On 11 January 2018 the Shenzhen Intermediate People’s Court Intellectual Property Court announced its decision in relation to two Standard Essential Patent (SEP) cases filed in May 2016 by Huawei Technologies Co Ltd against various Chinese entities, including companies belonging to the Samsung Group. This marks the first ruling from this Court, which was established recently on 26 December 2017 out of the Shenzhen Intermediate People’s Court, and also the first time a Chinese court has awarded an injunction in a case relating to international SEPs.
The Court found that Samsung had infringed two of Huawei’s 4G SEPs and had failed to comply with fair, reasonable and non-discriminatory (FRAND) principles in SEP cross-licensing negotiations with Huawei. The Court therefore awarded an injunction in favour of Huawei and ordered Samsung to cease its infringements of the two SEPs at issue, which included ceasing the manufacture and sale of all relevant devices.
In establishing Samsung’s infringement behaviour, the Court found that Huawei and Samsung had been involved in SEP cross-licensing negotiations for more than six years since July 2011, and that although Huawei complied with FRAND principles during the process, Samsung did not do so and was at “obvious fault”. For instance, despite Huawei’s various attempts to resolve SEP cross-licensing issues with Samsung via different means including negotiation and arbitration (i.e. acting as a willing licensor and licensee), Samsung employed “malicious” delay tactics in contravention of FRAND principles.
The Court’s approach in granting the injunction appears to follow that of the Beijing Intellectual Property Court in its March 2017 decision in Iwncomm v. Sony, which set out that, in SEP cases, an injunction should be granted in favour of the patentee if the patentee is not at fault in the course of licensing negotiations, but the implementer is.
No damages were awarded since Huawei did not seek any. The injunction can only be lifted if terms for the cross-licensing are agreed or if Huawei requests for the injunction to be lifted.