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Netgear settles WiFi 6 standard-essential patent dispute with Huawei, takes license to Sisvel pool between Unified Patent Court and Munich I Regional Court rulings

Context: After almost two years during which Huawei was, according to its own representation, “ghosted” by Netgear (December 21, 2024 ip fray article), the Chinese innovator sued the U.S. router maker over WiFi 6 standard-essential patents (SEPs) in 2022. In the summer of 2023, Huawei started an enforcement action in the Unified Patent Court (UPC) that led to a seven-country injunction shortly before the holidays (December 18, 2024 ip fray article). Another SEP injunction loomed large after the Landgericht München I (Munich I Regional Court) held a Huawei v. Netgear WiFi 6 patent trial the following day (December 19, 2024 ip fray article) and scheduled its ruling for January 9, 2025 (Thursday). Previously, Netgear had started to pursue a U.S. antisuit injunction against Huawei, but the UPC, the Munich I Regional Court and the Supreme People’s Court (SPC) of China handed down anti-antisuit injunctions (December 23, 2024 ip fray article), further to which Netgear withdrew its request for a U.S. antisuit injunction, yet continued to seek an interim license (December 24, 2024 ip fray article).

What’s new: A U.S. court filing made late on Friday (January 3, 2025) states that Huawei “Netgear took a license to certain Huawei patents” and asks the United States District Court for the Central District of California to put the antisuit and FRAND proceedings there on hold for thirty days so as to give the parties time to work out the remaining details for the dismissal of the pending actions. Shortly after the court filing, Sisvel announced that Netgear had taken a license to its WiFi 6 SEP pool (January 4, 2025 Sisvel press release). Huawei is the largest contributor to that pool.

Direct impact:

  • For Huawei, this outcome validates both its licensing program and its enforcement efforts, which are an exception while it typically concludes license agreements without litigation. It is the third WiFi 6 settlement for Huawei in ten months. Against Amazon (March 5, 2024 ip fray article) and German router market leader AVM (April 15, 2024 ip fray article), injunctions were also in force at the time of settlement.
  • By virtue of its license, Netgear can continue to sell its products in the relevant European markets without any disruption, and avoids the bad news it would likely have received from the German national court in a few days.
  • All that will be left for the parties to discuss are (a) the terms under which the pending actions in the various jurisdictions are withdrawn (the UPC and Germany are “loser pays” jurisdictions) and/or (b) potentially also some back-royalties for Netgear’s past use of Huawei’s patents, which started long before Sisvel’s pool was even formed. Theoretically, litigation over damages claims and/or fee awards would have to resume, but practically, that is very unlikely as the U.S. court filing says they “have settled in principle the matters in controversy in [the U.S.] action.”

Wider ramifications:

  • This is a win not only for Huawei and its outside counsel in Europe (Clifford Chance, Bird & Bird, Braun-Dullaeus Pannen Emmerling and Mitscherlich & Partner) and the U.S. (Susman Godfrey), but also for the UPC and its Munich Local Division (LD), which decisively thwarted Netgear’s antisuit injunction strategy, as well as the Munich I Regional Court, whose reasonably likely injunction would have substantially upped the pressure on Netgear, also because anti-antisuit injunctions (AASIs) are routinely upheld by the appeals court there (the Munich Higher Regional Court) while it would have been a matter of first impression for the UPC’s Court of Appeal (CoA). And litigants now know that Chinese courts will also order AASIs in such situations.
  • Huawei has no other WiFi 6-specific dispute pending. There is an ongoing dispute with European low-end smartphone maker HMD. Now that another major WiFi 6 implementer has accepted Huawei’s licensing terms and that litigation resources have been freed up, other unlicensed parties will deem it more prudent than ever to sign up.

This is the U.S. court filing:

Netgear wanted a hearing later this month to persuade Judge André Birotte Jr. that he should obligate Huawei to grant an interim license so as to defuse any injunctions. That would have been unprecedented for a U.S. court to do in a SEP dispute. Netgear pointed to Xiaomi’s interim license from Panasonic (October 3, 2024 ip fray article), but that was a decision by UK court involving a different standard (cellular) and in a situation where both parties had already declared their consent to have the FRAND terms for the final license set in that jurisdiction. In Netgear v. Huawei, it was a long shot.

Taking a license to Sisvel’s pool was always an option for Netgear once Huawei joined that pool as a founding member in mid 2022, a few months after starting its enforcement action against Netgear. A bilateral offer was also on the table. The UPC judgment was based in no small part on the fact that Netgear rejected (at the time) the terms of the Sisvel pool without explaining why it would have been unreasonable or discriminatory to sign up to it (December 18, 2024 ip fray article).

According to Sisvel’s press release, its WiFi 6 pool contains “over 200 patent families” frrom Huawei as well as Mediatek, Mitsubishi Electric, Orange, Panasonic, Philips, SK Telecom and Wilus. Huawei is by far the most important WiFi 6 patent owner among that group of eight. Sisvel rarely announces license deals and does not routinely disclose licensees, while the leading U.S.-based pool administrators (in alphabetical order: Access Advance, Avanci and Via LA) are far more transparent. The press release says Netgear is one of “over 20 companies” to have licensed that WiFi 6 pool, of which Acer is the only other licensee to be named. AVM and/or Amazon may also have opted for the pool license.

Huawei’s FRAND track record

There has been a certain pattern in recent years:

  • Most implementers accept Huawei’s terms. Presumably, just based on business logic, the fact that Huawei is both a major licensor and a major licensee (due to its high unit volume as an implementer) makes it a non-option to seek supra-FRAND royalties.
  • If implementers refuse those terms and accuse Huawei of FRAND breaches in court, they lose. The courts find that Huawei went beyond the call of duty as a licensor.
  • Then they take a license.

Huawei’s chief IP officer Alan Fan and other executives emphasized collaboration at a recent corporate event (September 10, 2024 ip fray article).

Courts and counsel

China

Huawei had already prevailed over Netgear in the Jinan Intermediate People’s Court on two Chinese patents (and on FRAND). That fact was communicated to the U.S. court.

The SPC granted Huawei an AASI in response to Netgear’s U.S. antisuit motion.

Europe

Huawei sued Netgear in the Dusseldorf Regional Court, Munich I Regional Court and the UPC’s Munich LD:

  • The Dusseldorf court stayed a case over validity doubts, but the patent was upheld by the Federal Patent Court last month (in an amended, but still presumably standard-essential form) (LinkedIn post by ip fray).
  • The Munich court’s 7th Civil Chamber (Presiding Judge: Dr. Oliver Schoen (“Schön” in German) appeared likely to order an injunction, and did grant an AASI.
  • The UPC’s Munich LD’s judgment last month was entered by the court’s first panel (Presiding Judge Dr. Matthias Zigann, Judge Tobias Pichlmaier, Judge Edger Brinkman (The Hague, Netherlands) and Technically Qualified Judge Patrice Vidon). Judge Vidon has meanwhile resigned from the UPC (December 30, 2024 LinkedIn post by ip fray), and for a second Huawei v. Netgear case that was scheduled to go to trial in March, a new technically qualified judge would have been appointed.
  • Interestingly, Huawei’s AASI motion was not even the first to be brought in the UPC: there was another one shortly before it, presumably by licensing firm Advanced Standards Communications against Xiaomi (December 27, 2024 ip fray article). All that is known about the outcome is that the UPC’s Munich LD’s second panel deemed the motion admissible. Whether it failed or succeeded on the merits should become known at some point.

Counsel for Huawei: Clifford Chance’s Dr. Tobias Hessel (lead), Thomas MisgaiskiLea Prehn and Dr. Marie Gessat; (for the FRAND part) Bird & Bird’s Christian HarmsenDr. Matthias Meyer and Dr. Joerg Witting (“Jörg” in German); Braun-Dullaeus Pannen Emmerling patent attorneys Dr. Friedrich Emmerling and Dr. Karl-Ulrich Braun-Dullaeus; and Mitscherlich & Partner’s Martin Körber and Alexander Bach. Huawei’s in-house counsel: Emil Zhang, Dylan Li, Dr. Thomas Dreiser, Liang Gao and Wanting Shao. For the UPC AASI, Dr. Hessel and Mr. Harmsen were listed as co-counsel.

Counsel for Netgear: Freshfields’s Dr. Stephan Dorn (lead), Dr. Frank-Erich Hufnagel (normally first-chair trial counsel, but not in this case), the above-mentioned Henning Gutheil and Diana Baum, as well as Samson & Partner patent attorneys Dr. Cletus von Pichler and Stefan Koenig (“König” in German). Netgear’s in-house counsel: Anna Lam (Vice President, Legal).

United States

About a year ago, Netgear lodged a politically charged “antitrust and racketeering” complaint against Huawei with the United States District Court for the Central District of California (February 4, 2024 ip fray article). Huawei asked the court to strike some parts and dismiss others (June 20, 2024 ip fray article). A hearing was held a couple of months ago, but now the issues are moot.

Huawei was defended by Susman Godfrey lawyers from three different offices:

Susman is predominantly a plaintiffs’ firm (see, e.g., this December 16, 2024 ip fray article). In this case, they were defending the offensive player: Huawei wanted Netgear to take a license, and Netgear started U.S. litigation as part of its defensive strategy.

Huawei’s U.S. in-house counsel: Steven Geiszler and Mark Ziegelbein.

Netgear’s counsel came from two Spencer Fane offices: