Context: In a dispute between device maker TCL and Access Advance, the Supreme People’s Court (SPC) of China made a decision on jurisdiction over FRAND (fair, reasonable and non-discriminatory licensing) claims against patent pools, though the full scope was not clear as the primary question at hand was whether one Chinese court or another should hear the case (September 3, 2024 ip fray article). No further clarification was obtained in that context because the parties settled (October 30, 2024 ip fray article).
What’s new:
- A decision that the SPC made in the summer, in conection with a High Efficiency Video Coding (HEVC, H.265) patent pool, became known yesterday. Chinese website IP Economy reported on the ruling and published it. It was easy to deduce that Access Advance was the pool operator in question, described as a U.S. LLC; about the implementer it was just known that it was a substantial Chinese company. The SPC held that a jurisdiction clause in a prior license agreement between the parties cannot apply to cases in which the abuse of a dominant market position is alleged. Categorizing it as an infringement or contract dispute would not change that result either. All in all, this new case went further than TCL in terms of holding that patent pool rates are subject to Chinese court review if there is a strong Chinese connection.
- After we heard of this, we reached out and have just received a statement from Access Advance that we publish in full below this box. It is now known that the implementer suing Advance in China is Dahua, a leading manufacturer of video surveillance equipment.
Direct impact: It is unclear whether a Chinese decision will come down before developments in other jurisdictions, or simply negotiations, lead to a settlement.
Wider ramifications:
- Tesla is also pursuing a pool rate claim, but in the UK (and against Avanci). It is doubtful that Tesla would ultimately benefit from a court ruling that might not be recognized in certain key jurisdictions (January 7, 2026 ip fray opinion piece).
- Apart from whether foreign courts recognize, or allow themselves to be influenced by, such FRAND rulings, there are also some issues that are specific to pools and do not apply to bilateral FRAND matters:
- Pool administrators can only grant licenses based on their own agreements with the actual patent holders. Those agreements require unanimity or a supermajority for different prices, but rarely give the administrator unilateral wiggle room. Therefore, a license at a court-ordered rate below the pool rate could not be lawfully granted.
- If an implementer takes issue with a pool license, it can talk to the individual patent holders and enforce FRAND against any of them who do not comply.
- If legal attacks on pools lead licensors to leave a pool, the world does not become a better place. No particular problem is solved that way.
- When pool rates have already been accepted by many licensees, a rate reduced by a court could distort the market.
Here’s the statement that Access Advance now provides in response to media inquiries about the Chinese litigation:
Statement from Access Advance on SPC Jurisdictional Ruling
Access Advance LLC was disappointed by the Supreme People’s Court’s procedural ruling last summer in Dahua v. Access Advance. But we respect the decision of the Court, and we remain confident in the merits of our position.
For context, Dahua was a Licensee in the HEVC Advance Patent Pool from 2016 until 2025. In 2020, Dahua breached its obligations under the Patent License Agreement. For example, Dahua refused to permit an audit of its books and records relating to its covered uses of the HEVC/H.265 standard in certain products. Dahua also unilaterally stopped paying royalties while continuing to use the licensed technology. Dahua’s failure to abide by its obligations, which it voluntarily agreed to, harms Dahua’s competitors, such as Ansjer, Axis, Hanwha and Honeywell, which are Licensees who do honor their obligations. It also harms the Licensors of the HEVC Advance Patent Pool, including Chinese Licensors such as Boyun, Huawei, Oppo, and ZTE, whose valuable technology is being used without compensation. After Dahua failed to resolve this dispute amicably, Access Advance was forced to file suit in New York in 2021 to enforce the agreement’s terms. Dahua’s filing in China came three years after Access Advance sought to hold them accountable for their contractual obligations.
Access Advance maintains licensing relationships with more than 400 companies worldwide, including recently completed agreements with Chinese companies such as Xiaomi, Hisense, Skyworth, Transsion, and TCL. These agreements, along with our long-term collaboration with other major Chinese companies, both as Licensors and Licensees, such as Alibaba, ByteDance, DJI, Honor, Huawei, Kuaishou, Lenovo, OPPO, Tencent, vivo, Xiaomi and ZTE, is a testimony to the fact that Access Advance’s patent pool licensing terms are fair, reasonable and non-discriminatory. Indeed, 99% of our Licensees fulfill their commitments and pay royalties in accordance with their agreements. That Dahua is not honoring its contractual obligations and is seeking to use these legal proceedings to avoid such obligations is an unfortunate exception. We will continue to defend our licensing programs and the legitimate interests of our Licensors and Licensees.