Lenovo take the win in UK interim licence dispute with Ericsson

Lenovo is entitled to an interim cross-licence from Ericsson, the UK Court of Appeal ruled today, overturning a first-instance decision that had favoured the patent holder Ericsson. The consequences of the ruling are still unclear.

Lenovo is entitled to an interim licence in the global dispute over a cross-licence agreement with Ericsson concerning its 4G and 5G portfolios (case ID: CA-2024-002821). Lenovo had appealed against an unfavourable judgement at first instance.

The three Court of Appeal judges — Richard Arnold, Guy Newey and Sarah Falk — handed down their judgment just ten days after hearing the case. They found that Ericsson had breached its “obligation of good faith under clause 6.1 of the ETSI IPR Policy by pursuing claims for injunctions and equivalent remedies in foreign courts and tribunals despite Lenovo having undertaken to enter into a licence on the terms determined by the Patents Court to be FRAND.”

The judges stated that a “willing licensor in Ericsson’s position would enter into an interim licence with Lenovo pending that determination.

The judges also commented on the possible interim licence fee, citing their decision in Panasonic vs Xiaomi. They consider the amount to be somewhere between Lenovo’s eight-figure dollar offer and Ericsson’s nine-figure dollar offer (paragraph 57(iii) of the judgement).

Complete U-turn

Last November, High Court judge Jonathan Richards rejected Lenovo’s application for an interim licence (case ID:HP-2023-000036). According to the ruling, “Lenovo seeks a declaration that a willing licensor and a willing licensee in the situation of the parties would agree to, and actually enter into, a short-term cross-licence, in a form annexed to Lenovo’s application, that would expire once either the English court or the EDNC fixes the terms of a FRAND Cross-Licence.”

Lenovo’s licence application sought three key features: firstly, “a ‘one-way’ licence of Ericsson’s SEPs only for a term starting on 1 January 2024 and ending on execution of any ‘Court-Determined Licence’, namely a FRAND Cross-Licence as determined by either the English court or the EDNC”; secondly, for Lenovo to make “a single lump-sum payment in two instalments. The Lump Sum is the same whatever the term of the licence”; thirdly, “a ‘true-up’ mechanism by which its financial and non-financial terms are adjusted in line with the terms of the final licence determined by the English court or EDNC”.

The ruling marked the second time a UK court has addressed interim licensing. In September, the court granted Xiaomi an interim licence in its dispute with Panasonic.

Ericsson may now appeal to the UK Supreme Court. Whether it will do so remains unclear, as the Supreme Court accepts few patent cases. If heard, it would be the first Supreme Court case involving an interim licence.

From America to Europe

The global dispute over 5G patents originated in the US, where Ericsson filed patent lawsuits at the Eastern District Court of North Carolina in October 2023, followed by ITC complaints and PI cases in Brazil and Colombia.

Lenovo responded by filing suit at the UK High Court in November 2023. Rather than countersuing with its own patents, the company sought a global cross-licence determination. This unusual strategy aimed to concentrate the dispute in London, where a ruling could establish global patent peace between the parties. An infringement case is also pending in the UK.

Then, in February 2024, Lenovo went one step further,taking the dispute to the Unified Patent Court. Lenovo subsidiary Motorola filed infringements suits over two patents with the Munich local division (case IDs:ACT_5326/2024andACT_5324/2024andACT_47298/2024). The latter two cases concernEP 3 780 758.

The Munich division rescheduled the EP 758 hearing from 12 March to 6 May 2025. After the EPO Opposition Division amendedEP 3 342 086, that UPC case is currently on hold. The Munich local division has not yet scheduled FRAND hearings for either case. The UK High Court will proceed with its FRAND trial in late April.

How likely is a settlement?

Whether today’s ruling will lead Lenovo and Ericsson to agree on an interim licence, potentially halting proceedings elsewhere, remains uncertain.

In the Panasonic vs Xiaomi dispute, a Court of Appeal-ordered interim licence in September 2024 led to a swift settlement. As a result, a scheduled UPC hearing did not take place. The Mannheim local division later heard Panasonic’s parallel case against Oppo, deliveringthe UPC’s first FRAND judgment in early December.

However, UK trial observers note key differences between the cases. Both Panasonic and Xiaomi had agreed to accept a licence set out by the UK court. Ericsson has not given such an undertaking in the dispute with Lenovo.

Today’s ruling does not compel specific actions from Ericsson, such as accepting an interim licence. Non-compliance would mainly affect UK proceedings, with limited impact on cases elsewhere, as other courts are likely to continue their proceedings.

Laura Quatela, Lenovo’s chief legal officer, welcomed the ruling as “landmark” with “broader implications for global SEP licensing and the technology industry”, saying the judgment “confirms that Lenovo is a willing licensee”.

Ericsson has not yet commented.