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Claim No. HC 201.

2 000076
IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

PATENTS COURT

BETWE E N:

. 02 MAR 2015~'
VRINGO INFRASTRUC URE, INC. .

. RECEIVED
'---- ~----~-- Claimant
- and-

ZTE (UK) LIMITED
Defendant

CLAIMANT'S STATEMENT OF CASE IN RELATION TO THE RELIEF TRIAL

Introduction

1. This is the Claimant's Statement of Case in relation to the Relief Trial served
pursuant to paragraph 5 of the Order of Mr Justice Birss of 30 January 2015.

2. In summary:

a. EP (UK) No 1 212 919 ("Patent 919") has been found valid and
infringed by the Defendant, and the Defendant has expressly
threatened to continue its infringing conduct. In the premises, subject
to the matters set out below, the Claimant seeks permanent injunctive
relief;

b. The Claimant is and has at all material times been willing to license its
standards-essential patents ("SEPs") on fair, reasonable, and non-
discriminatory ("FRAND") terms;

c.' Notwithstanding that the Claimant would be entitled to offer the

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Defendant a licence in respect of the Claimant's global patent portfolio
("a Global Portfolio Licence"), the Claimant is willing voluntarily to
enter into a licence agreement with the Defendant under which the
Defendant. would be granted a licence to Patent 919 for the United
Kingdom (a "Patent 919 UK Licence") on FRAND terms (it is not
admitted that there is any obligation on the Claimant to do so), should
the Defendant request such a licence;

d. '. Despite repeated requests, the Defendant has failed to specify the
terms of a Patent 919 UK Licence which it considers to be FRAND.
The Claimant sets out below the terms which it contends would be
FRAND;

e. Should the Defendant not enter into a licence with the Claimant on the
FRAND terms set out below, alternatively on such other terms as the
Court finds to be FRAND, then the Claimant seeks permanent
injunctive relief against the Defendant restraining the Defendant from
infringing Patent 919.

Permanent injunctive relief

3. By judgment dated 28 November 2014 ("the Judgment") Mr" Justice Birss found
that Patent 919 was valid as amended and was infringed by the Defendant.

4. The Defendant has expressly threatened to continue to infringe Patent 919.

PARTICULARS

. a. In paragraph 9 of' the Defendant's Re-Amended Defence and
Counterclaim, the Defendant pleads that "to the extent that ZTE has
carried out the actions complained of, ZTE lawfully intehds to continue
those Clcts" .

. b. The Defendant claims (paragraph 13 of the Re-Amended Defence and
Counterclaim) to be entitled to a licence, which licence can only be
required if the Defendant intends to continue to carry out acts that
would absent a licence infringe.

c. It is stated at paragraph 10 of Mr Liu Shenfei's Witness Statement of 8
January 2015 that "ZTE wishes to be free to offer and supply ZTE
Relevant Products in the UK in the future" ("ZTE Relevant Products" is
defined in paragraph 4 of that statement as including products that
infringe Patent 919).

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5. Unless restrained by this Court, the Defendant will continue to perform the acts
of infringement found in the Judgment and/or the threatened acts of
infringement.

6. In the premises, subject to the matters pleaded at paragraphs 7 to 14 below,
the Claimant seeks permanent injunctive relief restraining the Defendant,
whether acting by its directors, officers, servants or agents, from infringing
Patent 919.

Patent 919 UK Licence

7. The Claimant is and was at all material times willing to comply with its ETSI
FRAND licensing obligations and licence its SEPs on FRAND terms.

8. The Claimant maintains that it would. be FRAND to offer the Defendant a
Global Portfolio Licence under which the Defendant becomes licensed to each
SEP of the Claimant. By letter dated 28 March 2013 from Powell Gilbert LLP on
behalf of the Claimant to Olswang LLP on behalf of the Defendant, the
Claimant made a written offer to the Defendant to enter into a Global Portfolio
. Licence on FRAND terms and .that offer remains open for acceptance.

9. However, on 2 February 2015 the Defendant's parent company, ZTE
Corporation, commenced proceedings against the Claima!1t and its parent
company, Vringo Inc., in the United States District Court for the District· of
Delaware under Case Number 1:15-cv-00132-UNA alleging breach of contract
arising from an alleged failure to offer to license the Claimant's SEPs on
FRAND terms. Shortly thereafter the proceedings were transferred to the
United States District Court for the Southern District of New York (the "SDNY
Court"), where they are currently pending under Case Number 1: 15-cv-00986-
LAK (lithe SDNY Proceedings").

10. The Claimant has filed an Answer, and will on or before 3 March 2015 file its
Counterclaim against ZTE Corporation. The Claimant has denied the
allegations of breach of contract and/or failure to licence the Claimant's SEPs
on FRAND terms advanced by the Defendant in the SDNY proceedings.·
However, it is anticipated that in determining the matters in issue between the
parties to the SDNY Proceedings, the SDNY Court will determine what would
be the FRAND terms of a Global Portfolio Licence.

11. In these circumstances, the Claimant does not invite this Court to determine
the FRAND terms for a Gfobal Portfolio Licence. Rather, the Claimant is willing
. '\

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voluntarily to enter into a Patent 919 UK Licence with the Defendant on FRAND
terms (it is not admitted that there is any obligation on the Claimant to do so),
should the Defendant request such a licence, such Patent 919 UK Licence to
extend to the earlier of the expiry of Patent 919 .or a resolution which includes a
licence to Patent 919. The Claimant pleads the terms which it contends would
be FRAND below.

FRAND terms

12. By a lengthy exchange of correspondence which took place over the course of
approximately 2 years from February 2013 to February 2015 between Powell
Gilbert LLP on behalf of the Claimant and Olswang LLP on behalf of the
Defendant, the Claimant repeatedly requested that the Defendant clarify the
terms of a licence which it considered to be FRAND. Notwithstanding such
repeated requests, the Defendant has not done so.

13. Without prejudice to the Claimant's case that it is not obliged to offer the
Defendant more than one licence on FRAND terms and that it has complied
with its obligations by offering a Global Portfolio Licence on FRAND terms, the
Claimant is willing voluntarily to enter into a licence agreement with the
Defendant (it is not admitted that there is any obligation on the Claimant to do
so), under which the Defendant would be granted a Patent 919 UK Licence. It
is the Claimant's case that the following terms would he FRAND for a Patent
919 UK Licence:

a. The scope of the licence would be to practise those claims of Patent
919 (as amended by Order of Birss J of 19 December 2014) as were
held to be essential and infringed by a product implementing the
standard, being claims 1-27, ("Essential 919 Claims") only in relation
to the following UMTS and LTE infrastructure equipment compliant
with those sections of the UMTS and/or LTE standards relevant to
Patent 919: eNodeB products and Radio Network Controllers and
other products that infringe Patent 919 irrespective of their commercial
designation (together "Infringing Products"). It would not include
express or implied consent for the Defendant to place any specific
products on the market because such an entitlement would also
require a licence under other patents of the Claimant, in particular
where such products also implement GSM;

b. The geographical scope of the licence would cover acts carried out in

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relation to Infringing Products in the UK (including those areas
specified in section 132 of the Patents Act 1977) only;

c. The royalty under the licence would be as follows:

i.' 2.5% of the Defendant's turnover derived from acts carried out
in the UK in relation to Infringing Products (which equates to
approxim.ately 1% of the Defendant's turnover derived from
acts carried out in the uk in relation to all UMTS / LTE
infrastructure); and

ii. a lump sum payment per annum to permit the Defendant to
import into the UK, keep, use (whether for demonstration
purposes or as part of an offer to sell, but not use on behalf of
or for any other person) and/or offer to sell or supply Infringing
Products, such lump sum to be determined at trial following
disclosure. However, the Defendant shall be entitled to deduct
the said lump sum payment from any royalties due under sub-
paragraph (c)(i) above.

d. The licence term would commence on the date of grant of Patent 919,
being 8 September 2010. Royalties for past infringements would be
payable within 30 days of entry into the licence;

e. The licence term would extend to the earlier of the expiry of Patent
919 or a resolution which includes a licence to Patent 919;

f. The Claim'ilnt shall be entitled to conduct ,an audit of the Defendant's
records every 12 months;

g. The licence would be personal and the Defendant would not be
entitled to sublicense. The Defendant's direct and indirect customers
would be entitled to a personal licence to practice the Essential 919
Claims in the UK only in accordance with paragraphs 13a and 13b
above mutatis mutandis; and

h. No other express or any implied licence would be granted to the
Defendant's direct or indirect customers.

Relief sought

14. Should the Defendant not enter into a Patent 919 UK Licence on the terms set
out above, alternatively on such other terms as the Court finds to be FRAND,

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then the Claimant seeks permanent injunctive relief against the Defendant
restraining the Defendant from infringing Patent 919, together with an Order for
delivery up or destruction.

HENRY CARR QC
MARIE DEMETRIOU QC
THOMAS HINCHLlFFE
SARAH FORD
POWELL GILBERT LLP

STATEMENT OF TRUTH

The Claimant believes that the facts stated in this Statement of Case are true.

I am authorised by the Claimant to sign this Statement.

Signed
Full Name
. . . . at-.. . -. .-. . . . . . . . . . . . ..
Ari Laakkonen
Position PARTNER, POWELL GILBERT LLP
Claimant's solicitor

Served this 27th day of February 2015 by Powell Gilbert LLP of 85 Fleet Street,
London, EC4Y 1AE, solicitors for the Claimant.

Ref: VRI1.3/APl

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· "

Claim No. HC 2012 000076

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

BETWEEN:

VRINGO INFRASTRUCTURE, INC

Claimant

-and-

ZTE (UK) LIMITED
Defendant

CLAIMANT'S STATEMENT OF CASE
IN RELATION TO THE RELIEF TR,IAL

Powell Gilbert LLP
85 Fleet Street
London
EC4Y 1AE

Tel. 02030408000
Fax. 02030408001
OX: 358 London/Chancery Lane
Ref: VRI1.3/APL

Solicitors for the Claimant

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