March 31, 2025
As a leading innovator and contributor to standards-development organizations, Ericsson made a contractual commitment under the ETSI IPR Policy: that it would be prepared to grant licenses under its standards essential patents on FRAND terms and conditions. This commitment has facilitated hundreds of license agreements to Ericsson’s cellular essential patent portfolio, usually without litigation. And Ericsson lived up to its commitment in negotiations with Lenovo.
Ericsson thanks ETSI for its attention to this matter and for requesting Ericsson’s position, which explains how:
- Ericsson complied with the ETSI IPR Policy by making a FRAND-compliant offer in October 2023;
- Ericsson committed to a FRAND adjudication in North Carolina (Lenovo’s U.S. headquarters) or to binding arbitration. But Lenovo let Ericsson’s arbitration offer expire without response and refused to accept Ericsson’s offer, even if adjudicated FRAND;
- National courts are capable of determining whether Ericsson complied with its FRAND commitment when adjudicating Lenovo’s patent infringement within their borders. And, though Lenovo has raised FRAND defenses in these jurisdictions, they are failing after full trials on the merits because Ericsson’s offer is “clearly” FRAND;
- Faced with rejections of its FRAND defenses on the merits, Lenovo used its second-filed case in its preferred forum (the UK) to request an “interim license” declaration—which targeted all Ericsson patents, including non-standard essential, implementation patents—in an attempt to stop Ericsson’s ability to proceed with litigation outside the UK;
- Though the UK appellate court stated that Ericsson did not have to grant Lenovo this “interim license,” it also concluded that Ericsson would be considered an unwilling licensor in the eyes of the UK court for not granting it. Ericsson respectfully believes this opinion is factually and legally flawed for several reasons, including because the ETSI IPR Policy does not consider or require “interim licenses” and because an implementer does not get to select the sole venue for adjudicating a patent holder’s global rights; and
- The “interim license” order did not analyze and does not change the fact that Ericsson’s October 2023 offer—still available for Lenovo to accept—is FRAND-compliant.
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After 15 years of unproductive negotiations, Ericsson made Lenovo another standard essential patent cross-license offer in October 2023. Ericsson’s offer was plainly FRAND because it was a 5G offer at a 4G price: Ericsson asked Lenovo to pay the exact same rate for 5G that a U.S. judge, jury, and appellate court concluded was FRAND for Ericsson’s older 4G technology. Ericsson’s offer to Lenovo also reflected a discount from Ericsson’s public 5G price disclosure, announced to the whole industry via the ETSI website before the 5G standard was finalized. And Ericsson did not shy away from subjecting its offer to further scrutiny. Ericsson proactively went to Lenovo’s U.S. headquarters in North Carolina and asked a federal court there to declare Ericsson’s offer compliant with FRAND, or—if it was not—to determine what rate would be FRAND-compliant. Ericsson even proposed a December 2024 trial date and agreed to forgo appeal to expedite resolution. Ericsson alternatively proposed neutral arbitration and gave Lenovo 30 days to engage with this arbitration offer.
Lenovo did not meaningfully engage. Lenovo insisted that it still had the right to reject Ericsson’s October 2023 offer, even if the North Carolina court proceeding confirmed it was FRAND-compliant. And Lenovo let Ericsson’s arbitration proposal expire without comment. Instead, Lenovo chose to initiate a second-filed action in the UK, a jurisdiction that accounts for about 1% of Lenovo’s global smartphone sales.
Since Lenovo continued to use Ericsson’s patents in its major markets, Ericsson went to those national tribunals for recourse in accordance with their laws. Lenovo has been active in raising FRAND-related defenses in those proceedings, as is its right. But the facts support Ericsson. For instance, the U.S. Office of Unfair Import Investigations—a neutral third party representing the U.S. public interest—concluded after a 6-day evidentiary trial that Ericsson’s October 2023 offer is “clearly” FRAND, that Ericsson did not engage in hold up, that Lenovo delayed negotiations, and that exclusion of Lenovo’s infringing phones was appropriate.
Rather than accept that its FRAND defenses were failing on the merits, Lenovo sought to stop Ericsson’s ability to proceed with patent infringement actions at all. Lenovo turned to its second-filed UK action and asked the UK court to declare the terms of an “interim license” and declare that a willing licensor must agree to offer those terms to Lenovo. Lenovo’s requested “interim license” also covered more than just Ericsson’s standard essential patents: it targeted Ericsson’s non-standard essential, non-FRAND encumbered implementation patents. In other words, Lenovo asked the UK courts to declare that a willing licensor must agree to a global antisuit injunction—on all patents in its portfolio—that only allowed for litigation to proceed in the UK.
The first-instance court in the UK denied Lenovo’s request. Yet the UK appellate court reversed, advising Ericsson to grant Lenovo this “interim license” (though not ordering it to do so) and holding that if Ericsson was unwilling to do so, it was an unwilling licensor in the eyes of the UK court. Though Ericsson is seeking to appeal this ruling to the UK Supreme Court, Ericsson respectfully submits that there are several reasons why the UK appellate court’s opinion erred.
First, the UK’s advisory “interim license” covers implementation patents that are not standard essential and not declared to ETSI. Yet there is no legal mechanism in the ETSI IPR Policy or otherwise to force Ericsson to grant rights to those patents. Ericsson cannot be in breach of the Policy for refusing to grant a license—“interim” or otherwise—to its implementation patents. Nor does the ETSI IPR Policy mention or require “interim licenses” generally, and certainly not as a vehicle to block parallel judgments that are proceeding faster on the merits.
Second, there is no question that Ericsson is prepared to grant Lenovo a license under its standard essential patents on FRAND terms. This is evident from (i) Ericsson’s financial offer, which is based on final court adjudications of Ericsson’s FRAND rate, (ii) the U.S. Office of Unfair Import Investigations’ conclusion after a 6-day evidentiary trial that Ericsson’s October 2023 offer is “clearly” FRAND, and (iii) Ericsson’s decision to keep its offer open for Lenovo to accept while Ericsson’s legal actions proceed.
Yet in reaching its conclusion on this “interim license,” the UK court made no analysis of Ericsson’s offer or whether Ericsson was already prepared to grant an essential patent license on FRAND terms. Nor was there analysis of whether the “interim license” terms are FRAND compliant. Instead, the monetary terms of the “interim license” declaration were made by splitting the difference between two numbers provided by Lenovo’s UK counsel. And even if Ericsson were to offer Lenovo this proposed “interim license,” the contingent nature of its royalty payment means that Ericsson cannot book revenue until after a final judgment, which could take years after all appeals are done.
Finally, the practical effect of the “interim license” declaration is to either (i) force Ericsson to dismiss all pending litigation and commit to having all disputes resolved by Lenovo’s preferred forum, or (ii) be branded an unwilling licensor in the eyes of the UK court. But Ericsson cannot and should not be required to have all disputes decided by a single venue of Lenovo’s choosing. In the actions that Ericsson initiated, Lenovo can and has raised FRAND-related defenses. It is now for each court to decide what remedies are appropriate to combat Lenovo’s adjudicated infringement of patents within those countries’ borders consistent with Ericsson’s FRAND commitment. As courts have held regarding implementer-requested antisuit injunctions, it is a gross violation of fundamental rights for one court in one jurisdiction to seek to prevent patent holders from pursuing their legal rights before courts in other jurisdictions. That, however, is how Lenovo is trying to use the “interim license” declaration.
Indeed, allowing an implementer to select the sole venue for adjudicating a patent holder’s global rights will produce a classic race to the bottom that will disrupt ETSI’s cycle of innovation. Implementers will be incentivized to select jurisdictions for interim licenses and global FRAND determinations that they perceive will favor them most, either by awarding the lowest FRAND determinations, delaying such determinations the longest, or being willing to declare a patent holder an unwilling licensor for litigating outside that forum. Implementers will select these jurisdictions regardless of the connection those jurisdictions have to the dispute—just as Lenovo selected a jurisdiction that accounts for only 1% of Lenovo’s smartphone sales.
Lenovo is not the first implementer attempting to force all litigation to take place in its preferred forum (e.g., as others tried using Wuhan antisuit injunctions), and it will certainly not be the last. But the ETSI IPR Policy does not include a forum-selection clause imposing one venue above all others for a global FRAND determination, much less requiring essential patent owners to accept the one venue that an implementer prefers. And though Lenovo invokes Article 8.2, that is meant to address situations like negative declarations or a desire to keep standardized technology proprietary—not to resolve disputes over whether certain license terms are FRAND-compliant.
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Ericsson made a FRAND-compliant offer to Lenovo more than a year ago—an offer still on the table for Lenovo to accept. Ericsson’s FRAND compliance has been and will be evaluated in all jurisdictions where Ericsson has asserted its patents, and Ericsson is confident that it will succeed in showing that it is prepared to grant licenses on FRAND terms as the ETSI IPR Policy requires. Of course, Ericsson is willing to participate in a tripartite meeting with ETSI and Lenovo should it be helpful.