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and shall enter into the Interim Licence within seven days of any such appeal or permission to appeal being refused or withdrawn.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).
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