BREAKING: Mr Justice Arnold finds Conversant patent infringed but invalid for added matter in Conversant v Huawei
The FRAND/SEP saga continues today with a UK High Court decision on the validity of Conversant's patent for 3G mobile phone technology. Mr Justice Arnold found that Conversant's patent is essential and infringed by Huawei and ZTE, but invalid for added matter: Conversant v Huawei [2019] EWHC 1687 (Pat).
For a background summary of the dispute see IPKat here. In short, the case relates to standard essential patents (SEP) patents and Fair Reasonable and Non-Discriminatory (FRAND) licences. SEPs are patents protecting a technology which its owner has declared to be essential to the implementation of one or more of the telecommunications standards. To prevent anti-competitive behavior, standard setting organisations require SEP holders to licence the technology on Fair Reasonable and Non-Discriminatory (FRAND) terms.
In Huawei v Conversant [2019] EWCA Civ 38 (IPKat post here), Conversant sued both Huawei and ZTE in the UK courts for infringement of, what it claimed, were its essential patents. Conversant sought an injunction, damages and a declaration that it had made FRAND offers to the defendants. Huawei and ZTE responded that the English courts did not have the jurisdiction in determining the terms of a global FRAND licence. The Court of Appeal found that the English courts did have jurisdiction to decide on the global licence terms, but could not force Huawei to enter into a global licence (but that they may face and injunction on the basis of the UK designation). The UK courts could, however, decide on the validity of the patent and whether Huawei infringed. Huawei and ZTE have been given permission to appeal this jurisdictional aspect of the dispute to the Supreme Court (the hearing is expected in October this year, see IPKat post here).
In the latest decision Mr Justice Arnold considered whether Conversant's European Patent (UK) (EP1797659) was essential, valid and infringed by Huawei and ZTE. Conversant argued the UK patent was essential to an aspect of the 3G Universal Mobile Telecommunications Standard ("UMTS"), Uplink DRX. Conversant also argued that Huawei and ZTE marketed mobile phones complying with the UMTS, and were therefore infringing the patent. Mr Justice Arnold accepted Conversant's arguments. The Judge agreed that Huawei was not infringing under a literal interpretation of the claims. Particularly, the claims did not cover Uplink DRX under a literal interpretation, but could be found to be essential and infringed under the doctrine of equivalents (Actavis) (para. 201).
Mr Justice Arnold then went on to consider whether the SEP was valid. Huawei and ZTE argued that the claims extended to subject matter that was not disclosed in the application as originally filed. Another recent High Court decision considered the issue of added matter in detail (Novartis v Dr Reddy's Laboratories [2019] EWHC 92 (Pat), IPKat post here). In the present case, Mr Justice Arnold considered five separate added matter arguments from Huawei and ZTE, the fourth of which hit home. Particularly, Mr Justice Arnold agreed with Huawei and ZTE that an amendment to claim 1 during prosecution added matter to the claim that was not disclosed in the patent application as originally filed.
Interestingly, the feature in the claim in question was also the feature relied on by Conversant for their equivalence argument for infringement. Huawei and ZTE argued that Conversant's position on equivalence undermined their case that the same feature was not added matter. In particular, Huawei and ZTE argued that Conversant's argument for equivalence effectively "erased" the limitation introduced into the claim during prosecution. However, Mr Justice Arnold did not agree:
Mr Justice Arnold then went on to consider obviousness and insufficiency attacks from Huawei and ZTE, but rejected each of these. The patent was therefore found to be essential and infringed, non-obvious, sufficiently disclosed, but invalid for added matter (para. 260).
Of course, if a patent is not valid, it can not be enforced against an infringing party and need not be licensed (FRAND or otherwise). This latest decision, if upheld in higher courts, would thus render the jurisdictional aspect of the dispute irrelevant, at least with regards to patent at issue in this case. It therefore seems likely that Conversant will seek to appeal this latest UK High Court decision. However there is another technical trial coming in a few months time - that will likely be more telling about the strategy of the parties. The dispute, already in its 5th year, thus looks ready to continue for some time to come.
For a background summary of the dispute see IPKat here. In short, the case relates to standard essential patents (SEP) patents and Fair Reasonable and Non-Discriminatory (FRAND) licences. SEPs are patents protecting a technology which its owner has declared to be essential to the implementation of one or more of the telecommunications standards. To prevent anti-competitive behavior, standard setting organisations require SEP holders to licence the technology on Fair Reasonable and Non-Discriminatory (FRAND) terms.
In Huawei v Conversant [2019] EWCA Civ 38 (IPKat post here), Conversant sued both Huawei and ZTE in the UK courts for infringement of, what it claimed, were its essential patents. Conversant sought an injunction, damages and a declaration that it had made FRAND offers to the defendants. Huawei and ZTE responded that the English courts did not have the jurisdiction in determining the terms of a global FRAND licence. The Court of Appeal found that the English courts did have jurisdiction to decide on the global licence terms, but could not force Huawei to enter into a global licence (but that they may face and injunction on the basis of the UK designation). The UK courts could, however, decide on the validity of the patent and whether Huawei infringed. Huawei and ZTE have been given permission to appeal this jurisdictional aspect of the dispute to the Supreme Court (the hearing is expected in October this year, see IPKat post here).
In the latest decision Mr Justice Arnold considered whether Conversant's European Patent (UK) (EP1797659) was essential, valid and infringed by Huawei and ZTE. Conversant argued the UK patent was essential to an aspect of the 3G Universal Mobile Telecommunications Standard ("UMTS"), Uplink DRX. Conversant also argued that Huawei and ZTE marketed mobile phones complying with the UMTS, and were therefore infringing the patent. Mr Justice Arnold accepted Conversant's arguments. The Judge agreed that Huawei was not infringing under a literal interpretation of the claims. Particularly, the claims did not cover Uplink DRX under a literal interpretation, but could be found to be essential and infringed under the doctrine of equivalents (Actavis) (para. 201).
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Interestingly, the feature in the claim in question was also the feature relied on by Conversant for their equivalence argument for infringement. Huawei and ZTE argued that Conversant's position on equivalence undermined their case that the same feature was not added matter. In particular, Huawei and ZTE argued that Conversant's argument for equivalence effectively "erased" the limitation introduced into the claim during prosecution. However, Mr Justice Arnold did not agree:
In my judgment, however, this argument is misconceived, since it is an argument about the scope of protection, and not about disclosure. Infringement by equivalence cannot give rise to an added matter objection.None-the-less, Mr Justice Arnold found that the amendment of the claim during prosecution had introduced matter that was not disclosed in the application as originally filed, and that the claims were therefore invalid (para. 226).
Mr Justice Arnold then went on to consider obviousness and insufficiency attacks from Huawei and ZTE, but rejected each of these. The patent was therefore found to be essential and infringed, non-obvious, sufficiently disclosed, but invalid for added matter (para. 260).
Of course, if a patent is not valid, it can not be enforced against an infringing party and need not be licensed (FRAND or otherwise). This latest decision, if upheld in higher courts, would thus render the jurisdictional aspect of the dispute irrelevant, at least with regards to patent at issue in this case. It therefore seems likely that Conversant will seek to appeal this latest UK High Court decision. However there is another technical trial coming in a few months time - that will likely be more telling about the strategy of the parties. The dispute, already in its 5th year, thus looks ready to continue for some time to come.
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