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Samsung-Ericsson Royalty Feud Tests Foreign Injunction Strength

March 19, 2021, 8:11 PM

A patent royalty fight between Samsung Electronics Co. Ltd. and Ericsson Inc. is testing the amount of deference U.S. courts will give to injunctions in other countries that are increasingly part of such global battles.

A Chinese court prevented Ericsson from seeking royalties on its patented 4G and 5G technologies in other courts. Judge Rodney Gilstrap in the U.S. District Court for the Eastern District of Texas issued an injunction blocking Samsung from enforcing the order.

The injunctions have become more common in patent fights between large corporations over standardized wireless technology. Samsung has appealed to the U.S. Court of Appeals for the Federal Circuit, where the eventual ruling could influence companies’ strategies in these disputes.

Several intellectual property law professors, including the University of Utah’s Jorge Contreras, Ann Bartow of the University of New Hampshire, and Rutgers’ Michael Carrier, said in a recent Federal Circuit amicus brief that the Texas order was “counterproductive” as a matter of policy and an example of a “slippery slope” of dueling court orders.

“Left unchecked, as one amicus has cautioned, it’s anti-suit injunctions ‘all the way down,’” the professors wrote.

Respecting Injunctions

Ericsson sued Samsung in East Texas in December, accusing the electronics maker of refusing to negotiate in good faith during discussions to renew a licensing agreement. Ericsson says it was unaware Samsung had filed a lawsuit days earlier in Wuhan, China, asking a court there to set a royalty rate.

The Wuhan court Dec. 25 issued an order blocking Ericsson from pursuing the Texas case. Gilstrap responded with an order in January preventing Samsung from enforcing the Wuhan decision.

“Of paramount concern, amici believe that it is inappropriate for U.S. courts to enjoin parallel litigation in China and other jurisdictions, while failing to respect ASIs ordered by those same foreign courts in accordance with their own legal standards, especially where, as here, they overlap considerably with the analysis undertaken by U.S. courts,” the law professors wrote.

They contend the Wuhan court’s anti-suit injunction was a “legitimate exercise” of that court’s jurisdiction to resolve Ericsson and Samsung’s global patent fight. The professors noted that U.S. courts have issued similar orders.

“If U.S. courts expect foreign legal systems to respect their own injunctions, it is difficult to see how that deference will be maintained if it is not reciprocal,” the law professors wrote.

Samsung filed its opening brief last month, arguing Gilstrap’s order was an “overreach” and an “unnecessary affront to another judiciary’s legitimate order.” The ruling, if taken to its logical conclusion, would mean no anti-suit injunction affecting a U.S. court would ever be appropriate, the professors said.

“This reasoning would only portend the precise type of wasteful, duplicative, and inconsistent litigation that the ASI was intended to prevent,” the brief said. “Public policy weighs in favor of allowing the Chinese action to first resolve threshold issues, particularly in view of considerations of international judicial reciprocity.”

Ericsson’s brief is due April 2.

Ericsson is represented by MoloLamken LLP and McKool Smith PC. Samsung is represented by Kirkland & Ellis LLP.

The case is Ericsson Inc. v. Samsung Electronics Co., Ltd., Fed. Cir., No. 21-1565, corrected brief filed 3/16/21.

To contact the reporter on this story: Matthew Bultman in New York at mbultman@correspondent.bloomberglaw.com

To contact the editors responsible for this story: Keith Perine at kperine@bloomberglaw.com; Melissa B. Robinson at mrobinson@bloomberglaw.com

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