Jacob Schindler

The Intermediate People's Court in Shenzhen has handed down the latest milestone Chinese FRAND decision, with local telecom Huawei earning an SEP injunction as part of its wide-ranging assertion campaign against Samsung Electronics.

The decision was announced by an official social media channel of the court today. The short notice describes the ruling as the first SEP injunction to be issued in China on the basis of an “international” SEP. The Beijing IP Court previously granted an injunction against Sony back in March 2017, but the standard at issue there was WAPI, a seldom-used protocol which is only implemented in China.

The two patents asserted by Huawei in Shenzhen on May 25th, 2016 were: 201110269715.3 (“Transmission control signaling method and apparatus”) and 201010137731.2 (Method for feeding acknowledgement [ACK]/negative acknowledgement [NACK] back during carrier aggregation, base station and user equipment”). Both are declared as essential to the 4G standard. During an 18-day trial, each party accused the other of violating its FRAND obligations in cross-licence talks that have apparently been going on since 2011.

The court’s full decision has not been published yet, and I am relying on a machine translation of the court’s brief summary. However, a few of the court’s key findings have been made reasonably clear:

  1. Huawei’s patents were both found to be essential to the 4G standard
  2. Samsung produced and sold 4G capable terminal products in China, infringing Huawei’s patent rights
  3. During six years of cross-licence negotiations, Huawei made no obvious breach of the FRAND principle. On the other hand, Samsung made obvious breaches of FRAND in both procedure and substance
  4. While Huawei sought to resolve the dispute through negotiation and arbitration, Samsung “maliciously delayed talks” in a way that runs counter to the FRAND principle
  5. In view of all this, the court has granted Huawei’s injunction request

Details beyond those, including the affected Samsung products, are not known at this time. Patent owners will have to wait to see a full decision for guidance on exactly what factors went into the panel’s determination that Samsung, but not Huawei, violated its FRAND obligations. The press release said the judgment: "Creates a fair market competition environment for our country and equally protects the legitimate rights and interests of intellectual property owners at home and abroad".

The court also said it hopes the case highlights Shenzhen's "innovation-driven development strategy". The intermediate court in the southern city is right up there with Beijing, Shanghai and Guangzhou when it comes to big first-instance patent cases, and Chinese media recently reported that Shenzhen will get its own specialist IP venues in the near future.

Huawei's May 2016 lawsuits against Samsung in Shenzhen and the Northern District of California were the opening salvoes in what has become a sprawling battle. Another litigation filed subsequently in Quanzhou already yielded a win for Huawei when an April 2017 ruling ordering the Korean company to pay it $11 million in damages. IAM also reported in November that a Chinese NPE is suing Samsung with former Huawei patents.