Tillis, Michel and Iancu Back Ericsson in Heated International FRAND Dispute with Samsung

By Eileen McDermott
April 12, 2021

“Accepting the Wuhan court’s aggressive expansion over global rate-setting will only encourage other jurisdictions to do the same. We will have a race to the local courthouse, where each nation’s courts offer procedures that preemptively favor either the licensor or the licensee in future SEP FRAND disputes.” – Amicus brief of Tillis, Michel and Iancu

In the latest phase of an international dispute between Samsung Electronics and Ericsson, Inc., Senator Thom Tillis (R-NC), Judge Paul Michel and former U.S. Patent and Trademark Office (USPTO) Director Andrei Iancu have filed an amicus brief at the U.S. Court of Appeals for the Federal Circuit (CAFC) supporting Ericsson and urging the CAFC to affirm the district court’s order granting an anti-interference injunction. That order enjoined Samsung from taking any action to interfere with Ericsson’s U.S. FRAND (“fair, reasonable, and non-discriminatory” terms) lawsuit against Samsung in the Texas court.

A Battle for Jurisdiction

The appeal stems from Ericsson’s Emergency Application for an Anti-Interference Injunction related to Samsung’s lawsuit filed in the Wuhan Intermediate People’s Court of China (the Wuhan Action). In response to Ericsson’s motion filed on December 28, 2020, the United States Federal District Court for the Eastern District of Texas issued a temporary restraining order against Samsung in the FRAND lawsuit.

On December 11, 2020, Ericsson filed a suit against Samsung to resolve the FRAND dispute between the two parties. On December 25, Ericsson was informed that Samsung had filed a FRAND lawsuit in Wuhan and was granted its request for a broad anti-suit injunction enjoining the proceedings in the U.S. district court. Ericsson then filed a request for an emergency ex parte temporary restraining order and an anti-interference injunction, asking that Samsung “not take any further action to divest [the district court’s] jurisdiction or to prevent Ericsson Inc., and all of its corporate parents, subsidiaries, and affiliates, from asserting the full scope of its patent rights against Samsung in the United States.”

Judge Michel and Judge Randall Rader each filed briefs with the district court at the time arguing different sides of the case. Now, in the amicus brief to the Federal Circuit, Michel, Tillis and Iancu contend 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 United States.”

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A Step Never Before Taken

The present brief chiefly argues that the Wuhan court’s issuance of the injunction represents a step that “no court anywhere in the world” has taken. “It has declared itself the sole decider of global FRAND licensing terms without the full consent of the parties involved in the patent licensing negotiations,” explains the brief. The Eastern District of Texas’ decision to grant the anti-interference injunction was appropriate in order “to protect its jurisdiction from the Wuhan court’s unilateral interference.”

While U.S. courts have themselves issued anti-suit injunctions before, in those cases the parties all agreed that the U.S. court could decide the FRAND licensing terms. Here, the Wuhan court acted without such consent.

The brief makes two main arguments:

  • The Chinese Anti-Suit Injunction Is a Marked and Improper Intrusion on U.S. Sovereignty and the Jurisdiction of U.S. Courts to Decide U.S. Patent Issues; and
  • This Court’s Analysis Ought to Consider Issues of Judicial Comity in Proper Context.

In support of its first point, the brief explains that the district court was justified in defending its jurisdiction and that it was a proper exercise of the court’s authority. The brief adds:

If the U.S. court had not proceeded, the logical result would be FRAND disputes devolving into a race to the local courthouse. Every other court in the world—including U.S. 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.

The concern about different outcomes in the two cases is a red herring, because such a possibility always exists in patent litigation, says the brief. “Different outcomes in different national patent litigations are in fact a reasonable outcome, given different patent laws.”

While the amici recognize that it may be more efficient to have a single global court to decide FRAND rates, we do not, and thus the parties must resolve their disputes individually with the relevant national courts. The brief continues:

Accepting the Wuhan court’s aggressive expansion over global rate-setting will only encourage other jurisdictions to do the same. We will have a race to the local courthouse, where each nation’s courts offer procedures that preemptively favor either the licensor or the licensee in future SEP FRAND disputes.

The brief also cites to the three examples in which U.S. courts have granted anti-suit injunctions in the FRAND context, showing that no U.S. court has issued such an injunction without full consent. See TCL Communication Technology Holdings Ltd.v. Telefonaktiebolaget LM Ericsson; Microsoft Corp. v. Motorola, Inc.; and Huawei Technologies Co. v. Samsung Electronics Co.

The brief further cites examples of courts in Germany and India resisting similar attempts by Chinese courts by taking similar measures to the Eastern District of Texas court in this case.

Comity in Context

As to the question of international comity considerations, which Samsung has raised in its briefs, the amici cite from E. & J. Gallo Winery v. Andina Licores S.A., which held that “from the earliest times, authorities have recognized that the obligation of comity expires when the strong public policies of the forum are vitiated by the foreign act.”

Chinese officials and courts have been documented to encourage decisions that favor their own state-owned or state-dominated companies and “the United States and its courts should not accept this intrusion upon the nation’s sovereignty,” says the brief.

Ultimately, the amici urge the CAFC to affirm the district court’s anti-interference injunction and to allow the district court to proceed with the issues relevant to U.S. patent law and policy.

 

The Author

Eileen McDermott

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

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 2 Comments comments.

  1. Jonathan Stroud April 13, 2021 7:09 pm

    Ironic that in this context, a race to the courthouse is disfavored. (FWIW, I agree with the positions expressed in the brief ) Interesting to see former Judge Rader line up on the other side

  2. CharlieSeattle April 14, 2021 7:13 pm

    Good article on this.