This case started with Huawei suing Samsung for infringing two of its patents in 2016, both of which are 4G standard essential patents. The invention patent No. 201110269715.3 "Method and device for sending control signaling" was applied for in April 2007 and granted the invention patent right in July 2015; The invention patent No. 201010137731.2 "Method, base station and user equipment for feedback ACK/NACK information during carrier aggregation" was applied in March 2010, with priority of December 2009, and was granted the invention patent right in June 2014.
The court decided that there were two key points in this lawsuit, one was who was at fault for failing to reach a standard essential patent license agreement, the other was the problem of technology identification and determination, and whether Samsung constituted the above two patent infringements.
The court heard that the two companies had been negotiating for a long time, but Samsung had delayed time and treated them negatively. For example, Huawei was asked to package and authorize standard essential patents and non-standard essential patents to Samsung. When Huawei requested arbitration, Samsung refused to accept it, and Samsung had no intention of promoting an agreement. Huawei, on the other hand, has no obvious fault. Although there are certain faults in the negotiation process, it has been clarified in a timely manner and does not violate the FRAND principle.
On the second question, Samsung argued that Huawei has cross licensed the patent rights to Qualcomm, and Samsung has obtained the right to use Qualcomm's products. However, the court held that Huawei did not grant 4G and LTE patents to Qualcomm, and Samsung infringed Huawei's relevant patent rights.
The standard patents in the communication industry can hardly be bypassed. Companies with standard patents often circumvent each other's litigation by cross licensing. Huawei and Samsung, as the main players in the communication industry, have started negotiations for a long time, but from the perspective of litigation, the negotiation process is not smooth.
The court decided that Samsung lost the lawsuit, but there was no amount of compensation. In consideration of the particularity of the standard patent, it was hoped that the two parties would continue to negotiate to reach an agreement, which would also benefit Huawei. This judgment has many tendencies, such as that Samsung was too negative in the negotiation and was the fault party. For example, Huawei and Samsung were considered to have the same standard patent strength in the field of communications, and Huawei's strength in China was even higher than Samsung's. However, Samsung's patent licensing fees for Huawei were three times that of Samsung, which means that Huawei still has a lot of room for price increases.
In addition, the court also gave a total fee standard for standard essential patents in the mobile phone industry. For example, the cumulative license rate for 3G mobile phones is 5%, and the cumulative license rate for 4G mobile phones is 6% - 8%. Companies with patent rights can charge according to their own percentage of total patents. For example, Huawei has 5% of patents in 3G communication standards and 10% in 4G communication standards. The court also held that the price of 4G patents should be based on the difference between 4G mobile phones and 3G mobile phones, which is the contribution of 4G, not the selling price of 4G mobile phones.
Because of the industry secrets involved, the court has repeatedly used X to replace the license rate.
Source: Securities Times · e Company
Author: Yu Shengliang