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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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With Decision to Hear Bilski, Supreme Court Leaves Business Method Patents in Limbo

Time to Read: 1 minutes Practices: Intellectual Property

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By granting today the petition for writ of certiorari in Bilski v. Doll, the U.S. Supreme Court has prolonged the period in which the Federal Circuit's "machine-or-transformation" test is subject to serious question. While the Federal Circuit's test for patent-eligible subject matter applies to all patent applications, any decision by the Supreme Court is likely to have its greatest impact in the areas of business methods, software, and life sciences.

The Federal Circuit has declared that the "machine-or-transformation" test is the only test for determining patent eligible subject matter under § 101 of the Patent Act. But three of the Supreme Court justices – Anthony Kennedy, Stephen Breyer, and John Paul Stevens – who will decide this case have expressed concerns regarding the eligibility of business methods for patent protection. It would seem that at least some of those concerns were not alleviated by the Federal Circuit's "machine-or-transformation" test.

The petition presented the following issue: whether a "process" must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (the "machine-or-transformation" test), to be eligible for patenting under 35 U.S.C. § 101, and whether the "machine-or-transformation" test for patent eligibility contradicts Congressional intent that patents protect "method[s] of doing business" in 35 U.S.C. § 273.

The most immediate effect of the Supreme Court's action today is to leave in doubt the status of the "machine-or-transformation" test, which has been applied to ongoing patent cases at the Federal Circuit, in the federal district courts, and at the Patent Office. If you have any questions about today's development, please contact your usual Ropes & Gray adviser.

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