Is the new world order of the English Supreme Court sustainable?

Kat friend Dr. Roya Ghafele offers some interesting observations on the landmark decision in Unwired Planet vs Huawei and Conversant vs Huawei and ZTE regarding the issue of forum non conveniens.

As reported by IPKat, the Supreme Courts of England and Wales issued a landmark decision in the case of Unwired Planet vs Huawei and Conversant vs Huawei and ZTE. The cases address how to deal with international portfolios of standard essential patents and how to order the commercial relations between multinational technology companies. Apart from shedding further clarity on FRAND, a topic which deserves in and by itself further analysis, the Supreme Court offered its take on the ‘forum non conveniens’ doctrine.

In particular, the Court confirmed that the U.K. is the appropriate forum for setting a FRAND rate. The Court justified its decision by arguing that the Chinese courts had not made a relevant claim and that, in the Court’s view, a global FRAND rate is a market practice. This is an interesting take, particularly as the defendants to the Conversant case did not consent to having England and Wales rule over the case. The fact that the parties had only a minor commercial stake in the U.K. and also had only minor exposure to the British patent system was equally dismissed by the Court.

In this brief commentary, I look at these arguments from a historical perspective and explain why in my view the Supreme Court’s take on the forum non conveniens doctrine offers an unsatisfactory governance structure for global technology. My arguments are not rooted in law, but stem from an international relations perspective.

A Historical Take on the Forum Non Conveniens Doctrine

The forum non conveniens doctrine is rooted in Scottish law. It argues that there can be at least two fora. As such, it gives the court discretionary power to decline existing jurisdiction. Under this doctrine, the plaintiff has the burden of proof and needs to prove that her forum is the convenient one.

In Sim v. Robinow (1892 Sess. Cas. 665 (Scot. 1st Div.), Lord Kinnear laid the foundation for Scotland's application of the forum non conveniens doctrine: The plea [for staying proceedings on the ground of forum non conveniens] can never be sustained unless the court is satisfied that there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all the parties and for the ends of justice.

Scottish law created the doctrine to balance undue hardship arising out of arrestment ad fundandam jurisdiction, which existed when Scotland attached and seized foreign assets in order to force foreigners into Scottish courts. The forum non conveniens doctrine traveled from Scotland to England and, as a consequence of the English expansion, then to America. The application of the doctrine is, for example, documented in the early 19th century U.S. case law (see for example Gardner v. Thomas, 14 Johns. 134 (N.Y. Sup. Ct. 1817).

In an article from the 1990’s, Alexander Reus stated that the doctrine lends itself to counter imperialism: ‘No longer are courts eager to export the "superior" English judicial system by conducting trials with foreign parties.' To the contrary, English courts began to guard against forum shopping by foreign parties by following the U.S. example. The courts explained their change of attitude as a departure from ‘judicial chauvinism’ to ‘judicial comity.’ Whether the UK Supreme Court’s decision will change this course of action remains to be seen. I wonder how many companies in developing countries would seek recourse to local courts and ask that their country be the convenient forum for a patent dispute.

The UK Supreme Court rightly recognizes the inherent tensions that prevail between the increasing internationalization of economic activity and a patent law that is inherently national in character. It is, however, not the first to acknowledge that such tensions are difficult to manage. The borderless world poses challenges that the existing legal architecture is yet to come to grips with.

The TRIPS Agreement of the World Trade Organization strived to find a multilateral solution for the international IP community. In doing so, the WTO was heavily criticised by the anti-globalization movement. I myself recall an emergency evacuation from WTO’s building in Geneva because WTO staff feared the ramifications of protesters. (This was at the time of the Chinese accession to the WTO. My passport was kept for a full week in the WTO building and I could not fly home.)

One may criticise the TRIPS agreement for many things, but at the very least, it is an agreement that is widely known and that offers a multilateral framework. The Supreme Court decision is, however, far less understood beyond expert circles and I doubt that the general public will be able to grasp its full meaning. This lack of awareness should be of concern.

The inherent dilemma the English courts face is that they have no international mandate. This is problematic in many respects. For one, it is not up to one single country to set a global governance structure for FRAND rates. History offers many examples that hegemonic aspirations do not last forever. Even the UK was not able to keep its colonies. Against this background, I am doubtful that the newly designed British concept of an order for standard essential patents will last for long. I await with interest the reactions of other major forces in the international standard essential patent space.

Picture by Bjarki S and is made available under the Creative Commons CC0 1.0 Universal Public Domain Dedication.

Is the new world order of the English Supreme Court sustainable? Is the new world order of the English Supreme Court sustainable? Reviewed by Neil Wilkof on Friday, August 28, 2020 Rating: 5


  1. I fully agree with Dr. Roya Ghafele and disagree strongly with Catnic in its comment in the first blog publication of IPKat about the UKSC decision that it “is an elegantly pragmatic solution”.

    This decision from UKSC is a clear an attempt to encourage forum shopping to English Courts, as now UK has definitely explained that it will not participate to the UPC. That English courts have no international mandate is abundantly clear.

    The UKSC has well stated that Chinese courts “would not embark on the exercise”, and the corresponding argument was “no more than speculative”. This shows at least a certain arrogance. What if other jurisdictions claim the same? Then the mess will be perfect.

    How a jurisdiction in a country which has left the EU can takes the right to decide for the EU. I would not be surprised if the CJEU would have something to say about this.

  2. The thesis of this post is not clear to me, and as might be expected, I strongly disagree with Attentive Observer.

    The effect of the UKSC decision is not to set the UK courts up as some kind of monopoly global arbiter. The decision itself is very clear on the fact. See for example paragraphs 66 and 67;

    66. We turn to the submission (para 52 above) that the English courts are out of step with foreign courts in requiring an implementer to enter into a global licence in order to avoid an injunction for infringement of a national patent and in being prepared to determine the disputed terms of a global FRAND licence. Huawei suggests that the English courts are uniquely setting themselves up as a de facto global licensing tribunal.
    67. We are not persuaded by this submission. The Court of Appeal in the Unwired case (paras 59-74) analysed the cases which the parties had presented to the court and concluded that they did not support the contention that Birss J’s approach lost sight of the territorial nature of patents and did not accord with the approach taken in other jurisdictions. We agree. We recognise that Birss J has gone further than other courts have done thus far in his willingness to determine the terms of a FRAND licence which the parties could not agree, but that does not involve any difference in principle from the approach of courts in other jurisdictions. Otherwise his approach is consistent with several judgments in other jurisdictions, which, as this is a developing area of jurisprudence, we now examine briefly. The principles stated in those judgments contemplate that, in an appropriate case, the courts in the relevant jurisdictions would determine the terms of a global FRAND licence.

    In other words, the UK courts are the first to deal with this problem, but any other court with jurisdiction would be able to take the same approach.

    The sections from which AO selectively quotes are not dismissive of the Chinese courts' right or ability to make this decision, but are considering the actual state of present litigation in China. Again, they do not represent any claim to exclusivity.

    The post above makes exactly the same, misleading, claim as AO. The UKSC did not "[confirm] that the U.K. is the appropriate forum for setting a FRAND rate", the UKSC said that the UK is an appropriate forum for resolving this and similar disputes. The colonialism comments in the last paragraph are entirely inappropriate.

    If the UKSC decision has raised a broader issue, it is in the failure of SSOs or the WTO to anticipate the problem of such disputes or provide a suitable forum. The UKSC has stepped into this space, for better or worse. But it has not planted a flag or claimed territory, and to say otherwise is a deliberate miscasting of the facts of the decision.

  3. Dear C,

    It is no surprise to me that you disagree with the blog and with myself. I would then say we should at least agree that we disagree.

    The last § of the blog makes one thing abundantly clear: English courts have no international mandate and it is not up to one single country to set a global governance structure for FRAND rates.

    But that is exactly what has been done here, and your reply is mainly playing with words. I can agree with you that the UK courts are the first to deal with this problem, but any other court with jurisdiction would be in a position to take the same approach.

    And what would be the net result of this? An absolute mess! Other courts could come to different solutions, notably on the level of fees due.

    Whether you like it or not, by this decision UK courts assume extra-territorial power. That the UK courts are a reasonable forum to resolve SEP disputes when there is a UK right is not at stake here, but they should limit themselves to their territory and not try to decide for the whole world.

    Even if one considers that UK courts are AN appropriate forum for resolving this and similar disputes, it boils down that by pushing forward in the matter it has been done here, the whole exercise can be seen as to encourage forum shopping for UK courts in matter of SEP/FRAND disputes.

    In time of Brexit how can a UK court think it has the right to decide what is the licence level applicable within the EU? That is what the decision boils down to, and I would like to know what you think about this point.

    Even if the decision is global, how will you enforce it? Brussels 2 is not any longer available, and Lugano should be revived for the UK.

    I can well see that some manufacturers will simply avoid the UK market, which is quite modest compared to the global telecom market. What will then be the gain for the British consumer? And then there will be no increase of SEP/FRAND litigation in UK! Brexit will not help at all, and in spite of all the announcements, the country will not benefit from it, but this is another story.

    The colonialism comments in the last paragraph is not inappropriate. By pushing forward as they have done UK courts can easily be considered as a vector for neo-colonialism. On the basis of a (modest) territorial right, UK courts want to decide what is good for other countries. If this is not a form of colonialism, then I do not know what should be understood under this denomination.

    The funny thing is that although Huawei will be banned from the UK market for supplying 5G equipment, I have read somewhere, sorry I do not remember where, that Huawei is the largest SEP holder for the 5G technology! Tit for tat is on the doorstep.

    The whole problem of SEP/FRAND litigation should be tackled from another side. The whole discussions about SEP/FRAND licensing should be transferred not to a single jurisdiction or even a plurality of jurisdictions, but to standard setting organisations.

    ETSI members should wake up and give the whole business of SEP/FRAND to the organisation itself. I could well imagine a kind of clearing house within ETSI.

    But then courts will not have a lot to say, and they will not like it. Everything possible will be made to avoid loss of jobs for courts and lawyers.

  4. Dear AO,

    It seems we actually agree on rather more than you think.

    - A SEP/FRAND resolution process is something that should be considered or handled by an SSO, but currently is not.
    - There are going to be disputes about the terms of FRAND licences, and in the absence of any central authority, a court somewhere is going to have to handle the disputes.

    Where we diverge is that - and I hope I'm not misrepresenting you here - is that you think that FRAND disputes should be resolved on a country-by-country basis. There's no ambiguity about jurisdiction: each court resolves the licence terms in its own country.

    However, this leads directly to the problem you say will follow a global FRAND licence determination, an absolute mess. "And what would be the net result of this? An absolute mess! Other courts could come to different solutions, notably on the level of fees due." The SEP system breaks down into a mess of country-by-country litigation and divergent licence agreements. Honestly, a law firm looking for lucrative business would be far happier with your solution, all those expensive separate actions to fight.

    The idea of SEPs being licensed as global portfolios is precisely to avoid this kind of splintering to the benefit of SEP holders and implementers, and the UKSC decision respects the intention and practice of ETSI.

    Ironically, a simple solution would be for the SSOs to designate a court that hears disputes. It is absolutely normal and standard for international contracts to explicitly state which jurisdiction's laws and courts govern the agreement. Pick Switzerland or the Netherlands or anywhere really, make this a part of the SSO/SEP agreement, and the whole problem goes away. (See, I said it was basically a contractual issue).

  5. Dear C.

    I can confirm that you are not so far away as it looks at a glance.
    It confirms however my plea for the matter to be handled by SSO.
    They can decide whether a patent is indeed a SEP, and your proposal in deciding for a court in case of disputes is a good one.

    I am just wondering if UK courts are the right forum, mainly due to the fact that the UK market is relatively modest compared to the world market.

    It might well turn up that the decision might become a a Pyrhuss-style victory for this reason.

    I would like to draw your attention to an article from IAM published today in Lexology:

    An interesting read!

    UK is not any longer in the EU and other jurisdictions within the EU might want to take over. I think here of Germany. here is a further link to Lexology:

    But we are living in interesting times!


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