Lenovo Group Limited & Ors v Interdigital Technology Corporation & Ors

The parties are agreed on the following propositions of German law relating to InterDigital’s Orange Book offer:

Mr Chacksfield suggested in his closing submissions that Lenovo was asserting that InterDigital’s offer of a determination under Section 315 was “defective” because (i) it proposed a worldwide licence of Cellular SEPs and (ii) it provided for InterDigital, instead of Lenovo, to fix the royalty rate. However, while Mr Waldeck referred, in his first witness statement, to “doubts” as to whether the German courts would consider they had jurisdiction to determine a global rate, I do not understand that to be the position of Professor Chrocziel. Professor Meier-Beck had stated in his expert report that there was no obstacle to a Section 315 process being used to fix a worldwide royalty rate for Cellular SEPs. Indeed, he had suggested that in order for an Orange Book offer to be credible in the German Proceedings, it would have to propose a worldwide licence. Professor Chrocziel did not express disagreement with that conclusion. Moreover, while Professor Chrocziel suggested that it would not be “typical” for an Orange Book offer to give a holder of SEPs, as distinct from an implementer, the right to fix the royalty rate, he did not say that this feature would preclude the use of a Section 315 process.

Mr Waldeck’s views clearly command respect as he is experienced in this area. However, he is not an independent expert for the purposes of CPR 35 and, so is offering opinion evidence from the standpoint of a witness of fact. I will be guided more by the expert opinion of Professor Chrocziel and Professor Meier-Beck. I conclude that it is common ground between the independent experts that, if Lenovo accepted InterDigital’s offer of a global licence of SEPs under which InterDigital was entitled to fix the royalty rate, Section 315 could be invoked to result in the German court deciding a rate that is “equitable” for a global licence of the Cellular SEPs.

The experts were not agreed on whether, if Lenovo accepted the Orange Book offer, so that the German court determined an “equitable” royalty rate, that would necessarily result in the German court determining a FRAND rate.

Since I have not heard cross-examination of Professor Chrocziel or Professor Meier-Beck I am unable to determine whether there is any daylight between the concept of a “equitable” royalty rate and a “FRAND” royalty rate.

CPR 25.1(1)(b) gives the court power to grant an interim remedy consisting of an “interim declaration”. The parties’ submissions revealed a disagreement as to the general principles that the court should apply when deciding whether or not to exercise that discretion. In my judgment, InterDigital had the better of the argument on the principles that should govern an application for an interim declaration generally. I summarise my conclusions on the principles generally applicable and give reasons for those conclusions in the remainder of this section:

The propositions set out in paragraph ‎35.i) and paragraph ‎35.ii) were not particularly controversial. A useful shorthand distillation of the principles applicable to declarations generally that is sufficient for the purposes of the Interim Licence Application can be found in the judgment of Neuberger J in Financial Services Authority v Rourke [2002] CP Rep 14:

It seems to me that, when considering whether to grant a declaration or not, the court should take into account justice to the claimant, justice to the defendant, whether the declaration would serve a useful purpose and whether there are any other special reasons why or why not the court should grant the declaration.

The proposition set out in paragraph ‎35.iii) was uncontroversial as far as it goes since the judgment of Kerr J in The Secretary of State for Education v National Union of Teachers [2016] IRLR 512 proceeded expressly by reference to the criteria set out in American Cyanamid. That was a case in which the Secretary of State sought an interim declaration that proposed industrial action was unlawful. At [33] to [35], Kerr J noted the similarities between that application and an application for an interim injunction restraining the industrial action. As a consequence of those similarities, he applied a test similar to that set out in American Cyanamid when deciding whether to make the interim declaration. However, whereas the American Cyanamid principle does not require a court to assess the merits on which the application is based (beyond concluding that it gives rise to a “serious issue to be tried”), Kerr J engaged in an examination of the merits because statute requires such an examination in the context of applications for injunctions to restrain industrial action.

The proposition in paragraph ‎35.iv) was controversial. Lenovo’s case is that the court should generally apply American Cyanamid principles to applications for interim declarations with the consequence that Lenovo need only show a “serious issue to be tried” that the Interim Licence would be FRAND.

However that position is at odds with the judgment of the Court of Appeal in N v Royal Bank of Scotland plc [2017] EWCA 253. At [85] of that judgment, Hamblen LJ noted the submission that the declaration sought in that case “operates in much the same way as an interim injunction. It is both provisional and suspensory in nature, making a temporary declaration as to the state of the law or a party’s rights whilst leaving the state of uncertainty to be determined at a full trial”. However, he did not accept that submission, concluding at [88] that the first instance judge should not have made the declaration because it was determining substantive law questions that only permit of a final rather than a temporary answer. Hamblen LJ’s conclusion involved the application of a different test from that set out in American Cyanamid.

In a similar vein at [25] and [26] of his judgment in British Airline Pilots’ Association v British Airways Cityflyer Limited [2018] EHC 1889 (QB), Butcher J concluded that making an interim declaration in relation to the contractual rights of parties to a private law contract would be a “very exceptional remedy” reasoning that:

to take an interim view of the parties’ private law contractual rights, with effect on the parties which depends on that interim view, may give rise to a merely and explicitly provisional view creating adverse effect on the parties with no compensation to them if it is wrong.

The proposition set out in paragraph ‎35.v) above comes from [89] of Hamblen LJ’s judgment in N v Royal Bank of Scotland in which he set out the threshold that should apply if, contrary to his conclusion at [88], the declaration could properly be made.

I did not understand the proposition set out in paragraph ‎35.vi) to be controversial. Kerr J performed just such a balancing exercise in The Secretary of State for Education v National Union of Teachers.

I agree with InterDigital that, if the sole purpose of the Interim Licence Declaration would be to influence the decision of the German court in the German Proceedings, that declaration should not be made. That follows from [51] to [52] of Arnold LJ’s judgment in Teva v Novartis [2022] EWCA Civ 1617 as follows:

… it is wrong for an English court to make a declaration solely for the purpose of influencing a decision by a foreign court on an issue governed by the law of the foreign court. It is not the function of the courts of England and Wales to provide advisory opinions to foreign courts seised of issues which fall to be determined in accordance with their own laws. The English courts have no special competence to determine such issues. If anything, it is likely that they have less competence than the local courts. It makes no difference that the English court and the foreign court are applying the same basic law. Furthermore, comity requires restraint on the part of the English courts, not (to adopt Floyd LJ's graphic phrase) jurisdictional imperialism.

InterDigital invites me to go further and conclude that, if the Interim Licence Declaration has any effect on the German Proceedings that is a negative feature that should incline me against making it. InterDigital seeks to draw support for this proposition from the following passage of the judgment of Marcus Smith J at [22] of Bank of New York Mellon v Essar Steel [2018] EWHC 3177 (Ch):

Thus, I find that as between the parties before the court, the declarations sought have no clear utility. Moreover, if and to the extent that the declarations sought will have an effect on a foreign process, it seems to me that this is an undesirable side-effect of making the declarations, and a strong indicator that they should not be made. Given the existence of these foreign insolvency proceedings, to the extent that disputes have arisen in those proceedings, they should also be resolved in those proceedings.

However, this submission involves a failure to put the above quote in context. Marcus Smith J’s point was not that if his declaration had an effect on foreign proceedings, that was necessarily a negative feature. Rather, his concern was that a declaration by him might have an effect on a third party, described in his judgment as the “Insolvency Resolution Professional” who was not party to the proceedings and so whose views on the matter could not be heard (see [21(5)] and [22(3)(c)] which immediately precedes the quote on which InterDigital relies).

The key question that emerges from Teva v Novartis is whether making the Interim Licence Declaration would be only for the purpose of influencing the German Proceedings. If making that declaration would serve some other genuine useful purpose, then the fact that it might also be of some interest in the German Proceedings is not a negative, particularly since both Professor Chrocziel and Professor Meier-Beck are agreed that the German Proceedings will pay some regard to dispute resolution mechanisms proposed in non-German proceedings.

However, I consider that the court’s exercise of discretion entitles it to take into account considerations of relative utility. If a party will obtain some, but little, benefit from an interim declaration in English proceedings and is in substance seeking the declaration to influence foreign proceedings, the court can treat that as a negative feature of the application.

I was also referred to paragraphs [16] to [18] of the judgment of Evans-Lombe J, sitting as a judge of the Court of Appeal in Royal Bank of Canada v Cooperatieve Centrale Raiffeinsen-Boerenleenbank [2004] EWCA Civ 07 which set out the principles applicable to anti-suit injunctions. However, since I have been able to determine the Interim Licence Application without reference to principles applicable to anti-suit injunctions, I will not quote those paragraphs.

I will approach my task first by considering arguments that the parties advanced, grouped under various headings simply for the sake of readability. In doing so, I am not suggesting that the headings I use are constituents of the overall test. Rather, at the end of this section, I will apply what I have determined to be the correct approach to the exercise of my discretion in the light of my conclusions on the parties’ arguments.

By the Interim Licence Application, Lenovo seeks only a declaration that the terms of its proposed Interim Licence are FRAND. It recognises that the concept of “FRAND” can be applied to describe behaviour of both an implementer and a holder of SEPs, both before and after proceedings are taken in relation to those SEPs. However, Lenovo seeks no declarations as to the categorisation of InterDigital’s behaviour as FRAND or otherwise. A previous version of the Interim Licence Application sought a declaration to the effect that a “willing” holder of SEPs would enter into the Interim Licence. However, Lenovo no longer seeks a declaration in those terms.

Nor does Lenovo seek an order of the English court that compels InterDigital actually to enter into an Interim Licence with it. A previous formulation of the application did seek such an order, but the Interim Licence Application before me does not. That said, Lenovo hopes that, if the Interim Declaration is made, InterDigital will agree to enter into an interim licence on those terms. With a view to ensuring that the Interim Licence operates, from Lenovo’s perspective, as closely as possible to an actual licence, Lenovo proposes that, if the Interim Declaration is made (i) it will enter into an Interim Licence if InterDigital is willing to do so and (ii) if not, Lenovo will act, in all material and relevant respects, as if they were bound by the terms of the Interim Licence. Accordingly, if InterDigital is prepared to enter into an Interim Licence, Lenovo will pay it the royalty stipulated in that licence of US$17.5 cents per unit. If InterDigital is not prepared to enter into the Interim Licence, Lenovo will instead pay these sums into court.

No doubt with an eye on the case law analysed in paragraphs ‎43 to ‎46 above, Lenovo submits that it does not seek the Interim Declaration solely to obtain support for its case in the German Proceedings. It argues that, even if there were no German Proceedings, the Interim Declaration would be of utility in the English Proceedings in “holding the ring” until a final FRAND licence can be determined.

I do not, however, consider that in the English Proceedings there is much of a ring that needs to be held. Where a claimant seeks an interim injunction restraining a defendant from taking certain action prior to trial, it does so to preserve benefits or legal rights that might otherwise be lost or prejudiced. Without an interim injunction, an employer whose employee who has taken confidential customer lists and proposes to set up a rival business, might need an interim injunction as otherwise its business might have suffered irreparable damage by the time the trial comes on. That is not the situation in these proceedings. Lenovo is perfectly able to conduct its business in England and Wales even though, from 1 January 2024, it has no licence of Cellular SEPs. It is not facing any injunction proceedings in England and Wales in which InterDigital seeks to prevent it running any aspect of that business. I do not, therefore, regard the Interim Declaration as being analogous to an interim injunction.

Lenovo points out precedents in which a court has determined the terms of interim licences in copyright disputes pending trial. However, the fact that interim licences might be useful in copyright proceedings says little about the utility of the Interim Declaration in these proceedings which are concerned with SEPs not copyright.

Lenovo argues that the wider proceedings in England will ultimately result in the determination of a global FRAND licence of Cellular SEPs. Therefore, it submits that it is entirely consistent with those proceedings for there to be an interim licence which preserves the legitimate interests of both Lenovo and InterDigital: Lenovo would be licensed on an interim basis and InterDigital would be entitled to an interim royalty.

However, I consider that to be a slender benefit from the point of view of the English Proceedings. First, as I have noted, the Interim Licence Application will not actually achieve the “consistent” result on which Lenovo relies since the Interim Declaration is only as to terms that would be FRAND and does not compel InterDigital to enter into any licence at all. Second, as I have said, Lenovo does not need an interim licence as it is not currently under threat of an injunction in England and Wales. Third, InterDigital does not, at least as matters stand, seem to be greatly interested in receiving an interim royalty of US$17.5 cents per unit.

Next, Lenovo points out that in the previous proceedings which determined a global licence for the period from 1 January 2007 to 31 December 2023, Mellor J decided that Lenovo should have to pay InterDigital an amount computed by reference to interest on the basis that it had not been paying a recurring royalty during that period. Lenovo argues that, if the Interim Declaration is made it will either pay the interim royalty of US$17.5 cents per unit into court or, if InterDigital is prepared to enter into an actual licence, will pay that sum direct to InterDigital. Either approach would, it argues, reduce its exposure to interest once the global FRAND licence is determined.

There is something in that point, but not as much as Lenovo argues. If no Interim Declaration is made, then Lenovo will retain cash that it would otherwise have paid to InterDigital or paid into court. It will have the use of that cash in its business which will itself mitigate the effect of any future interest award that is made. It can also seek to agree terms with InterDigital under which some interim payments are made. If, as Lenovo argued, InterDigital is rejecting offers of interim payments in order to bolster its case that an injunction should be made in Germany on the basis that Lenovo is “unwilling”, Lenovo will be free to draw that matter to the attention of the judge who ultimately fixes the amount of any interest that Lenovo has to pay as part of the determination of a FRAND licence.

By contrast to what I consider to be relatively slender benefits in the English Proceedings, the benefits of the Interim Declaration that Lenovo seeks in connection with the German Proceedings are evident. Lenovo’s skeleton argument served in advance of the hearing made absolutely clear what it considers to be InterDigital’s unprincipled position in the German Proceedings. Lenovo argues that, having actively sought a determination of a FRAND licence in the English courts in the proceedings before Mellor J, InterDigital is now seeking to subvert Lenovo’s attempts to have a FRAND licence determined by the English courts. It argues that the only conceivable benefit of the German Proceedings from InterDigital’s perspective is to put pressure on Lenovo to agree a licence at supra-FRAND rates in order to stave off the threat of an injunction in Germany. It supports that assertion by arguing that in negotiations to date on the terms of a global licence of Cellular SEPs, InterDigital has been pressing for rates considerably in excess of the US$17.5 cents per unit that Mellor J determined to be FRAND in the previous proceedings.

As explained below, I do not consider that an analysis of the parties’ respective “behaviour” advances the debate on the Interim Licence Application greatly at least in the present case. However, I agree with InterDigital that it is clear from the way in which Lenovo puts its case that by far the most substantial benefit that they seek from the Interim Declaration is an effect in the German Proceedings. Shortly put, Lenovo hopes that, if the Interim Declaration is made, either (i) InterDigital will enter into an Interim Licence, in which case the German Proceedings would fall away since there could be no infringement of EP (DE) 420 since Lenovo will be licensed or (ii) the German courts would label InterDigital “unwilling” as a result of its refusal to enter into the Interim Licence, determined by the English court to be FRAND, in which case InterDigital will not obtain an injunction in Germany.

That is an explanation of the substantial benefit that Lenovo seeks from the Interim Declaration. I am in no position to assess whether the Interim Declaration would actually provide Lenovo with that benefit. First, as matters stand, it appears unlikely that InterDigital will enter into an Interim Licence given its position, examined below, that it is not FRAND even on an interim basis. Second, I am in no position to assess the weight that the German court would give to an Interim Declaration if made (see paragraph ‎24 above).

The debate considered in this section was directed at the points made in paragraphs ‎35.iv) and ‎35.v) above.

Lenovo argues that, by its Interim Licence Application it is seeking only an interim remedy and does not seek to prejudge the amount of royalty that is FRAND which is for the court to decide. If the court decides that a higher, or lower, royalty is ultimately payable than US$17.5 cents per unit, Lenovo accepts that there will have to be a “truing up” by reference to that final royalty.

InterDigital disagrees. Its first proposition is that Lenovo is seeking final relief because the court will never revisit the terms of Lenovo’s proposed Interim Licence. Instead, it will determine the terms of a FRAND final licence. In his oral submissions on behalf of InterDigital, Mr Chacksfield categorised the Interim Licence as a “final interim licence” rather than an “interim final licence” to illustrate the distinction he was making.

I do not, however, consider that this provides much of a guide as to whether the Interim Declaration should be made. Much interim relief is not revisited in the way Mr Chacksfield highlighted. Continuing with my example in paragraph ‎53, the terms of any interim injunction made against the employee will typically not be revisited at trial. If the employee breaches the terms of the interim injunction before trial, it will be no answer to say that the court decided to make no final injunction at trial. If the court considers that the interim injunction was too tightly drawn, it is unlikely to vary the interim injunction, but it will instead ensure that the final injunction is appropriately framed.

InterDigital had a further submission on this point, namely that even if the Interim Licence truly is “interim” in nature, it may have a final effect if, for example, it results in InterDigital failing to obtain an injunction in Germany. However, in my judgment, that does not make Lenovo’s application for relief “final”. The injunction considered in paragraph ‎53 may also have some final effect as it may mean that the employee loses an opportunity to enter into a contract with one of the customers on the list that never becomes available again. In my judgment, the way to deal with the allegation that an Interim Declaration would have a disproportionate and irreversible effect on the German Proceedings is as part of the process of weighing up balancing considerations that I have summarised in paragraph ‎35.vi) above.

The argument considered under this heading follows on from those in the previous section. InterDigital argues that, even if Lenovo is seeking “interim” relief either (i) it is not possible to determine that the Interim Licence is FRAND at the present interlocutory hearing or (ii) the court cannot be satisfied to the requisite standard that the Interim Licence is FRAND.

Lenovo’s approach relies on the proposition that rolling over the Cellular PLA and using that as the basis for the Interim Licence (including the royalty at US$17.5 cents per unit) will produce an outcome that the court can be satisfied, to the requisite degree of assurance, is FRAND. That argument is illustrated by Lenovo’s submission that, if US$17.5 cents per unit was a FRAND rate on 31 December 2023, the court can be suitably satisfied that it is a FRAND rate from 1 January 2024.

However, while the argument that not much can change in a single day is superficially attractive, it falls down on closer inspection. The Cellular PLA which Mellor J determined to be FRAND covered the period from 2007 to 2023. Therefore, the US$17.5 cents per unit figure was not simply a snapshot of the FRAND rate as at 31 December 2023. It was a blended rate that synthesised a FRAND royalty for the entirety of the period which Mellor J had divided into three separate sub-periods for the purpose of his analysis. As Mr Bond and Ms Mattis explain in their evidence (which has not been tested by cross-examination and which I therefore accept), between 2007 and 2023, the bulk of the relevant devices using the Cellular SEPs would have been 3G and 4G. From 1 January 2024, the devices in question will largely be 5G. Yet the US$17.5 cents per unit figure was calculated largely by reference to the “best comparable” that Mellor J could identify (see, for example, paragraph [611] of his judgment reported at [2023] EWHC 1583(Pat)) which was a licence concluded before the 5G standard was available.

In addition, the Interim Licence that Lenovo has proposed is a “running royalty” licence. Since it would result in InterDigital obtaining royalty payments at periodic intervals over the term of the licence, it would, as Ms Mattis explains in her witness statement result in InterDigital taking some risk on Lenovo’s future business and strategy generating sufficient income to pay the royalty. By contrast, if the Interim Licence provided for a lump sum royalty, InterDigital would not be running that risk. There is, therefore, a question as to whether a “running royalty” is FRAND.

Lenovo does not answer these points by putting forward valuation evidence as to the appropriate royalty rate for a licence of the Cellular SEPs beginning on 1 January 2024. Nor does it rely on evidence to counteract Ms Mattis’s point about the incremental risk that InterDigital face under a running royalty licence. Its position is that there is at least a “good arguable case” that the Interim Licence would be FRAND and that InterDigital remains free to make its arguments to the contrary at the substantive trial.

In my judgment, the approach reveals a flaw in the Interim Licence Application. The question whether the Interim Licence is, or is not, FRAND like the issues that Hamblen LJ considered in N v Royal Bank of Scotland plc referred to in paragraph ‎39 above, is really susceptible only to a final rather than a temporary answer. That follows from the sheer quantity of considerations that feed into the determination of what is FRAND. The figure of US$17.5 cents per unit might still be FRAND from 1 January 2024, but if it is, that would largely be a coincidence. On the basis of an assertion based on a presumption of continuity and without evidence, I do not have a high degree of assurance that this is a FRAND rate.

Lenovo relies heavily on what it submits to be the unattractive behaviour of InterDigital in seeking an injunction in Germany while proceedings are ongoing in England that will determine a global FRAND licence of Cellular SEPs. It argues that similar behaviour of Panasonic drew sharp criticism from Meade J in Panasonic v Xiaomi [2023] EWHC 2872 (Pat).

That prompted InterDigital to respond that the analogy with Panasonic v Xiaomi is imperfect. InterDigital emphasises that, unlike Panasonic, it has not brought proceedings in the English courts to determine a FRAND licence from 1 January 2024 onwards. Its position is that a FRAND licence should be determined either by arbitration or in Orange Book proceedings in Germany. It relies on the principles of the English court that I have set out in paragraph 13 above as indicating that a patentee typically has the right to control the courts in which infringement proceedings are brought and so where a FRAND defence is determined.

I respectfully agree with Meade J that patentees who seek injunctions overseas as part of a strategy to exact supra-FRAND rates should not expect that behaviour will go unnoticed when the English court exercises case management or other discretions. However, in the case before me, I do not need to decide whether InterDigital is doing this since the principles governing the making of interim declarations do not require an analysis of “behaviour” in the general sense. In saying this, I should not be taken as endorsing InterDigital’s attempts to seek injunctions, whether in Germany or elsewhere. I do entertain some concern that these actions may be part of an attempt to obtain supra-FRAND rates even though I make no finding to this effect.

Much of the argument on the Interim Licence Application addressed differences between the approaches the German courts and the English courts take to FRAND issues. I have set out, in some detail, the parties’ respective analyses of the German and English Proceedings. InterDigital at points in its argument suggested that Lenovo’s approach is based on an assertion that the German Proceedings are somehow “unfair” in the sense that they could result in Lenovo being subject to an injunction even though they are positively seeking to drive forward a FRAND determination in England. For my part, I did not understand Lenovo to be making a case based on “unfairness”. Even if it was, it would be quite wrong for me to express any views on the way the German courts choose to deal with FRAND matters: that is a matter entirely for them.

I do not need to make findings as to the general differences between the German approach and the English approach. I consider the finding in paragraph ‎29 to be significant as it serves as a guide to what is likely to happen in this case. Beyond that, I see no need for general findings as to differences between the proceedings. Nor do I need to decide whether InterDigital has the “right to choose” where a FRAND determination takes place since, given my conclusion in paragraph ‎29, it cannot have exercised such a right, even if it exists, as the German Proceedings will not result in a FRAND determination in this case.

I also consider InterDigital’s assertions as to the commercial disadvantages that it would suffer if the Interim Declaration is made. Ms Mattis explained in her witness statement that the Interim Declaration could lead to difficult or stalled negotiations with InterDigital’s licensees. She explains that, if the English court is seen as “confirming” a rate based on US$17.5 cents per unit as FRAND, other licensees will either insist on that rate or decline to conclude negotiations based on a higher rate until these proceedings conclude with determination of an actual FRAND rate. She says that this would result in either deferred or reduced revenue for InterDigital with a corresponding effect on its ability to fund research and development to grow its business.

Lenovo’s response is that InterDigital’s licensees will see any Interim Declaration for what it is, namely a purely interim determination of what a FRAND rate is. However, that does not deal with Ms Mattis’s point. She is concerned, not with whether licensees understand the Interim Declaration or not, but how they will behave in response to it. Ms Mattis’s evidence goes to commercial disadvantages that InterDigital could suffer if the Interim Declaration were made. That evidence is perfectly plausible and I accept it.

The analysis above leads me to the clear conclusion that the Interim Licence Application should be refused.

This is not one of those cases where the Interim Declaration can be analysed in terms similar to an interim injunction (see paragraph ‎53 above). I will not, therefore, proceed by analogy with American Cyanamid.

As I have explained in paragraph ‎72, I see real difficulties in determining on an interim basis that the Interim Licence is FRAND. I consider that question likely to be capable of determination only on a final basis. That in itself is a strong indication that the Interim Declaration should not be made.

Even if that objection can be overcome, I consider I should make the Interim Declaration only if I have a high degree of assurance that the Interim Licence is FRAND. I have explained why I do not have that high degree of assurance.

A consideration of the advantages and disadvantages of making the Interim Declaration also points against making it. Making the Interim Declaration would at most confer a slender benefit on Lenovo in the English Proceedings. The substantial benefit that Lenovo seeks from the Interim Declaration is the ability to influence the outcome of the German Proceedings. While I consider that InterDigital overstates matters in classifying the Interim Declaration as tantamount to an anti-suit injunction, I do not consider that it would be appropriate for the court to make the Interim Declaration for the substantial purpose of influencing the German Proceedings. I am reinforced in that view by my conclusions as to the commercial disbenefits that InterDigital would suffer if the Interim Declaration is made.

Even if I were wrong about that, and it would be appropriate for the court to make the Interim Declaration in order to give Lenovo assistance in the German Proceedings, given that the divided expert opinion that I have highlighted above, I cannot be satisfied that the effect Lenovo seeks would actually be obtained in Germany.

By the Stay Application, InterDigital seeks a stay of some, but not all, aspects of the English Proceedings pending resolution of the German Proceedings. InterDigital does not seek to stay those aspects of the English Proceedings that do not relate to Cellular SEPs since it accepts that those aspects do not overlap with the German Proceedings. As a consequence, it agrees that a proposed hearing in the English Proceedings to determine questions of jurisdiction should go ahead. In the English Proceedings, Lenovo has applied for expedition of the trial on FRAND matters. InterDigital considers that as a matter of principle, that application should be stayed. However, it argues that the practical significance of this is limited since existing case management directions mean that Lenovo’s application for expedition will be heard only after the questions of jurisdiction have been determined, by which time it is expected that the German Proceedings will have concluded and the stay expired.

In Conversant Wireless Licensing SARL v Huawei Technologies Co Ltd and others [2020] UKSC 37, the Supreme Court noted the English courts’ case management power to stay English proceedings where there are parallel proceedings in another jurisdiction raising similar or related issues between the same or related parties, where the earlier resolution of those issues in the foreign proceedings would better serve the interests of justice than by allowing the English proceedings to continue without a temporary stay. However, the Supreme Court noted that this would be justified only in “rare or compelling circumstances”.

I have concluded that there are no proceedings pending in Germany that will result in a court determining FRAND terms for Cellular SEPs before the English Proceedings conclude. Accordingly, the precondition for the exercise of the power described in Conversant is not present. Nor are such proceedings presently anticipated since, as matters stand, Lenovo is not prepared to enter into the licence that InterDigital proposes as part of its Orange Book offer and unless it does so, the jurisdiction of the German courts to determine an “equitable” royalty rate is not engaged.

There are likewise no current arbitration proceedings, nor are any arbitration proceedings contemplated since Lenovo has not accepted InterDigital’s offer of arbitration.

InterDigital clearly considers that Lenovo is being unreasonable in refusing to enter into such a licence or to engage with its Orange Book offer or to engage in arbitration. Proceedings such as this often involve parties alleging that the other is behaving unreasonably. I can understand why Lenovo is reluctant to accept wholesale InterDigital’s proposed licence as a precondition to an Orange Book process. InterDigital’s proposed licence does not include features that Lenovo considers desirable such as provision for general “patent peace” or a restriction on InterDigital continuing to seek injunctions. That said, I am not in a position to perform a full audit of both parties’ positions on the proposed Orange Book licence. However, I consider that I do not need to do so. The simple point is that there are no arbitration proceedings or court proceedings in Germany which I consider will determine a FRAND licence.

Nor do I consider that InterDigital’s proposed stay would achieve much in case management terms in any event. Many aspects of the English Proceedings would continue. Those aspects which InterDigital considers would be subject to the stay (such as the expedition application) look likely to arise for determination once the German Proceedings have concluded and the stay expired. Moreover, there is a clear risk that granting the stay would involve a refusal of Lenovo’s expedition application by default since InterDigital might say that with English Proceedings having been stayed, it has had insufficient preparation time to contest that application once questions of jurisdiction are resolved.

Finally, if I stay the English Proceedings, InterDigital might obtain an unintended benefit in the German Proceedings since it might be able to argue that, since there are no English Proceedings presently on foot, Lenovo cannot rely on their existence as part of their arguments on “willingness”.

In my judgment the balance falls firmly against allowing the Stay Application which is accordingly dismissed.

Both the Interim Licence Application and the Stay Application are refused.