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Rader Tells Gilstrap China Can Handle Essential IP Fight

Former Federal Circuit Chief Judge Randall R. Rader has defended the strength of China's patent courts and their ability to handle licensing disputes over standard-essential patents, urging a Texas federal judge to let Chinese litigation between Ericsson and Samsung proceed.

U.S. District Judge Rodney Gilstrap issued a temporary restraining order and anti-interference injunction on Dec. 28, barring Samsung from trying to enforce a Chinese court's injunction against Ericsson if it would impact Ericsson's case in Texas. But Judge Rader, in a declaration supporting Samsung, said Friday he fully trusts the Chinese courts to handle the global dispute. 

"I am most confident that the China Court at issue will apply the laws and rules appropriately and treat an international company like Ericsson quite fairly in a litigation against another international company like Samsung," Judge Rader said.

The dispute between Sweden's Ericsson and South Korea's Samsung is based on a global patent cross-license that expired in 2014. The parties had tried to negotiate a new license for the patents essential to the 4G and 5G wireless standards, but were unable to come to an agreement. Such licensing offers are required to be based on fair, reasonable and nondiscriminatory, or FRAND, terms.

In December, Samsung sued in the Wuhan Intermediate Court of China, and Ericsson sued in the Eastern District of Texas.

The Chinese court on Dec. 25 issued what's called an antisuit injunction, barring Ericsson from seeking its own injunctive relief anywhere in the world on these patents. The Wuhan court also barred Ericsson from requesting an anti-antisuit injunction, under which someone like Judge Gilstrap would bar the Chinese court from barring Ericsson from asking for an injunction.

A few days later, Judge Gilstrap issued a temporary restraining order to maintain the status quo while he considers Ericsson's bid for a preliminary injunction. He issued it before Samsung was able to respond to Ericsson's motion, saying there was "a substantial risk of irreparable harm" that justified moving fast.

In opposing the injunction Friday, Samsung told Judge Gilstrap that "Ericsson's motion paints an incomplete picture of the facts." Samsung said it filed its suit in China days before Ericsson did so in Texas — even if there's a delay in notice to the other party — and that it followed Chinese civil procedure. It also said Ericsson failed to show the Chinese courts are not an appropriate forum to handle the global dispute.

"Ericsson's requested injunction would offend international comity, improperly exceed the scope of this action, and wrongly punish Samsung for a foreign court's enforcement of its own orders — including, potentially, without Samsung doing anything that is prohibited by the requested injunction," the company said in its opposition. "Ericsson failed to meet its burden to show it is entitled to any preliminary injunction, much less the extraordinary remedies it now seeks."

Judge Rader likewise said there's "no reason" not to give the Chinese court deference in this case.

"China is an appropriate and fair venue to decide an international contract and patent dispute like this one between Korean and Swedish companies," the retired judge said. "Based on my experience, including working directly with many of these judges and teaching intellectual property law in China, the suggestion in Ericsson's motion that it will not receive a fair hearing in China is incorrect."

Also on Friday, Ericsson filed an amended complaint in the Texas case, which expanded the breach of contract suit to also assert infringement of eight patents. The same day, Ericsson filed a second suit in the Eastern District of Texas, alleging Samsung infringed four nonessential patents with devices including several models of the Galaxy smartphone and certain smart TVs.

Representatives for Ericsson and Samsung didn't immediately respond to requests for comment Monday.

The essential patents-in-suit are U.S. Patent Nos. 8,102,805; 8,607,130; 9,949,239; 9,532,355; 10,454,655; 10,193,600; 10,425,817; and 10,516,513. The nonessential patents-in-suit are U.S. Patent Nos. 7,151,430; 6,879,849; 7,286,823; and 9,313,178.

Ericsson is represented by Theodore Stevenson III, Nicholas Mathews, Christine Woodin, Blake Bailey, Samuel F. Baxter and Jennifer L. Truelove of McKool Smith PC.

Samsung is represented by Melissa R. Smith of Gillam Smith LLP, Gregory S. Arovas, Edward C. Donovan, F. Christopher Mizzo and David Rokach of Kirkland & Ellis LLP, Kevin Hardy and Thomas D. Pease of Quinn Emanuel Urquhart & Sullivan LLP, and Paul Zeineddin of Axinn Veltrop & Harkrider LLP.

The cases are Ericsson Inc. et al v. Samsung Electronics Co.. Ltd. et al., case numbers 2:20-cv-00380 and 2:21-cv-00001, in the U.S. District Court for the Eastern District of Texas.