BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
Rolls Building, Fetter Lane, London, EC4A 1NL
B e f o r e :
| (1) APPLE RETAIL UK LIMITED
(2) APPLE DISTRIBUTION INTERNATIONAL
(3) APPLE OPERATIONS EUROPE
(4) APPLE GMBH
(5) APPLE RETAIL GERMANY B.V. & CO. KG
(6) APPLE INC
- and –
|(1) QUALCOMM (UK) LIMITED
(2) QUALCOMM INCORPORATED
Mark Howard QC, James Flynn QC, Nicholas Saunders QC & Gerard Rothschild (instructed by Quinn Emanuel Urquhart & Sullivan LLP) for the Defendants
Hearing dates: 27 & 28 March 2018
Crown Copyright ©
The Hon Mr Justice Morgan:
The parties to these proceedings
The procedural history
The claim against the First Defendant
The claims against the Second Defendant
Strike out and/or summary judgment for the First Defendant
"It is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better."
"That was not a case where the point of law was a difficult one. Lord Porter said, at p 341, that "when the various Acts and provisions are collated the answer is clear". Consequently the observations of the members of the Appellate Committee are obiter, but although they do not all put it in the same way, the overall effect of the decision is that if the question is whether the claim against D1 is bound to fail on a question of law it should be decided on the application for permission to serve D2 (or on the application to discharge the order granting permission), but not where there is an exceptionally difficult and doubtful point of law: Lord Porter, at p 341, and cf, at p 338 per Lord Porter; Lord du Parcq, at p 351. Contrast Lord Simonds, at p 348: "the court should not easily be deterred by any apparent difficulty or complexity of subject matter from considering and, if it can do so at that stage, forming an opinion on the question whether the action is bound to fail against the defendants within the jurisdiction." "
"83 … Standards exist so that different manufacturers can produce equipment which is interoperable with the result that the manufacturers compete with one another. So the phone makers compete in the market for phones and the public can select a phone from any supplier and be sure (for example) that if it is a 4G phone, it will work with any 4G network. As a society we want the best, most up to date technology to be incorporated into the latest standards and that will involve incorporating patented inventions. While the inventor must be entitled to a fair return for the use of their invention, in order for the standard to permit interoperability the inventor must not be able to prevent others from using the patented invention incorporated in the standard as long as implementers take an appropriate licence and pay a fair royalty. In this way a balance is struck, in the public interest, between the inventor and the implementers. The appropriate licence is one which is fair, reasonable and non-discriminatory. That way a standard can safely incorporate the invention claimed in a patent without giving the inventor or his successors in title unwarranted power over those who implement the standard. Thus the public interest is served because telecommunication standards can be set using the best and most up-to-date technical expedients available and the inventor's private interest is served because the FRAND undertaking ensures they or their successors will obtain a fair reward for their invention.
84 Telecommunications standards worldwide are formulated and set by SSOs (Standards Setting Organisations). In Europe the relevant SSO is ETSI. SSOs require the holders of patents which are essential to the standards to give an undertaking to license on FRAND terms if they wish to participate in standard setting.
85 In ETSI this process is based on its Directives which include Rules of Procedure and a Guide to IPRs. Within the Directives, as an annex to the Guide to IPRs, is an IPR Policy. The policy and the rules have been adjusted over time but none of the issues before me turn on any differences. Article 4.1 of the ETSI IPR Policy requires members of ETSI to inform ETSI of "ESSENTIAL IPRs" in a timely fashion. ESSENTIAL and IPR are defined terms (art. 15). A patent which would inevitably be infringed by operating in accordance with a standard is an example of an ESSENTIAL IPR. By definition a SEP is an ESSENTIAL IPR. Once an ESSENTIAL IPR has been declared by its owner to ETSI, the owner will be requested by ETSI (art. 6.1 of the ETSI IPR Policy) to give an irrevocable undertaking in writing that it is prepared to grant irrevocable licences on FRAND terms."
"AFFILIATE" of a first legal entity means any other legal entity:
- directly or indirectly owning or controlling the first legal entity, or
- under the same direct or indirect ownership or control as the first legal entity, or
- directly or indirectly owned or controlled by the first legal entity,
for so long as ownership or control lasts.
Ownership or control shall exist through the direct or indirect:
- ownership of more than 50% of the nominal value of the issued equity share capital or of more than 50% of the shares entitling the holders to vote for the election of directors or persons performing similar functions, or
- right by any other means to elect or appoint directors, or persons who collectively can exercise such control. A state, a division of a state or other public entity operating under public law, or any legal entity, linked to the first legal entity solely through a state or any division of a state or other public entity operating under public law, shall be deemed to fall outside the definition of an AFFILIATE.
"ESSENTIAL" as applied to IPR means that it is not possible on technical (but not commercial) grounds, taking into account normal technical practice and the state of the art generally available at the time of standardization, to make, sell, lease, otherwise dispose of, repair, use or operate EQUIPMENT or METHODS which comply with a STANDARD without infringing that IPR. For the avoidance of doubt in exceptional cases where a STANDARD can only be implemented by technical solutions, all of which are infringements of IPRs, all such IPRs shall be considered ESSENTIAL.
"IPR" shall mean any intellectual property right conferred by statute law including applications therefor other than trademarks. For the avoidance of doubt rights relating to get-up, confidential information, trade secrets or the like are excluded from the definition of IPR.
"MEMBER" shall mean a member or Associate member of ETSI. References to a MEMBER shall wherever the context permits be interpreted as references to that MEMBER and its AFFILIATES.
"PATENT FAMILY" shall mean all the documents having at least one priority in common, including the priority document(s) themselves. For the avoidance of doubt, "documents" refers to patents, utility models, and applications therefor.
"3 Policy Objectives
3.1 It is ETSI's objective to create STANDARDS and TECHNICAL SPECIFICATIONS that are based on solutions which best meet the technical objectives of the European telecommunications sector, as defined by the General Assembly. In order to further this objective the ETSI IPR POLICY seeks to reduce the risk to ETSI, MEMBERS, and others applying ETSI STANDARDS and TECHNICAL SPECIFICATIONS, that investment in the preparation, adoption and application of STANDARDS could be wasted as a result of an ESSENTIAL IPR for a STANDARD or TECHNICAL SPECIFICATION being unavailable. In achieving this objective, the ETSI IPR POLICY seeks a balance between the needs of standardization for public use in the field of telecommunications and the rights of owners of IPRs.
3.2 IPR holders whether members of ETSI and their AFFILIATES or third parties, should be adequately and fairly rewarded for the use of their IPRs in the implementation of STANDARDS and TECHNICAL SPECIFICATIONS.
3.3 ETSI shall take reasonable measures to ensure, as far as possible, that its activities which relate to the preparation, adoption and application of STANDARDS and TECHNICAL SPECIFICATIONS, enable STANDARDS and TECHNICAL SPECIFICATIONS to be available to potential users in accordance with the general principles of standardization."
"4 Disclosure of IPRs
4.1 Subject to Clause 4.2 below, each MEMBER shall use its reasonable endeavours, in particular during the development of a STANDARD or TECHNICAL SPECIFICATION where it participates, to inform ETSI of ESSENTIAL IPRs in a timely fashion. In particular, a MEMBER submitting a technical proposal for a STANDARD or TECHNICAL SPECIFICATION shall, on a bona fide basis, draw the attention of ETSI to any of that MEMBER's IPR which might be ESSENTIAL if that proposal is adopted.
4.2 The obligations pursuant to Clause 4.1 above do however not imply any obligation on MEMBERS to conduct IPR searches.
4.3 The obligations pursuant to Clause 4.1 above are deemed to be fulfilled in respect of all existing and future members of a PATENT FAMILY if ETSI has been informed of a member of this PATENT FAMILY in a timely fashion. Information on other members of this PATENT FAMILY, if any, may be voluntarily provided."
"6 Availability of Licences
6.1 When an ESSENTIAL IPR relating to a particular STANDARD or TECHNICAL SPECIFICATION is brought to the attention of ETSI, the Director-General of ETSI shall immediately request the owner to give within three months an irrevocable undertaking in writing that it is prepared to grant irrevocable licences on fair, reasonable and non-discriminatory ("FRAND") terms and conditions under such IPR to at least the following extent:
- MANUFACTURE, including the right to make or have made customized components and sub-systems to the licensee's own design for use in MANUFACTURE;
- sell, lease, or otherwise dispose of EQUIPMENT so MANUFACTURED;
- repair, use, or operate EQUIPMENT; and
- use METHODS.
The above undertaking may be made subject to the condition that those who seek licences agree to reciprocate.
6.1bis Transfer of ownership of ESSENTIAL IPR
FRAND licensing undertakings made pursuant to Clause 6 shall be interpreted as encumbrances that bind all successors-in-interest. Recognizing that this interpretation may not apply in all legal jurisdictions, any Declarant who has submitted a FRAND undertaking according to the POLICY who transfers ownership of ESSENTIAL IPR that is subject to such undertaking shall include appropriate provisions in the relevant transfer documents to ensure that the undertaking is binding on the transferee and that the transferee will similarly include appropriate provisions in the event of future transfers with the goal of binding all successors-in-interest. The undertaking shall be interpreted as binding on successors-in-interest regardless of whether such provisions are included in the relevant transfer documents.
6.2 An undertaking pursuant to Clause 6.1 with regard to a specified member of a PATENT FAMILY shall apply to all existing and future ESSENTIAL IPRs of that PATENT FAMILY unless there is an explicit written exclusion of specified IPRs at the time the undertaking is made. The extent of any such exclusion shall be limited to those explicitly specified IPRs.
6.3 As long as the requested undertaking of the IPR owner is not granted, the COMMITTEE Chairmen should, if appropriate, in consultation with the ETSI Secretariat use their judgment as to whether or not the COMMITTEE should suspend work on the relevant parts of the STANDARD or TECHNICAL SPECIFICATION until the matter has been resolved and/or submit for approval any relevant STANDARD or TECHNICAL SPECIFICATION.
6.4 At the request of the European Commission and/or EFTA, initially for a specific STANDARD or TECHNICAL SPECIFICATION or a class of STANDARDS/TECHNICAL SPECIFICATIONS, ETSI shall arrange to have carried out in a competent and timely manner an investigation including an IPR search, with the objective of ascertaining whether IPRs exist or are likely to exist which may be or may become ESSENTIAL to a proposed STANDARD or TECHNICAL SPECIFICATIONS and the possible terms and conditions of licences for such IPRs. This shall be subject to the European Commission and/or EFTA meeting all reasonable expenses of such an investigation, in accordance with detailed arrangements to be worked out with the European Commission and/or EFTA prior to the investigation being undertaken."
"6bis Use of the IPR Licensing Declaration Forms
MEMBERS shall use one of the ETSI IPR Licensing Declaration forms at the Appendix to this ETSI IPR Policy to make their IPR licensing declarations."
"8 Non-availability of Licences
8.1 Non-availability of licences prior to the publication of a STANDARD or a TECHNICAL SPECIFICATION
8.1.1 Existence of a viable alternative technology
Where prior to the publication of STANDARD or a TECHNICAL SPECIFICATION and IPR owner informs ETSI that it is not prepared to license an IPR in respect of a STANDARD or TECHNICAL SPECIFICATION in accordance with Clause 6.1 above, the General Assembly shall review the requirement for that STANDARD or TECHNICAL SPECIFICATION and satisfy itself that a viable alternative technology is available for the STANDARD or TECHNICAL SPECIFICATION which:
- is not blocked by that IPR; and
- satisfies ETSI's requirements.
8.1.2 Non-existence of a viable alternative technology
Where, in the opinion of the General Assembly, no such viable alternative technology exists, work on the STANDARD or TECHNICAL SPECIFICATION shall cease, and the Director-General of ETSI shall observe the following procedure:
a) If the IPR owner is a MEMBER,
i) the Director-General of ETSI shall request that MEMBER to reconsider its position.
ii) If that MEMBER however decides not to withdraw its refusal to license the IPR, it shall then inform the Director-General of ETSI of its decision and provide a written explanation of its reasoning for refusing to license that IPR, within three months of its receipt of the Director-General's request.
iii) The Director-General of ETSI shall then send the MEMBER's explanation together with relevant extracts from the minutes of the General Assembly to the ETSI Counsellors for their consideration.
b) If the IPR owner is a third party,
i) the Director-General of ETSI shall, wherever appropriate, request full supporting details from any MEMBER who has complained that licenses are not available in accordance with Clause 6.1 above and/or request appropriate MEMBERS to use their good offices to find a solution to the problem.
ii) Where this does not lead to a solution the Director-General of ETSI shall write to the IPR owner concerned for an explanation and request ultimately that licences be granted according to Clause 6.1 above.
iii) Where the IPR owner refuses the Director-General's request and decides not to withdraw its refusal to license the IPR or does not answer the letter within three months after receipt of the Director-General's request, the Director-General shall then send the IPR owner's explanation, if any, together with relevant extracts from the minutes of the General Assembly to the ETSI Counsellors for their consideration.
8.1.3 Prior to any decision by the General Assembly, the COMMITTEE should in consultation with the ETSI Secretariat use their judgment as to whether or not the COMMITTEE should pursue development of the concerned parts of the STANDARD or TECHNICAL SPECIFICATION based on the non-available technology and should look for alternative solutions.
8.2 Non-availability of licences after the publication of a STANDARD or a TECHNICAL SPECIFICATION
Where, in respect of a published STANDARD or TECHNICAL SPECIFICATION, ETSI becomes aware that licences are not available from an IPR owner in accordance with Clause 6.1 above, that STANDARD or TECHNICAL SPECIFICATION shall be referred to the Director-General of ETSI for further consideration in accordance with the following procedure:
i) The Director-General shall request full supporting details from any MEMBER or third party who has complained that licences are not available in accordance with Clause 6.1 above.
ii) The Director-General shall write to the IPR owner concerned for an explanation and request that licences be granted according to Clause 6.1 above. Where the concerned IPR owner is a MEMBER, it shall inform the Director-General of ETSI of its decision and provide a written explanation of its reasons in case of continuing refusal to license that IPR.
iii) Where the IPR owner refuses the Director-General's request or does not answer the letter within three months, the Director-General shall inform the General Assembly and, if available, provide the General Assembly with the IPR owner's explanation for consideration. A vote shall be taken in the General Assembly on an individual weighted basis to immediately refer the STANDARD or TECHNICAL SPECIFICATION to the relevant COMMITTEE to modify it so that the IPR is no longer ESSENTIAL.
iv) Where the vote in the General Assembly does not succeed, then the General Assembly shall, where appropriate, consult the ETSI Counsellors with a view to finding a solution to the problem. In parallel, the General Assembly may request appropriate MEMBERS to use their good offices to find a solution to the problem.
v) Where (iv) does not lead to a solution, then the General Assembly shall request the European Commission to see what further action may be appropriate, including non-recognition of the STANDARD or TECHNICAL SPECIFICATION in question.
In carrying out the foregoing procedure due account shall be taken of the interest of the enterprises that have invested in the implementation of the STANDARD or TECHNICAL SPECIFICATION in question."
"In accordance with Clause 6.1 of the ETSI IPR Policy the Declarant and/or its AFFILIATES hereby irrevocably declares the following:
To the extent that the IPR(s) disclosed in the attached IPR Information Statement Annex are or become, and remain, ESSENTIAL in respect of the ETSI Work Item, STANDARD and/or TECHNICAL SPECIFICATION identified in the attached IPR Information Statement Annex, the Declarant and/or its AFFILIATES are (1) prepared to grant irrevocable licences under this/these IPR(s) on terms and conditions which are in accordance with Clause 6.1 of the ETSI IPR Policy; and (2) will comply with Clause 6.1bis of the ETSI IPR Policy.
This irrevocable undertaking is made subject to the condition that those who seek licences agree to reciprocate.
By signing this IPR Information Statement and Licensing Declaration Form, you represent that you have the authority to bind the Declarant and/or its AFFILIATES to the representations and commitments provided in this form."
"In accordance with Clause 6.1 of the ETSI IPR Policy the Declarant and/or its AFFILIATES hereby irrevocably declares the following:
To the extent that the IPR(s) disclosed in the attached IPR Information Statement Annex are or become, and remain, ESSENTIAL in respect of the ETSI Work Item, STANDARD and/or TECHNICAL SPECIFICATION identified in the attached IPR Information Statement Annex, the Declarant and/or its AFFILIATES are prepared to grant irrevocable licences under this/these IPR(s) on terms and conditions which are in accordance with Clause 6.1 of the ETSI IPR Policy.
This irrevocable undertaking is made subject to the condition that those who seek licences agree to reciprocate."
The pleaded case against the First Claimant
The expert evidence on French law
"21 I consider that the following provisions of the French Civil Code are those that are relevant to the matters considered in this Expert Report:
a. As a matter of French law, Article 1192 states that "Clear and unambiguous terms are not subject to interpretation as doing so risks their distortion".
i. This provision of the French Civil Code means that, when the terms of a contract are clear and unambiguous, under French law, plain language will govern: i.e. "what is clear must not be interpreted". The French Cour de Cassation overrules decisions that do not comply with this requirement i.e. decisions that "construe" contract terms which are already clear in meaning.
ii. In the event that it is necessary to resolve any ambiguity or question, however, produced by a literal reading of a provision in a contract, Article 1182(2) of the Civil Code sets out the manner in which this ambiguity must be resolved. Article 1188(2) of the French Civil Code provides:
"Article 1188: A contract is to be interpreted according to the common intention of the parties rather than stopping at the literal meaning of its terms.
Where this intention cannot be discerned, a contract is to be interpreted in the sense which a reasonable person placed in the same situation would give it."
iii. The main objective of the interpretation of a contract under French law is to find out the genuine "common intent" (commune intention) of the parties. This is where the relevant terms of the contract are not clear i.e. that the common intent of the parties is not clearly expressed. This may be the result of a contradiction or an ambiguity within the contract itself (e.g. resulting from the comparison of two clauses) or an external contradiction or ambiguity (e.g. the contract itself is clear in meaning but when examined in relation to another pre-existing or background document, becomes ambiguous: Cass. civ. 1, October, 13 1965, JCP 65.II.14426, n. J.A).
iv. If the intention cannot be discerned, from a mere reading of the relevant provisions, in isolation from other terms of the contract and other relevant factors, this provision of the French Civil Code requires an ambiguous contractual provision to be read in the manner which a reasonable person would adopt.
v. Other rules guide the interpretation of an ambiguous contractual provision such as the fact that "where a contract term is capable of bearing two meanings, the one which gives it some effect is to be preferred to the one which makes it produce no effect" (Article 1191 of the French Civil Code).
b. Article 1199 of the French Civil Code provides that a contract creates rights and obligations only between the parties to the contract.
c. However, this principle does not exclude the possibility that a contractual obligation may confer rights for the benefit of third parties in certain circumstances governed by the French Civil Code:
i. Articles 1205-1209 of the French Civil Code make it clear that where a contract provides for rights for the benefit of third parties, also, those rights are enforceable by any third party beneficiary of those rights. This preserves the principle under French law of enforcement by such third party beneficiary on the basis of stipulation pour autrui.
ii. This mechanism permits a party to enter into a binding obligation for the benefit of third parties. It can be described as the following: an obligation in favour of a third party that is formed by an exchange of agreement between two parties. In a stipulation pour autrui, the promisor commits to the stipulator to grant a right to one or more third party beneficiaries. By sole commitment of the promisor, the third party beneficiaries are vested with an immediate and direct right against the promisor.
iii. Article 1204 of the French Civil Code expressly contemplates that "a person may stand surety ("se porter fort") by promising that a third party will do something" and that in such a case if the third party does not perform the action which was promised, the promisor "may be ordered to pay damages". This is a classical mechanism under French law known as "porte-forte". It is an important exception to the fact that a person may only give undertakings in its own name as regards itself. Here, a person undertakes that a third party will do something. In this sense it is possible to make obligatory on the part of one person the entering into of a contract or the performance of a positive act by another. "
"14. In sub-paragraph 21(c)(iii), Professor Molfessis refers to Article 1204 of the Code, introducing the French law notion of porte-fort. The wording of Article 1204 that he cites, providing that "a person may stand surety by promising that a third party will do something", is taken from the official translation of the New Code which I co-authored and which is exhibited to my First Report. As noted in the footnotes to that translation, there is no exact common law equivalent of "porte-fort" that I am aware of. It is very important to understand from the outset that the promise made by the 'surety' in no way commits the third party to a particular course of action – the third party may act as it pleases without incurring liability, and the extent of any liability of the promisor depends on the language of the contract.
15. Traditionally, the notion of porte-fort developed from personal and family law to deal with situations where a family member was incapacitated or temporarily absent. The representative of someone who was incapacitated could enter into a contract and promise performance by the incapacitated person when the incapacity ended. More recently, porte-fort has been used in a commercial context as a special form of guarantee. However, crucially, it differs from many typical guarantees in that it is an autonomous undertaking by the promisor and not incidental to any particular contract between the promisee and the third party.
16 . In the final two sentences of paragraph 21(c)(iii), Professor Molfessis describes the effect of Article 1204 as follows: "Here, a person undertakes that a third party will do something. In this sense it is possible to make obligatory on the part of one person the entering into of a contract or the performance of a positive act by another" (emphasis added). I disagree entirely with this description. There is no obligation on the promisor to perform the specified act of the third party itself, nor any possibility to obtain specific performance of the act by the third party on the basis of the assumption of the porte-fort obligation. In the event that the third party does not perform the specified act, the legal consequence for the promisor is limited to its potential liability in damages as Article 1204 states; there is no legal consequence for the third party.
17 . The amount of any damages awarded against the contracting party under Article 1204 depends on the nature of the third party act in respect of which the promise was given. Damages are not assessed on a basis which would put the promisee in the position he would have been in if the third party act had been performed. The amount of damages is not designed to cover the full profit that would have been expected had the obligation been performed. This is summarised by Bénabent in his textbook as follows:
"If the third party refused to ratify the contract, it is deprived of any effect (…). Whoever stood as surety has consequently failed in his engagement and will be liable in damages, which however will not cover the profit of the expected contract, but only the immobilization of the good or the loss of other opportunities (by analogy with Articles 1112 paragraph 2 and 1116 paragraph 3)"
18. Contracts which contain a porte-fort obligation are exceptional and clear language is normally required before the French Courts will impose this obligation. The third party is usually expressly identified and the nature of the acts it is required to undertake specified in detail.
19. More generally, it is also important to bear in mind that the normal rule under French law when a company enters into a contract is that it does so on its own behalf and not on that of any other members of the corporate group to which it belongs. This is in part a consequence of Article 1199 discussed above, but also of more general provisions of French law including those relating to French companies. The position is succinctly summarised by Merle as follows:
"The principle remains that the mere fact that a company has control over another is not sufficient for it to be condemned to carry out the commitments made by that company."
20. Consequently, for the contract to relate not only to acts of the contracting party but also acts of members of the corporate group of the contracting party, there must be clear wording to suggest that an obligation of porte-fort has been assumed by the contracting party."
"19 The position is, as ever, put with clarity in Dicey, Morris & Collins on The Conflict of Laws, 15th ed, (2012) at para 9-019:
"The function of the expert witness in relation to the interpretation of foreign statutes must be contrasted with his function in relation to the construction of foreign documents. In the former case, the expert tells the court what the statute means, explaining his opinion, if necessary, by reference to foreign rules of construction. In the latter case, the expert merely proves the foreign rules of construction, and the court itself, in the light of these rules, determines the meaning of the documents."
See also paras 32-143 to 145. The point was again put with clarity by Lord Greene MR in one of the cases cited in Dicey, Rouyer Guillet & Cie v Rouyer Guillet & Co Ltd  1 All ER 244 (CA):
"I must make it clear that the evidence of French law is subject to a certain differentiation as between the evidence of the meaning of the law of 1925 and the evidence of the meaning of the articles. As I understand the law of England, evidence as to the meaning of the statute is to be obtained from the evidence of expert French witnesses and the decisions of the French courts. On a matter of French law the decision of a French court would be most persuasive. On the other hand, evidence on the construction of a private document, such as articles of association, is admissible so far as it deals with French rules of construction or French rules of law or the explanation of French technical terms, but evidence as to its meaning after those aids have been taken into account is not admissible. It is for the court to construe the document, having fortified itself with the permissible evidence."
See also, to the same effect, two more recent first instance decisions: Svenska Petroleum Exploration AB v Government of the Republic of Lithuania  EWHC 2437 (Comm), per Gloster J at para 29, and Toomey v Banco Vitalicio de Espana SA de Seguros y Reaseguros  EWHC 1102 (Comm), per Andrew Smith J at para 37."
The claim against the First Defendant: discussion and conclusions
"The obligations that an ETSI Member has agreed to assume by becoming an ETSI Member include the obligation set out at Clause 6.1 of the IPR Policy to irrevocably undertake to be prepared to grant irrevocable licences to any patents declared to be SEPs (upon request by ETSI)."
However, the clear wording of Clause 6.1 does not impose an obligation to undertake to grant licences. Whatever Professor Molfessis is doing it does not involve a process of applying the undisputed principles of French law to the construction of the actual wording of Clause 6.1.
Service on the Second Defendant out of the jurisdiction
"99 There was no dispute between the parties on the general principles to be applied when deciding whether permission should be granted to serve proceedings on a defendant who is out of the jurisdiction, under the terms of paragraph 3.1 of Practice Direction 6B of the CPR. The three basic principles were recently restated by Lord Collins of Mapesbury in giving the advice of the Privy Council in AK Investment CJSC v Kyrgyz Mobile Tel Ltd UKPC 7;  1 CLC 205 at paragraphs 71, 81 and 88. They can be summarised as follows: first, the claimant must satisfy the court that, in relation to the foreign defendant to be served with the proceedings, there is a serious issue to be tried on the merits of the claim, i.e. a substantial question of fact or law or both. This means that there has to be a real, as opposed to a fanciful, prospect of success on the claim. Secondly, the claimant must satisfy the court that there is a good arguable case that the claim against the foreign defendant falls within one or more of the classes of case for which leave to serve out of the jurisdiction may be given. These are now set out in paragraph 3.1 of Practice Direction 6B. 'Good arguable case' in this context means that the claimant has a much better argument than the foreign defendant. Further, where a question of law arises in connection with a dispute about service out of the jurisdiction and that question of law goes to the existence of the jurisdiction (e.g. whether a claim falls within one of the classes set out in paragraph 3.1 of Practice Direction 6B), then the court will normally decide the question of law, as opposed to seeing whether there is a good arguable case on that issue of law.
100 Thirdly, the claimant must satisfy the court that in all the circumstances England is clearly or distinctly the appropriate forum for the trial of the dispute and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction. This requirement is reflected in Rule 6.37(3) of the CPR, which provides that 'The court will not give permission [to serve a claim form out of the jurisdiction on any of the grounds set out in paragraph 3.1 of Practice Direction 6B] unless satisfied that England and Wales is the proper place in which to bring the claim'.
101 On the last of the three basic principles, two further points should be made. They arise from the now classic speech of Lord Goff of Chieveley in Spiliada Maritime Corp v Cansulex Ltd AC 460 , at 475–484. They are: first, where a claimant seeks leave to serve proceedings on a foreign defendant out of the jurisdiction, the task of the court is to identify the forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice. Secondly, in such a case the burden is on the claimant to persuade the court that England is clearly or distinctly the appropriate forum."
"In my opinion it is a serviceable test, provided that it is correctly understood. The reference to "a much better argument on the material available" is not a reversion to the civil burden of proof which the House of Lords had rejected in Vitkovice. What is meant is (i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it. I do not believe that anything is gained by the word "much", which suggests a superior standard of conviction that is both uncertain and unwarranted in this context."
"A claim is made against the defendant in reliance on one or more of paragraphs (2), (6) to (16), (19) or (21) and a further claim is made against the same defendant which arises out of the same or closely connected facts."
"32 Gateway (4A) is certainly not as wide as the ambit of the court's power to try distinct domestic cases together, where no jurisdictional question arises, but it seems to me that essentially the same practical considerations indicate what the provision is aimed at. Given that the defendant is already properly subject to the court's jurisdiction, pragmatic factors are appropriate matters to take into account in deciding whether the connection between the facts is sufficiently close to justify service out having regard to the overall justice of the circumstances. The purpose of gateway (4A) is to allow the joinder of a further claim against the same defendant based on the same or closely connected facts so as to further the interests of justice, including taking into account practical considerations such as procedural economy and an avoidance of inconsistent results.
33 If facts unique to the second claim include disputed matters of primary fact and would require extensive cross-examination and disclosure [to] resolve, then that would support a conclusion that the connection between the facts is not sufficiently close to justify service out. But if the key factual issues in the second claim are facts it has in common with the anchor claim and the difference in the relevant facts is only on matters which are undisputed or which can readily be dealt with without substantial disclosure and little or no cross-examination, then the factual connection may be sufficiently close to justify service out."
"A claim is made in tort where –
a) damage was sustained, or will be sustained, within the jurisdiction; or
b) damage which has been or will be sustained results from an act committed, or likely to be committed, within the jurisdiction."
"127. By reason of the abuses pleaded above, the Claimants have suffered loss and damage. The Claimants' primary case is that such loss and damage was suffered by Apple Operations (the Third Claimant). However, to the extent that such loss was reflected in the prices charged by Apple Operations to the other Claimants (or, so far as the royalties are concerned, to the extent that it may be held that some part of such loss was retained within the Sixth Claimant rather than being passed on to Apple Operations), such loss was suffered by such other Claimant, as the case may be.
128. The Claimants are not currently in a position to quantify such loss. The Claimants will particularise their case as to loss and damage in due course by way of expert accountancy evidence."
"129. By reason of the abuses pleaded above, the Claimants have suffered loss and damage. So far as concerns which Claimant entity bore the overcharge in relation to devices sold through the First to Fifth Claimant entity, the Claimants' case is that such loss and damage was suffered by Apple Operations (the Third Claimant) and to the extent that such loss was reflected in the prices charged by Apple Operations to the other Claimants (or, so far as the royalties are concerned, to the extent that it may be held that some part of such loss was retained within the Sixth Claimant rather than being passed on to Apple Operations), such loss was suffered by such other Claimant, as the case may be. So far as concerns the Claimants' retail operations, the retail price of Apple devices is centrally set by the Sixth Claimant for sales in all countries or territories internationally. Such price reflects the prices and charges paid by Apple in relation to such devices and all components thereof, including the element reflecting the royalties charged by Qualcomm. By reason of the charging of excessive (supra-FRAND) royalties by Qualcomm, as well as its overpricing of chipsets, the price of such devices over the period to which these proceedings relate was higher than it otherwise would have been. Although Apple's retail operations, such as those carried on by the First and Fourth Claimants, are generally carried on, in accordance with applicable taxation principles, so as to generate a specific percentage margin per sale, because the price of the devices was higher than it would otherwise have been, such Claimants will have lost sales they would otherwise have made and suffered losses thereby accordingly.
130. The Claimants are not currently in a position to quantify such loss. The Claimants will particularise their case as to loss and damage in due course by way of expert accountancy evidence. For the avoidance of doubt, the Claimants in these proceedings sue only in relation to Apple devices sold in the EEA through the First to Fifth Claimants."
"14(c) The basis for and details of how this would have led to loss suffered by the First and Second Claimants will be set out by Apple in due course in the event that these Proceedings continue to full trial. However, at this stage I note:
i. The First and Second Claimants acquire devices for onward sale to end-users through various internal supply chain and distribution agreements. The costs of the devices as paid for by the First and Second Claimants, are set, as required by international tax principles on transfer pricing, at levels that ensure that those entities are able to achieve a fixed operating margin, i.e, percentage of revenues, commensurate with a retail business.
ii. In the event that the First and Second Claimants had been able to sell a higher volume of devices in the jurisdiction, their revenue levels and overall profit in 'real pound' terms would have been higher."
"Although those companies' per-unit margins are set, the total amount of their profits depends on the volume of devices which they sell. The lost volumes resulting from the increased retail prices of the devices resulting from the overcharges imposed by Qualcomm about which Apple complains in these proceedings therefore result in loss to such retail companies, including the First Claimant."
(1) The claim is by a company incorporated in this jurisdiction;
(2) The claim is for loss suffered in this jurisdiction;
(3) The applicable law of the claim is European law (Article 102 of TFEU) which is part of this jurisdiction's domestic law;
(4) On 24 January 2018, the European Commission issued a Press Release disclosing that it had fined Qualcomm €997 million for abusing its dominant position in LTE baseband chipsets contrary to Article 102; the Claimants have asked Qualcomm for a copy of the Commission Decision but this has not been provided; the First Claimant's claim for breach of Article 102 is or includes a follow-on claim; in this jurisdiction, the First Claimant will have the benefit of Article 16 of Council Regulation (EC) No 1/2003 and can rely on the Commission Decision;
(5) The patent claims are proceeding in this jurisdiction in any event.
The next steps
1. On 20 January 2017, Apple filed a complaint against Qualcomm in federal court in San Diego, California seeking declarations with respect to several of Qualcomm's patents and alleging that Qualcomm breached certain agreements and violated federal antitrust and California state unfair competition laws.
2. In its initial complaint:
(1) Apple sought declaratory judgments of non-infringement by Apple of nine of Qualcomm's US patents (including equivalents to the patents-in-suit in the English proceedings). Apple also challenged the validity of these patents and, if valid, the degree to which those patents are essential.
(2) Apple further sought a declaration that Qualcomm's sale of baseband chipsets exhausts Qualcomm's patent rights for patents embodied in those chipsets.
(3) Apple further sought in the alternative, if a patent is not invalid, infringed or exhausted, a declaration of FRAND royalties for that patent.
(4) Apple alleged that Qualcomm had attempted to evade the patent exhaustion doctrine by reorganising its corporate structure.
(5) Apple sought to disgorge Qualcomm of excessive non-FRAND royalties from Apple and to disgorge royalties paid by Apple including through its contract manufacturers.
(6) Apple claimed that Qualcomm's refusal to make certain payments to Apple under a Business Cooperation and Patent Agreement ("BCPA") constitutes a breach of contract in violation of California law and sought damages in the amount of the unpaid payments, alleged to be approximately $1 billion.
(7) Apple claimed that Qualcomm has refused to deal with competitors in contravention of Qualcomm's agreements with applicable standard setting organisations (naming ETSI in particular), has used its market position to impose contractual obligations on Apple that prevented Apple from challenging Qualcomm's licensing practices, has tied the purchase of Qualcomm's CDMA-enabled and "premium" LTE-enabled chipsets to licensing certain of Qualcomm's patents and has required Apple to purchase baseband chipsets exclusively from Qualcomm as a condition of Qualcomm's payment to Apple of certain rebates, in violation of Section 2 of the Sherman Act (unlawful monopolisation) and the California Unfair Competition Law. Apple alleges that the relevant product markets for the purposes of its monopolisation claim are the markets for "premium LTE" baseband processor chipsets and CDMA baseband processor chipsets. The relevant geographic market was said to be worldwide.
(8) Apple sought injunctive relief with respect to these claims and a judgment awarding its expenses, costs and attorneys' fees.
3. On 10 April 2017, Qualcomm filed its Answer and Counterclaims (amended on 24 May 2017) in response to Apple's complaint denying Apple's claims and asserting claims against Apple. The counterclaims against Apple include:
(1) Tortious interference with Qualcomm's Subscriber Unit License Agreements ("SULAs") with third-party contract manufacturers of Apple devices, allegedly causing those contract manufacturers to withhold certain royalty payments owed to Qualcomm and violate their audit obligations.
(2) Claims for declarations that Qualcomm's licence agreements with the contract manufacturers do not violate Qualcomm's FRAND commitments to ETSI, and that Qualcomm has satisfied its FRAND commitments to ETSI with respect to Apple.
(3) Claims for declarations that Qualcomm's SULAs with the contract manufacturers do not violate either Section 2 of the Sherman Act or California Unfair Competition Law.
(4) Breach of contract based on Apple's failure to pay amounts allegedly owed to Qualcomm under a Statement of Work relating to a high-speed feature of Qualcomm's chipsets. 
(5) Breach of contract and the implied covenant of good faith and fair dealing relating to the BCPA.
(6) Unjust enrichment and declaratory relief relating to the BCPA.
(7) Violation of California Unfair Competition Law based on Apple's threatening Qualcomm to prevent it from promoting the superior performance of Qualcomm's own chipsets.
(8) Breach of the parties' Master Software Agreement.
4. On 19 June 2017, Apple filed a Partial Motion to Dismiss Qualcomm's counterclaim for violation of the California Unfair Competition Law. The court granted that motion on 8 November 2017. On 20 June 2017, Apple filed an Answer and Affirmative Defenses to the rest of Qualcomm's counterclaims.
5. On 20 June 2017, Apple also filed an Amended Complaint, reiterating all of the original claims and adding:
(1) Claims for declaratory judgments of invalidity of the nine patents that are subject to declaratory judgment claims in the original complaint.
(2) New declaratory judgment claims for non-infringement, invalidity and a declaration of royalties for nine more patents.
(3) Claims for declaratory judgments that certain of Qualcomm's agreements are unenforceable.
6. On 18 July 2017, Apple filed a motion to consolidate this action with Qualcomm Incorporated v. Compal Electronics, Inc., et al., (the "CM Proceedings") and on 13 September 2017, the court granted that motion.
7. On 21 July 2017, Qualcomm filed an Answer to Apple's Amended Complaint as well as a motion to dismiss the new declaratory judgment claims for non-infringement, invalidity and a declaration of royalties for the nine additional patents. The court granted Qualcomm's motion on 8 November 2017.
8. On 7 September 2017, the court rejected Qualcomm's motion for an anti-suit injunction.
9. On 11 February 2018, the court issued an amended scheduling order setting out various deadlines relating to discovery, expert disclosures, expert depositions and pre-trial motions. Fact discovery is coordinated with fact discovery in proceedings brought against Qualcomm by the US Federal Trade Commission and a putative consumer class in the Northern District of California, as well as the CM Proceedings.
10. Pursuant to the terms of that order, fact discovery is set to close on 11 May 2018. As part of fact discovery, Apple and Qualcomm have each produced millions of documents, and the parties have taken more than 70 depositions (and are likely to take dozens more before the end of fact discovery). Expert disclosures are due on 1 June 2018, and rebuttal expert disclosures are due on 29 June 2018. Expert discovery closes on 10 August 2018. Partial or fully dispositive motions are due by 6 July 2018. A final pre-trial conference is scheduled for 28 September 2018.
11. No trial date has been set.
QUALCOMM INCORPORATED V. COMPAL ELECTRONICS, INC. ET AL
(Case No. 3:17-cv-1010-GPC-MDD)
12. On 17 May 2017, Qualcomm filed a complaint in the United States District Court for the Southern District of California against Compal Electronics, Inc. ("Compal"), FIH Mobile, Ltd., Hon Hai Precision Industry Co., Ltd. (together with FIH Mobile, Ltd., "Foxconn"), Pegatron Corporation ("Pegatron") and Wistron Corporation ("Wistron") asserting claims for injunctive relief, specific performance, declaratory relief and damages stemming from the defendants' breach of contracts by ceasing the payment of royalties for iPhones and other devices which they manufacture for Apple globally.
13. On 24 May 2017, Qualcomm applied for a payment injunction against the defendants. This was rejected by the court on 7 September 2017.
14. On 17 July 2017, Compal, Foxconn, Pegatron and Wistron each filed third-party complaints for contractual indemnity against Apple seeking to join Apple as a party to the action. On 18 July 2017, Apple filed an answer to these third party complaints acknowledging its indemnity agreements and consenting to be joined. Also on this date, Apple filed a motion to consolidate this action with the Apple Inc. v. Qualcomm Incorporated case. On 13 September 2017, the court granted Apple's consolidation motion.
15. On 18 July 2017, the defendants filed an Answer and Counterclaims to the complaint, asserting defences and counterclaims similar to allegations made by Apple in the Apple Inc. v. Qualcomm Incorporated case in the Southern District of California. In addition, the defendants asserted certain new claims against Qualcomm, including claims under Section 1 of the Sherman Act (anticompetitive agreement) and California's Cartwright Act (state antitrust law). The defendants seek damages, declaratory relief, injunctive relief, restitution of excessive licence fees paid under the SULAs and other relief.
16. Fact discovery is coordinated with fact discovery in Apple Inc. v. Qualcomm Incorporated . A final pre-trial conference is scheduled for 28 September 2018.
17. No trial date has been set.