Judge Blocks Huawei's Chinese Injunctions Against Samsung
U.S. District Judge William Orrick III granted Samsung's anti-suit injunction until he can resolve parallel claims over standard-essential patents.
April 16, 2018 at 09:23 PM
3 minute read
No matter what the Federal Circuit or the new head of DOJ antitrust might have said, standard-essential patents and injunctions don't mix.
That's the takeaway from U.S. District Judge William Orrick III's order on April 13 in Samsung Electronics Co. and Huawei Technologies Co.'s worldwide patent litigation.
Samsung prevailed with Orrick to temporarily nullify Chinese court injunctions that would have blocked Samsung from making and selling smartphones in that country. Orrick ruled it was too soon in the U.S. litigation process to enforce injunctions over the disputed patents, which are essential to practicing the 4G LTE standard.
“The Chinese injunctions could render meaningless the proceedings here, and the risk of harm to Samsung's operations in China in the interim is great,” Orrick wrote in granting Samsung's motion for an anti-suit injunction. The order effectively prevents Huawei from enforcing the Chinese injunctions until parallel U.S. claims are resolved.
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The April 13 ruling in Huawei Technologies v. Samsung Electronics is a win for a Quinn Emanuel Urquhart & Sullivan team led by partners Charles Verhoeven, Victoria Maroulis, Thomas Pease and of counsel Sam Stake. R. Paul Zeineddin of Zeineddin PLLC also represents Samsung. Huawei is represented by Sidley Austin.
Huawei sued Samsung in the Northern District of California in 2016, alleging patent infringement and Samsung's alleged breach of its commitment to license its standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms. Within 24 hours Huawei filed a series of parallel suits in the Intermediate People's Court of Shenzhen. Samsung counterclaimed, asserting its own patents in each action.
The Shenzhen litigation has moved more quickly. Following trials on two each of the parties' patents, the Shenzhen court in January ruled that Samsung is not honoring its FRAND commitment and enjoined Samsung's Chinese affiliates from manufacturing or selling its 4G LTE smartphones in China. Samsung is appealing the decisions, which it says could force it to close factories, negotiate from a weakened position and force it to accept a license on less than FRAND terms.
It also asked Orrick to block the injunction, saying the orders violate U.S. antitrust law that forbids patent “holdup” and are contrary to the FRAND commitment Huawei made to the European Telecommunications Standard Institute, or ETSI.
The U.S. Court of Appeals for the Federal Circuit ruled in 2014 that injunctions are available for standard-essential patents. Under Donald Trump, the DOJ's Antitrust Division has been warning standard-setting bodies like ETSI that it cannot exclude injunctions as a means of enforcing standard-essential patents.
But Samsung was only seeking to block the Chinese injunctions until Orrick can evaluate the propriety of injunctive relief in the action in his own court. That probably won't take more than six months, he found.
“The appropriate remedy for Huawei's breach of contract claim may very well be the injunctive relief issued by the Shenzhen court,” Orrick wrote. “But I must have the opportunity to adjudicate that claim without Samsung facing the threat of the Shenzhen court injunctions.”
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