Court of Appeal hands down judgment on jurisdiction in implementer-led FRAND dispute

Last week, the Court of Appeal handed down judgment in the case of Vestel v Access Advance & Philips. The judgment is of interest of those in the SEP/FRAND space as it concerns an implementer-led claim for, originally, alleged abuse of dominance, via which vehicle the implementer sought a FRAND determination. The relevant standard was H.265 (HEVC), and the relevant standards body was the ITU.

In short, the Court of Appeal upheld the first instance decision that the court did not have jurisdiction to hear the claims against either Access Advance (the patent pool administrator) or Philips (a pool member).

The case at first instance had turned primarily on the question of whether Vestel had suffered, or could suffer, direct damage in the UK to found jurisdiction and/or meet the requirement that there was a serious issue to be tried. On Appeal, however, the case had narrowed, with Vestel (a) abandoning its abuse case and (b) contending that the matter related to a form of negative declaration as regards the tort of patent infringement (relying on the Arrrow line of case law and especially the decision in Pfizer).

In addition to determining that neither Article 7(2) of the Brussels 1 Regulation Recast, or the tort or property gateways applied in this case, the Court of Appeal determined that the Court's inherent declaratory jurisdiction cannot be engaged unless it is based on the existence or non-existence of a legal right (in addition to serving a useful purpose). Vestel did not assert it had a legally enforceable right to a FRAND licence. Further, it did not plead any legal standard against which the matter could properly be judged. The Court held that the claim had no reasonable prospect of success.

Bristows acts for Philips in this matter.