Samsung Electronics Company, Ltd v ZTE Corporation

Hearing date: 28 October 2025

Approved Judgment

This judgment was handed down remotely at 4pm on 31 October 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Introduction

This is another appeal raising the question as to whether a willing licensor of a portfolio of patents declared essential to one or more European Telecommunications Standards Institute (“ETSI”) standards (“standard-essential patents” or “SEPs”) would grant an implementer of those standards who has undertaken to take a licence to that portfolio on the terms to be determined by the Patents Court to be fair, reasonable and non-discriminatory (“FRAND”) an interim licence pending that determination. It follows three decisions of this Court which have established the principle that, in an appropriate case, the Patents Court may make a declaration that a SEP owner would enter into such an interim licence: Panasonic Holdings Corp v Xiaomi Technology UK Ltd [2024] EWCA Civ 1143, [2005] RPC 2 (“ Panasonic v Xiaomi”); Alcatel Lucent SAS v Amazon Digital UK Ltd [2025] EWCA Civ 43, [2005] RPC 6 (“ Alcatel v Amazon”); and Lenovo Group Ltd v Telefonaktiebolaget Ericsson (Publ) [2025] EWCA Civ 182, [2005] RPC 11 (“ Lenovo v Ericsson”). This case differs from the previous cases in that the parties agree that there should be an interim cross-licence, and even agree as to the terms of the interim cross-licence, and in particular how much should be paid for it (the amount is confidential). They disagree as to whether the terms of the interim cross-licence, and in particular the amount payable, should be subject to adjustment so as to bring them into line with the terms of the final cross-licence determined to be FRAND by the Patents Court, as the Claimants (“Samsung”) contend, or so as to bring them into line with the terms of the final cross-licence determined to be FRAND by the Intermediate People's Court of Chongqing Municipality (“the Chongqing Court”), as the Defendants (“ZTE”) contend. The appeal raises an important issue of principle: does it constitute bad faith for a SEP owner to commence infringement proceedings in multiple courts with the objective of forcing an implementer to accept determination of FRAND terms by the SEP owner's preferred court rather than the implementer's preferred court? Mellor J answered that question in the affirmative for the reasons given in his judgment dated 25 June 2025 [2025] EWHC 1432 (Pat). I granted permission to appeal and expedited the appeal. I regret that, for reasons that it is unnecessary to go into, it was not possible to grant the appeal greater expedition.

The general background to disputes of this nature, basic legal principles applicable to the determination of FRAND terms and legal principles applicable to the grant of declarations

I set these matters out in my judgment in Lenovo v Ericsson at [3]–[16], [17]–[26] and [27]–[29] respectively. There is no point in repeating that exposition, and so I shall take it as read.

Interim licence declarations: a brief summary of the principles

The ETSI IPR Policy requires SEP owners and implementers to negotiate FRAND terms in good faith. The basis for, and nature of, the good faith obligation was explained in Panasonic v Xiaomi at [48] and Lenovo v Ericsson at [82].

The SEP owner's undertaking to ETSI provides an implementer which is willing to take a licence of SEPs on FRAND terms with a contractual defence to claims of patent infringement. An implementer which has undertaken to the Patents Court to take a licence on the terms determined by the Patents Court to be FRAND (subject to adjustment on appeal) is by definition a willing licensee. Such an implementer will be required to pay royalties at the rate determined by the Patents Court to be FRAND from day one of implementation regardless of limitation periods and to pay realistic interest in respect of past royalties. The implementer therefore cannot be accused of holding out even if it had previously been holding out.

Interim licence declarations are a limited remedy to the problem of hold up by SEP owners after implementers have given such an undertaking. The essential basis for the declarations which this Court made in Panasonic v Xiaomi and Lenovo v Ericsson ( Alcatel v Amazon was only concerned with the principle) was that the SEP owners were acting contrary to their obligation to negotiate FRAND terms in good faith: their purpose in pursuing injunctive (or equivalent) relief in other jurisdictions was to try to force the implementers to agree to take a licence on terms more favourable to the SEP owner than the English courts would find to be FRAND. Further, any rational SEP owner would want to be paid at least part of what they were due sooner rather than later, and yet the SEP owners were refusing this because of their desire to coerce the implementers.

The Court considered that the grant of the declaration would serve a useful purpose because it would be persuasive, albeit not coercive. It would not be contrary to comity because, if it led to an interim licence being agreed, it would relieve the foreign courts of burdensome and wasteful litigation; and, if not, it would be up to the foreign courts to make their own assessments of the parties' conduct. As to what terms for an interim licence would be FRAND, in both Panasonic v Xiaomi and Lenovo v Ericsson the Court essentially took a midpoint between the parties' most recent royalty rate offers and applied that rate to the anticipated period of the interim licence. (This does not exclude the possibility of another solution in an appropriate case.)

In Panasonic v Xiaomi the parties did subsequently agree to enter into an interim licence on the terms specified by the Court. In Lenovo v Ericsson they did not. All three cases were the subject of global settlements not long after this Court's decision, which may or may not be coincidental.

Thus the issues raised by an application for a declaration that a SEP owner would enter into an interim licence are as follows:

i) Is the SEP owner in breach of its obligation to negotiate FRAND terms with the implementer in good faith?

ii) Would the grant of the declaration serve a useful purpose?

iii) Would the grant of the declaration be contrary to comity with foreign courts?

iv) What terms for an interim licence would be FRAND?

The burden of proof lies on the implementer and the court must have a high degree of assurance before granting a declaration.

I should record before proceeding further that ZTE accept that the trio of cases referred to in paragraph 1 above constitute binding authority at this level that the Patents Court has jurisdiction to make an interim licence declaration, but reserve the right to argue to the contrary in the Supreme Court.

Jurisdictional conflict

As I have observed in many judgments concerning FRAND issues, the ETSI IPR Policy, while valuable in many ways, has a flaw in that it does not provide for a global dispute resolution mechanism for determining FRAND disputes. In the absence of such a mechanism, or an ad hoc agreement to arbitrate, the possibility of jurisdictional conflict is inescapable.

In this regard the parties and the judge referred to what I said in Nokia Technologies OY v OnePlus Technology (Shenzhen) Co Ltd [2022] EWCA Civ 947, [2023] FSR 11 (“ Nokia v OPPO”):

“16. But what is to happen if the courts of more than one country are seised with proceedings concerning the SEPs in question? If more than one country's courts proceed to determine the terms of a global FRAND licence, there is an obvious risk of inconsistent decisions (not to mention a huge waste of legal costs). The only way to avoid the risk of inconsistent decisions is to ensure that only one court determines the terms of the global FRAND licence. As a matter of principle, one might expect this to be the court first seised of the dispute, with its determination being binding on the parties (by way of res judicata) in any other proceedings. This has three potential consequences. The first is a rush by each party to the court to establish jurisdiction in a forum which is perceived to be favourable to that party's position. The second is an application by one party for an anti-suit injunction to restrain the other party from commencing or pursuing proceedings in a different jurisdiction to that considered favourable by the applicant party. The third is an application by the respondent party in the forum sought to be enjoined for an anti-anti-suit injunction restraining the first party from making or pursuing its application for the anti-suit injunction in the other forum. All of these consequences have manifested themselves in disputes between patentees and implementers in recent years.

17. The only sure way to avoid these problems is to use a supranational dispute resolution procedure, and the only supranational procedure currently available is arbitration. If the parties do not agree to arbitration, however, the national...