Ericsson Wins Temporary Restraining Order Over Samsung in ED TX FRAND Litigation

By Gene Quinn
December 29, 2020

“This is perhaps the perfect case for Judge Gilstrap to state the obvious: an innovator headquartered in Texas has a right to litigate in Texas where they do business and where the defendant similarly does business, period.”

Ericsson office in Kista, Sweden. Courtesy Ericsson press photo library.Yesterday, Judge Rodney Gilstrap of the United States Federal District Court for the Eastern District of Texas issued a temporary restraining order against Samsung in a FRAND (fair, reasonable and non-discriminatory licensing rates) lawsuit filed by Ericsson on December 11, 2020. The Order gives Samsung until January 1, 2021 to file any opposition to the continuation of the temporary restraining order, and gives Ericsson until January 5, 2021 to respond if, or more likely when, Samsung, files an objection.

At first glance to the trained eye this seems shocking, but as is so often the case in the world of standard essential patents (SEPs) and FRAND, there is much more than meets the eye.

Merry Christmas, Ericsson

Why would Judge Gilstrap give Samsung only until January 1 to respond? That seems unnecessarily Grinch-worthy unless he just wants to ruin whatever new year celebration COVID-19 will allow Samsung’s attorneys to otherwise be enjoying. But if you look at what provoked the issuance of this temporary restraining order you will see that after Ericsson sued Samsung in the Eastern District of Texas, Samsung filed a secret lawsuit in Wuhan seeking to enjoin the proceedings in Judge Gilstrap’s court. Ericsson was given no advance notice of the Wuhan lawsuit, or the broad antisuit injunction requested until it was issued early in the morning on Christmas day, December 25, 2020. So, Ericsson’s Christmas present from Samsung was an injunction from Wuhan for a proceeding they weren’t informed about. Merry Christmas!

Samsung’s attempt to divest Judge Gilstrap of jurisdiction over this case dealing with a worldwide telecommunications innovator that is literally headquartered in Plano, Texas is beyond egregious even for the contentious world of patent infringement litigation. Even worse, the selection of Wuhan as a venue by Samsung is duplicitous and hypocritical. Ericsson’s Emergency Application for Temporary Restraining Order summarizes the issue well:

The Wuhan court is an odd choice, as neither Ericsson nor Samsung have a strong connection there. Wuhan is not a corporate home to either company. China is Samsung’s 30th largest market for cellular devices, behind both Canada and Poland. None of the parties’ licensing negotiators reside in Wuhan, and none of the parties’ licensing negotiations had any connection to Wuhan. It is particularly surprising that Samsung, a Korean company, would file a suit in China to seek a FRAND adjudication. Less than two years ago, Samsung told a U.S. federal court, on the public record in a hearing in a breach of FRAND case, that Chinese courts are “antithetical to the United States judicial system,” “inquisitorial,” have “no due process requirements,” and that as a result, Samsung could not receive a “full and fair FRAND determination.”

Chinese courts cannot render fair justice in FRAND cases, but they are preferable to Judge Gilstrap. That is the self-interested logic of Samsung.

Run Amok

Let’s just acknowledge what is happening— anti-lawsuit injunctions and anti-injunction lawsuits run amok in the SEP world. While these are not new procedural tools, they have become far more popular in recent years, particularly within the SEP space, and particularly with respect to FRAND licensing disputes in the telecommunications industry. China is the home to a great many of these anti-injunction lawsuits, a fact that should surprise no one. China is trying to interfere with justice around the world.

China has been on a march toward becoming a global hegemony. Businesses and political leaders around the world, blinded by the size of the Chinese economy, have looked the other way as they have outsourced manufacturing, given away intellectual property to competing Chinese companies in exchange for access to Chinese markets, cut favorable trade deals that create inequitable tariffs, turn a blind eye to currency manipulation and refuse to hold the Chinese accountable for polluting the planet based on some misguided belief that China is a developing country like Nigeria, the Philippines, Qatar, or Turkey, when China has a larger GDP than the United States when adjusted for purchasing power and will by 2028 have a larger economy than the United States.

Something Must Be Done

Sadly, we obviously cannot look to political leaders and the vast majority of business leaders to confront the growing Chinese hegemony. Unless federal district court judges want to become nothing more than glorified filing clerks and magistrates for the People’s Republic of China, something must be done to address the growing plague of these types of anti-lawsuit injunctions. This is perhaps the perfect case for Judge Gilstrap to state the obvious: an innovator headquartered in Texas has a right to litigate in Texas where they do business and where the defendant similarly does business, period. There is no legitimate, justifiable or even plausible reason to allow Wuhan or anywhere else in China, or any other court around the world, to divest the Eastern District of Texas of its jurisdiction or to supplant proper venue.

Photo: courtesy Ericsson press photo library. 

 

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 4 Comments comments. Join the discussion.

  1. Josh Malone December 29, 2020 10:41 am

    Wuhan is indistinguishable from the PTAB, the other venue where infringers attempt to transfer cases. Texas courts are the last bastion of justice involving patents. Why are infringers so afraid of Texas?

  2. Anonymous December 30, 2020 8:14 am

    Ericsson is headquartered in Sweden. You are confusing a Swedish Co. with a US subsidiary. The ASI was a US invention, not CN. So US courts can issue ASI’s but no other courts? CN should just sit back while US and UK courts Jack up SEP rates? Your premise and thus reasoning is fatally flawed This AASI is yet another blatant example of SEP abuse. Don’t be fooled by drinking the TX coolaid.

  3. Gene Quinn December 30, 2020 11:25 am

    Anonymous @2…

    Nothing in my argument is flawed in any way, and challenge you to an open and full discussion of these issues if you wish to proceed with your real name so we know your bias.

    First, Ericsson does have a headquarters in Plano, TX, which opened in 2001. See: https://www.ericsson.com/en/careers/global-locations/mana#:~:text=Headquartered%20in%20Plano%2C%20Texas%2C%20our,the%20whole%20of%20North%20America.

    And before you anonymously claim that this is merely a North American headquarters, please realize our audience here is educated and worldly and well knows that multinational corporations have many corporate entities around the world for various corporate reasons. Ericsson employs 10,000 people in North America and 2500 in Plano, Texas at its 38 acre campus. Plano, Texas is also home to its state of the art 5G research. See: https://www.ericsson.com/en/press-releases/6/2020/ericsson-powers-north-texas-campuses-with-5g-distributed-innovation-network. Thus, as Ericsson correctly claims, Texas is in fact the epicenter of this dispute. China has absolutely no ties whatsoever to this dispute. Samsung has called Chinese courts unfair and unreliable, and China isn’t even a top 30 market for Samsung. For a Chinese court to step into this dispute is fantastically ridiculous. Only the most biased individuals who cling to anonymity so as to not ruin their own integrity could argue otherwise.

    You ask: “CN should just sit back while US and UK courts Jack up SEP rates?”

    China can try and exert whatever leverage they want, but when Chinese courts are wrong on the law and attempt to act as a World Court they must be ignored. Furthermore, no court should EVER issue a faux emergency injunction in secret without notice on Christmas morning, period. That this even has to be explained to you speaks volumes about your lack of intellectual integrity. There was no looming emergency that required injunctive relief be issued on Christmas morning. Samsung acted in bad faith (as they are famous for doing) and the court in Wuhan egregiously went along with Samsung, similarly acting in bad faith. I trust Judge Gilstrap will see this for what it is, an attempt to further Chinese hegemony (as I wrote).

  4. Lisalisadc December 31, 2020 2:20 pm

    Samsung Electronics Co., Ltd., Samsung China, and Samsung China Investment Cos. are suing Ericsson, not Samsung Korea. Judge Gilstrap may be incorrect to say that Samsung (and Ericsson) does not have a strong connection to Wuhan. In 2014, Samsung (China) Investment Co. Ltd established its central China branch in Wuhan. This office is in charge of business management in Hubei, Hunan, Henan, Jiangxi, etc. Ericsson has an office in Wuhan and has been in a joint venture with the Wuhan Research Institute for 20+ years (Wuhan Yangtze Ericsson Telecommunications Company Ltd.).

    Another reason that Samsung may have sued Ericsson in Wuhan is that the court may not be favorable to any rivals of China’s largest telecom company, Xiaomi. Ericsson is very much on the radar of Xiaomi and other Chinese enterprises.  In 2014, Ericsson sued Xiaomi for patent infringement under FRAND in India and was granted an injunction, effectively banning Xiaomi from India for a few years.  

    Also, Xiaomi is China’s largest telecom company and the world’s 4th largest and has a second headquarters in Wuhan. While Xiaomi is not CCP owned, it has strong ties to the communist party because Xiaomi was set up by a Communist Party committee (i.e., a large number of X’s executives are CCP members and the majority of its investors are state-owned entities). Although Xiaomi is not a party to this lawsuit, Xiaomi’s influence in this region could have influenced Samsung to select Wuhan as its venue, and of course gamble on old-fashioned Chinese “justice.”

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