Last week, Judge Orrick of the U.S. District Court for the Northern District of California issued an Order that enjoins Huawei from enforcing an injunction on Chinese standard essential patents (SEPs) entered by the Chinese People’s Court of Shenzhen (the Shenzhen Court).  The Chinese Shenzhen Court entered that injunction after considering Samsung’s arguments that the SEPs were subject to Huawei’s commitment to license them on fair, reasonable and non-discriminatory (FRAND) terms.  This case provides incremental insight into asking a U.S. court to bar enforcement of a foreign injunction based on foreign SEPs so that the U.S. court may consider FRAND contractual rights as to those foreign SEPs.

As with most cases, this decision is fairly fact specific.  Some of the key points from this decision include the following:

  • Filing Date of U.S. and Foreign Actions.  The patent owner (Huawei) filed this U.S. action and the Chinese action at the same time.  Technically, perhaps because of the time zone difference, the U.S. action was filed one day before the Chinese action.  The simultaneous filing indicated that the patent owner was not  filing the Chinese action as a run-around a much earlier filed U.S. action (as was the case in the Microsoft v. Motorola case where an antisuit injunction was entered).
  • First-To-File Race?  This case has a first-to-file flavor similar to what we see in selecting a forum for U.S. court actions–e.g., courts defer to litigating a case in the first U.S. district court where the matter is raised, rather than in another U.S. district court with a later-filed case on the same matter.  That first-to-file deference leads to a race to the court where the patent owner tries to  file a U.S. case in its preferred U.S. court before an accused infringer files a related declaratory action in another U.S. court, and vice versa.  The fact that Huawei technically filed this U.S. case one day before Huawei filed the Chinese case was a factor that Judge Orrick found to favor entering an antisuit injunction that gives preference to the first filed U.S. action over the later filed Chinese action.  Huawei essentially outraced itself in the first-to-file competition (i.e., filed its U.S. action before filing its Chinese action)
  • Scope of U.S. and Foreign Actions.  Although not totally clear from the record, the Chinese court apparently considered only whether the accused infringer (Samsung) was a willing licensee in its negotiations with the patent owner (Huawei) for a license under the Chinese SEPs.  In this U.S. case, however, the court would consider a much broader issue of whether Huawei breached its FRAND commitment and determine FRAND contract terms.  In other words, the U.S. court was not going to simply retry and decide the same issues already decided by the Chinese court and his decision would control whether the patent owner would be entitled to the injunctive relief granted by the Chinese court.
  • The Antisuit Injunction is Limited In Scope and Duration.  The U.S. court was entering an injunction of limited duration and scope.  The Chinese injunction that the patent owner (Huawei) was enjoined from enforcing concerned only 2 Chinese patents and was subject to an appeal in China that would not be decided for a few more months.  This U.S. case is scheduled for trial in December, after which the U.S. court would decide the contract issues and dissolve the antisuit injunction.  Accordingly, the antisuit injunction would preclude enforcement of the Chinese injunction for only a few months and impact only 2 Chinese patents.
  • Judicial Estoppel From Entering the Antisuit Injunction.  The accused infringer (Samsung) successfully argued against bifurcating the U.S. case that would have decided the FRAND contract issues first; rather, it argued that the U.S. court must first determine whether the patent owner’s (Huawei’s) patents were valid, enforceable, infringed and essential to the standard before the court could then decide the contractual FRAND issues.  The U.S. court agreed to proceed with the entire case–both the FRAND contract and U.S. SEP infringement claims–at the same time with a single two-week jury trial.  The accused infringer’s later request for an antisuit injunction “tempted” the court to hold that the accused infringer was judicially estopped from now arguing that an antisuit injunction was warranted so that the the contractual issues would be decided first (contrary to the accused infringer’s successful bifurcation argument).  But, rather than that, the court ruled that the infringer would be granted the antisuit injunction but could not argue that the FRAND contract issues could not be decided without evidence of whether the foreign patents were valid, enforceable, infringed or essential (if such determinations were outside the scope of the U.S. court’s jurisdiction).

Below is a more detailed discussion of the decision.
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Magistrate Judge Payne recently ruled against prospective licensee T-Mobile’s motion to dismiss patent owner Huawei’s Declaratory Judgment Complaint that seeks a declaration that Huawei  complied with its FRAND commitments to ETSI regarding LTE standard-essential patents during Huawei’s license negotiations with T-Mobile.  Judge Payne did not rule whether or not Huawei had complied with its licensing negotiations; rather, he simply indicated that there was sufficient controversy between the parties and concern that T-Mobile might bring a breach of contract action against Huawei that the court could exercise declaratory judgment subject-matter jurisdiction to resolve the FRAND-compliance dispute.  This is a procedural ruling that is subject to review by the presiding district court judge, Judge Gilstrap.

This decision is interesting because it supports a way for patent owners with large SEP portfolios to resolve FRAND or other licensing disputes in a single action and, thereby, avoid complex and expensive patent infringement litigations on a patent-by-patent basis.  But the devil is in the details and we will await further developments as the case proceeds.
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Judge Payne recently denied a request to proceed with all of the parties’ alleged FRAND-obligated standard essential patents in the same case, disappointing counterclaimants who had wanted to resolve together the single controversy over each of the parties’ standard essential patents.  Huawei brought suit asserting patents alleged to be essential to 3GPP LTE standards and subject to a FRAND obligation.  Nokia filed a counterclaim against Huawei on patents that also were alleged to be essential to 3GPP LTE standards and subject to a FRAND obligation.  Judge Payne decided that it would be more efficient to proceed with the Huawei and Nokia patents in their own separate cases, rather than together.
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Today, a European Union high court issued a ruling that provides guidance on what steps the owner of a FRAND-encumbered patent that may be essential to a standard should take before seeking injunctive relief.  The court also ruled that a willing licensee should act without delay, provide a counter-offer, and actively pay royalties (in trust

Judge Essex issued a Notice Regarding Initial Determination in InterDigital’s ITC action against ZTE and Nokia (Inv. No. 337-TA-868) on Friday, indicating that there has been a finding of no violation with respect to any of the 3G and 4G devices at issue. The notice is sparse on details, indicating only that no violation of

Last week the U.S. International Trade Commission issued the public version  of its decision last December that no valid claim of Interdigital’s 3G patents was infringed by Huawei, Nokia or ZTE and reserving ruling on other issues, such as on RAND obligations (see our Dec. 23,2013 post).  The ITC also gave its Federal Register

On December 30, 2013, InterDigital and Huawei filed a stipulation to dismiss the pending Delaware district court action (13-cv-00008) without prejudice, indicating the parties entered into a “binding settlement agreement and agreement to arbitrate”.  The Court promptly dismissed the case.

Yesterday, InterDigital and Huawei similarly moved to terminate the corresponding ITC action, Inv. No.

On Dec. 19, the U.S. International Trade Commission (ITC) ruled that Huawei, Nokia and ZTE did not infringe any valid Interdigital alleged 3G patents and, therefore, did not rule on RAND or public interest issues in that investigation (discussed in our prior post).  The ITC is reserving those issues for consideration in due course

Today, the U.S. International Trade Commission issued its delayed decision on whether it would review ALJ David P. Shaw’s Initial Determination finding no violation of Section 337 in In the Matter of Certain Wireless Devices with 3G Capabilities and Components Thereof, Inv. No. 337-TA-800.  (For some background, see our previous post on the ALJ’s