Posted: April 20th, 2021
(1) Vestel Elektronik Sanayi Ve Ticaret A.S. (2) Vestel UK Limited v (1) Access Advance LLC (2) Koninklijke Philips N.V. , 26 March 2021, Court of Appeal, UK, Case No. A3/2020/0019
The UK Court of Appeal (“CofA”) dismissed an appeal by Vestel against the decision that the UK Court had no jurisdiction to hear Vestel’s claim.
Vestel (an implementer who manufactures and sells televisions) had originally brought a UK action against a patent pool (Access Advance) and Philips, seeking a global licence to use their H.265 (HEVC) video compression standard essential patents on Fair, Reasonable and Non-Discriminatory (FRAND) terms. Vestel had pleaded its original case on the basis that Access Advance and Philips had abused their dominant market positions by refusing to licence on FRAND terms. However, the UK High Court found that Vestel’s claim had failed to satisfy the requirements to establish jurisdiction for claims relating to foreign defendants which were based in matters of tort or property – specifically, they had not demonstrated that any damage would be suffered in the UK or that the subject matter was wholly or principally related to UK property.
By the time of the appeal, Vestel had amended its case such that:
(i) the FRAND terms in issue related to a licence of the UK patents;
(ii) the pleading relating to abuse of dominant position had been dropped;
(iii) a new argument was raised that the relevant tort for jurisdiction requirements was patent infringement; and
(iv) the court’s inherent jurisdiction to grant declarations was used as a new legal basis for Vestel’s claim.
The CofA allowed the associated amendments, noting that the two new points raised were both pure points of law and caused no prejudice because the pre-existing facts and evidence applied.
In spite of the amendments, the CofA held that Vestel had still not satisfied the requirements to establish jurisdiction. While the tort requirements would have been satisfied by a claim for a declaration of non-liability in tort, the FRAND licence declarations sought by Vestel were not found to be part of a claim for a declaration of non-infringement of patents – Vestel had not pleaded any case showing a legal right to a FRAND licence.
Similarly, the requirement to establish jurisdiction for property claims was not satisfied because Vestel had not identified a legal claim which gave it any right to the FRAND licence declarations sought (although the CofA did find that, had such a legal claim existed, the narrowing of the subject matter to UK patents would have met the jurisdiction requirement – even where the resulting FRAND licence involved licensing a much larger proportion of foreign patents). The attempt to invoke the court’s inherent declaratory jurisdiction would not assist in the absence of any legal claim or standard against which to judge the matter. There is no such thing as a free-standing FRAND claim.
A copy of the judgment (in English) can be read here.
Headnote: John de Rohan-Truba, Marks & Clerk Law LLP