As Many as Three Incompatible FRAND Judgments Before Breakfast

Within the past week, there have been three judgments rendered in the ongoing FRAND dispute between ZTE and Samsung.  (For discussion on this blog of earlier proceedings in this dispute, see here.)  On Friday, Mr. Justice Meade issued his decision in Samsung Elecs. Co. v. ZTE Corp., [2026] EWHC 999 (Pat.) (Eng.).  In this action for a declaratory judgment, brought by net licensee Samsung, the court determines that a court-determined global FRAND license pertaining to ZTE’s and Samsung’s portfolios would (1) cover both 4G and 5G technology, (2) run for five years, and (3) require a net payment from Samsung in the amount of $392 million.  This number is derived from one comparable, the 2020 SEP license between ZTE and Apple.  Because ZTE negotiated this license from a position of comparative weakness, in part due to U.S. sanctions levied against the firm, the court effectively increases the inferred amount by 21%, which results in a net amount of $392 million.  Meanwhile, it has been widely reported that on the very same day the Chongqing court, in which a parallel global FRAND rate determination has been ongoing, issued a decision applying a top-down methodology and awarding ZTE the full amount it had sought for a six-year license, namely $731 million.  Then today the ip fray blog reports that the Munich Regional Court issued a written decision (apparently not yet publicly available), following up its oral decision last week that ZTE was entitled to an injunction, in which the court states that in its view a five-year global FRAND royalty based upon a top-down methodology would be in the amount of $640 million.  The report indicates that the court urged the parties to settle.

Settlement would seem the most likely course to me at this juncture; but settlements occur in the shadow of the law, and so the question arises . . . well, what exactly is the law here?  In other words, if the parties don’t settle, what happens?

Without the text of the Chongqing decision, the answer to this question is necessarily somewhat speculative—and even with it, I’m not sure I know the answer, but I will hazard a few possibilities nonetheless.  First, since the English decision is (at this stage) only for a declaratory judgment, I think Samsung would have to follow up with a request for injunctive relief (within the U.K.) and/or specific performance, if it wanted to force ZTE to accede to Mr. Justice Meade’s terms.  But then the question would arise whether, if ZTE didn’t accede (or perhaps even if it did?), other jurisdictions would feel themselves bound to recognize the judgment.  I suspect the Chinese courts would not, particularly in view of the recently-published Regulations of the People's Republic of China on Countering Foreign States' Unlawful Extraterritorial Jurisdiction Measures (which have been reported on elsewhere, and which may be the subject of a separate forthcoming blog post); and perhaps the German courts wouldn't either.  As for the Chongqing decision, if Samsung were to refuse to accede, I suspect that that court might enter an injunction against Samsung and/or permit the judgment to be levied against whatever assets Samsung has in China. Whether courts outside of China would enforce or recognize the judgment, however, remains to be seen; as readers are probably aware, the EU has a pending WTO complaint targeting China’s practice of establishing global FRAND royalties.  The German decision, if I understand correctly, would appear to force Samsung products off the market in Germany unless and until a license (covering at least whatever domestic SEP or SEPs are at issue in the Munich litigation) is concluded, but the court’s reported statements about the terms of a global FRAND license would not, in and of themselves, force Samsung to accede to those terms.  Whether other courts are persuaded by the Munich court's reasoning would be up to those courts.

These are all topics to which I will be giving a good deal of thought over the summer, as I work on an essay on IP and extraterritoriality.  I’m hoping as well that some of the well-regarded voices on private international law—that is, on general private international law not limited to the IP context, people such as Professors Bill Dodge and Curtis Bradley--will have something to say about this morass, and possibly how to resolve it.         

China and ASIs

I don’t think I have previously this mentioned on this blog, but Professor Tim Holbrook and I have signed a contract with Oxford University Press to coedit an edited volume titled Research Handbook on Extraterritoriality and Intellectual Property Law.  I will have more to say about this project over the course of the next year or so, but for now will just note that we have assembled a list of about forty contributors, including ourselves, to address the many issues that may arise in evaluating the geographic scope of IP rights.

One group of such issues, of course, relates to standard-essential patents; among the relevant issues are whether courts can or should award global royalties, with or without consent of the parties, and whether they can or should award interim relief such as antisuit injunctions, anti-antisuit injunctions, or declarations concerning interim licenses.  In connection with antisuit injunctions, as readers are by now aware, a WTO arbitration panel last year ruled in favor of the EU's appeal from the original panel decision, in finding that China’s antisuit injunction policy violated TRIPS articles 28.1 and 28.2, read in light of article 1.1 second sentence (see my post here).  It is therefore notable that, as has been reported elsewhere, on April 1 the EU published an announcement that China had announced its withdrawal of the antisuit injunction policy at the WTO Dispute Settlement Body meeting in September.  The minutes of that meeting are available here, and the EU-China dispute is Item 2 (pages 6-9).  China expresses its agreement with the original panel opinion and its disagreement with the arbitration panel, before stating in paragraph 2.4 that the Supreme People’s Court had issued a notice on September 25 “stating that the so-called ‘ASI policy’, to the extent it ever existed, had been withdrawn and had no continuing effect upon how Chinese courts evaluated requests for anti-suit injunctions in the context of SEP litigation.”  The aforementioned EU announcement states that “[a]fter some initial technical issues were resolved, this notice is currently accessible online from outside China too” (if any readers can point me to it, I would appreciate it), but that “[g]iven the unwritten nature of China’s anti-suit injunction policy, the European Commission will continue to closely monitor the situation to ensure China’s full compliance . . .  and take further action, if necessary.”

In light of these developments, it was interesting to read an article by Yao Jianjun (former vice president of the Xi’an Intermediate People’s Court) in an issue of China Patents & Trademarks, No. 4, 2025, that recently came my way.  The article, appearing in English translation at pages 12-22, is titled Application of Anti-Suit Injunctions in SEP Disputes.  It provides an overview of Huawei v. Conversant, which was the first of five cases from 2020 in which a Chinese court (here, the SPC) granted an ASI (here, against the enforcement of an injunction granted against Huawei in Düsseldorf).  The author discusses where ASIs fit within Chinese civil procedure law, as well as the five conditions specified by the SPC for granting an ASI (“the impact of the enforcement of foreign judgments on Chinese litigation,” “the necessity of ASIs as a preservation measure,” the “balance of interests of both parties,” “the impact of ASI on the public interest,” and “international comity”) and how they played out on the facts of Huawei v. Conversant.  The author agrees with the court’s decision, though he also notes some of the limitations of ASIs, and cautions against the sequence of lawsuits being a dispositive factor (insofar as this would encourage races to the courthouse).  Apparently the article was written before the EU-China matter was completed, since the author references its existence but not its conclusion.

One thing I found interesting in the article, and which I plan to discuss in the essay I will be contributing to the edited volume I mentioned at the beginning of this post, is the author’s emphasis on the perceived need to counteract the impact of proceedings initiated in another country which, he writes, may “impair[ ] the legitimate rights and interests of the applicant,” thus requiring “a remedy . . . to the party that has suffered damage to the injunction” (pp. 14-15).   In this regard, he writes, if Conversant had applied to enforce an injunction in Germany, the result would have been that Huawei either would have exited the German market or would have settled with Conversant (at a rate, he says, that would have been 18.3 times higher than the rate determined by the Chinese first instance court); and that "such potential damage . . . may substantially harm Huawei's legitimate rights and interests" (p.18).  This framing of the issues bears some resemblance the "effects" test (as used, for example, in U.S. antitrust litigation), under which courts sometimes justify the exercise of prescriptive jurisdiction directed against extraterritorial conduct when such conduct has effects within the prescribing jurisdiction.  From an economic perspective, the application of the effects test is akin to the concept of internalizing an externality—though in this context, the twist is that the externality is caused by the foreign jurisdiction’s toleration or authorization of conduct which the domestic court would like to forbid.  Relevant to this point, a generation ago Professor Joel Trachtman wrote an intriguing paper titled Externalities and Extraterritoriality: The Law and Economics of Prescriptive Jurisdiction, in Economic Dimensions in International Law 642 (Jagdeep S. Bhandari et al. eds., 1997), in which he posits that, if we think of nations participating in a market for prescriptive jurisdiction, and of (in some cases) even having the ability to engage in some measure of Coasean bargaining, there is a range of possible options for allocating the right to prescribe.  Some allocations may be more efficient than others, under the circumstances at hand.  An unavoidable aspect of this framework, however, is determining exactly what counts or should count as a harmful externality—that is, one that causes cognizable harm, a topic that my colleague Claire Hill also has written about.  In the context of ASIs, of course, the country against which the ASI is directed (in effect though not in form, since the form of the injunction is inter partes) presumably believes that it is doing nothing wrong by entertaining a case that is lawfully before it, or by issuing an injunction against the infringement of domestic patent rights in accordance with domestic law; and indeed, if the WTO arbitration panel approach prevails, such conduct is in general privileged and does not cause cognizable harm under international law.  But one could also imagine an alternative rule under which the right to issue an ASI to prevent the perceived negative domestic effect (suffered by a domestic firm or by a domestic court) of a foreign injunction prevails over the foreign court's right to entertain a case or enter an injunction.  Determining which rule makes more sense from a policy standpoint might perhaps depend on how absolute the prohibition on ASIs is under the first approach, and how substantial the domestic effect must be under the second.  (Thinking of these issues from a slightly different angle, as I mention in a discussion of Professor Christopher Drahozal’s game theoretic approach to ASIs in my forthcoming book Wrongful Patent Assertion, in a given case reasonable minds may differ whether it is the country issuing the ASI, or the country against which the ASI is issued, that is deviating from the "comity" norm under which nations are largely left to determine their own domestic policies.)  At this stage, I'm not sure exactly where my analysis is going to lead, but this seems like an interesting problem for analysis through a law-and-econ lens; and if readers have any thoughts or suggestions, I’d be delighted to hear them.     

EU Requests WTO Panel to Determine Legality of Global FRAND Determinations in China

February was an unusually busy month for me, and my week-long bout with COVID didn't help, so I am behind schedule in blogging about recent events of relevance to the world of patent remedies.  One of the biggest of these was the European Union’s announcement on February 12 that it would be requesting the establishment of a WTO panel to determine whether China’s practice of establishing global FRAND royalties without consent of both parties violates the TRIPS Agreement.  The request for establishment of a panel in DS632 China-Worldwide Licensing Terms for Standard-Essential Patents is available here, and the EU's brief summary of the case here.  The WTO site for the case is here.

As previously noted on this blog, in January 2025 the EU instituted consultations with China concerning the issue of global FRAND royalties.  In addition, in July 2025 the EU prevailed in its other WTO dispute with China (DS611-Enforcement of Intellectual Property Rights), concerning China’s antisuit injunction policy, when an arbitration panel (assembled in the absence, for several years now, of a functioning WTO appellate body) concluded (contrary to the initial panel decision) that that policy violated TRIPS articles 28.1 and 28.2 as read in light of article 1.1, because it “frustrate[d] the exercise of the exclusive right of a patent owner to prevent the use of the subject of its patent without its consent” and “alter[ed] the negotiating position of SEP holders in a fundamental way.”  Much the same logic is expressed in the EU’s current request, along with additional reliance on Paris Convention 4bis (which is incorporated by reference into the TRIPS Agreement).  In particular, the EU argues that the challenged measure (of setting global FRAND rates without consent of both parties) violates the following:

Article 28.1, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement, because China's measure has as its effect to restrict the ability of the owner of a non-Chinese patent to exercise the exclusive rights conferred on it by other WTO Members under Article 28.1 of the TRIPS Agreement, i.e., to prevent third parties not having the patent owner’s consent from making, using, offering for sale, selling, or importing the patented product.

 

Article 28.2, read in conjunction with Article 1.1, first sentence, of the TRIPS Agreement, because China's measure has as its effect to restrict the ability of the owner of a non-Chinese patent to meaningfully exercise its right to conclude licensing contracts, as conferred in the territory of other WTO Members under Article 28.2 of the TRIPS Agreement, by freely negotiating and concluding licensing contracts for the non-Chinese patents.

 

Article 4bis of the Paris Convention (1967), as incorporated into the TRIPS Agreement by virtue of Article 2.1 of the TRIPS Agreement, because China’s measure undermines the principle of territoriality and restricts the possibility for the parties subject to a decision rendered in China to start or continue proceedings before the courts of the WTO Member that granted the non-Chinese patents, and thus for the courts of that WTO Member to adjudicate actions relating to those patents in their respective jurisdictions.

Two obvious points to note.  One is that, although the EU is challenging China’s policy only, it would seem that if the EU’s position turns out to be sound, the U.K.’s policy of establishing global FRAND rates without consent of both parties would be equally vulnerable.  Second, if the EU’s position on Paris Convention 4bis is sound—and there is language in DS611 that is consistent with that position, as I noted here—wouldn’t that place the CJEU’s decision in BSH v. Electrolux in jeopardy as well, to the extent that decision appears to contemplate that courts in EU member states may adjudicate patent infirngement claims arising under non-EU member state law (as discussed, e.g., here and here?)   

Aggregate Royalties for Cellular SEPs

Nadia Soboleva and John Hayes have published an article titled Aggregate Royalty for Cellular SEPs in Recent Court Decisions, 11/2025 GRUR Patent 546.  Here is the abstract:

 

Standards organizations developing cellular communication standards typically require participants to disclose standard essential patents (SEPs) and agree to license such patents on fair, reasonable, and non-discriminatory (FRAND) terms. When courts are asked to adjudicate license disputes involving SEPs, they often calculate the implied aggregate royalty for all SEPs in the relevant standard associated with a potential license.  We review five recently litigated FRAND cases and report the aggregate royalty per mobile device in most of these decisions falls in a range from $3 to $16, with an average of $9.25.  The aggregate royalty by the UK Court of Appeal in Optis/Apple is an outlier of $39.47.

The five cases are the U.S. TCL v. Ericsson decision, Unwired Planet, InterDigital v. Lenovo, Optis v. Apple, and the Chinese Oppo v. Nokia decision.  The authors write that these cases “encompass the only publicly available decisions that set a worldwide FRAND royalty for the 4G or 5G cellular standards.”

A few quick things to note.  First, the authors are both from Charles River Associates, and they note that they “have worked on multiple projects involving SEPs, including some of the matters discussed in” their article.  Second, I haven’t endeavored to check the authors’ analysis against the decisions they discuss.  I have no reason too question their analysis, but for now I am just reporting what they state.  Third, a range of $3 to $16 seems pretty broad to me, even without Optis/Apple (the appeal from which is pending before the U.K. Supreme Court).  Fourth, as noted previously on ip fray, the Munich Regional Court recently suggested in its decision involving Wilus and Asus that a rate of 10-18% for all SEPs reasonably necessary for operation of a mobile device would be within the FRAND range (see decision here, para. 294:  “Ausgehend von diesem Wert für den wichtigsten Standard (Mobilfunk) liegt die Gesamtbelastung für ein Mobiltelefon für alle für einen sinnvollen Betrieb erforderlichen Standards (Mobilfunk, Wi-Fi, Streaming, etc.) bei ca. 10% bis 18%.”).  For a mid-priced phone, that would be substantially higher than the aggregate royalty the above authors report, assuming that they and the Munich court are talking about the aggregate royalty burden for the same combinations of technologies.  Fifth, even if these are the only decisions available for the purpose of the study, five cases are a small sample, and whether the derived amounts accurately reflect FRAND rates depends on whether the courts in these cases got their numbers right; and some commentators have critiqued the methodology employed in, e.g., Unwired Planet.   Even so, one might be inclined to think that the Munich court’s range seems rather high, all things considered.

Gervais on Territoriality and Global FRAND Rate-Setting

Daniel Gervais, one of the world’s leading experts on the TRIPS Agreement, has published a very interesting article titled The Principle of Territoriality in International Intellectual Property Law and Its Implications for Global FRAND Rate-Setting, GRUR Int. (advance access pdf available here).  Here is the abstract:

The principle of territoriality under which intellectual property (IP) rights exist and are enforced only within national borders sits uneasily alongside the global nature of standard-essential patent (SEP) licensing disputes. In recent years, courts in Brazil, China, Colombia, Germany, India, the United Kingdom, and now the Unified Patent Court have asserted authority, directly or indirectly, to determine worldwide fair, reasonable, and non-discriminatory (FRAND) licensing terms, often without both parties’ consent. These practices, ranging from injunction-driven leverage to comprehensive judicial rate-setting, raise difficult questions about jurisdiction, comity, competition norms, and the coherence of international IP law.

 

This article provides a systematic and comparative analysis of the principle of territoriality in international IP law and its tension with non-consensual global FRAND determinations. It traces the origins and enduring role of territoriality in treaties such as the Paris Convention and TRIPS Agreement, examines its implications for jurisdiction and choice of law, and explains why territoriality remains a cornerstone of global IP governance. It then turns to the distinctive case of SEPs, highlighting the role of standard-setting organizations and the unique licensing challenges they generate. Against this backdrop, the article maps national approaches across key jurisdictions, identifying functional categories (adjudicators, regulators, and leverage providers) and analyzing how their practices interact in transnational disputes.

 

Drawing on recent case law, WTO findings, and comparative treatment of other IP rights, the article argues that non-consensual global FRAND rate-setting undermines the territorial foundation of international IP law and risks destabilizing global markets. At the same time, it acknowledges arguments for efficiency and uniformity, and considers how these objectives might be pursued within a framework that respects sovereignty and due process. The article concludes by proposing both short-term and longer-term solutions, ranging from national court strategies and WTO enforcement to a possible role for WIPO, the US Congress, and the EU, designed to reconcile innovation incentives, market access, and the legitimacy of international dispute resolution.

I may have more comments to follow, but two things leap out to me upon first reading.  One is Professor Gervais’ argument that even the granting of purely domestic injunctions in FRAND cases, as in Germany, effectively albeit indirectly erodes the territoriality principle by “plac[ing] enormous pressure on the implementer to capitulate to the SEP holder’s terms” (p.13).  It might seem to follow from his analysis, then, that to uphold the territoriality principle nations would have to temper their enthusiasm for granting injunctions in at least some cases.  This may be right, though it also may seem a bit paradoxical that upholding the territorial principle under international law, as Professor Gervais understands it, would require nations to temper the use of a remedy (injunctions with domestic effect only, as a legal if not practical matter) that domestic law otherwise would permit in a given case.  (Again, that may be right—the principle seems logically appealing—but I wonder what the limiting principle would be?)  The other thing that caught my attention was Professor Gervais’ embrace of the view that, absent consent by both parties, only domestic courts can adjudicate questions of infringement and validity under domestic patent law.  This is, as previously noted here, the issue at the heart of the pending BMW v. Onesta dispute, in view of the CJEU’s 2025 decision in BSH v. Electrolux (which seems to me to point, whether rightly or not, in the opposite direction).   (Note that the Federal Circuit has temporarily stayed Judge Albright's antisuit injunction from last week, and we are still awaiting Judge Albright's written decision in that case.)

EWCA Vacates Declaration of Interim License in Samsung v. ZTE

I was taking a blogging break ever since this decision was handed down on October 31, so I hadn’t written anything about it yet.   By way of background, this summer the EWHC (Mellor, J.) granted the interim declaration (which Samsung had sought), including among others the following terms:

1. ZTE are in breach of their obligations of good faith under clause 6.1 of the ETSI IPR Policy.

2. A willing licensor in the position of ZTE, and in light of the undertaking given by Samsung, would enter into the interim cross-licence with Samsung on terms and including the sum to be paid by Samsung by way of royalty in respect of the interim licence period as set out in Confidential Annex 1 to this Order (the Interim Licence).

  
3. The terms (including the sum to be paid) of the Interim Licence are subject to adjustment and amendment so as to bring the terms into line with the terms of the final cross-licence determined to be FRAND by the Patents Court after the FRAND Trial in these proceedings (subject to any later adjustments or amendments following any appeals).

4. In the event that, within seven days of the date of this Order, ZTE refuse either 4.1 or 4.2 below, ZTE are in breach of their FRAND commitments under the ETSI IPR Policy and are unwilling licensors (and unwilling licensees).

4.1 To offer Samsung the Interim Licence and to enter into the same with Samsung; or

4.2 Give the following undertaking to the Court on condition that Samsung give the reciprocal undertaking set out above:

 

Pending any application for permission to appeal or the determination of any such appeal, ZTE undertake that they shall abide by the terms of the Interim Licence as if the same were in full force and effect and shall enter into the Interim Licence within seven days of any such appeal or permission to appeal being refused or withdrawn. If any appeal is finally allowed, ZTE shall repay any sums paid by Samsung under their undertaking given above which the Court decides should  be repaid (including interest if appropriate). 

On Halloween, however, the EWCA concluded that ZTE is not in breach of its obligation of good faith and is not an unwilling licensor/licensee.  (Meanwhile, the English courts’ willingness to grant declarations of interim FRAND licenses in some other cases remains controversial, as witness the back-and-forth between the EWHC and the UPC Mannheim Local Division in recent weeks in cases involving Amazon and InterDigital (see, e.g., here), and also the recent judgment in Warner Brothers Discovery Inc. v. Nokia Corp., [2025] EWHC 2888 (Pat.).  These cases remain works-in-progress, and I’m sure I will have something more to say about them all in due time.)

Anyway, on appeal in Samsung v. ZTE, Lord Justice Arnold writes the principal opinion, stating at the outset that this case differs from other EWCA decisions concerning interim licenses—Panasonic Holdings Corp. v. Xiaomi Tech. UK Ltd. [2024] EWCA Civ 1143, Alcatel Lucent SAS v. Amazon Digital UK Ltd. [2025] EWCA Civ 43, and Lenovo Group Ltd. v Telefonaktiebolaget Ericsson (Publ) [2025]—

 

in that the parties agree that there should be an interim cross-licence, and even agree as to the terms of the interim cross-licence, and in particular how much should be paid for it (the amount is confidential). They disagree as to whether the terms of the interim cross-licence, and in particular the amount payable, should be subject to adjustment so as to bring them into line with the terms of the final cross-licence determined to be FRAND by the Patents Court, as the Claimants (“Samsung”) contend, or so as to bring them into line with the terms of the final cross-licence determined to be FRAND by the Intermediate People’s Court of Chongqing Municipality (“the Chongqing Court”), as the Defendants (“ZTE”) contend. The appeal raises an important issue of principle: does it constitute bad faith for a SEP owner to commence infringement proceedings in multiple courts with the objective of forcing an implementer to accept determination of FRAND terms by the SEP owner’s preferred court rather than the implementer’s preferred court? Mellor J answered that question in the affirmative for the reasons given in his judgment dated 25 June 2025 [2025] EWHC 1432 (Pat) (para. 1).

The court states further that the relevant issues in such cases are whether the SEP owner is “in breach of its obligation to negotiate FRAND terms with the implementer in good faith,” whether the grant of the declaration would “serve a useful purpose,” whether it would be “contrary to comity with foreign courts,” and “[w]hat terms for an interim licence would be FRAND?” (para. 8).  Further, “the burden of proof lies on the implementer and the court must have a high degree of assurance before granting a declaration” (para. 9).

The relevant facts here, in brief, are that both parties have portfolios of certain FRAND-committed SEPs, but that when all is said and done Samsung will be a net licensee.  Samsung nevertheless was the first to file suit for a global cross-license, in the U.K., in December 2024, after which it filed an antitrust action in Frankfurt, and ZTE filed suit against Samsung in Chongqing seeking a global FRAND cross-license.  ZTE subsequently initiated proceedings in Munich, the UPC, Brazil, and Hangzhou, and Samsung countered with infringement actions in Germany, the UPC, and Hangzhou.  In July, “Samsung complained to ETSI that ZTE was in breach of the ETSI IPR Policy. On 14 October 2025 ZTE obtained an ex parte preliminary injunction from the Munich I Regional Court requiring Samsung to withdraw the complaint.  On 16 October 2025 Samsung withdrew the complaint in compliance with the injunction” (para. 37).  The parties have each offered to arbitrate but “neither had accepted the other’s offer” (para. 39).  Lord Justice Arnold then summarizes Mr. Justice Mellor’s judgment below, and proceeds to discuss ZTE’s first two grounds for appeal, namely that the lower court “was wrong to hold that ZTE had acted in bad faith” and “to treat the fact that the English courts were first seised as a decisive factor” (para. 54).  In effect, Lord Justice Arnold agrees with ZTE:

 

. . . In my judgment, unless there is a legitimate and substantiated objection to the forum in question, it does not constitute bad faith for a SEP owner to seek to force an implementer to accept determination of FRAND terms by the SEP holder’s preferred court rather than the implementer’s preferred court.

 

If (and I emphasise if) there is a legitimate and substantiated objection to determination of FRAND terms by the forum in question, then there may (and I emphasise may) in an appropriate case be a remedy by way of an anti-suit injunction. In the present case, however, both parties have laudably refrained from seeking anti-suit injunctions . . . .

 

Whether or not anti-suit relief would be available if there were a legitimate and substantiated objection to determination of FRAND terms by the Chongqing Court, Samsung have not substantiated any legitimate objection to this. . . .

 

If it is not illegitimate for the Chongqing Court to determine FRAND terms, I do not see how it can be bad faith for ZTE to use legal proceedings which it is not suggested are not otherwise properly open to ZTE to put pressure on Samsung to agree to that course. Such conduct is unattractive, and I should not be taken to endorse it, but that is not sufficient to constitute bad faith.

 

As I have explained in numerous judgments, a SEP portfolio will typically include patents which subsist in multiple jurisdictions. Patents are territorial, but the contractual defence provided by the FRAND obligation is global. It follows that the possibilities both of parallel SEP infringement proceedings and parallel FRAND determinations in multiple jurisdictions are inherent in the current system.  The principled answer to this might be that the court first seised should determine what terms are FRAND, but that answer has a number of negative consequences. One of these is that it encourages forum shopping by pre-emptive commencement of proceedings. As the judge recognised, forum shopping is to some extent inevitable in this context, but it should be discouraged rather than encouraged. Even if the English courts consider that jurisdiction should be exercised by the court first seised, this cannot be said to be an answer that commands universal assent: as I pointed out in Nokia v OPPO, there are no internationally agreed jurisdictional rules applicable to FRAND disputes. If the principle of ceding jurisdiction to the court first seised was internationally accepted, the Chongqing Court would have declined jurisdiction as the court second seised. The fact that the English courts were first seised is therefore not a sufficient basis for a conclusion that ZTE have acted in bad faith. Given that ZTE were otherwise entitled to bring the infringement proceedings of which Samsung complain, there is nothing else to support the conclusion that ZTE have acted in bad faith.

 

I would add that another problem which this case illustrates is that, if jurisdiction is not ceded to the court first seised, the court first seised is not guaranteed to be the first to decide. As the parties agreed during the course of argument, the consequences of this will have to be worked out in due course (paras. 70-75).

Although Lord Justice Arnold does not reach ZTE’s other two grounds for appeal, he does close by stating that “comity is a real concern in this case” (para. 78).

In a brief concurring opinion (with which Lord Justice Arnold expresses agreement), Lord Justice Birss makes some interesting points:

 

. . . this case is quite different from the previous cases concerned with interim licences in a FRAND context. In this dispute there are two competent courts both seised with the issue of making a global FRAND determination as between these two parties. The judge rejected Samsung’s criticisms of the Chongqing Court and there is no appeal from that conclusion. The judge also found (and again there is no appeal) that the behaviour of ZTE which was said to be in bad faith was not directed to extracting supra-FRAND rates. . . .

 

Rather, as the judge held, what ZTE were doing was directed at trying to force Samsung to agree to a FRAND determination in Chongqing rather than London. To “force” ZTE to reconsider was the reason for making the interim licence declarations below. A striking aspect of ZTE’s case on this appeal was that a flaw with the scheme of the declarations and interim licence made by the judge was, conversely, that it was not just designed to force ZTE to reconsider Chongqing, it has the effect of forcing ZTE to agree to a FRAND determination in London instead. Despite counsel for Samsung’s best efforts to submit to the contrary, in my judgment there is a significant degree of symmetry between the positions of the two parties in this case (para. 82-83).

Lord Justice Birss also contends that “[t]he concept of an interim licence is inherent in” Huawei v. ZTE, in which 

the CJEU identified the idea that in some circumstances it might be for the implementer, in advance of a final resolution of the dispute between the SEP holder and the implementer, to provide appropriate security for the royalties which will end up being due in a licence agreement. . . .  Once that principle is identified, one is entitled to ask: what is it that the implementer is getting in return for the financial commitment they are making? Although not spelled out explicitly by the CJEU, the answer is fairly simple. The implementer is demonstrating their willingness to pay for the licence, once the terms can be agreed or resolved, and so, in the meantime the SEP holder ought not to be able to take the implementer’s products off the market by means of an injunction. In other words what the implementer gets in return for the financial commitment is, at least implicitly, a form of licence pending the final resolution of the dispute. It could be called an interim licence. Assuming the sum being committed or paid is calculated on a global basis, then the willingness of the implementer which it embodies is also global in nature. . . .

 

The difficulty in this case is that the terms of the interim licence itself and the declarations made are designed to seek to fore on party to do something they clearly do not wish to do and have no intention of doing. . . (paras. 84, 86). 

Lord Justice Jackson agrees with both judgments (para. 89). 

2024 US-China Patent Valuation and Damages Workshop

A workshop report titled The 2024 Patent Valuation and Damages Workshop: A US-China Comparative Law Perspective is available on ssrn, and should be of interest to anyone following U.S. and Chinese patent and/or SEP litigation.  I remotely delivered a presentation on compensatory patent damages in the U.S. at the workshop, which was held in May 2024 and included presentations by several other U.S. and Chinese participants.  Here is a link to the report, and here is the abstract:

This report summarizes the proceedings of the 2024 Patent Valuation and Damages Workshop: A U.S.–China Comparative Law Perspective, jointly organized by the Berkeley Asia IP & Competition Law Center (BAIC), Berkeley Center for Law and Technology (BCLT), KoGuan School of Law at Shanghai Jiao Tong University, and the Institute of Intellectual Property and Competition Law. Held in Shanghai on May 28, 2024, the workshop convened leading judges, scholars, practitioners, in-house counsel, and economists from both countries to examine the evolving frameworks for patent damages and valuation. As the inaugural workshop on patent law and practice from a U.S.–China comparative perspective, pioneered by BAIC and BCLT, it explored compensatory damages (lost profits, reasonable royalties, price erosion, apportionment), punitive damages and their deterrence effects, the challenges of valuing and licensing standard-essential patents (SEPs), and the “important but limited” role of judicial rate setting in shaping technology markets. With attention to both theoretical underpinnings and practical case studies, the report highlights key similarities and divergences in practice, as well as the implications for global patent litigation and licensing. By capturing this pioneering comparative dialogue, the report provides valuable insight into the jurisprudential evolution of patent remedies and their broader policy context in the world’s two largest innovation economies.

Bonadio, Kansara & Tayal on the Eu-China WTO Arbitration Panel Decision

Although I (and others) have blogged about the July 2025 WTO arbitration award finding China’s antisuit injunction policy to be in violation of TRIPS (see, e.g., here, here, and here), this is the first (though I know it will not be the last) full-length article on the arbitration award that has come to my attention:  Enrico Bonadio, Mahak Kansara & Vansh Tayal, Litigating Patent Standards:  the EU-China WTO Dispute on Anti-Suit Injunctions, 47 EIPR __ (forthcoming 2025).  Here is a link to the ssrn version, and here is the abstract:

 

This article examines the WTO dispute between the EU and China concerning Chinese courts' use of anti-suit injunctions (ASIs) in standard-essential patents (SEPs) litigation. The Arbitrators' ruling of 21 July 2025 overturned key Panel findings, holding that China's ASIs policy violates Articles 1.1, 28.1, and 28.2 of the TRIPS Agreement by frustrating foreign patent holders' rights to enforce and license SEPs internationally. Significantly, the Arbitrators articulated a new and problematic "anti-frustration" rule, clarifying that measures which systematically undermine substantive IP rights and their cross-border enforcement contravene WTO/TRIPS obligations. The article critically assesses the legal and policy implications of the Arbitrators' interpretations, exploring their impact on global SEPs enforcement and the evolving interface of international IP and the WTO dispute resolution system.

The article does a good job explaining the dispute, and devotes considerable attention to the arbitrators’ conclusion that TRIPS article 1.1 embodies some sort of “anti-frustration” principle, which China’s anti-suit injunction policy breached.  (See Arbitration Award para. 4.74, in which the panel states that the corollary of the obligation set forth in article 1.1 to "give effect to the provisions of th[e] Agreement" in members’ territory “is to do so without frustrating the functioning of the systems of protection and enforcement of IP rights implemented by other Members in their respective territories.”)  Although (for now, at least, and unlike Bonadio et al.) I remain agnostic on whether the arbitrators were correct in inferring some sort of “anti-frustration” principle into article 1.1, I fully agree that the arbitrators articulation of that principle leaves much to be desired.  Taken to its logical conclusion, the anti-frustration principle would not only do away with ASIs altogether (even the more traditional, limited ones that the U.S. and U.K. might occasionally grant), but also would seem to cast many other national practices into doubt—including not only awards of global FRAND royalties as in the U.K. and China, but also the practice of the German courts to routinely grant injunctions in SEP cases (which, as a practical matter, often compel global settlements).  Of course, it would be crazy to say that Germany’s obligation to give effect to the provisions of TRIPS forbids Germany from entering territorially-limited injunctions because doing so frustrates the ability of other member states to adjudicate FRAND disputes pending before their courts, but the fact that the anti-frustration principle would lead to that paradoxical (and clearly wrong) result indicates that there must be something amiss with an unconstrained anti-frustration principle.  Unfortunately, the arbitration panel didn’t spell out the constraints, though as Bonadio et al. suggest, perhaps the other EU-China dispute pending before the WTO (involving China’s willingness to render global FRAND awards) will clarify matters.  

A Couple of New Articles on FRAND/SEPs

1. Michael Nieder has published an article titled EPG-Widerklage auf gerichtliche Bestimmung einer angemessenen FRAND-Lizenz?—Zur Entscheidung der LK Mannheim vom 22.11.2024—UPC CFI 210/2023 (“UPC Counterclaim for a Judicial Determination of a Reasonable FRAND License?—On the Nov. 11, 2024 Decision of the Mannheim Local Division— UPC CFI 210/2023”), 2025 GRUR Patent 401.  Here is the abstract:

The EPG [UPC] has so far issued two injunctions for infringement of a standard-essential patent (SEP) in cases where the FRAND issue played a role.  These are the decisions of the EPG Local Division Mannheim of November 22, 2024—UPC CFI 210/2023—Panasonic/OPPO an OROPE and the EPG Local Division Munich of December 18, 2024—UPC CFI 9/2023—Huawei/Netgear.  Due to corresponding counterclaims by the defendants, the question of the possibility of a court determining the appropriate rate for a FRAND license arose only in the Panasonic/OPPO and OROPE case.  The following remarks deal with this issue.

In the course of the article, Dr. Nieder argues against the position taken by Matthias Leistner (who believes the UPC has jurisdiction to determine FRAND rates), and in favor of the position taken by Peter Meier-Beck and by Tim Dornis (that it doesn’t).  For my previous commentary on the Mannheim decision, see here; for previous posts on Dr. Leistner’s and Judge Meier-Beck’s takes on the issue discussed by Dr. Nieder, see here and here.   

2.  Runhua Want has posted an article on ssrn titled Irrational Unwillingness in SEP Licensing, 34 Tex. Intell. Prop. L.J. __ (forthcoming 2025).   Here is a link to the paper, and here is the abstract:

The role of injunctions in guiding standard-essential patent (SEP) licensing negotiations is important but remains unclear. Many SEP holders argue that a high threshold for injunctions fails to protect them against holdout and efficient infringement. By contrast, SEP implementers are concerned about patent holdup resulting from threats of injunctions by SEP holders. This conflict raises a broader policy issue: how should legal institutions guide parties toward efficient licensing negotiations? However, since the United States withdrew its most recent guidance in 2021, it has lacked a clear position on this issue. Other jurisdictions likewise face challenges in designing effective injunction rules. Among these challenges, the definition of unwilling licensees, a key factor in granting injunctions, remains inconsistent and under development. This Article addresses the unsettled role of injunctions in SEP licensing negotiations and contributes to the policy debate by analyzing cognitive and structural barriers to implementer cooperation. Specifically, it examines whether injunction rules can be designed to effectively enhance the willingness of implementers to license. To that end, it reviews public feedback submitted in a semi-structured survey, which was conducted by the United States Department of Justice in 2022. The survey examined both the thresholds for injunctions and the standards for identifying unwilling licensees. This Article documents various approaches to identifying unwilling licensees, as suggested in the feedback. Based on the documented feedback and textual analysis, the Article identifies four motivations that underline SEP implementers' lack of cooperation in licensing negotiations: 1) resistance to holdup, 2) information asymmetries, 3) habitual holdout and efficient infringement, and 4) financial constraints. These motivations reflect not only strategic behavior but also deeper cognitive biases held by both SEP holders and implementers. This Article argues that due to the cognitive biases, injunction rules, regardless of their design, face inherent limitations in promoting efficient licensing.