China’s Approach

OPPO v. Sharp (Supreme People’s Court, August 19, 2021): OPPO sued Sharp to determine global FRAND licensing rates for Sharp’s 3G, 4G, Wi-Fi, and HEVC SEPs, following Sharp’s infringement lawsuits in Japan, Germany, and Taiwan. The SPC upheld the Guangzhou IP Court’s jurisdiction, citing OPPO’s Chinese manufacturing base and the parties’ intent to negotiate a global license in Shenzhen. The court ruled that Sharp’s licensing terms violated FRAND principles, setting global royalty rates and awarding OPPO 3 million RMB for Sharp’s FRAND violations. The decision emphasized China’s nexus to SEP disputes due to its market size and manufacturing activities, dismissing Sharp’s jurisdictional objections. This case reinforced Chinese courts’ authority to set global FRAND rates, challenging Western jurisdictions and highlighting China’s role in global SEP litigation. It underscored the importance of good-faith negotiations and China’s balanced approach to SEP disputes.

TCL v. Access Advance (Supreme People’s Court, 2024, Zui Gao Fa Zhi Min Zhong No. 123): In 2022, TCL Electronics sued Access Advance, a U.S.-based patent pool administrator managing High Efficiency Video Coding (HEVC) SEPs, at the Guangzhou Intermediate People’s Court, alleging non-FRAND rates for the HEVC pool, covering 76% of global HEVC assets from licensors like GE and Philips. TCL contested Access Advance’s ~$0.15 per device rate, claiming it was six times higher than the AVC standard, and sought a global FRAND rate. On June 24, 2024, the Supreme People’s Court (SPC) dismissed Access Advance’s jurisdictional appeal ((2024) Zui Gao Fa Zhi Min Zhong No. 123), affirming Chinese courts’ authority to set global pool rates, citing TCL’s Chinese operations. The SPC remanded rate-setting to Guangzhou, which was unsettled due to an October 2024 agreement. No injunction was granted, as TCL was deemed a willing licensee per Huawei v. ZTE (CJEU, 2015). The ruling, ignoring the EU’s 2021 WTO complaint against China’s anti-suit injunctions, marked a global first, extending China’s FRAND jurisdiction to patent pools, influencing codec disputes (HEVC, VVC).

Samsung v. Ericsson (Wuhan Intermediate Court, 2020, E 01 Zhi Min Chu No. 743): On December 7, 2020, Samsung sued Ericsson in the Wuhan Intermediate People’s Court, seeking global FRAND rate-setting for Ericsson’s 4G SEPs after failed cross-licensing talks post their 2014 agreement’s expiration. On December 14, Samsung requested an ASI to block Ericsson’s injunctions in U.S. and Brazilian courts for 4G SEP infringement, alleging Ericsson breached FRAND obligations. On December 25, the Wuhan court granted the ASI ex parte, prohibiting Ericsson from seeking global injunctive relief, FRAND rulings outside Wuhan, or anti-anti-suit injunctions, with a ~US$150,000 daily fine for non-compliance. The court found Ericsson’s actions undermined Chinese jurisdiction (citing Article 4 of China’s Patent Law). The court confirmed Samsung’s infringement of Ericsson’s 4G SEPs but did not set a royalty rate, pending the rate-setting suit, per Huawei v. ZTE (CJEU, 2015) good-faith negotiation principles. Ericsson secured a U.S. anti-interference injunction on January 11, 2021, allowing its Texas lawsuit to proceed, and the parties settled globally in May 2021. The ruling, a landmark in China’s ASI trend, influenced the later Huawei v. Netgear (2021), where similar ASIs were sought, reinforcing Wuhan’s role in SEP disputes. It drew EU criticism, prompting a 2021 WTO complaint against China’s ASIs for extraterritorial overreach. The ruling, a landmark in China’s ASI trend, reinforced Wuhan’s role in global SEP disputes.

InterDigital v. OPPO (Supreme People’s Court, September 4, 2023 Zui Gao Fa Zhi Min Xia Zhong No. 282): In January 2022, OPPO sued InterDigital in the Guangzhou Intellectual Property Court to set global FRAND rates for InterDigital’s 3G, 4G, 5G, and HEVC SEPs after InterDigital filed infringement suits in Germany, the UK, and India in 2021, seeking injunctions. OPPO alleged InterDigital’s royalty demands were non-FRAND. On January 13, 2023, Guangzhou rejected InterDigital’s jurisdictional objection, asserting authority due to OPPO’s Chinese operations (manufacturing in Dongguan) and negotiation nexus. On September 4, 2023, the SPC upheld this ruling, emphasizing China’s market significance and the parties’ global licensing intent. Guangzhou found InterDigital’s terms non-FRAND, setting lower global royalty rates (specifics undisclosed), and issued an ASI to block InterDigital’s foreign injunctions, protecting OPPO during rate-setting. The SPC affirmed both decisions, reinforcing China’s implementer-friendly stance. The ruling, following OPPO v. Nokia, solidified China’s role as a global SEP litigation hub, enabling courts to dictate global FRAND terms. However, limited public access to rulings raised transparency concerns, and the ASI fueled the EU’s 2021 WTO complaint against China’s jurisdictional overreach. This case solidified China’s role as a global SEP litigation hub, but raising transparency concerns due to limited public access to rulings.

InterDigital v. Xiaomi (Wuhan Intermediate People’s Court, September 23, 2020):: Xiaomi sued InterDigital (IDC) to set global FRAND rates for IDC’s 3G and 4G SEPs after IDC filed injunctions in India. The Wuhan court granted an anti-suit injunction (ASI), ordering IDC to withdraw Indian injunctions and refrain from further filings, with a 1 million RMB daily fine for non-compliance. The court found IDC’s actions interfered with Chinese proceedings and violated FRAND principles. Xiaomi’s request for global royalty rates was partially addressed, emphasizing China’s jurisdiction due to Xiaomi’s operations. This case marked China’s aggressive use of ASIs, drawing criticism for extraterritorial overreach but reinforcing Wuhan’s role in SEP litigation It highlighted China’s implementer-friendly stance and its challenge to global patent regimes.

Huawei v. Samsung (Shenzhen Intermediate People’s Court, January 4, 2018): Huawei sued Samsung for infringing its 3G SEPs, alleging unauthorized use in handsets and FRAND violations during cross-licensing talks. The Shenzhen court found Samsung’s negotiation conduct lacking, as it delayed and failed to make a serious counteroffer, violating FRAND obligations under Guangdong High Court’s SEP Guidelines. Huawei’s offer was deemed FRAND-compliant, and an injunction was granted against Samsung’s infringing products. The decision emphasizes good-faith negotiation and China’s willingness to issue injunctions to support SEP holders. This case highlighted Shenzhen’s role in SEP disputes and China’s balanced approach, contrasting with its implementer-friendly ASI rulings.

Oppo v. Nokia (Chongqing First Intermediate Court, 2023): Oppo sued Nokia, seeking a global FRAND rate for 2G–5G SEPs. The Chongqing court set rates ($0.07 for 4G, $0.14 for 5G) using a top-down approach, per comparable licenses, marking China’s first global rate-setting. Oppo’s AML claims were rejected, and no injunction was granted, following European Commissions’ Huawei v. ZTE (CJEU, Case C-170/13, 2015).

Huawei v. Conversant (Supreme People’s Court, 2019 / 2020, Zui Gao Fa Zhi Min Zhong No. 732 & Others): Huawei v. Conversant dispute, covering Huawei’s January 2018 Nanjing lawsuit for FRAND royalty rates and non-infringement of three 2G–4G SEPs (ZL00819208.1, ZL200580038621.8, ZL200680014086.7). On September 16, 2019, the Nanjing court used a top-down approach to set rates (2G: 0.0018%, 3G: 0.0022%, 4G: 0.0018%), reducing Conversant’s 0.041% demand. The formula used China’s cumulative royalty (2G/3G: 2.17%, 4G: 3.93–5.24%) and SEP family counts (2G: 517, 3G: 1,218, 4G: 2,036). Conversant appealed to the SPC, which, on August 28, 2020, granted an ASI (Case IDs: (2019) Zui Gao Fa Zhi Min Zhong No. 732, 733, 734), prohibiting Conversant from enforcing Düsseldorf’s August 27, 2020, injunction, with a 1 million RMB daily fine. The SPC cited Conversant’s bad-faith negotiation (excessive rates, non-transparency), referencing Huawei v. ZTE (CJEU, 2015). The ruling established China’s ASI practice, influencing cases like Oppo v. Nokia, and highlighted China’s ambition to lead global SEP litigation by asserting jurisdiction over FRAND rates. What is important to note that Chinese courts use ASIs to protect jurisdiction, setting low FRAND rates.