Context: Samsung brought FRAND (fair, reasonable and non-discriminatory licensing) claims against ZTE in the U.S., UK and Germany (March 3, 2025 ip fray article). Last week, the High Court of Justice for England & Wales (EWHC) held an interim license hearing (June 4, 2025 ip fray article), further to which a decision may come down this week and could mark a new low for UK standard-essential patent (SEP) jurisprudence (June 6, 2025 ip fray article). In the U.S., ZTE file a motion to dismiss Samsung’s FRAND case (May 28, 2025 ip fray article).
What’s new: Late on Tuesday (June 10, 2025), Samsung filed its opposition to ZTE’s motion to dismiss. None of the legal and factual arguments are surprising. It’s interesting that Samsung is worried about the dismissal of Continental’s antitrust complaint against Avanci and certain Avanci licensors being non-binding but potentially persuasive precedent. The most striking part of Samsung’s brief, however, is the accusation that Chinese courts would favor ZTE and set a higher royalty rate for Samsung to pay than courts in other jurisdictions.
Direct impact: ZTE will get to reply to Samsung’s opposition brief. The hurdle is high for a party seeking the outright dismissal of a complaint at the earliest procedural stage, but Samsung’s multi-forum-shopping could backfire. The United States District Court for the Northern District of California is one of the busiest courts in the world and may not have much of an appetite for a Korean-Chinese dispute with a tenuous U.S. connection, especially since Samsung’s jurisdictional arguments would enable any implementer of a standard to bring FRAND cases in the U.S. just because the SEP holder’s patent families have U.S. members.
Wider ramifications: Like last week’s UK hearing, Samsung’s new U.S. filing shows that it pursues its tactical goals in this litigation without looking left and right. Its lawyers tell the courts in each jurisdiction what suits them in a given situation, but Samsung sometimes appears oblivious to its significant business interests in China.
Here’s Samsung’s opposition brief, followed by further commentary:
Samsung’s arguments against dismissal stress the fact that ZTE used to have a U.S. presence and that there were activities by ZTE that related to standard-setting and have or may have been performed in the U.S., such as filing an ETSI declaration in the Pacific Time Zone. In the end, ZTE does not need to prevail on a “no jurisdiction” type of argument: the real battle is whether the court will ultimately find that it is not reasonable to conduct that litigation in the Northern District of California. Samsung’s opposition brief notes that Samsung is the largest seller of Android phones in the U.S. market, but that is also the case in many other geographic markets.
On the antitrust side, where the challenge for Samsung is to have a plausible case, it is noticeable that its lawyers try to downplay the relevance of the failure of Continental Automotive Systems’ U.S. antitrust lawsuit against Avanci and some of its licensors (particularly Nokia). Samsung’s lawyers try to portray it as an isolated case, but they forget that their favorite case, Broadcom v. Qualcomm, was an outlier in many ways. Also, the Continental case started in the Northern District of California, and then-District (now Circuit) Judge Lucy H. Koh’s interest in it was less than lukewarm (she ultimately sent it to Texas).
There actually is an argument that Continental v. Avanci et al. (Fifth Circuit) has much more in common with FTC v. Qualcomm (equally dismissed, but by the Ninth Circuit) than with Broadcom v. Qualcomm (Third Circuit).
Samsung’s opposition brief says ZTE is “seeking to bar Samsung’s sale of standards-compliant products in Brazil, China, and eighteen European countries.” This suggests that ZTE’s UPC cases actually cover either all of UPCland (that would be 18 countries) or (less likely) a post-BSH Hausgeräte mix of UPCland and non-UPC countries. It’s also possible that it’s hyperbole and they just counted the number of UPC contracting member states instead of those with respect to which ZTE is actually seeking injunctions. In the latter case, however, they’d have made an untruthful representation to the U.S. court, and that would be out of character for a firm like Kirkland & Ellis. If they had overstated the number, they would be completely off-base where they say ZTE is “seeking to enjoin Samsung product sales in nearly two dozen countries.”
The striking part is where Samsung tells the U.S. court it needs help in the U.S. because ZTE, after Samsung filed a case in the UK, brought a FRAND action in China. Here the question is, once again, whether a U.S. court is really interested in playing a role in a dispute over whether rate-setting should be performed in China (where there is a strong connection here based on where the parties have major operations, where Samsung manufactures etc.) or the UK.
Knowing that in this case all real-world facts weigh in favor of a Chinese FRAND determination and none for the U.S. or the UK, Samsung then takes a rather bold step: it engages in China-bashing:
In case you can’t read the screenshot well on your device, here’s the same content but as plain text:
Notably, ZTE’s own annual report shows that its “controlling shai·eholder” is an entity over which Chinese governmental entities apparently enjoy a majority of board votes and partial ownership. […] Litigating in a court that is part of the same Chinese government that controls ZTE itself raises obvious bias concerns. And ZTE’s desperate insistence on forcing Samsung into its redundant, second-filed lawsuit in China reinforces that ZTE clearly expects preferential treatment in China.
The last sentence is a non sequitur because there are various other reasons, and ZTE’s UK counsel explained them to Mr Justice Mellor at last week’s hearing. But the sentence in the middle of that passage is the real issue: “obvious bias concerns.”
ZTE argues that the Chinese government’s stake in the company is not that huge, but in any event, the courts will decide based on the law and the facts, not shareholder lists.
If patent holders assert their rights against, for example, Deutsche Telekom in Germany, the government probably has a larger stake in that company than the Chinese government does in ZTE.
At last week’s hearing, Samsung’s counsel tried to walk a fine line by suggesting to Mr Justice Mellor that the Chinese proceedings would not be fair while keeping clear of being as blunt as his U.S. colleagues in yesterday’s filings. The U.S. filing provides interpretive guidance with respect to what was said at the UK hearing (which included the belittling comment that Chinese courts are “fast learners” and intentional ignorance of the fact that Samsung itself availed itself of Chinese FRAND jurisdiction against Ericsson only about four years ago and heaped plenty of praise on Chinese patent judges at the time). One just has to remember what Samsung’s UK counsel said and connect the dots with the U.S. filing shown further above, particularly the footnote that accuses Chinese courts of being biased, which is a very serious (and entirely unsubstantiated) allegation.