While I was on vacation in late June, Mr. Justice Mellor handed down his decision in Samsung Elecs. Co. v. ZTE Corp., [2025] EWHC 1432 (Pat). The decision grants the interim declaration that Samsung had sought, to wit:
i) a declaration that the Defendants (ZTE) are in breach of their obligations of good faith under ETSI;
ii) a declaration that a willing licensor in the position of ZTE and a willing licensee in the position of Samsung would enter into an interim licence in respect of each other’s standard essential patents (SEPs) with appropriate royalty terms to be determined by this Court, subject to adjustment and amendment upon final determination of global FRAND terms by this Court (or as otherwise agreed by the parties); and
iii) a declaration that if ZTE refuse to offer Samsung such an interim licence, ZTE are unwilling licensors (and unwilling licensees in view of the cross-licence).
Although other commentators have already written about the decision, I will provide a short summary and add a few thoughts of my own.
First off, however, for readers who are new to the topic of interim licenses, a little background on interim licenses for FRAND-committed SEPs may be helpful. The foundational decision, still less than a year old, is Panasonic Holdings Corp. v. Xiaomi Tech. UK Ltd., [2024] EWCA Civ 1143, in which the Court of Appeal for England and Wales held that Xiaomi was entitled to a declaration that a willing licensor in the position of Panasonic “would agree to enter into, and would enter into, an interim licence of” Panasonic’s SEP portfolio “pending the determination by the Patents Court of what terms for a final licence” are FRAND. In that particular case, the SEP owner had agreed to submit a global FRAND determination by the U.K. courts, but then appeared to renege on that commitment by proceeding with litigation in Germany, which might have had the effect of coercing Xiaomi to settle before the resolution of the matter in the U.K. The EWCA concluded that the declaration “would serve a useful purpose in forcing Panasonic to reconsider its position” (and in fact, the case settled shortly thereafter), and stated that the requested relief would be less intrusive than an antisuit injunction (ASI). Since then, the English courts have considered requests for declarations concerning interim licenses in four additional cases, including the present one. The most far-reaching of these, arguably, is Lenovo Group Ltd. v. Telefonaktiebolaget LM Ericsson (Publ), [2025] EWCA Civ 182, in which the EWCA held that Lenovo was entitled to an interim-license declaration despite the fact that Ericsson, unlike Panasonic, had not agreed to the U.K. court’s determination of global FRAND terms, and the U.K. action (initiated by Lenovo) was not the first filed between the parties.
Coming back to the present case, the facts, briefly, are as follows. On December 19, 2024, Samsung filed an action in the EWHC for the infringement of certain SEPs, and requested the determination of global FRAND terms including a cross-license for ZTE’s SEPs. (Samsung will be a net licensee rather than licensor.) The next day, Samsung filed an E.U. competition law claim against ZTE in Frankfurt, Germany. On December 23, ZTE filed an action in the Chongqing Intermediate People’s Court for a global FRAND cross-license. Thereafter, ZTE commenced actions for the infringement of individual SEPs in Germany, the UPC, Hangzhou (China), and Brazil, obtaining a preliminary injunction in the last of these. Samsung also filed additional actions, including an antitrust action in the Northern District of California and claims for the infringement of certain patents in Germany, the UPC, and China. Unlike the previous English cases involving requests for interim declarations, however, in this dispute both parties have offered to agree to interim licenses, the difference being that Samsung wants the declaration to state that the terms of the interim license will be adjusted to bring them “into line with the terms of the final global license determined to be FRAND by the High Court of Justice of England & Wales at the UK FRAND Trial, and subject to any later adjustments or amendments following any appeals in the UK FRAND Proceedings, or the license that is otherwise agreed between the Parties” (para. 10), whereas ZTE wants the interim license to be adjusted “in accordance with the final determination of FRAND terms in an action brought by ZTE in Chongqing (absent earlier agreement by the parties)” (para. 9; see also para. 71).
In reaching its decision in favor of Samsung, the court concludes, first, that ZTE breached its obligation to negotiate in good faith. According to the court, ZTE’s purpose in proceeding with the Brazilian, German, UPC, and Hangzhou litigation is “to try to force Samsung into accepting that global FRAND terms would be decided in Chongqing”—that is, to use “the exclusionary power of national injunctions to enforce its jurisdictional preference” for the Chongqing forum, which ZTE perceives as advantageous—despite the fact that the U.K. courts were the first seised (a matter that the court describes as not being “a trump card in all situations,” but a possible “tie-breaker in an appropriate case”) (paras. 99-100, 105, 117, 119). Moreover, given the UKSC’s decision in Unwired Planet, recognizing the English courts’ jurisdiction to determine global FRAND royalties even in the absence of the consent of both parties, there was nothing improper about Samsung’s resort to the English courts to make a global FRAND determination here (para. 120). All of this leads the court to conclude as follows:
127. In my judgment, a willing licensor in the position of ZTE would have engaged with this action and proceeded as speedily as possible to the FRAND trial, in the absence of earlier agreement between the parties. In my view, a willing licensor would not commence a wave of injunctive proceedings, whatever the aim of the pressure which those proceedings would exert on the SEP licensee. The wave of injunctive proceedings commenced by ZTE were completely unnecessary since Samsung were and are actively seeking fresh global FRAND cross-licence terms, to replace the previous global cross-licensing terms which the parties abided by for several years. There is no suggestion that Samsung were operating other than as a willing licensee (and as a willing licensor).
128. I acknowledge that a SEP licensor who seeks to persuade what they perceive to be an unwilling licensee to take a licence on FRAND terms will necessarily seek injunctive relief as the ultimate incentive to force the licensee into accepting the FRAND terms determined (in this instance) by the Court. In the UK, a so-called FRAND injunction presents the licensee with that choice. There is, however, a clear difference between seeking final injunctive relief in the FRAND proceedings on the one hand and seeking interim injunctive relief in many jurisdictions to try to force the other party off various markets. In FRAND proceedings, the licensor’s ultimate remedy is money and the risk of irreparable damage is rare or non-existent where substantial companies are involved.
129. Of course, from ZTE’s standpoint, the wave of injunctive proceedings was necessary to fulfil a principal aim of ZTE: to force Samsung into accepting a global FRAND determination in Chongqing.
130. Overall, and notwithstanding the manoeuvring by ZTE to narrow the gap between the two sides, the conclusion in my judgment is inescapable. ZTE have acted in bad faith with their wave of unnecessary injunctive proceedings, and by using the continuing threat imposed by them to seek to sideline or displace the jurisdiction of this Court and in seeking to secure their preference for a determination in Chongqing.
The court’s statement that, in FRAND cases, “the licensor’s ultimate remedy is money and the risk of irreparable damage is rare or non-existent where substantial companies are involved,” is of course consistent with the views expressed in other English decisions, particularly those authored by Lord Justice Arnold, and is quite different from the views expressed by the German and UPC judges (see, e.g., here).
Second, the court concludes that the requested declaration would serve a useful purpose because it may “force ZTE to reconsider its position”: “Faced with a decision by this Court that ZTE are in breach of their obligation of good faith and a formal declaration that a willing licensor would enter into the interim licence proposed by Samsung, would ZTE really persist in conduct that the Court has unequivocally and publicly condemned? I not only hope that ZTE will see the error of their ways but consider there is a prospect of them doing so” (paras. 135-36). More specifically, in view of the declaration “a number of possibilities arise, including the following: i) First, both actions will proceed to trial, yielding two global FRAND determinations. From an academic and practical perspective, it would be interesting to have the opportunity to compare those outcomes even if they are unlikely to match due to the fact that each court is likely to hear different evidence. ii) Second, the parties agree that only one of these actions should proceed. If the parties manage to agree that, I suspect they would have moved closer to agreeing FRAND terms. iii) Third, the parties agree FRAND terms” (para. 139).
Third, the court concludes that the declaration would not undermine comity, writing that “[i]f the declaration does induce ZTE to reconsider their position and grant Samsung an interim licence on the terms Samsung seek, that would promote comity because it would relieve the courts and tribunals of Brazil, Germany, the UPC and Hangzhou of a great deal of burdensome and wasteful litigation commenced by ZTE, but also the retaliatory litigation in those jurisdictions plus the USA commenced by Samsung” (para. 152). To be sure, “the various offers made by ZTE would, if accepted, also relieve the same courts of the same amount of burdensome and wasteful litigation”; but in the court’s view “there is no basis . . . for criticizing Samsung for not accepting ZTE’s terms” given that the English court has jurisdiction over the matter, whereas “there is a basis for criticizing ZTE’s conduct in trying, through their interim licence terms, backed by their wave of litigation, to either derail or displace this action. ZTE’s terms interfere with the jurisdiction of this Court which they have accepted . . . . In practical terms, ZTE’s terms are designed to render this action pointless, so that Samsung effectively has to abandon it, unless they can bear the prospect of the costs of two FRAND determinations” (paras. 155-57). The court acknowledges “that one of the unintended consequences of this judgment is that it enhances the significance of the Court first seised of a claim to determine FRAND terms, with the consequences mentioned by Arnold LJ in Nokia CA at [16] and particularly the first”—that is, the “rush by each party to the court to establish jurisdiction in a forum which is perceived to be favourable to that party’s position”—but states that “[t]here is nothing I can do about that. It is a further reminder that ETSI and other Standard Setting Organisations need to focus attention on incorporating some dispute resolution procedure(s) into their terms” (para. 161).
I’ll be giving this case a good deal of thought over the next week, and may speak about it at the upcoming IP Day Conference at Boston University a week from today. For now, I’ll just note a few initial thoughts. First, on one view this case might seem similar to Microsoft v. Motorola (in which Judge Robart issued an ASI) and Panasonic v. Xiaomi (in which Lord Justice Arnold concluded that an interim license was appropriate), in that the SEP owner can be viewed as using litigation in another forum to derail proceedings that are properly before the forum issuing the requested relief. (See, e.g., para. 159: “If ZTE were right in their opposition to this application and the position they have adopted, it would add a powerful weapon to the SEP licensor’s armoury, in this sense. Any action for FRAND terms commenced by an implementer or net payer under a cross-licence, could be derailed in short order by the SEP licensor offering an interim licence on condition that the other party must accept the SEP licensor’s choice of forum, the offer being backed with injunctive relief in other jurisdictions, most likely targeted to cause the maximum damage to the SEP licensee’s business.”) On the other hand, although ZTE is not challenging the English court’s jurisdiction, it hasn’t committed to agreeing to whatever the court’s global FRAND determination happens to be, which might distinguish this case from Microsoft and Panasonic. Second, as the court acknowledges, the EWHC’s conclusion that ZTE has acted in bad faith is not binding on any of the non-U.K. courts and does not preclude those courts from proceeding as they see fit—though it may have consequences in the U.K. litigation, if it leads to the conclusion that ZTE is an “unwilling” licensor/licensee (see paras. 5(iii), 28-29). Third, however, if ZTE doesn’t back down and the Chongqing court reaches a global FRAND determination first, what then? If Samsung were to accede to the Chinese court’s terms, that would seem to be the end of the matter, I would think, and perhaps that is what ZTE is hoping for—though whether the Chongqing litigation is likely to terminate first is unclear (see paras. 35, 47), and the decision surely shifts some bargaining leverage to Samsung. Fourth, as noted above, the decision would seem to encourage forum shopping by exacerbating the race-to-the-courthouse phenomenon—though perhaps only marginally so, since even if the decision had come out the other way I should think that both net licensors and net licensees would have a substantial incentive to strike first in their favored forums. Fifth, is it possible that there would be less strategic maneuvering in cases like the present one if the English courts hadn’t first embraced global FRAND determinations in Unwired Planet–or would the Chinese courts have adopted that practice eventually anyway, and in so doing encouraged the U.K. to do the same? I suppose we will never know—though even without courts making global FRAND determinations, SEP owners would surely use the prospect of injunctive relief in jurisdictions such as Germany, the UPC, and Brazil to nudge licensees into global settlements on licensor-friendly terms, forum shopping being one of those things that everyone condemns and that every advocate nevertheless does to serve their clients’ interests. (In the words of La Rochefoucauld, “l'hypocrisie est un hommage que le vice rend à la vertu.”) Sixth—although I think it is unlikely things will actually get this far—perhaps this will be the first case in which two different courts each establish global FRAND terms for the very same portfolios. As Mr. Justice Mellor notes, if that came to pass it would “be interesting to compare the FRAND ranges or rate determined by each Court and the reasoning which led to each result”—although “because the evidence heard and accepted by the English Court may well be different to that heard and accepted by the Chongqing Court, the two Courts might reach differing conclusions, but one would hope their FRAND ranges would overlap to a significant extent” (paras. 28(iv), 91). One would, indeed, hope so.
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