Context: On Tuesday (October 28, 2025), we reported on the England & Wales Court of Appeal (EWCA) hearing of ZTE’s appeal of Samsung’s interim-license declaration, and our headline said the following: UK appeals court starts to realize Samsung’s interim-license declaration against ZTE lacks objective justification and necessity
What’s new: The appellate panel, with Lord Justice Richard Arnold as the author of the detailed opinion, in which Lord Justice Colin Birss (with a few additional remarks) and Lord Justice Peter Jackson (who supported both his colleagues) joined, has reversed Mr Justice James Mellor’s interim-license declaration, primarily because Samsung had not shown why ZTE’s offer to extend an interim license subject to a FRAND (fair, reasonable and non-discriminatory licensing) rate-setting decision by a Chinese court was unacceptable.
Direct impact: Given that the Munich I Regional Court canceled last week’s ZTE v. Samsung standard-essential patent (SEP) infringement trial on short notice, the parties may already have been hammering out the last details of an agreement (October 23, 2025 ip fray article), but for whatever reason wanted to let the UK appeals court decide. It would not be surprising to see the dispute end in a matter of a very few days.
Wider ramifications:
- ZTE is now officially FRAND-compliant even by UK standards.
- Samsung had lodged a complaint against ZTE with the European Telecommunication Standards Institute (ETSI), which it had to withdraw after an anti-ETSI-complaint injunction (AECI) by the Munich I Regional Court (October 15, 2025 ip fray article). That complaint was centered around the allegation that ZTE didn’t discharge its FRAND obligation because it didn’t comply with the interim-license declaration. The fact that the latter has now been reversed exposes Samsung’s complaint as 100% meritless and ETSI made a fundamental mistake by even just contemplating the possibility of subjecting the question of ZTE’s participation in standard-setting to a General Assembly vote based on a complaint that was easily discernible as meritless. But this was an unprecedented situation for ETSI, and implementer lawsuits against ETSI may have scared them into believing that they had a duty to investigate even a bogus complaint. But they must learn from this and give meritless complaints short shrift.
- It is positive that all three members of the appellate panel, led by LJ Arnold as the author of the primary opinion, recognized that the UK courts cannot avoid accusations of jurisdictional imperalism (if not supremacy) by telling SEP holders that only the UK is the right jurisdiction to set FRAND terms.
- The appellate panel overruled Mr James Mellor, but the opinion makes it clear that they do respect him. So does ip fray, but the reversed decision was the wrong one.
- LJ Arnold notes that one future outcome of similar UK cases could be that the English courts would declare on what terms a party cannot reasonably refuse to enter into arbitration. It is too early to take a position on whether that will work. But it can be said that this does not bode well for the position taken by Acer, ASUS and Hisense vis-Ă -vis Nokia. Nokia does offer arbitration (October 21, 2025 ip fray article).
This decision does not mark a departure from prior cases, but a recognition that a SEP holder prepared to leave the determination of FRAND terms to a court can choose the forum for that purpose unless the implementer comes up with some really good resaons to reject the proposed jurisdiction:
- Against that background, I can now turn to the issue of principle. In my judgment, unless there is a legitimate and substantiated objection to the forum in question, it does not constitute bad faith for a SEP owner to seek to force an implementer to accept determination of FRAND terms by the SEP holder’s preferred court rather than the implementer’s preferred court.
- If (and I emphasise if) there is a legitimate and substantiated objection to determination of FRAND terms by the forum in question, then there may (and I emphasise may) in an appropriate case be a remedy by way of an anti-suit injunction. In the present case, however, both parties have laudably refrained from seeking anti-suit injunctions: Samsung have not applied to the English courts for an injunction restraining ZTE from pursuing the proceedings in Chongqing, nor have ZTE applied to the Chongqing Court for an injunction restraining Samsung from pursuing the English proceedings. (ZTE’s application in respect of Samsung’s ETSI complaint stands in a completely different position.)
Samsung’s strategy worked in the court below, but not on appeal. Samsung did not want to say directly that it expected the Chinese proceedings to be unfair, and it could not have said so given that Samsung itself took the position in its dispute with Ericsson only a few years ago that China was the best place to resolve that FRAND dispute. But Samsung’s counsel said various things, also at the appellate hearing, that were meant to persuade the English courts of a Chinese court not offering a level playing field. Samsung wanted to have it both ways, and now walks away with nothing.
The paragraph on arbitration is worth a look, given that this may play a role in future cases, starting with the three Nokia cases on which Mr Justice Mellor will have to decide now:
Given that each side objects to the other’s preferred forum for FRAND determination, the obvious solution is arbitration. We were told that both sides had made offers to arbitrate, but neither had accepted the other’s offer. We were not given any details of either side’s proposal, save that we were informed that it was agreed that the arbitral tribunal should be composed of persons who were neither Korean nor Chinese nationals. It is deeply regrettable that the parties have been unable to agree terms for arbitration of this dispute. As discussed in the course of argument, it merits consideration whether one way for such deadlocks to be broken would be for the Patents Court to be asked to make a declaration as to suitable arbitral terms. That is a question for another day, however.
Arbitration should be a matter of bilateral agreement and parties must always be free to opt for judicial decisions. If the English courts went down the avenue outlined by LJ Arnold in his thought experiment, foreign courts may and probably will find ways to dissuade implementers from forcing SEP holders into arbitration. The UK courts must stop their jurisdictional overreach that leads nowhere. But today’s decision is, apart from para. 39 and other parts of the decision, a step in the right direction.
SEP holders now have various ways of dealing with the UK interim-license threat:
- anti-interim license injunctions (AILIs) (October 30, 2025 ip fray article) from the Unified Patent Court (UPC) and German national courts, particularly the Munich I Regional Court;
- interim-license offers with a reasonable forum choice such as China; and
- arbitration-adjustable license offers with reasonable arbitration parameters.
Here’s the full decision (which should appear on the UK judiciary’s official website any moment):
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Counsel
Counsel for defendant-appellant ZTE: Sarah Abram KC, instructed by Powell Gilbert (lead: Ari Laakkonen).
Counsel for plaintiff-appellee Samsung: Daniel Alexander KC, instructed by Kirkland & Ellis (lead: Nicola Dagg).