CA-2025-001926 - [2025] EWCA Civ 1383

Factual background

The parties and their SEP portfolios

Although both the Claimants and the Defendants include companies incorporated in England and Wales, the parent companies are incorporated in South Korea (Samsung) and the People’s Republic of China (ZTE). Both Samsung and ZTE own substantial portfolios of SEPs declared essential to one or more of the 2G, 3G, 4G and 5G standards for wireless communications.

The 2021 Agreement

In July 2021 Samsung and ZTE entered into a global patent cross-licence covering their respective portfolios of SEPs for the 4G and earlier standards (“the 2021 Agreement”). The licence expired on 31 December 2023, but the 2021 Agreement included a defined covenant not to sue until 31 December 2024.

Negotiations for a further cross-licence

In mid-2023 the parties started negotiating the terms of a further cross-licence which would not only continue the previous cross-licence, but also extend it to their respective portfolios of 5G SEPs. To date the parties have been unable to agree the terms of the further cross-licence, but it is agreed that Samsung will be the net payer under the cross-licence. Thus Samsung effectively stands in the position of an implementer so far as this appeal is concerned. For that reason I shall refer in the remainder of this judgment to an interim licence in favour of Samsung rather than an interim cross-licence.

The English proceedings

On 19 December 2024 – one day after a meeting between the parties and without any prior warning to ZTE – Samsung issued the claim form in these proceedings. In these proceedings Samsung:

allege that ZTE has infringed a number of Samsung UK SEPs (“the Asserted Patents”) and seek a FRAND injunction in respect of those patents;

seek declarations of invalidity and non-essentiality in respect of certain UK SEPs owned by ZTE (“the Challenged Patents”), and in the alternative ask the Court to determine the terms of a FRAND licence covering the Challenged Patents;

claim that the FRAND licence covering the Asserted Patents and/or the Challenged Patents is a single global cross-licence covering Samsung’s and ZTE’s respective portfolios of “Cellular SEPs”; and

undertake to enter into the FRAND licence covering the Asserted Patents and/or the Challenged Patents on the terms that are determined by the English Court to be FRAND (“the English Court-Determined Licence” or “CDL”) following the exhaustion of appeals.

The Particulars of Claim initially defined “Cellular SEPs” as patents that have been declared essential only to 5G. The Asserted Patents and Challenged Patents were also initially limited to 5G-only SEPs. The Particulars of Claim were amended on 21 March 2025, inter alia, to extend the definition of Cellular SEPs to patents declared essential to the 2G-5G standards and to include 4G SEPs amongst the Asserted and Challenged Patents. ZTE argue that the original, more limited, definition was adopted tactically with a view to avoiding a breach of the covenant not to sue in the 2021 Agreement, which applied to 4G and earlier SEPs, but not 5G SEPs. Samsung riposte that, because the covenant not to sue did not prevent Samsung from enforcing 5G SEPs, Samsung were entitled to bring the proceedings when they did. It was nevertheless inevitable that any cross-licence would embrace 2G-4G SEPs as well as 5G SEPs, and thus the amendment in March 2025 simply formalised that reality.

ZTE have not challenged the English courts’ jurisdiction in these proceedings, but neither have they given any undertaking to enter into the CDL. ZTE have not counterclaimed for infringement of the Challenged Patents or otherwise sought a FRAND injunction against Samsung in this jurisdiction.

On 13 March 2025 the judge directed an expedited FRAND trial to be heard starting on 12 January 2026. Two technical trials in the English proceedings – which could result in a UK FRAND injunction against ZTE (but not Samsung) – are listed to be heard starting on 2 March and 5 May 2026.

The Chongqing proceedings

On 23 December 2024, two working days after the English proceedings were commenced, ZTE commenced proceedings in the Chongqing Court. In the Chongqing proceedings ZTE seek a determination of the terms of a global FRAND cross-licence between the parties covering the entirety of their respective portfolios of wireless communication SEPs.

On 24 January 2025 Samsung challenged the personal jurisdiction of the Chongqing Court. That challenge was rejected by a judgment of 4 June 2025. Samsung’s appeal against that judgment was dismissed by the Supreme People’s Court of China on 30 July 2025.

The Chongqing Court has held substantive hearings on 8-12 September, 13-17 October 2025 and 27-31 October 2025. Thus it appears that there is a real prospect of the Chongqing Court issuing its decision on FRAND before the start of the English FRAND trial on 12 January 2026, or at any rate before the judge hearing that trial hands down his or her judgment.

Frankfurt proceedings brought by Samsung

On 20 December 2024, one day after issuing the English proceedings, Samsung issued competition law proceedings in the Frankfurt District Court. ZTE’s evidence before Mellor J was that the Frankfurt proceedings had the potential to result in a third determination of FRAND terms, but the judge found that the possibility of global FRAND determination is “mooted in Samsung’s Frankfurt pleading in a very tentative way”. There is no challenge to that finding, and accordingly the Frankfurt proceedings did not feature in the argument before us.

German and UPC proceedings brought by ZTE

On 1 January 2025 ZTE commenced three patent infringement proceedings seeking unqualified injunctive relief, one in the Munich I Regional Court and two in the Mannheim Local Division of the Unified Patents Court (“the UPC”). On 10 January 2025 ZTE commenced a second action for infringement in Munich.

Brazilian and Hangzhou proceedings brought by ZTE

On 15 January 2025 ZTE commenced an action for infringement in Brazil. On 23 January 2025 ZTE obtained a preliminary injunction against Samsung in Brazil, apparently on an ex parte but on notice basis. An appeal was heard on 19 March 2025 and judgment is awaited. The injunction was lifted on 25 March 2025 after Samsung had posted a bond.

On 16 January 2025 ZTE commenced two actions for infringement in the Intermediate People’s Court of Hangzhou, China (“the Hangzhou Court”).

US proceedings brought by Samsung

On 25 February 2025 Samsung brought anti-trust proceedings in the US District Court for the Northern District of California. The precise nature of the US proceedings is unclear, and accordingly the US proceedings did not feature in the argument before us.

German, UPC and Hangzhou proceedings brought by Samsung

On 28 February 2025 Samsung commenced five patent infringement proceedings seeking unqualified injunctive relief: a counterclaim in the Munich I Regional Court proceedings brought by ZTE, two claims in the UPC and two claims in the Hangzhou Court. On 6 March 2025 Samsung commenced a further claim in the Munich I Regional Court.

German invalidity proceedings brought by both parties

As I understand it, both parties have brought invalidity proceedings in the German Federal Patents Court in respect of the patents alleged to be infringed by the other.

Standstill offers made by the parties

On 1 January 2025 ZTE wrote to Samsung (i) inviting Samsung to agree to a determination of FRAND terms for a global cross-licence of the parties’ respective portfolios of wireless communication SEPs by the Chongqing Court and (ii) offering to stay or terminate all other global litigation if Samsung did agree. That offer has not been accepted by Samsung. It remains open.

On 14 February 2025 Samsung proposed to ZTE that the parties enter into a standstill of all global litigation pending the determination of FRAND terms in the English proceedings. That offer would have required ZTE to abandon the Chongqing proceedings. That offer has not been accepted by ZTE. It appears that it remains open.

The interim licence application

On 11 March 2025 Samsung made its application for an interim licence declaration (although its intention to make such an application had been signalled by service of a draft Amended Particulars of Claim on 28 January 2025). Samsung circulated the terms of their proposed interim licence on 12 March 2025. This was also an offer for a global cross-licence covering the parties’ respective SEPs, providing for an upfront payment from Samsung to ZTE (albeit in an amount lower than that proposed by ZTE in March), but subject to prospective and retrospective adjustment of all terms in accordance with the FRAND determination of the English courts.

Also on 11 March 2025 ZTE offered Samsung a global interim cross-licence covering the parties’ respective SEPs providing for an upfront payment from Samsung to ZTE, subject to prospective and retrospective adjustment of all terms (including royalties) in accordance with the final determination of FRAND terms in the Chongqing proceedings.

ZTE made a further interim licence offer on 16 April 2025, which supplemented ZTE’s March offer. Samsung served an amended set of proposed interim licence terms on 12 May 2025.

By the time of the hearing before the judge, any earlier differences as to the scope of the interim licence and the level of upfront payment had dissipated. The only material difference between the parties’ proposals was as to the forum that should determine FRAND terms for the final cross-licence.

Samsung’s complaint to ETSI

On 18 July 2025 Samsung complained to ETSI that ZTE was in breach of the ETSI IPR Policy. On 14 October 2025 ZTE obtained an ex parte preliminary injunction from the Munich I Regional Court requiring Samsung to withdraw the complaint. On 16 October 2025 Samsung withdrew the complaint in compliance with the injunction.

A recent stay in Germany

On 22 October 2025 the parties sensibly agreed to stay three sets of proceedings in the Munich I Regional Court where hearings had been scheduled in October and December 2025 and related invalidity proceedings in the Federal Patent Court. The next scheduled hearing in any of the German proceedings is on 4 February 2026. The earliest scheduled hearing in the UPC is on 17-18 March 2026.

Offers to arbitrate

Given that each side objects to the other’s preferred forum for FRAND determination, the obvious solution is arbitration. We were told that both sides had made offers to arbitrate, but neither had accepted the other’s offer. We were not given any details of either side’s proposal, save that we were informed that it was agreed that the arbitral tribunal should be composed of persons who were neither Korean nor Chinese nationals. It is deeply regrettable that the parties have been unable to agree terms for arbitration of this dispute. As discussed in the course of argument, it merits consideration whether one way for such deadlocks to be broken would be for the Patents Court to be asked to make a declaration as to suitable arbitral terms. That is a question for another day, however.