Interdigital Technology Corporation & Ors v Lenovo Group Limited & Ors

Interdigital Technology Corporation & Ors v Lenovo Group Limited & Ors

Limitation periods are irrelevant to the calculation of royalties for past sales under a FRAND licence; a willing licensee would pay for all past use. Interest is payable on past royalties at a rate reflecting the time value of money, here 4% compounded quarterly. The appropriate per-unit rate must be derived from the best comparable licence, correcting for non-FRAND market distortions such as heavy discounting of past sales. The blended rate from LG 2017 was too low due to such distortions; a corrected rate of $0.30 per unit, adjusted by a factor of 0.75 for Lenovo, is FRAND. The judge's failure to correct for market distortions was an error. Non-discrimination does not entitle Lenovo to...

Parties
Claimant: InterDigital Technology Corporation; Claimant: InterDigital Patent Holdings, Inc.; Claimant: InterDigital, Inc.; Claimant: InterDigital Holdings, Inc.; Defendant: Lenovo Group Limited; Defendant: Lenovo (United States) Inc.; Defendant: Lenovo Technology (United Kingdom) Limited; Defendant: Motorola Mobility LLC; Defendant: Motorola Mobility UK Limited
Jurisdiction
England and Wales
Judgment Date
07 December 2024
Procedural Posture
Civil Appeal (intellectual Property/patents/frand) / Court of Appeal Judgment on Appeal and Cross Appeal From High Court
Outcome
Appeal allowed in part; cross-appeal dismissed
Legal Topics
Standard Essential Patents (seps), FRAND Licensing, Patent Licensing, Limitation Periods, Interest on Damages, Comparables Analysis, Non Discrimination in Licensing
Intellectual Property Law Contract Law Competition Law Standard Essential Patents (seps) FRAND Licensing Patent Licensing Limitation Periods Interest on Damages +2 more

Case Brief

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Parties

InterDigital Technology Corporation

Claimant

InterDigital Patent Holdings, Inc.

Claimant

InterDigital, Inc.

Claimant

InterDigital Holdings, Inc.

Claimant

Lenovo Group Limited

Defendant

Lenovo (United States) Inc.

Defendant

Lenovo Technology (United Kingdom) Limited

Defendant

Motorola Mobility LLC

Defendant

Motorola Mobility UK Limited

Defendant

Procedural Posture

Civil Appeal (intellectual Property/patents/frand) / Court of Appeal Judgment on Appeal and Cross Appeal From High Court

Legal Issues

  1. 1 Whether limitation periods are relevant to the calculation of royalties for past sales under a FRAND licence
  2. 2 Whether interest should be awarded on past royalties and at what rate
  3. 3 How to determine the appropriate per-unit royalty rate for a global FRAND licence based on comparable licences

Ratio Decidendi

Limitation periods are irrelevant to the calculation of royalties for past sales under a FRAND licence; a willing licensee would pay for all past use. Interest is payable on past royalties at a rate reflecting the time value of money, here 4% compounded quarterly. The appropriate per-unit rate must be derived from the best comparable licence, correcting for non-FRAND market distortions such as heavy discounting of past sales. The blended rate from LG 2017 was too low due to such distortions; a corrected rate of $0.30 per unit, adjusted by a factor of 0.75 for Lenovo, is FRAND. The judge's failure to correct for market distortions was an error. Non-discrimination does not entitle Lenovo to...

Court Disposition

Appeal allowed in part; cross-appeal dismissed

Orders

  • The per-unit royalty rate for Lenovo is set at $0.225 per unit (i.e., $0.30 x 0.75).
  • Lenovo to pay a lump sum of $178.3 million for sales from 2007 to 2023.