Lenovo has secured a major legal victory in the UK Court of Appeal, overturning a lower court’s decision to deny an interim license for Ericsson’s 5G patents.
The ruling, reported by multiple sources including Reuters, marks a pivotal moment in the ongoing global licensing dispute between the two telecom giants, centered on fair, reasonable, and non-discriminatory (FRAND) terms for patent licensing.
The decision provides Lenovo with temporary relief and reinforces the principles of good faith in FRAND negotiations, potentially setting a precedent for future cases.
Lenovo, known for its personal computers and smartphone division through Motorola Mobility, and Ericsson, a Swedish multinational specializing in networking and telecommunications, both hold extensive patent portfolios in 4G and 5G wireless technology.
Their dispute arises from the need to license each other’s standard-essential patents (SEPs), which are crucial for implementing industry standards like 5G. SEPs require owners to license them on FRAND terms to prevent monopolistic practices and ensure accessibility for all manufacturers.
The concept of FRAND is integral to the telecommunications industry, particularly as 5G deployment accelerates globally. Patentees, by participating in standard-setting organizations, commit to licensing SEPs on terms that are fair, reasonable, and non-discriminatory.
When parties cannot agree on these terms, disputes often escalate to courts, as seen in this case, with legal battles spanning the UK, US, Brazil, and Colombia.
Lenovo initiated legal action against Ericsson in the UK High Court in 2023, seeking a declaration that a willing licensor would agree to a short-term license pending the final determination of FRAND terms.
This interim license would allow Lenovo to use Ericsson’s patents without immediate disruption while the court deliberates on the final licensing agreement, which can be a lengthy process. The initial application was refused, but on February 28, 2025, the Court of Appeal reversed this decision.
Judge Richard Arnold, in his written ruling, stated that “a willing licensor in the position of Ericsson would enter into an interim licence with Lenovo,” adding that he hoped Ericsson would now choose to do so.
A key aspect of the ruling was the finding that Ericsson had breached its obligation to act in good faith by pursuing claims in foreign courts despite Lenovo’s willingness to accept the FRAND terms set by the English courts.
This breach was cited as a reason for granting the appeal, emphasizing the importance of cooperative behavior in FRAND negotiations.
Laura Quatela, Lenovo’s Chief Legal Officer, commented on the ruling, stating,
“This not only confirms that Lenovo is a willing licensee but strengthens and reaffirms our commitment to advocating for transparency and fairness in global FRAND licensing.” Ericsson, however, has not immediately responded to requests for comment, leaving uncertainty about their next steps.
This case is part of a broader trend of FRAND disputes in the telecom sector, where companies like Nokia and Qualcomm have also faced similar legal challenges.
For instance, English courts have recently permitted parties to pursue short-term patent licenses pending trial, as seen in Amazon’s dispute with Nokia, highlighting a growing acceptance of interim measures to maintain business continuity.
The UK courts’ role is particularly significant, as they can set global FRAND terms following a 2020 UK Supreme Court ruling, making decisions like this one potentially influential worldwide.
The ruling’s emphasis on good faith aligns with international legal standards for SEP licensing, potentially encouraging more cooperative negotiations in future disputes.
The interim license provides Lenovo with immediate operational relief, allowing it to continue manufacturing and selling devices that rely on Ericsson’s 5G patents without fear of infringement claims during the negotiation period. For Ericsson, the ruling may prompt a reassessment of its strategy, especially given the court’s finding of bad faith. The company might contest the decision or seek further legal avenues, but the lack of immediate comment suggests a cautious approach.
For the industry, this ruling could set a precedent for how interim licenses are handled in FRAND disputes, potentially reducing the risk of business disruptions for licensees. It also reinforces the UK’s position as a key jurisdiction for resolving global patent licensing issues, which could attract more such cases to English courts.
The final determination of FRAND terms will be crucial, as it will establish the royalty rates and other conditions for Lenovo and Ericsson’s licensing agreement, potentially influencing market dynamics.
Industry observers will be watching closely to see if this decision leads to a more standardized approach to interim licensing, impacting investor confidence in tech stocks and telecom licensing practices.
On April 3, 2025, Ericsson and Lenovo announced that they have reached a settlement in their long-running patent licensing dispute. The companies have agreed to a global cross-license deal, meaning they will share patents instead of continuing their legal battles.
This settlement results in the withdrawal of all ongoing lawsuits, including those with the U.S. International Trade Commission (USITC). Financial effects from the settlement are expected to appear in Q2 2025, with one remaining dispute to be resolved through arbitration.