Ericsson and Samsung agree SEP truce
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Ericsson has secured the support of the former director of the US Trademark and Patent Office Andrei Iancu, Senator Thom Tillis and former Federal Circuit Judge Paul Michel, in its international standard-essential patents (SEP) dispute with Samsung.
The trio filed an amicus brief on Friday, April 9, urging the US Court of Appeals for the Federal Circuit to uphold an anti-interference injunction handed down by a US federal court, and to ignore an anti-suit order delivered by a Chinese court.
In the brief, Tillis and Iancu and Michel warned that the case “represents an extreme and concerning step in the increasingly contentious battles of where and how to resolve FRAND licensing disputes” and that the issue “goes to the sovereignty of the US”.
“The case has turned into an international dispute about the intrusion of a foreign court (in this instance, a Chinese court) asserting, without the parties’ consent, unilateral control over global patent-licence rate-setting for critical 4G and 5G communications technologies,” the brief stated.
Background to dispute
The dispute arose in December last year when Ericsson sued Samsung for infringing its SEP covering the telecommunications technology at the US District Court for the Eastern District for Texas. Ericsson also filed a complaint against the Swedish patent owner in Wuhan, China, asking the Wuhan court to set a global royalty rate for the Ericsson patents on FRAND terms.
On Christmas Day 2020, the Wuhan Intermediate People’s Court granted Samsung an anti-suit injunction (ASI), preventing Ericsson from pursuing an injunction on 4G and 5G SEPs in any other jurisdiction.
According to the brief filed by Iancu, Tillis and Michel last week, the Wuhan court’s actions were “a marked departure from precedent and the general norm in FRAND litigation over standard essential patents”.
It added that no other court in the world has taken such action from the outset of the proceeding, without the parties’ consent and without prior notice to all parties” and that the Chinese court had “declared itself the sole decider of global FRAND licensing terms...”
In January, Judge Rodney Gilstrap granted Ericsson a temporary restraining order (TRO) preventing Samsung from pursuing enforcement of the Wuhan court’s order.
He ordered Samsung to: “take no action in the Chinese action that would interfere with this court’s jurisdiction to determine whether Ericsson or Samsung have met or breached their FRAND obligations as they relate to both Ericsson and Samsung’s 4G and 5G SEPs, or that would interfere with any other cause of action before this court.”
Protection from ‘unilateral interference’
In an opinion outlining his reasons for granting the order, Judge Gilstrap said his objective was to ensure both the Texas and Chinese lawsuits could continue in parallel, and not to interfere with the jurisdiction of the Wuhan court.
In the amicus brief, Iancu, Michel and Tillis argued that the Texas court’s decision to grant the anti-interference injunction was necessary “to protect its jurisdiction from the Wuhan court’s unilateral interference”.
They held that the Chinese anti-suit injunction was “a marked and improper intrusion on US sovereignty and the jurisdiction of US courts to decide US patent issues.”
The brief said if the Texas court had not delivered its injunction, it would have created chaos in legal proceedings involving FRAND disputes. “Every other court in the world—including US courts—will have to halt its patent proceedings, simply because a single court in the world received a case first—perhaps by a few minutes before another country’s court—and issued an injunction without notice and consent of all parties,” it said.
The amici also pointed out the US court was not alone in rejecting unquestioned compliance to the Wuhan court’s orders. “So far, courts in Germany and India have responded similarly as the US court has, and they issued anti-interference injunctions that push back on the expansive anti-suit injunctions issued by the very same Wuhan court in other cases,” they said.
The brief also downplayed Samsung’s concerns about different outcomes in the two cases, arguing that such a possibility always exists in patent litigation. “Different outcomes in different national patent litigations are in fact a reasonable outcome, given different patent laws,” the brief said.
It also contended that accepting the Wuhan court’s “aggressive expansion over global rate-setting will only encourage other jurisdictions to do the same”.
The brief added that Chinese officials and courts have been shown to encourage decisions that favour their own state-owned or state-dominated companies and “the US and its courts should not accept this intrusion upon the nation’s sovereignty”.
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Ericsson, Samsung, FRAND, dispute, Wuhan, infringement, patents, SEPs