Former CAFC Chief Judge Michel Backs Ericsson in FRAND Dispute

On January 5, the Honorable Paul R. Michel filed an amicus brief in support of Ericsson’s Emergency Application for an Anti-Interference Injunction related to Samsung’s lawsuit filed in the Wuhan Intermediate People’s Court of China (the Wuhan Action). In response to Ericsson’s motion filed on December 28, 2020, the United States Federal District Court for the Eastern District of Texas issued a temporary restraining order against Samsung in the FRAND (fair, reasonable and non-discriminatory licensing rates) lawsuit. Michel’s brief addressed the “substantial notice and due process concerns associated with [an] anti-suit injunction issued by the Wuhan Court.”

The Wuhan Action

On December 11, 2020, Ericsson filed a suit against Samsung to resolve a FRAND dispute between Ericsson and Samsung. On December 25, Ericsson was informed that Samsung had secretly filed a FRAND lawsuit and a broad antisuit injunction in Wuhan seeking to enjoin the proceedings in the district court. Ericsson then filed a request for an emergency ex parte temporary restraining order and an anti-interference injunction, asking that Samsung not to take any further action to divest [the district court’s] jurisdiction or to prevent Ericsson Inc., and all of its corporate parents, subsidiaries, and affiliates, from asserting the full scope of its patent rights against Samsung in the United States.”

Due Process Concerns

In his brief in support of Ericsson, Michel asserted that the district court “should independently assess whether it should maintain its jurisdiction and proceed with the FRAND dispute between Ericsson and Samsung.” Michel pointed out several apparent issues with the Wuhan proceeding and the Wuhan court’s procedures that implicate “significant due process concerns.”

In particular, Michel noted that the “Wuhan’s court procedures appear designed to empower a party to obtain a world-wide injunction with no meaningful opportunity to be heard. And it is unclear if a party so enjoined has any meaningful opportunity to have such an injunction reconsidered or vacated, whether by the issuing court or an appellate court.” Michel further criticized the timing of the Wuhan proceeding, which he asserted raised “significant concerns about whether the Wuhan court’s procedures provide a party such as Ericsson sufficient notice and due process.” He explained that FRAND litigation often involves fast moving actions but noted that it must also be ensured that all involved parties have “ample opportunity to be heard before the court of first instance makes a decision that effectively precludes every other court throughout the world from being able to adjudicate a case—or even to consider the propriety of the injunction at all.” Michel also noted that the Wuhan court does not appear to offer an opportunity for other interested parties to adequately weigh in on any decision to institute a FRAND proceeding. Noting that FRAND litigations “concern immensely important issues that impact global intellectual property rights and valuations,” Michel expressed his opinion that there does not appear to be any reason for the district court to cede its authority and, rather, both cases should proceed in parallel.

China’s IP System: Serious Questions Remain

Judge Michel explained that, while China appears to have made strides in its intellectual property system, serious questions remain as to its judicial system, “particularly in the context of resolving major SEP FRAND disputes that will affect worldwide patent rights, including the rights of U.S. patent owners and consumers.” He explained that there appear to be deep differences between the Chinese judicial system and the systems of other countries that have adjudicated FRAND disputes. Michel noted that this case represents a new era of global IP disputes about critical intellectual property, and it should not “devolve into a mere question of who filed first.” Thus, Michel submitted that the district court should grant Ericsson’s motion in order to preserve the district court’s jurisdiction and authority “to adjudicate the merits of the issues raised and any issues relating to U.S. patents.”