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When will a patent be "standards essential"? Court of Appeal confirms there's more than one way to skin a RAT

01/12/2021

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United Kingdom

The English Court of Appeal has reversed a decision by the Patents Court that a patent relating to radio access technologies (RATs) was "standards essential" and therefore infringed by Apple. The decision underlines how different evidence in different cases can lead judges to come to different decisions on the same "essential" question.

Background
 
This is the latest in a spate of cases relating to Standard Essential Patents (SEPs) in the mobile telecoms sector. As we explained in our blog on the Supreme Court's decision in Unwired Planet v Huawei (FRANDS for the memories – Supreme Court brings Unwired Planet v Huawei to a close | Fieldfisher), SEPs are patents that protect an invention/technology, the use of which is essential in order to implement a specific agreed industry standard. Therefore, competitors producing a product which complies with the relevant industry standard (in this case in the mobile telecommunications sector) will necessarily infringe the SEP.  Holders of SEPs therefore undertake to the relevant standard-setting bodies to offer licences on a FRAND (fair, reasonable and non-discriminatory) basis.
 
The international standards in question are those set by the European Telecommunications Standards Institute (ETSI). ETSI requires its members to declare any patents which might be used in a telecommunications industry standard. Under its IPR Policy, the SEP owner has to give an irrevocable undertaking to license their patented technology on FRAND terms. ETSI does not check the validity of information supplied to it by its members, or the relevance of the identified patents, and is unable to confirm whether they are, in fact, essential.
 
When there is a dispute over whether a patent is in fact essential, the matter is therefore left to the courts to decide. In its latest ruling on this issue (Optis Cellular Technology LLC & Ors v Apple Retail UK Ltd & Ors [2021] EWCA Civ 1619 (10 November 2021)) the Court of Appeal has emphasised again just how dependent this question of "essentiality" is on the factual evidence before the court.
 

Key facts
 
In this case, the claimants (Optis) were the owners of a UK patent concerning the handover of information between second generation (2G/GSM) phones and third generation (3G/UMTS) phones. Optis contended that the patent in question was: (i) valid; and (ii) essential to international standard 3GPP TS 45.008 concerning GSM. If these factors could be made out, there was no dispute on the issue of infringement – it was agreed that Apple would have infringed.
 
Interestingly these questions had already received judicial attention as part of the Unwired Planet v Huawei decision, mentioned above. In that case, Birss J (as he was then) had concluded that the patent was both valid and essential. It is therefore perhaps not entirely surprising that when asked to revisit these issues in the first instance case ([2020] EWHC 2746 (Pat)), Birss J again came to the same conclusion (i.e. that the patent was both valid and essential).
 
On the question of "essentiality" the judge was convinced that the international standard established a process for handing over information from one type of RAT to the other which involved conversion of a UMTS measurement into a form (i) comparable with a GSM measurement and (ii) expressed in a GSM measurement format. As both these functions were covered by Optis' patent, Birss J held that the patent was "standard essential" and Apple were therefore infringing.
 
Court of Appeal's ruling
 
On appeal, however, the Court of Appeal disagreed with that conclusion. Whilst rejecting the appeal on the issue of validity, Arnold LJ (giving the leading judgment) found that Birss J's finding of fact regarding the comparability of the UMTS and GSM measurements had relied on some flawed reasoning, and that here the judge "fell into error".
 
In particular, the Court of Appeal rejected the finding that the UMTS values were directly comparable with the GSM values prior to the application of certain offsets. Whereas Birss J seemed to accept that "comparability exists regardless of the values of the offsets", Arnold LJ preferred the position that (prior to the application of the offsets) the values may have been comparable or they may not.
 
Optis tried to contest this conclusion by advancing three arguments. However all were rejected by the Court of Appeal:

  1. First, Optis tried to suggest that comparability before application of the offsets could be inferred from evidence that one of the functions of these offsets was to facilitate prioritisation between different RATs. However, since this was not the only function of the offsets, Arnold LJ disagreed that this inference could be drawn.

  2. Secondly, Optis tried to rely on the constant 5 dBm difference between two of the types of values (the RXLEV and RSCP values) prior to being offset. Again, Arnold LJ rejected this, preferring the position that the values "are not comparable if they are only comparable when the offsets are set to zero".

  3. Finally, Optis tried to argue that the network used values prior to the application of the offsets in certain circumstances, implying that they must be sufficiently comparable to "enable at least a rough-and ready comparison". However, again, Arnold LJ rejected this: as Birss J had made no findings as to what the network did with the reported values, and this had not been explored in the evidence.

Consequently, the Court of Appeal concluded that Optis had failed to demonstrate the conversion process covered by the patent was essential to the methodology set out in the international standard, and there was therefore no infringement by Apple. 

Key takeaways
 
This case underlines just how sensitive the question of "essentiality" is to the detail of the factual evidence.
 
Although Arnold LJ seemed to be convinced by the argument that "… Apple were probably correct to contend at trial that it is the application of the offsets that make the values comparable", he was also quick to emphasise that it was "not necessary to reach a conclusion on this point". As such, the case was decided not on the basis that the offsets were required in order to make the values comparable; but rather only that Optis had failed to sufficiently demonstrate that these offsets were not required.
 
As is so often the case in litigation, one is therefore left only to speculate how things might have been different if Optis had been able to adduce evidence as to how the values were used by the network at first instance.
 
The case is therefore an important reminder to litigants of just how important factual evidence can be in these matters.
 
With special thanks to James Russell, Trainee, co-author of this blog.
 

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