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IN THE HIGH COURT OF JUSTICE HC-2012-000076 CHANCERY DIVISION PATENTS COURT BETWEEN VRINGO INFRASTRUCTURE, INC. (a company incorporated under the laws of the state of Delaware) Claimant -and- ZTE (UK) LIMITED Defendant DEFENDANT'S STATEMENT OF CASE IN RELATION TO THE RELIEF TRIAL. Introduction 1. Paragraph references in this statement of case are to paragraphs of the Claimant's Statement of Case in relation to the Relief Trial 2, The Defendant responds to the Claimant's summary in paragraph 2 as follows: a. It is admitted that EP (UK) No. 1 212 919 (“the 919 Patent”) has been found valid and infringed by the Defendant but it is not admitted that it is, in fact, valid and infringed. ‘The further prior art identified following the judgment and sought to be relied on following judgment means that, even in the United Kingdom, the patent should be treated as arguably invalid. Moreover, equivalents of the 919 Patent have been held invalid in other jurisdictions, in particular in China, and the German Federal Patent Court's preliminary opinion is that the German equivalent of the 919 Patent is invalid? b. The Claimant is not and has not at any time been willing to license its standards essential patents ("SEPs") or any of them on fair reasonable and non-discriminatory (“FRAND") terms. To the contrary, the Claimant has pursued an international litigation strategy which, it is to be inferred, has been conducted in co- operation with its predecessor in title and potential beneficiary - Nokia Corporation - which is intended to require the Defendant (and possibly others) to pay much more than the SEPs and each of them are genuinely worth. Further, the Claimant has sought to take advantage of the availability in certain jurisdictions of injunctive relief (in particular ex parte preliminary injunctive relief before the validity and infringement of the relevant patents has been tested) to try to oppress the Defendant into paying royalties for its SEPs at a level which is not FRAND. c. The Claimant has not offered the Defendant a licence in respect of the Claimant's global patent portfolio (a “Global Portfolio Licence”). The global portfolio licence to which the Claimant refers was offered to the Defendant's parent company, ZTE Corporation. ZTE Corporation is not a Defendant in these proceedings and is not alleged to carry out any infringing acts in the UK. The Defendant does not need, and has not requested, a Global Portfolio Licence. The Claimant is not entitled only to offer the Defendant a licence to the 919 Patent through a Global Portfolio Licence to the Defendant's parent company. In any event, the Global Portfolio Licence is not FRAND, inter alia, for the following reasons: + A final decision on the German equivalent of the 919 Patent is expected in early May 2015, Based on the oral hearing, in which the Court mentioned that the independent claims (as, originally granted) seemed not to be valid, itis expected that the German equivalent of 919 Patent will only survive (iFat all} with a very limited scope in Germany. i. it is inappropriate for the Claimant to force the Defendant to take a licence to patents that the Defendant does not use and/or that are invalid, ii, it is also inappropriate for the Claimant to force the Defendant to pay the same royalty rate in all countries irrespective of the number of patents that are registered in that country or the extent to which those patents are used by the Defendant in that country, iii, although the Claimant may now be “willing voluntarily” to enter into a licence agreement with the Defendant under which the Defendant would be granted a licence to the 919 Patent for the United Kingdom (“a 919 Patent UK Licence”) on FRAND terms, at all material times the Claimant has either licensed or is under an obligation to license the Defendant under the 919 Patent in the UK, regardless of whether the Defendant takes a licence under any other of the Claimant's alleged rights. The aforesaid obligation applies to all of the Claimant's patents which have been declared to be standard essential, since the legal effect of an ETSI declaration, as well as the relevant competition law of the EU and the UK, are such as to ensure that such licences are available not as a matter of the proprietor’s choice but as a right available for all in the telecommunications industry to exercise d. The Defendant has not “failed to specify the terms of a Patent 919 UK Licence which it considers to be FRAND" if such is intended to imply that the Defendant was under an obligation to do so, Atal material times, the Claimant has been under a duty to offer FRAND. terms for a Patent 919 UK Licence and has repeatedly refused to do so. Despite repeated requests from the Defendant, the