Context: When we became aware of a press release by the Frankfurt Regional Court on an antitrust action by an implementer against a Chinese standard-essential patent (SEP) holder, the fact that Samsung had previously sued ZTE in the High Court of Justice for England & Wales (EWHC) was the primary reason for which we were unsure that this was a Samsung v. ZTE case (February 12, 2025 ip fray article). Samsung’s German subsidiary is based in the Frankfurt area, but it appeared counterintuitive that someone would bring two FRAND cases against the same defendant in parallel. A visit to the courthouse, however, confirmed that it was indeed Samsung v. ZTE (February 13, 2025 ip fray article).
What’s new: Even more surprisingly, a third such lawsuit became discoverable in the Northern District of California last week. Samsung brought claims under antitrust as well as contract law, accusing ZTE of having violated its FRAND licensing obligations and seeking a preliminary and permanent injunction of rather broad scope.
Direct impact: Theoretically, multiple bites at the apple increases the likelihood of obtaining at least one favorable decision. In this case, however, it is not a given that Samsung is going to get a better result as a result of bringing an unprecedented number of parallel FRAND claims in three countries on two continents. For the reasons discussed in this article, it could also prove counterproductive. It could make each of the three courts wonder why it should move quickly when there are related cases pending in other venues,
Wider ramifications: The degree to which this dispute has escalated at an early stage is unusual. Normally, both Samsung and ZTE resolve disagreements on licensing terms without having to resort to litigation. Also, two of the arguments Samsung makes in its new U.S. complaint are inconsistent with certain positions it took in past disputes with Apple and Ericsson.
Both Samsung and ZTE are major wireless innovators. Recently, Samsung may have lost market share, which some attribute to the fact that Google increasingly tries to sell its own Pixel products (reportedly also because of dissatisfaction with Samsung’s efforts to compete with Apple, particularly in the U.S. market) and others to the fact that certain competitors in the Android device market may have been ahead in the incorporation of AI functionality. But Samsung still has an estimated global smartphone market share of more than 20%.
More than a decade ago, ZTE defended itself against SEP assertions from Huawei that led to the famous Huawei v. ZTE ruling by the European Court of Justice, while Samsung was investigated by competition watchdogs over its alleged abuse of SEPs against Apple.
Samsung’s U.S. complaint does not mention the Frankfurt action. It does, however, seek to distinguish itself from the UK FRAND case Samsung brought last year (prior to the expiration of their previous license agreement and, therefore, prior to any enforcement action by ZTE).
We are unaware of any other dispute in which an implementer brought proactive FRAND claims against the same party (thus over essentially the same question) in two, let alone three jurisdictions.
Here’s the U.S. complaint, followed by further analysis:
The case has been assigned to United States District Judge Araceli Martínez-Olguín in San Francisco.
In at least two respects, Samsung’s new U.S. complaint reminds of earlier SEP disputes to which Samsung was a party:
- The antitrust claim is based on allegations of bad faith when ZTE made its FRAND pledge to the European Telecommunications Standards Institute (ETSI). Apple tried something similar against Samsung. While the 2012 “Appsung” trial was generally a huge loss for Samsung (a jury awarded Apple more than a billion dollars in damages), Samsung’s successful defense against Apple’s SEP abuse claims was actually its only significant accomplishment. That particular part of the case was won by David Hecht, who later (2023) settled a patent dispute with Samsung on behalf of another company, and other (then-)Quinn Emanuel lawyers.
- Samsung faults ZTE for seeking a FRAND determination from a Chinese court. But Samsung itself actually went to a Chinese court in late 2020 for the same purpose, and even obtained a Chinese antisuit injuntion against Ericsson. Ericsson then won an anti-antisuit injunction in the United States District Court for the Eastern District of Texas, and the dispute settled a little later.
Based on what we learned from the U.S. complaint, a press release by the Frankfurt Regional Court and can reasonably infer from the overall situation, it appears that the three Samsung FRAND actions have the following objectives:
- In the U.S., Samsung alleges violations of contract law, federal antitrust law (Sherman Act) and California unfair competition law (Section 172000). It claims that ZTE is abusing its SEPs by enforcing them in various other jurisdictions and seeks damages as well as a preliminary and permanent injunction. Samsung is trying to leverage geopolitics.
- In the UK, Samsung wants (quoting from the U.S. complaint now) “a neutral determination of FRAND terms through rate setting by the [EWHC]” while leaving to the U.S. court the question of “redress for the harm suffered by Samsung as a result of ZTE’s non-FRAND conduct.” It would be the normal course of business there, even more so after last Friday’s new appellate decision in Lenovo v. Ericsson (February 28, 2025 ip fray article), for Samsung to seek an interim license, which could serve merely declaratory purposes or be tantamount to an antisuit injunction. Lenovo wants a cross-license. Samsung also has SEPs of its own (in fact, far more than Lenovo), but we don’t know yet whether Samsung is seeking a one-way or a two-way license in the UK.
- As for Germany, we just know that Samsung alleges an antitrust violation by ZTE with respect to its cellular SEPs. The fact that Samsung’s U.S. complaint fails to mention the German action suggests that the two could overlap. All that Samsung could gain in Germany, but not in the U.S. or UK, is a decision of res iudicata (“adjudged matter”) effect with a view to the SEP infringement actions ZTE brought in Germany and the Unified Patent Court (UPC). However, there is no guarantee that the Frankfurt court, which to our knowledge has never dealt with SEPs, will hand down an antitrust ruling before ZTE’s patent infringement actions give rise to injunctions. The courts hearing the infringement cases do not have to await the outcome of the Frankfurt case, and ZTE could appeal any adverse ruling there at any rate.
Other deep-pocketed implementers, such as Apple (which is actually far richer than Samsung), previously avoided scattershot FRAND litigation. That makes Samsung’s brute-force FRAND strategy unconventional. Others presumably refrained from it for the following reasons:
- If a party asks multiple courts for help in the same context, each court may take its time and rely on the others to act fast.
- A party making such a massive investment in FRAND litigation may be perceived as an unwilling licensee, particularly by the judges deciding the infringement cases. They would not formally base an unwillingness finding on parallel FRAND litigation, but the way they perceive that litigation strategy could be disadvantageous.
- At the psychological level, this course of action may come across as a well-resourced implementer preferring to spend money on FRAND litigation over taking a license.
We will keep an eye on further filings in the U.S. case. Given that Samsung is seeking a preliminary injunction in the U.S., it presumably won’t take long before something happens, though Judge Martínez-Olguín routinely scheduled the initial case management conference for June 2, 2025.