Optis v Apple, High Court of Justice

10 May 2023 - Case No. [2023] EWHC 1095 (Ch)

http://caselaw.4ipcouncil.com/english-court-decisions/england-and-wales-high-court/optis-v-apple-high-court-justice

A. Facts

Optis owns patents declared as (potentially) essential to the practice of wireless standards developed by the European Telecommunica­tions Standards Institute (ETSI). ETSI requires patent owners to commit to make standard-essential patents (SEPs) accessible to users on fair, reasonable and non-discriminatory (FRAND) terms and conditions.

Apple is a global manufacturer of electronic devices complying - among others - with ETSI standards.

In 2016 and early 2017, the parties had introductory meetings concerning a licence to Optis’ patent portfolio. In the following months, Optis and Apple had discussions about licence terms.

In December 2017, Optis made a licensing offer to Apple. The parties did not reach agreement.

In April 2018, Apple made a (counter)offer to Optis, proposing a lump-sum payment of USD 35 million. Optis rejected Apple’s offer.

In February 2019, Optis filed an action against Apple before the High Court of Justice (High Court) based on UK patents. The High Court listed four technical trials dealing with the validity and essentiality of the patents in suit (technical trials A-D). A further trial would deal with Optis’ request for injunctive relief (injunction trial). The High Court would set the terms of a FRAND licence to Optis’ portfolio and treat certain competition law issues in separate proceedings (FRAND trial).

In October 2020, the High Court delivered a first ruling in the technical trial A, finding the patent in suit to be valid and essential.^[1]  In the second instance, the Court of Appeal confirmed the finding of validity, but reversed the finding of essentiality.^[2]

In June 2021, the High Court confirmed the validity and infringement of another patent in suit in the technical trial B.^[3] Apple’s appeal against this decision was dismissed.^[4]

In September 2021, the High Court gave judgment in the injunction trial.^[5] The High Court ruled that Apple was (at that time) not entitled to rely upon Optis’ FRAND undertaking towards ETSI (and, thus, avoid an injunction), because Apple refused to commit to take a licence on the terms that the High Court would set in the FRAND trial. The High Court opined that a ‘FRAND-injunction’ (which would seize to have effect if Apple would sign a FRAND licence with Optis in the future) would be the proper relief. Both parties appealed. After the ruling was issued, Apple made an undertaking to accept the court-determined FRAND licence in the terms advised by the High Court. By order dated 25 October 2021, the High Court refused to grant an injunction.

In November 2021, the High Court found all three patents asserted in technical trial C to be invalid (essentiality was not contended).^[6] In second instance, this ruling was overturned.^[7] In March 2022, the High Court confirmed the validity and essentiality of the two patents involved in technical trial D.^[8] Apple’s respective appeal was dismissed.^[9]

In October 2022, the Court of Appeal dismissed the appeals of both parties and confirmed the decision of the High Court of September 2021 in the injunction trial.^[10]

With the present judgment, the High Court delivered its ruling in the FRAND trial.^[11]

The High Court set an annual lump-sum rate for Optis’ portfolio amounting to USD 5.13 million.^[12] Apple is required to pay a five years’ annual rate upfront for sales until the end of the term of the licence (USD 25.65 million)^[13] as well as a six years’ annual rate for past sales (USD 30.78 million).^[14] For the past release, interest at a (provisional) rate of 5 % per annum is also payable.^[15]

Apart from the royalties, the High Court also determined the scope (i.e., worldwide multi-standard licence covering all existing and future products of Apple)^[16] and the term of the agreement (i.e., licence will run until the expiry of the longest-living portfolio patent) as well as the way to treat parallel pending litigation between the parties (i.e., any proceedings globally shall seize).^[17]

B. Court’s reasoning

The High Court’s analysis predominantly revolved around the fundamental question of which terms shall form a FRAND licence for Apple to Optis’ SEP portfolio.

FRAND price / comparable licences

Reflecting on the meaning of FRAND, the High Court observed that the ‘FRAND price’ is ‘not a market price’, as ‘there is no market from which the prices of SEPs declared to a given Standard can be derived [..].’^[18] For determining the FRAND price ‘reference to factors that proxy a market price’ is needed.^[19] Typically, ‘comparable transactions’ are a relevant reference factor.^[20] In the FRAND context, comparable licensing agreements with third parties (comparable agreements or comparables) that were ‘fairly negotiated’ and are ‘genuinely similar’ to the individual case ‘would have significant evidential value.’^[21] The High Court noted, however, that this applies only when the agreements are ‘in fact comparable’.^[22]

Looking at the licences put forward by Optis and Apple, the High Court pointed out that they ‘need to be treated with extreme caution.’^[23] Optis’ and Apple’s agreements formed two ‘categorically different’ pools^[24]. To render these agreements comparable ‘unpacking’ by experts was required, which, in the eyes of the High Court, is a ‘regrettably subjective process’ involving a ‘high degree of subjective input from the experts.’^[25] What is more, the High Court criticised the fact that the experts appointed by the parties following the instructions of their clients had ‘unpacked’ the licences in different ways, so that no common ground was reached.^[26] The High Court identified ‘subjectivities’ with respect to the way in which the royalties were computed in the various licences, the valuation of cross-licences, and the differentiation between future royalties and past releases.^[27] The analysis of both parties’ experts was, therefore, seen as ‘insufficient’.^[28]

Apart from the need to ‘unpack’ the agreements, which ‘imports as many subjectivities as it eliminates’, the High Court explained that using the parties’ comparables as a guide to a market price was difficult in the present case, not least because Optis’ portfolio is unique, so that one could not just ‘ask what other sellers of the same product as Optis were selling for’.^[29]

Against this backdrop, the High Court turned to define the concrete meaning of the values ‘Fair’, ‘Reasonable’ and ‘Non-Discriminatory’, which form the FRAND price.^[30]

Non-discriminatory rate

The High Court reasoned that a non-discriminatory rate ‘is one that does not differentiate in a discriminatory way between SEP Owners on the one hand and Implementers on the other.^[31] In other words, taking ‘all material differences’ into account, implementers ‘ought to pay the same’ and SEP owners ‘ought to be paid the same.’^[32]

According to the High Court, the question of what constitutes a non-discriminatory price among implementers is ‘more nuanced than might at first appear’, as it ‘may (counterintuitively) involve a more flexible approach to pricing than a one-size-fits all approach’.^[33] The High Court outlined that charging an identical ad valorem rate (i.e., a rate calculated on basis of a percentage of the average selling price of a standard-compliant product) to all implementers is not required; conversely, this could be problematic, when product prices vary significantly between implementers.^[34] Applying the same per unit price across all implementers could equally be problematic, especially when sales volumes vary significantly.^[35] An identical lump sum rate for all implementers was seen as ‘more overtly discriminatory unless it reflects proper differences between Implementers.’^[36]

Addressing the question of non-discrimination between SEP owners, the High Court highlighted that ‘the key differentiator is the proportion of the Stack owned by different SEP Owners’.^[37] This means that the price charged by SEP owners should ‘vary as to the proportion of the Stack owned by each SEP Owner’.^[38] On the contrary, the High Court rejected the notion that ‘quality’ – although generally a driver of price –  can be a differentiator in this respect, as it is a value impossible to assess and ‘the Implementer is paying not for valid, essential and important SEPs, but for access to the Standard.’^[39]

Fair and reasonable rate

The High Court sought to define the terms ‘Fair’ and ‘Reasonable’ by way of analogy to the law regarding unfair pricing in abuse of market dominance cases.^[40] In the view of the High Court, there is ‘a very close alignment between a price that exceeds FRAND and a price that infringes the Chapter II prohibition’, although there is no complete overlap: A ‘neutral zone’ where a price is supra-FRAND but not excessive in competition law terms exists.^[41] 

In line with the above, the High Court held that factors such as cost, comparables, or prices charged by other undertakings, which are relevant for the assessment of excessive pricing, can, generally, be helpful also for determining a fair and reasonable rate.^[42] Whereas, in the present case, comparables were seen as ‘one of the best sources’, cost was, on the other hand, considered to be a factor that would be difficult to assess.^[43] The analysis of excessive pricing was, therefore, only ‘indirectly’ important to the extent that it revealed that the FRAND price must not necessarily be translated in ad valorem rates, but could be reflected equally in a price based on a per unit or lump sum rate.^[44]

The High Court found that the FRAND price ‘ought to take account of the value of the Standard to the Implementer’.^[45] In particular, the FRAND price ‘involves valuing the access to the Standard, because that is what (in a pro rata or rateable way) the Implementer is paying for.’^[46] The High Court elaborated that ‘the profit that the Implementer can make, using this technology, will form an important element in calculating price’.^[47] The ‘value to the consumer of Cellular Connectivity’ was not seen as a relevant factor, not least because it is a point ‘impossible to answer’.^[48]

Methodology for royalty calculation

In terms of methodology, the High Court applied the following two-step analysis: First, the High Court sought ‘to price the value of the entire Stack to Apple’.^[49] Second, the High Court apportioned that price ‘pro rata amongst the co-owners of the Stack in proportion with their holding’.^[50] The High Court clarified that this exercise did not include an assessment of the value of individual patents but focused on the price that implementers should pay for the overall stack of relevant patents.^[51]

The relevant stack of patents

The High Court first determined which patents comprise the stack. In this regard, the High Court identified ‘evidential deficiencies in relation to the number of Declared Patents to the Standards, their validity, essentiality and importance.’^[52]

Neither Optis nor Apple had relied on metrics extracted directly from ETSI’s declaration database, as both parties thought that the ETSI (raw) data was not reliable.^[53] The High Court did not contest this, considering that ‘the risk of over-declaration of patents is enormous and largely uncontrolled by ETSI.’^[54] The High Court understood, however, that ‘over-declaration’ is ‘an attribute inherent to the system’ and that the ETSI FRAND declarations ‘are of enormous economic benefit’, so that ‘an aggressive filter intended to procure that only valid and essential patents were declared would very likely be counter-productive’.^[55]

Turning to the evidence put forward by the parties, the High Court stressed that the respective data should be treated ‘extremely carefully.’^[56] The parties relied mainly on two sources: Reports of Innography and reports of PA Consulting. As the parties had changed their position concerning the quality of the data included in these reports during the proceedings and no experts from either Innography or PA Consulting gave evidence in the trial, the High Court described the evidence on the quality of the respective data as ‘patchy and very much second-hand.^[57]

Nevertheless, for determining the stack, the High Court relied – with ‘some caution’ – on the data provided by Innography.^[58] Compared to the data of PA Consulting, Innography’s data was ‘far less ambitious’, since it focused solely on the number of declarations of patents to a particular Standard without reference to the essentiality or validity of (declared) patents.^[59] On the other hand, the PA Consulting data applied a filter of essentiality to declared patents.^[60] Although the High Court accepted that a ‘reliable qualitative assessment’ would likely be preferrable, it concluded that PA consulting data was not to be used here, because ‘making a judgement about levels of essentiality in the stack is unreliable and unsafe’.^[61] Filtering for essentiality, as PA Consulting did, is ‘quintessentially a judgemental exercise, where ultimately it is the courts of relevant jurisdiction that have the last word’.^[62] The High Court concluded that for the purpose of FRAND determination purely quantitative data (number of SEPs declared) should be preferred over ‘an unreliable qualitative assessment’.^[63] In this context, the High Court made clear that the stack should be assessed based on patent families and not individual patents (both Optis and Apple had referred to patent families as well).^[64]

The value of the stack

Having determined the relevant stack of patents (i.e., patent families), the High Court moved on to price the value of the (entire) stack to Apple.^[65] Since data regarding every component element of the stack was missing, the High Court considered multiple data sources.^[66] The High Court placed particular weight on the comparable agreements produced by the parties, despite the fundamental concerns mentioned above.^[67]

Given the different types of comparables available (agreements with ad valorem rates and others with lump sum rates), the High Court assessed both an ad valorem price and a lump sum price for the stack.^[68] In brief, the High Court extrapolated a rate from the comparable agreements of the parties: While for the ad valorem calculation the High Court relied mainly on Optis’ comparables (which provided for ad valorem rates), for the lump sum calculation it used Apple’s agreements (that provided for lump sum rates).^[69]

The High Court argued that an ad valorem assessment was not defensible in the present case.^[70] Optis’ comparable agreements were considered as ‘worse than useless at deriving a rate for Apple to pay’; Apple’s comparables were no reliable source for this exercise either, since they required ‘unpacking’.^[71] The High Court concluded that Optis’ comparable agreements produced ‘remarkably high rates’ that were ‘certainly not FRAND’ and, thus, needed to be discounted.^[72] Optis’ agreements were concluded with rather small players and – in the view of the High Court – were signed by Optis ‘not because of their economic significance, but because they provided Optis with comparables (or rates in comparables) that Optis wanted to deploy.’^[73]

The High Court chose to price the stack on a lump sum basis.^[74] Pricing the stack ‘on monetary rather than ad valorem terms’ was seen as generally preferrable.^[75] The lump sum approach was favoured here particularly because Apple’s (lump sum) comparables did not require ‘unpacking’ and allowed the High Court – in contrast to Optis’ comparables – to gain insights about the value of different tranches of the stack, as they were entered into with various different SEP owners holding different parts of the stack.^[76] Moreover, Apple’s comparables were signed with ‘big beasts’ which, according to the High Court, could indicate that ‘the bargain ultimately reached is one that reflects economic realities and so is not abusive, but fair.’^[77] The High Court was not convinced that Apple’s comparables contained ‘unduly low’ rates depressed by hold-out on the side of Apple.^[78] Although the High Court presumed that several principles underlying Apple’s licensing negotiations framework are not in line with the FRAND regime established by UK case-law in the meantime, it did not consider that – at least at the time they were advanced – they resulted in (illegitimate) hold-out.^[79]

Apportionment / Optis’ share of the stack

As a next step, the High Court calculated Optis’ share of the value of the entire stack in proportion to Optis’ share of SEPs. For this, the High Court relied on the total number of declared patent families owned by Optis and again refrained from a qualitative assessment of Optis’ portfolio as part of the stack.^[80]

The High Court rejected Optis’ contention that its portfolio deserved a higher valuation, because it was above average in terms of quality and strength.^[81] The High Court accepted that, in principle, this argument could be of relevance, provided, however, that the SEP owner indeed has a portfolio that is better than the average.^[82] In the present case, the High Court found ‘no basis for any conclusion that the Portfolio was “above average” in strength, either as regards essentiality or validity’ and that Optis’ respective claims were ‘entirely unsupported by any credible evidence.’^[83] The outcomes of the technical trials concerning the patents in suit, which ‘split broadly 50/50’ were not seen as a reliable indicator of portfolio strength, as the sample was considered to be too small.^[84] The High Court further noted that Optis had produced only ‘minimal documentation’ regarding the process of constructing its portfolio, which Optis had argued contained a higher proportion of selected ‘litigation grade’ patents with high quality.^[85] The High Court drew also an inference ‘above the immaterial’ from the fact that Optis had withdrawn evidence relating to the quality (in terms of a high degree of essentiality) of its portfolio, after a test of such evidence by reference to a sample of patents selected by Apple was ordered in trial.^[86]

Treatment of past sales

Regarding sales of infringing products prior to the signing of a license agreement, the High Court highlighted that, in principle, a FRAND licence should ‘provide not only for a payment in respect of (potential) past infringements, but also ensure that Hold Out does not pay. In short, there ought to be equality of value as between the past and the future.’^[87] In the case at hand, this meant that Apple would be required to pay a release for past sales based on the same annual lump sum amount determined by the High Court for future sales.^[88] In the eyes of the High Court, the licence ‘must deal with past release, and in a manner that incentivises, without being punitive, the swift conclusion of FRAND licences in the future, and is discouraging of Hold Out.’^[89]

In addition, the High Court ordered Apple to pay interest at a (provisional) rate of 5 % per annum.^[90] The annual lump sum payment, on which this rate shall apply, was deemed to have been payable on the first day of each (unlicensed) past year, starting with January 1, 2017.^[91]

Licensing negotiations / Hold-up and hold-out

Finally, the High Court addressed the question of whether the parties had engaged in ‘hold-up’ or ‘hold-out’ during the negotiations preceding the present trial.^[92]

The High Court defined hold-up as follows: ‘Hold Up involves an SEP Owner holding up an Implementer’s business by threatening an injunction for patent infringement or actually obtaining such an injunction.’^[93] Hold-out was defined as ‘the converse situation, namely the case where an Implementer delays obtaining a licence from an SEP Owner whilst infringing or allegedly infringing, relying upon the fact that it is actually quite difficult (even without the obligation to license on FRAND terms) to enforce even valid and essential patents.’^[94]

In the view of the High Court, both hold-up and hold-out ‘will be intrinsic to any hard commercial negotiation for a licence’, so that ‘[a] certain degree of Hold Up and Hold Out is to be expected as inevitable.’^[95] According to the High Court, ‘the point is not that Hold Up and Hold Out are illegitimate or unlawful, but that they are undesirable’.^[96] Having said that, the High Court did not rule out that ‘illegitimate’ hold-up or hold-out can exist.^[97] Drawing the line between ‘proper’ and ‘improper’ hold-up and hold-out is, however, a difficult task.^[98] The High Court seems to favour a rather high threshold, drawing an analogy with ‘improper market power’ and abusive behaviour.^[99]

In this context, the High Court mentioned that the case-law of English courts has now ‘articulated a legal regime which resolves problems of Hold Up and Hold Out’.^[100] Hold-up is eliminated, since an injunction will be denied when the SEP owner has made a FRAND declaration and the implementer has committed to abide to the court-determined terms of a FRAND licence.^[101] On the other hand, by ordering the implementer to fully pay for past infringements including interest, English courts discourage hold-out.^[102] Given that during the parties’ negotiations and at the early stages of this trial the relevant English jurisprudence had not settled yet, the High Court opined that it was appropriate to address the respective arguments advanced by both Optis and Apple here, but – at the same time – indicated that in future cases there will likely be no justification for raising such arguments in FRAND cases.^[103]

Turning to the parties’ contentions concerning hold-up or hold-out, the High Court concluded that, in general terms, they were ‘in fact entirely irrelevant and both Optis and Apple are to be criticised for raising them and wasting valuable time and money in litigating them.’^[104] The main reason for this was that ‘[n]either Optis nor Apple were clear where the borderline between legitimate and illegitimate Hold Up/Hold Out lay.’^[105]

Hold-out

Considering Apple’s behaviour in negotiations with SEP owners, the High Court accepted that Apple took a ‘hard-nosed approach’.^[106] Nevertheless, the High Court was not convinced that ‘Apple was failing to engage or failing to take the request for a licence seriously’ or that it ‘operated in bad faith’: The respective contentions put forward by Optis were dismissed as ‘overblown and wrong.’^[107]

The fact that certain principles of the FRAND negotiation framework followed by Apple were ‘indefensible’ did not change the above assessment.^[108] The High Court criticized Apple’s position that royalties should be calculated based on the so-called ‘Smallest Saleable Patent Practising Unit’ (SSPPU) and that SEP owners should not participate in the value attributable to the standard.^[109] The High Court also held that insisting on a patent-by-patent assessment of portfolios taking into account the technical merits of the individual SEPs was pragmatically impossible and just a ‘negotiating ploy’ applied by Apple.^[110]

In particular, the High Court found that the ‘basic premiss’ underlying Apple’s SSPPU arguments ‘is wrong in its essence.’^[111] In contrast to Apple’s view, the High Court considered the assumption that the manufacturers of baseband chipsets – which were deemed to be the SSPPU with regard to Apple’s products – would pay license fees out of their profit to be ‘quite absurd’ and absent extremely clear market evidence ‘almost certainly both unsafe and wrong’.^[112] What is more, decisive is the question ‘what would the market enable the chipset manufacturers to recover from their purchasers to reflect this additional cost/benefit.^[113] The High Court reasoned that in case the licence taken at the chipset level would – as Apple seemed to suggest – exhaust the rights arising from SEPs downstream, then ‘the licence is of real value to a seller of chipsets to handset manufacturers’ and the ‘FRAND price ought to be exactly the same as that which would be paid by the handset manufacturer.’^[114] In more general terms, the High Court stressed that ‘focusing on the SSPPU in no way assists in deriving a price for the technology licence here in issue. What matters is the price that can be charged in the market; not an artificial attempt to localise the technology in issue to a particular component.’^[115]

Furthermore, the High Court rejected the notion that the value attributable to the standard should be excluded from the valuation of individual SEPs.^[116] In brief, Apple’s argument was that the FRAND rate for a specific SEP should be the rate that the parties would have negotiated prior to the finalisation of the standard, so that the value of the standard to the implementer should be disregarded.^[117] The High Court observed that given the number of relevant patent families, a patent-by-patent evaluation of the technical merits of individual patents is a ‘non-starter’, so that the entire approach was rather ‘theoretical’.^[118] The High Court added that this approach is also ‘wrong in principle’: The argument that the value of the standard should be excluded from payments to SEP owners is ‘difficult to defend’, not least because ‘[t]he fact is that the SEPs are part of what makes the Standard’.^[119] Moreover, the FRAND commitment made by the SEP owner ‘is a contribution going beyond the value of the SEP itself.’^[120]

Abuse of market dominance

The High Court concluded that Optis had not abused a market dominant position.^[121]

Exceptionally, the High Court did not start with the question of whether Optis is a dominant undertaking but dealt with the question of the existence of an abusive behaviour first.^[122] This was – according to the High Court – owed to the ‘oddity’ of Apple’s respective case: Apple had not been forced to agree to an abusive price nor had it been excluded from a market or inhibited in its commercial activities, so that the High Court failed to see any loss that Apple could have suffered.^[123] The cost of the present litigation was not seen as a relevant loss in this context either.^[124] In the view of the High Court, even though ‘[b]oth parties made missteps’ during the negotiations, characterising these ‘missteps’ as an abuse of dominance or as ‘illegitimate’ hold-out was ‘simply wrong’.^[125] The High Court pointed out that Apple’s respective contention ‘was – albeit disguised – an attack on a party’s freedom to negotiate price.’^[126] More generally, the High Court expressed concerns against using competition law ‘as a control over parties’ negotiations, when such negotiations are fundamental to the operation of a market economy’, as this would constitute ‘a novel and remarkably dangerous contention’.^[127]

Having said that, the High Court also explained that Optis is not a dominant undertaking.^[128] The High Court noted that ‘Optis’ market power derives from a combination of its intellectual property rights (such as they may be) in the individual SEPs and the fact that the Standard to which those SEPs are declared is overtly intended to be ubiquitous.’^[129] However, Optis pays a ‘price’ for engaging with ETSI standards, namely the ‘obligation, legally enforceable against it, to offer to license its Portfolio on FRAND terms to anyone who seeks such a licence’, which prevents Optis from obtaining an injunction when the standards implementer has expressed a willingness to take a FRAND licence.^[130] For these reasons, dominance is not given.^[131]

^[1] Optis v Apple, High Court of Justice, judgment dated 16 October 2020, [2020] EWHC 2746 (Pat).

^[2] Optis v Apple, Court of Appeal, judgment dated 10 November 2021, [2021] EWCA Civ 1619.

^[3] Optis v Apple, High Court of Justice, judgment dated 25 June 2021, [2021] EWHC 1739 (Pat).

^[4] Optis v Apple, Court of Appeal, judgment dated 13 June 2022, [2022] EWCA Civ 792.

^[5] Optis v Apple, High Court of Justice, judgment dated 27 September 2021, [2021] EWHC 2564 (Pat).

^[6] Optis v Apple, High Court of Justice, judgment dated 25 November 2021, [2021] EWHC 3121 (Pat).

^[7] Optis v Apple, Court of Appeal, judgment dated 25 April 2023, [2023] EWCA Civ 438.

^[8] Optis v Apple, High Court of Justice, judgment dated 15 March 2022, [2022] EWHC 561 (Pat).

^[9] Optis v Apple, Court of Appeal, judgment dated 4 July 2023, [2023] EWCA Civ 758.

^[10] Optis v Apple, Court of Appeal, judgment dated 27 October 2022, [2022] EWCA Civ 1411.

^[11] Optis v Apple, High Court of Justice, judgment dated 10 May 2023, [2023] EWHC 1095 (Ch).

^[12] Ibid, para. 497.

^[13] Ibid, para. 498.

^[14] Ibid, para. 501.

^[15] Ibid, para. 502.

^[16] Ibid, paras. 495-497. 

^[17] Ibid, paras. 503 et seqq.

^[18] Ibid, para. 424.

^[19] Ibid, para. 424.

^[20] Ibid, para. 425.

^[21] Ibid, para. 229.

^[22] Ibid, paras. 288 and 55. 

^[23] Ibid, para. 288.

^[24] Ibid, para. 294.

^[25] Ibid, paras. 296 et seq.

^[26] Ibid, para. 298.

^[27] Ibid, para. 301.

^[28] Ibid, paras. 318 and 56.

^[29] Ibid, para. 425.

^[30] Ibid, paras. 426 et seqq.

^[31] Ibid, para. 429.

^[32] Ibid, paras. 429 and 453.

^[33] Ibid, para. 430.

^[34] Ibid, para. 430.

^[35] Ibid, para. 430.

^[36] Ibid, para. 430.

^[37] Ibid, para. 433.

^[38] Ibid, para. 433.

^[39] Ibid, para. 433.

^[40] Ibid, para. 434.

^[41] Ibid, para. 439.

^[42] Ibid, para. 440.

^[43] Ibid, paras. 441 et seq.

^[44] Ibid, paras. 451 et seq.

^[45] Ibid, para. 452.

^[46] Ibid, para. 452.

^[47] Ibid, para. 452.

^[48] Ibid, para. 452.

^[49] Ibid, para. 456.

^[50] Ibid, para. 456.

^[51] Ibid, para. 456.

^[52] Ibid, para. 63.

^[53] Ibid, paras. 111 and 67.

^[54] Ibid, para. 105.

^[55] Ibid, para. 107.

^[56] Ibid, para. 114.

^[57] Ibid, paras. 69 et seq. and 113 et seq.

^[58] Ibid, para. 134.

^[59] Ibid, para. 128.

^[60] Ibid, para. 136.

^[61] Ibid, para. 136.

^[62] Ibid, paras. 136 et seq.

^[63] Ibid, para. 138.

^[64] Ibid, paras. 84 et seq. The High Court held that 22,000 patent families constitute the entire stack, see para. 460. The High Court also made clear that a reliable patent-by-patent assessment of the quality of patents or patent families in any given portfolio is not possible, so that ‘any assessment needs to operate at a high level of abstraction or generalisation’, para. 65.

^[65] Ibid, paras. 462 et seqq.

^[66] Ibid, para. 462.

^[67] Ibid, para. 455. The High Court made clear that it would be inadmissible to rely on the findings of Birrs J in Unwired Planet v Huawei when determining what was the proper FRAND rate here, irrespective of the fact that this case involved part of Optis’ portfolio (that is the portfolio acquired by Unwired Planet), para. 364.    

^[68] Ibid, para. 463.

^[69] Ibid, para. 464.

^[70] Ibid, para. 471.

^[71] Ibid, para. 471.

^[72] Ibid, paras. 470 and 473.

^[73] Ibid, paras. 470 and 292.

^[74] Ibid, para. 475.

^[75] Ibid, para. 472.

^[76] Ibid, para. 476. Having found that the range of values for the entire stack derived from Apple’s comparables was in part considerable, the High Court decided to eliminate certain agreements seen as ‘outliers’; paras. 483 et seqq.

^[77] Ibid, para. 481.

^[78] Ibid, para. 481.

^[79] Ibid, para. 481.

^[80] Ibid, paras. 469, 487 and 183.

^[81] Ibid, paras. 108 and 162.

^[82] Ibid, para. 109.

^[83] Ibid, paras. 182 and 162. The High Court also doubted that inferences about the quality and strength of a portfolio can be drawn by a single patent or patent family, para. 200.

^[84] Ibid, para. 188.

^[85] Ibid, para. 158.

^[86] Ibid, paras. 167 et seqq.

^[87] Ibid, para. 500.

^[88] Ibid, para. 501.

^[89] Ibid, para. 489.

^[90] Ibid, para. 502.

^[91] Ibid, para. 502.

^[92] Ibid, paras. 365 et seqq.

^[93] Ibid, para. 365.

^[94] Ibid, para. 365.

^[95] Ibid, paras. 366 et seq.

^[96] Ibid, para. 370.

^[97] Ibid, para. 371.

^[98] Ibid, para. 373.

^[99] Ibid, paras. 372 and 391.

^[100] Ibid, para. 375.

^[101] Ibid, paras. 377, 368 and 228.

^[102] Ibid, paras. 379 and 489.

^[103] Ibid, paras. 374 and 380.

^[104] Ibid, para. 374.

^[105] Ibid, para. 373.

^[106] Ibid, para. 208.

^[107] Ibid, paras. 210 and 357.

^[108] Ibid, para. 360.

^[109] Ibid, para. 360.

^[110] Ibid, paras. 360, 407 and 207.

^[111] Ibid, para. 218.

^[112] Ibid, para. 218. Regarding the related question of whether the manufacturer of a baseband chipset would require a licence, the High Court noted that ‘nothing turns on this’, cf. footnote 310.

^[113] Ibid, para. 219.

^[114] Ibid, para. 219.

^[115] Ibid, para. 220.

^[116] Ibid, paras. 228 et seqq.

^[117] Ibid, para. 226. 

^[118] Ibid, para. 228. 

^[119] Ibid, para. 228. 

^[120] Ibid, para. 228.

^[121] Ibid, paras. 381 et seqq.

^[122] Ibid, para. 383.

^[123] Ibid, paras. 383 et seq.

^[124] Ibid, para. 385.

^[125] Ibid, para. 385.

^[126] Ibid, para. 385.

^[127] Ibid, para. 385.

^[128] Ibid, para. 388.

^[129] Ibid, para. 386.

^[130] Ibid, para. 387.

^[131] Ibid, para. 388