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U.K. Supreme Court Permits SEP Holders to Require Worldwide FRAND Licenses

On August 26, 2020, the U.K. Supreme Court—the U.K.’s highest court—issued its highly anticipated decision in Unwired Planet International v. Huawei involving the “Fair, Reasonable, and Non-Discriminatory” (“FRAND”) licensing of standard essential patents (“SEPs”) in the telecommunications space. The decision in several consolidated cases rejected all appeals from Huawei and ZTE and affirmed the decisions from the London High Court (Justice Birss) and Court of Appeals. The Court concluded that owners of patents essential to ETSI’s telecommunications standards (including 2G, 3G, and 4G (LTE)) can demand that an implementer practicing a U.K. SEP take a license on FRAND terms to all of the patent owner’s worldwide telecommunications SEPs, and can obtain an injunction should the implementer refuse. This decision has significant implications for FRAND licensing, assertion of SEPs, and antitrust issues both in the telecommunications context and more broadly.

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Supreme Court Dismisses Closely Watched Patent Case

Time to Read: 1 minutes Practices: Intellectual Property

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On June 22, the U.S. Supreme Court issued a “non-decision” in Laboratory Corporation of America Holdings v. Metabolite Laboratories, a case closely watched by the patent bar. At issue in Metabolite was the patentability of a claim to detecting vitamin deficiencies -- specifically, whether the claim covered unpatentable “natural phenomena.” A majority of the justices dismissed the case on the grounds that the Court had improvidently granted the writ of certiorari because the lower courts had not adequately addressed the issue.

Justice Stephen Breyer dissented, joined by Justice John Paul Stevens and Justice David Souter. In Justice Breyer’s view, the importance of resolving the issue outweighed the benefits of waiting for another case in which the lower courts had more thoroughly addressed the issue. With respect to the merits, Justice Breyer found that the claim at issue, which involved testing blood for presence of a substance and making a correlation with the test result to determine whether a vitamin deficiency exists, covers unpatentable natural phenomena. Justice Breyer acknowledged, however, the difficulty of drawing the line between unpatentable natural phenomena on the one hand, and patentable processes on the other. The dissent strongly suggests that the claim at issue was too broad.

You may expect to see this issue remain a matter of controversy, returning to the Supreme Court’s docket in the not-so-distant future. In the meantime, you may also expect to see lower courts struggle with what amounts to a line-drawing exercise between pure and applied science, or even more broadly, between science and technology. At stake is not only the viability of patents covering medical technologies, but virtually every other technological discipline -- not to mention business method patents.

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