PRC goes global (FRAND)

The inevitable decision from China following the UK Supreme Court's ruling in Unwired has now arrived. In Oppo v Sharp, the Supreme People's Court of the People's Republic of China (the SPC) confirmed the Chinese courts' jurisdiction to set global licensing terms (not just rates) in FRAND disputes.

However, the ruling is perhaps more balanced that many expected, with the decision setting out various reasons why the SPC felt it was appropriate to set global licensing terms in this case. Putting aside some factors as being effectively irrelevant due to being easily satisfied (including that the offer was global and involved a number of Chinese rights), other factors may be harder to show in some cases. For example, the SPC placed emphasis on the fact that the defendant was a Chinese company, that it predominantly manufactured in the PRC where it also had considerable sales, and that the negotiations took place in the PRC. 

Some of these factors can be gamed to an extent: cue companies that prefer the Chinese courts insisting on in-person negotiations being in the PRC, or ensuring a reasonable manufacturing base in the PRC. However, in any event they are strong indicators of a significant connection to the PRC. In contrast, the UKSC decision in Unwired requires no such factual assessment, seeing it purely as a question of contract law to be raised in any FRAND case (though the SPC also did note that these disputes were about contract law as well as about patent law). That difference in approach is interesting, and may mean less of a competition between jurisdictions than many expected.