When can a Defendant extricate itself from a FRAND trial?

23/01/20

In a judgment handed down on 17 January 2020 in Koninklijke Philips NV v ASUS Computer Incorporation & Ors [2020] EWHC 29 (Ch) Mr Justice Marcus Smith has ruled on the circumstances in which a Defendant may seek to extricate itself from a FRAND trial intended to determine the appropriate FRAND rate for the licensing of a Claimant’s patent portfolio.

The first Defendant group (“ASUS”) had a small market in the UK for products requiring a licence to the relevant portfolio. They indicated that they no longer wished to rely on the Claimant’s FRAND undertaking to obtain a license and were prepared to be enjoined from infringing the relevant portfolio in the UK. In those circumstances, they applied to be removed as Defendants from the forthcoming FRAND trial, relying on the recent judgment of the Court of Appeal in TQ Delta LLC v ZyXel Communications.

In contrast to the position in TQ Delta, there remained a dispute between the parties as to the quantum of compensatory damages for past infringement. Accordingly, in order for their application to succeed, it was necessary for ASUS to strike out and/or obtain summary judgment in respect of those parts of the Claimant’s pleading advancing its rival case on quantum.

The Court emphasised that the process whereby damages for infringement of UK patents are assessed is heavily fact based. In particular, the extent to which the terms of a licence which the Court has declared to be FRAND are relevant to the terms of the counterfactual licence that would have been concluded but for the infringement is a question of fact to be determined at trial and is not susceptible of summary determination. Accordingly, the ASUS application was dismissed.

A copy of the judgment is here.