Optis Cellular Technology LLC & Ors v Apple Retail UK Ltd & Ors

Optis Cellular Technology LLC & Ors v Apple Retail UK Ltd & Ors

The High Court erred in rejecting expert accountancy evidence and adopting a lump sum averaging approach unsupported by law or evidence. The correct approach is to identify the best comparable licences, use unpacked DPU rates, and set the FRAND rate accordingly. The Google licence and the highest-value Apple licences are the best comparables. The FRAND rate for Optis is set at $0.15 per unit, to be capitalised into a lump sum. The licence must treat any final US judgment as a floor, not require vacatur, and interest must run until payment. Non-royalty terms should revert to the parties' composite draft, subject to resolution of outstanding points.

Parties
Claimant/appellant: Optis Cellular Technology LLC; Claimant/appellant: Optis Wireless Technology LLC; Claimant/appellant: Unwired Planet International Ltd; Defendant/respondent: Apple Retail UK Ltd; Defendant/respondent: Apple Distribution International Ltd; Defendant/respondent: Apple Inc.
Jurisdiction
England and Wales
Judgment Date
12 February 2025
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (patents Court)
Outcome
Appeal allowed in part; High Court's approach to FRAND valuation and certain licence terms set aside; FRAND rate and licence terms re-determined by Court of Appeal.
Legal Topics
FRAND Licensing, Standard Essential Patents (seps), Patent Valuation, Global Portfolio Licensing, Hold Up and Hold Out, Anti Suit Injunctions, Interest on Damages, Comity and Foreign Judgments
Intellectual Property Contract Law Competition Law FRAND Licensing Standard Essential Patents (seps) Patent Valuation Global Portfolio Licensing Hold Up and Hold Out +3 more

Case Brief

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Parties

Optis Cellular Technology LLC

Claimant/appellant

Optis Wireless Technology LLC

Claimant/appellant

Unwired Planet International Ltd

Claimant/appellant

Apple Retail UK Ltd

Defendant/respondent

Apple Distribution International Ltd

Defendant/respondent

Apple Inc.

Defendant/respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (patents Court)

Legal Issues

  1. 1 What is the fair, reasonable and non-discriminatory (FRAND) licence fee for Optis's SEP portfolio?
  2. 2 Was the High Court correct to reject expert accountancy evidence and adopt its own lump sum averaging approach?
  3. 3 Should the FRAND licence account for parallel US proceedings and judgments?

Ratio Decidendi

The High Court erred in rejecting expert accountancy evidence and adopting a lump sum averaging approach unsupported by law or evidence. The correct approach is to identify the best comparable licences, use unpacked DPU rates, and set the FRAND rate accordingly. The Google licence and the highest-value Apple licences are the best comparables. The FRAND rate for Optis is set at $0.15 per unit, to be capitalised into a lump sum. The licence must treat any final US judgment as a floor, not require vacatur, and interest must run until payment. Non-royalty terms should revert to the parties' composite draft, subject to resolution of outstanding points.

Court Disposition

Appeal allowed in part; High Court's approach to FRAND valuation and certain licence terms set aside; FRAND rate and licence terms re-determined by Court of Appeal.

Orders

  • FRAND rate set at $0.15 per unit, to be capitalised into a lump sum (indicatively $502 million for 2013-2027, subject to final calculation).
  • Licence to treat any final US judgment as a floor for royalties; no requirement to vacate US judgment.