Chinese courts step into the SEP space
The first comprehensive statistical analysis of SEP litigation in China finds that numbers of cases are growing, with foreign companies being heavily involved - yet few make it to judgment
Between 2011 and 2019, Chinese courts accepted 160 cases involving SEPs. Judges in China have therefore accumulated considerable experience in hearing these kinds of dispute. To this end we have gathered a substantial amount of data on these cases to provide a quantitative analysis of the annual distribution of the number of SEP cases, industrial distribution and profiling of the parties, geographic distribution of the courts, causes of action, adjudication progress and final outcomes. This includes specific analysis of SEP cases accepted by Chinese courts in 2018 and 2019. The cases covered here are those accepted by civil courts in mainland China from 2011 to 2019, where the plaintiffs claimed or the defendants argued that the asserted patents were SEPs. Cases that were withdrawn or dismissed due to the invalidation of asserted patents are also covered. Since 2011, Chinese SEP cases have increased gradually in number and diversified in type. Cases accepted by the courts before 2011 are not included.
Data was collected up to December 2019. However, information on SEP cases filed in 2019 may be incomplete as the disclosure of some cases may be delayed or some cases may not have been disclosed due to confidentiality requirement. Sources of information for the cases covered include official announcements by the involved parties, information disclosed by the courts and relevant news reports.
Annual distribution of accepted SEP cases
In October 2010, Nokia sued Huaqin before the Shanghai First Intermediate People's Court, requesting that the court find that Huaqin had infringed its four patents, which were essential to relevant telecoms standards. The court accepted the case in early 2011. This was the first SEP lawsuit to be filed by a patentee in the telecoms industry in China as well as the first SEP case that Chinese courts had accepted in the time frame covered by this article. Since the case involved four SEPs, the court held that it was necessary to individually compare the patents in dispute with the relevant standards and determine whether infringement had occurred. Therefore, in 2012, the court decided to split the four claims and the acceptance time of the other three cases as the spin-off fell in 2012 based on the court decision. Among these cases, one was withdrawn in 2012, and the Shanghai Higher People's Court handed down final judgments for the other three. Details of the three judgments are provided later on.
FIGURE 1. Annual distribution of SEP cases accepted by Chinese courts from 2011 to 2019
As Figure 1 reveals, the number of SEP cases accepted by Chinese courts peaked in 2016 and 2018, with 47 and 51 disputes, respectively. This is primarily because in some cases several parties filed multiple cases against each other in both years or plaintiffs filed a series of cases against various defendants.
For example, in 2016, Huawei and Samsung sued each other for SEP infringement before the Shenzhen Intermediate People's Court, the Beijing IP Court and the Xi'an Intermediate People's Court, with a total of 27 cases involving the pair accepted that year. Further, in June 2016, Qualcomm filed a lawsuit before the Beijing IP Court, requesting that it declare that the licensing terms it had provided to Meizu did not violate China’s Anti-Monopoly Law. Following this, the Beijing IP Court and the Shanghai IP Court each accepted five cases filed by Qualcomm against Meizu over SEP infringement, with 11 cases in total filed by Qualcomm. As a result, in 2016, the total number of SEP cases between Huawei and Samsung and those that Qualcomm brought against Meizu reached 38 alone, making the number of SEP cases that Chinese courts accepted in 2016 significantly higher than the number in previous years.
In 2018, Advanced Codec Technologies (ACT) sued Xiaomi, Vivo and OPPO separately for infringing its six SEPs before the Nanjing Intermediate People’s Court, giving rise to 18 cases in total. Also in 2018, Siemens brought SEP infringement lawsuits against Xiaomi, Meizu and Gionee separately before the Shanghai IP Court and against OPPO and Vivo separately before the Beijing IP Court, with a total of eight cases filed. Shanghai Xuanpu Industry Co Ltd filed 18 SEP infringement lawsuits against MediaTek and Yulong (the owner of Coolpad) in the same year. In 2018, the number of cases initiated by ACT, Siemens and Xuanpu reached 44, making the number of cases that Chinese courts accepted in 2018 significantly higher than the number in 2017.
Sectors and geography
As Figure 2 demonstrates, from 2011 to December 2019 the SEP cases accepted by Chinese courts have involved the telecoms, construction and pharmaceutical industries. 154 cases, roughly 96% of the total, involve the telecoms industry, while the remaining six were for the construction and pharmaceutical industry.
FIGURE 2. Industry sector distribution of Chinese SEP cases between 2011 and 2019
Figures 3 and 4 show that the 10 companies filing the largest number of SEP cases in China are mainstream operating entities and NPEs in the telecoms industry. The total number of cases filed by the 10 companies is 126, which accounts for about 79% of SEP cases in China. Meanwhile, the top 10 companies being sued in SEP cases are mainly operating in the telecoms industry, including end-use product manufacturers and enterprises mainly engaged in R&D. The total number of such cases where these 10 companies were sued is 123 – 77% of the total. SEP cases are basically between companies active in the telecoms industry.
FIGURE 3. Top 10 companies initiating the most SEP cases in China between 2011 and 2019
NB: Two companies filed six SEPs. Both companies are included in Figure 3.
FIGURE 4. Top 10 companies sued the most in SEP cases in China from 2011 to 2019
As Figure 5 reveals, roughly 75% of SEP cases accepted by Chinese courts took place between Chinese and foreign entities. Among them, some are SEP infringement cases initiated by foreign patentees against standard implementers in China, such as Nokia v Huaqin, the series of SEP cases brought by Royal KPN and another series of SEP cases brought by Siemens. Some were brought by Chinese entities to counter the SEP lawsuits that foreign patentees filed in other jurisdictions. For example, following the cases initiated by Sisvel against Xiaomi in the United Kingdom, the Netherlands and Italy in 2019, Xiaomi sued Sisvel before the Beijing IP Court in December 2019, seeking a determination of FRAND terms in the Chinese market for all Sisvel’s Chinese SEPs. In addition, due to the importance of the Chinese market, Chinese courts have accepted a number of SEP cases between foreign parties over the past few years, which accounted for more than 10% of all SEP cases in China (eg, Apple v Qualcomm and GPNE v Apple).
FIGURE 5. Nationality of the parties to SEP cases in Chinese courts between 2011 and 2019
In sum, the SEP cases accepted by Chinese courts have been highly concentrated in the telecoms industry and the parties involved in these cases are also mainly entities active in this industry. In addition, most of the SEP cases accepted by Chinese courts are foreign-related, with many cases involving parallel proceedings in other jurisdictions.
As Figure 6 demonstrates, more than 95% of the cases were handled by the courts in Beijing, Guangdong, Shanghai and Jiangsu. The reason for this is likely related to the geographic distribution of China's telecommunication companies, the relevant courts’ first-mover advantage and the courts’ accumulated experience with SEP cases. With the accumulation of judicial experience, Chinese courts have handed down some landmark judgments that have also attracted attention from foreign courts, academia and industry, including Iwncomm v Sony, Huawei v Interdigital (IDC), Nokia v Huaqin, Huawei v Samsung and Huawei v Conversant, among others.
FIGURE 6. Distribution of SEP cases among Chinese courts from 2011 to 2019
Causes of action
As Figure 7 shows, among the SEP cases from 2011 to December 2019, most (135 cases or 84%) were patent infringement disputes (including patent infringement actions and actions for declaration of non-infringement), followed by anti-monopoly disputes (13 cases) and disputes over FRAND licensing terms (10 cases). There was only one unfair competition dispute and one dispute over breach of FRAND licensing agreements.
FIGURE 7. Causes of action of Chinese SEP cases from 2011 to 2019
Disputes over FRAND licence agreements in this article refer to those where the parties have entered into this kind of agreement and one party sued the other for breaching it. These cases are listed in a separate category because they differ in nature from disputes where one or both parties request the court to determine the FRAND licensing terms when they have not yet formally signed a FRAND licence agreement.
Of the 135 patent infringement disputes involving SEPs, three were non-infringement declaration actions filed by standard implementers (all filed by Apple against Qualcomm and eventually withdrawn) and the remaining 132 cases were patent infringement cases filed by patentees, where in three cases the accused infringers argued, as a defence, that the patents in dispute were SEPs. In addition, Huawei filed three cases in 2018 requesting for non-infringement declarations of Conversant’s three Chinese SEPs and determination of FRAND licensing terms for all of Conversant’s Chinese SEPs. In September 2019, the Nanjing Intermediate People’s Court determined the FRAND licensing terms for the Chinese market but dismissed the claims for non-infringement declarations due to the invalidation of all asserted patents. To avoid duplicacy, in this report, Huawei v Conversant is classified as a dispute over FRAND licensing terms instead of a patent infringement dispute.
Of the 13 anti-monopoly disputes, one was filed by Qualcomm in 2016 seeking a declaration of non-violation of China’s Anti-Monopoly Law, while the remaining 12 cases were filed by standard implementers. The remaining SEP cases, 10 over FRAND licensing terms, one over unfair competition and another over a breach of the FRAND licensing agreement, were all filed by standards implementers. While most of the SEP cases accepted by Chinese courts have been patent infringement disputes, the number of cases where the parties requested the court to determine FRAND licensing terms during FRAND licensing negotiations also rose. Between 2017 and 2019 alone, Chinese courts accepted seven lawsuits requesting determination of FRAND licensing terms in Chinese market.
Adjudication status and outcomes
Figures 8 and 9 demonstrate that as of 16 January 2020, among all the SEP cases that Chinese courts accepted from 2011 to December 2019, 124 (about 78%) were concluded in the first instance, and 36 are still pending. Of the 124 SEP cases already concluded by the first-instance courts, 89 (roughly 72%) were withdrawn by the plaintiffs, 17 were dismissed by the first-instance courts and 18 were concluded with court judgments.
FIGURE 8. Progress of SEP cases in Chinese courts between 2011 and 2019
FIGURE 9. First-instance decisions of Chinese SEP cases between 2011-2019
Cases settled and withdrawn
The SEP cases withdrawn by the parties account for about 72% of all the concluded SEP cases in China. It can be seen that in a SEP dispute, the parties’ main purpose in bringing lawsuits is not just to win the litigation, but also as a means of pushing forward the licensing negotiation. Thus, the parties may still continue the negotiation amid the legal proceedings and then withdraw the action once they reach a settlement. For example, Huawei and Samsung have initiated SEP-related lawsuits against each other in a number of jurisdictions since 2016, among which 28 were filed in China. In May 2019, the two parties reached a settlement and applied to withdraw the pending cases. Similarly, in November 2018, ACT filed six SEP infringement cases against Xiaomi before the Nanjing Intermediate People’s Court and in September 2019, applied to withdraw all the actions after reaching a settlement with Xiaomi. The court approved the withdrawal in December 2019.
Cases dismissed by the courts
The first-instance courts dismissed 17 SEP cases because the plaintiffs had lost the legal basis of the claims due to the invalidation or abandonment of the asserted patents. The details are as follows:
- 14 cases were dismissed because the asserted patents were entirely invalidated by the former Patent Re-examination Board (PRB);
- one case was dismissed because the asserted patent was partially invalidated and the technical solution, which the plaintiff asserted in the civil action, was part of a claim that was declared invalid;
- one case was dismissed because the claims of the asserted patent were either abandoned by the patentee or invalidated by the PRB; and
- one case was dismissed because the court essentially invalidated the asserted patent by reversing the lower PRB decision upholding the patent.
Once sued for patent infringement, the alleged infringer would usually file a request to invalidate the asserted patent as a counter measure in response to the civil action. Whether the civil action would proceed was directly related to whether the asserted patent was upheld or invalidated. For example, between 2016 and 2018, Xuanpu filed 22 patent infringement actions against Yulong and MediaTek before the Shanghai IP Court, 19 of which were about SEPs. MediaTek then filed invalidation actions against the 20 asserted patents before the PRB. As of the end of May 2019, seven of these (all SEPs) were entirely invalidated, seven were partially invalidated and six were upheld. The Shanghai IP Court then issued rulings to dismiss the seven cases based on the seven SEPs entirely invalidated by the PRB (the remainder of Xuanpu’s 22 infringement cases were eventually withdrawn).
Cases with first-instance judgments
TABLE 1. Cases with first-instance judgments
The table above gives details of the 18 SEP cases where the first-instance judgments were issued. As shown in the table, among these 18 SEP cases:
- two involve the pharmaceutical industry, two involve the construction industry and the remaining 14 involve the telecoms industry;
- two are disputes over FRAND licensing terms, two are anti-monopoly disputes and the remaining 14 are patent infringement disputes;
- 12 of the 18 SEP cases were concluded with the second-instance judgments, two were withdrawn by the parties during the second instance and four were concluded with the first-instance judgments. The Supreme People’s Court has not adjudicated on the merits of any SEP cases during this timeframe and it has rejected two requests for retrial.
In the two disputes over FRAND licensing terms, the parties in both cases asked the court to set SEP licensing rates for the Chinese market only. In Huawei v InterDigital, the courts of the first and second instance basically applied the approach of comparable licence agreements to determine the SEP royalty rates in China, while in Huawei v Conversant, the first-instance court applied the top-down approach to determine the royalty rates in China, and the case is currently amid the second trial by the Supreme People’s Court.
As for the two anti-monopoly disputes, one is another case between Huawei and InterDigital, in which Huawei claimed that InterDigital had breached its FRAND obligations by imposing unreasonable trading conditions in the licensing of its SEP portfolios. The courts of the first and second instance found that InterDigital’s conduct in bundling SEP licensing did not constitute an abuse of market dominance, but it had charged unfairly high royalties from Huawei. The other anti-monopoly dispute is China Construction Second Engineering Bureau Ltd v Zeng Qingyi, where the patent asserted was entirely invalidated and the court found that certain features of the patent were not included in the relevant standard for the construction industry and thus rejected the claim of abuse of market dominance.
Among the 14 patent infringement disputes related to SEPs, 11 were initially declared to be SEP cases by the patent owners, while in the three other the defendants argued that the patents were SEPs as a defence. The former 11 SEP cases could be divided into the following four groups based on the parties involved:
- Three SEP infringement disputes were initiated by Nokia against Huaqin. In the first case, the claims of infringement were unsuccessful before the courts of both first and second instance. In the second case, the patent asserted was found to be non-essential to the relevant standard by the courts of both the first and second instance. And in the third case, the first-instance court found infringement by one allegedly infringing product and no infringement by the other product. Both parties appealed in the third case and it is still pending in the second instance.
- Five SEP infringement disputes were initiated by Royal KPN against Yulong, Xiaomi, Motorola, TCL and HTC based on one same patent, and the plaintiff claimed damages only. The plaintiff lost all five cases because the patent was found to be non-essential to the relevant standard by the courts of both the first and second instance.
- One SEP infringement dispute was initiated by Iwncomm against Sony for a permanent injunction and damages. The first and second-instance courts found infringement by Sony and ordered a permanent injunction and damages in favour of Iwncomm.
- Two SEP infringement disputes were filed by Huawei against Samsung and Huawei applied for permanent injunction only. The first-instance courts in both cases found infringement by Samsung and ordered permanent injunctions in favour of Huawei.
In another three of the 14 patent infringement disputes where judgments were issued, the defendants argued, as a defence, that the asserted patents were SEPs. In Beijing Sihuan Pharmaceutical Co Ltd v Qilu Pharmaceutical Co Ltd, the defendant argued that the patent-in-suit was essential to a mandatory national standard and requested the court to deny the permanent injunction requested by the plaintiff. The defence that “the court should deny the injunctive relief the plaintiff requested when the asserted patent is essential to a mandatory national standard” was rejected by the first and second-instance courts. The plaintiff petitioned for a retrial, which was rejected by the Supreme People’s Court.
In Hu Xiaoquan & Zhu Jiangrong v Shandong Huinuo Pharmaceutical Co Ltd and Hubei Tang Shi Jian Hua Building Material Ltd v Hubei Sanhe Pile and Pole Co Ltd, the defendants requested the court to determine that the disputed patents had not been infringed on the grounds that these patents were essential to relevant standards. The abovementioned defences raised by the defendants were rejected by the courts.
Status of SEP cases accepted by Chinese courts in 2018 and 2019
According to publicly available information, the Chinese courts accepted 58 SEP cases in 2018 and 2019. Of these, 51 were accepted in 2018:
- In January 2018, Hubei Tang Shi Jian Hua Building Material Ltd sued Hubei Sanhe Pile and Pole Co Ltd before the Wuhan Intermediate People's Court for patent infringement. The defendant argued that the patent asserted (ZL200910065112.4) was essential to a local construction standard and that the implementation of that standard did not constitute patent infringement. The standard in question is a regional standard for the construction engineering industry. In June 2018, the court handed down the first-instance judgment finding the defendant liable for infringement. The defendant then appealed to the Hubei Higher People's Court. During the second-instance proceedings, the patent was entirely invalidated. The plaintiff then withdrew the patent infringement action.
- In January 2018, Huawei filed a lawsuit against Conversant before the Nanjing Intermediate People’s Court, seeking a non-infringement declaration for three SEPs owned by Conversant and a determination of the FRAND licensing terms of the Chinese SEP portfolio owned by Conversant. Conversant declared 15 patents it owned as essential to relevant Chinese standards, of which eight patents were entirely invalidated before the court could issue the judgment. Thus, the court focused on the remaining seven patents in determining essentiality. On 16 September 2019 the court handed down its first-instance judgment, finding that only one of the patents in dispute is essential to the relevant standards, and determined the licensing terms (including royalty rates) for that SEP in China.
- Conversant appealed the first-instance judgment to the IP Division of the Supreme People’s Court and the appeal was accepted by the court on 18 November 2019. Meanwhile in Germany, Conversant brought three SEP infringement actions against Huawei before the Dusseldorf Regional Court in April 2018 and the German court handed down the first-instance judgment in the infringement action involving EP1797659 on 27 August 2020. The German court found the asserted patent to be infringed and Huawei to be an unwilling licensee and rendered an injunction order, which prohibits Huawei and its German affiliates from providing, selling, using or, for such purposes, importing or possessing relevant mobile devices, and prohibits Huawei from supplying or delivering UMTS-compliant mobile phones and tablets to customers. The court also ruled that Huawei must reveal information about the infringing acts and sales, destroy and recall the infringing products and bear the cost of litigation. Huawei applied for behaviour preservation to the IP Division of the Supreme People's Court at the same day the Dusseldorf court issued its decision, seeking an order prohibiting Conversant from enforcing the Dusseldorf decision before the IP Division issues its final judgment on the Chinese action. Huawei also provided a bond of Rmb19.7 million for the application. On 28 August the IP Division of the Supreme People's Court granted Huawei’s application and this is the first anti-suit injunction that Chinese courts have issued in SEP cases that involve parallel proceedings in other jurisdictions.
- In January 2018, ZTE sued Conversant before the Shenzhen Intermediate People’s Court, requesting the court to set the FRAND licensing terms for all the SEPs that Conversant held in China. Conversant challenged the jurisdiction of the court and was dismissed by the Shenzhen court. Conversant then appealed before the IP Division and was again dismissed by the court on 21 August 2020.
- In June 2018, Yuan Gongyi sued Apple before the Beijing IP Court, claiming that Apple had infringed his Chinese patent (ZL00800381.5), which he declared essential to technologies under relevant 3GPP standards. In July 2018, Yuan also sued Xiaomi before the Beijing IP Court for infringing the same patent. The patent was previously held by Golden Bridge Tech Inc, a US company located in New Jersey, and was transferred to Yuan on 8 December 2016. On 15 May 2019 the patent was entirely invalidated and Yuan subsequently withdrew the two lawsuits.
- From September to October 2018, Siemens filed four SEP infringement cases against Xiaomi, Meizu and Gionee separately before the Shanghai IP Court, and four SEP infringement cases against OPPO and Vivo separately before the Beijing IP Court. As of December 2019, the PRB had made decisions on the validity of four of the asserted patents. As for the two patents asserted against Xiaomi, patent ZL02813713.2 was entirely invalidated and ZL02812385.9 was partially invalidated. As for the two patents asserted against OPPO and Vivo, ZL200480023688.X was entirely invalidated and ZL201010120482.6 was partially invalidated. Based on the above PRB decisions, the Beijing IP Court dismissed the two cases against OPPO and Vivo.
- In November 2018, ACT initiated a total of 18 cases against Xiaomi, Vivo and OPPO for SEP infringement before the Nanjing Intermediate People’s Court. After filing these cases, ACT reached a global licensing agreement with Xiaomi and was allowed to withdraw the relevant cases in December 2019. The remaining 12 cases against Vivo and OPPO are still pending in the first instance. According to relevant court announcements, the court held hearings on the cases against Vivo and OPPO in December 2019 and January 2020.
- TCL filed two SEP cases against Ericsson before the Shenzhen Intermediate People’s Court and the Guangzhou IP Court, respectively – one for monopoly and the other for unfair competition.
- In 2018, Xuanpu filed 18 cases against MediaTek and Yulong for SEP infringement before the Shanghai IP Court, all of which have already been concluded. Among them, seven cases were dismissed by the court due to the invalidation of the asserted patents in their entirety, and the remaining 11 were withdrawn by the plaintiff.
In 2019 Chinese courts accepted seven SEP cases, including three patent infringement disputes, two disputes over FRAND licensing terms, one anti-monopoly dispute and one dispute over breach of a FRAND licensing agreement.
- In 2019, ACT filed three lawsuits against TCL for SEP infringement before the Shanghai IP Court. According to relevant court announcements, the court held hearings for the cases in December 2019.
- In January 2019, Huawei sued IDC before the Shenzhen Intermediate People’s Court, requesting a determination of the FRAND terms for licensing IDC’s Chinese 3G, 4G and 5G SEPs to Huawei from 2019 to 2023. Prior to this legal action, the SEP licence agreement between Huawei and IDC expired on 31 December 2018. Following the lawsuit, in December 2019, IDC announced that it had filed a lawsuit against Huawei before the UK High Court of Justice, seeking a declaration that the licensing terms it offered to Huawei for a global licence are consistent with its FRAND commitments, or a determination of the global FRAND rates for its 3G, 4G and 5G SEP portfolio. IDC also requested the UK court to issue a FRAND injunction against Huawei. In late April 2020, IDC announced that it had entered a worldwide patent licensing agreement with Huawei and that they had settled all litigation against each other.
- In March 2019, to counter the cases filed by Motorola in other jurisdictions, Hytera filed two SEP cases against Motorola, one for anti-monopoly practice and the other for breach of a FRAND licensing agreement before the Shenzhen Intermediate People’s Court. In the anti-monopoly action, Hytera sought a ruling to determine that Motorola had abused its market dominance in the licensing of patents essential to the cost-optimised private network telecoms standards. In the action over breach of a FRAND licensing agreement, Hytera requested a court ruling to determine that Motorola, by filing a complaint before the US International Trade Commission (ITC) and patent infringement actions against Hytera in the United States and Australia, had violated its SEP licensing agreement for DMR with Hytera. Hytera also requested the court to issue an injunction requiring Motorola to immediately withdraw the relevant patent infringement lawsuits in these two countries. Both cases brought by Hytera are currently pending in the first instance.
- In December 2019, Xiaomi announced that it had filed a lawsuit against Sisvel before the Beijing IP Court and requested the court to set the FRAND terms in the Chinese market for the SEPs that Sisvel held in China, which is the first action filed by Xiaomi for determination of FRAND licensing terms in China.
Further, after statistics were collected on 16 January 2020, information of three more SEP cases filed before Chinese courts in late 2019 were collected (prior to their official publication), which comprise a dispute over FRAND licensing terms, an anti-monopoly dispute before the Guangzhou IP Court filed by OPPO against Sisvel and an anti-monopoly dispute before Beijing IP Court filed by Xiaomi against Sisvel. The addition of these cases brings the total number of SEP cases that Chinese courts accepted in 2019 to 10.
Chinese courts have already accepted new SEP cases in the first half of 2020. For example, in February 2020, to counter cases filed by Sharp in other jurisdictions, OPPO sued Sharp before the Shenzhen Intermediate People’s Court for violation of FRAND principles in their licensing negotiation. In April 2020, following cases in the High Court in London and the US District Court for Delaware, Lenovo and Motorola brought an action against IDC before the Beijing IP Court, seeking determination of FRAND royalties for IDC’s 3G, 4G and 5G SEPs in the Chinese market. The case was accepted in June 2020. Also in June 2020, Xiaomi sued IDC before the Wuhan Intermediate People’s Court seeking a determination of the FRAND royalties for IDC’s 3G and 4G SPEs in the global market. Later in July 2020, IDC sued Xiaomi before the Delhi High Court in India for SEP infringement and requested injunctive relief. On 23 September 2020, as requested by Xiaomi, the Wuhan court ordered that, over the disputed SEPs in the Chinese action, IDC must immediately withdraw its application for injunctive relief before the Indian court. IDC must not apply for or enforce current or potential injunctions for the related SEPs or file any actions for determination of FRAND terms against Xiaomi in any courts within or out of China. This is the first case accepted by Chinese Court on the determination of FRAND royalty in global market, and it is the second anti-suit injunction, after the one granted by the IP Division in Huawei v Conversant, that Chinese courts issued in a SEP dispute involving parallel proceedings in foreign jurisdiction.
The number of SEP-related disputes is expected to grow further with the development of the telecoms sector and the Internet of Things. This means that Chinese courts could play a greater role than ever in setting the parameters around global SEP licensing negotiations.
A comprehensive survey of SEP litigation in China finds that activity is increasing, with foreign telecoms players heavily involved.
- From 2011 to December 2019, Chinese courts accepted 160 cases related to SEPs.
- Most of the cases involved foreign entities and related to the telecoms industry.
- Most of the cases were filed with the courts in Beijing, Guangdong, Shanghai and Jiangsu.
- Most of the cases were patent infringement disputes, although cases asking the court to determine FRAND terms during licence negotiations are also on the rise.
- From 2018 to 2019, Chinese courts accepted 58 SEP cases, half of which are still pending in the first instance.