo argued that the judge should have withheld the payment of interest in this case because of InterDigital's conduct which I mentioned above. Lord Justice Arnold agreed that that was a decision that Mr Justice Mellor could have taken but decided not to do so in this case. It was an evaluative decision that the trial judge was well-placed to make. Lenovo did not demonstrate any flaw in his reasoning to justify the Court's intervention. On the contrary, it seemed to Lord Justice Arnold that Mr Justice Mellor's conclusion was amply justified for the reasons he discussed in the context of limitation. The same was true for the rate, basis and period of interest. Lord Justice Arnold dismissed Lenovo's appeal as to interest at para [227].
Lord Justice Nugee said in [290] that the duty of an implementer to pay interest had "nothing to do with the award of interest by English courts as damages, or under statute, or in equity, where for largely historical reasons English law is notoriously complex; it is again a much simpler enquiry as to what is fair and reasonable, and it again seems to me self-evident that it is only fair that someone who pays in 2023 for using someone else's property in 2007 should also pay interest to reflect the time value of money."
Lord Justice Nugee said in [290] that the duty of an implementer to pay interest had "nothing to do with the award of interest by English courts as damages, or under statute, or in equity, where for largely historical reasons English law is notoriously complex; it is again a much simpler enquiry as to what is fair and reasonable, and it again seems to me self-evident that it is only fair that someone who pays in 2023 for using someone else's property in 2007 should also pay interest to reflect the time value of money."
Ground A: The Per Unit Rate
To reach the $138.7 million lump sum as consideration for a licence mentioned in the opening paragraph, Mr Justice Mellor used a blended rate of $0.24 per unit. Lord Justice Birss explained in para [305] that the blended nature of that rate was based on combining a lower rate for past sales and the higher rate for future sales. Mr Justice Mellor had derived that rate from LG 2017. InterDigital argued that that rate was too low. It contended that the rate that the judge should have used was the future rate of $0.61. It should have been adjusted by a ratio of 0.803, resulting in a figure of $0.49 per unit. Applying that rate to all of Lenovo's sales from 2007 to the end of 2023 would have produced the lump sum of $388.5 million.
Lord Justice Arnold agreed that the rate of $0.24 was too low. In arriving at that rate the judge had taken account of extensive discounting which had resulted from concerns over suing in multiple jurisdictions and the effect of limitation. That was inconsistent with Mr Justice Mellor's observations that the results of such discounting were not FRAND. The judge had ignored expert evidence on the allocation of the lump sum between past sales and future sales. He had also lost sight of the court's task which was to estimate the rate that would be FRAND for Lenovo. Lord Justice Arnold estimated the per unit rate at $0.30. He therefore allowed InterDigital's appeal on ground A to the extent of substituting the figure of $0.30 for the figure of $0.24 per unit derived by the judge from LG 2017.
Lord Justice Nugee found this was a more difficult issue to resolve and that he had doubts as to whether the appeal should be allowed at all. He explained his difficulty between para [291] and para [300]. In the end he deferred to the experience of Lord Justice Arnold and Lord Justice Birss.
Lord Justice Nugee found this was a more difficult issue to resolve and that he had doubts as to whether the appeal should be allowed at all. He explained his difficulty between para [291] and para [300]. In the end he deferred to the experience of Lord Justice Arnold and Lord Justice Birss.
Ground B: Adjustment
The learned lord justice agreed that the per unit rate should be adjusted, In his view the appropriate ratio was 0.75. Multiplying $0.30 by 0.75 produced a per unit figure of $0.225. On the assumption that there had been 792,571,429 units the multiplication of that figure by $0.225 produced a total sum of $178.3 million. His lordship directed the parties to produce the interest at the trial judge's rate of 4% compounded quarterly.
Ground C: Cross-Check
Lord Justice Arnold was unpersuaded of the value of the top-down cross-check.
Ground D: Whether InterDigital Had Been a Willing Licensor
It was not necessary to reach any conclusion on this question because InterDigital had not identified any purpose to be served by making a declaration to that effect. Because of this decision, the past willingness or otherwise of InterDigital or Lenovo is simply irrelevant. The only question of importance was what sum of money is FRAND. Subject to any further appeal to the Supreme Court, that question has now been resolved.
Further Information
I shall discuss this case as part of my talk entitled TMT: A SEP & FRAND overview at the Cambridge IP Law Summer School at Downing College on 13 Aug 2024. I have written a longer article about this course in Cambridge IP Law Summer School in NIPC News on 20 July 2024. Anyone unable to attend the summer school who nevertheless wishes to discuss this article further should call me on 020 7404 5252 during normal office hours or send me a message through my contact page.
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