18-08-27 Samsung Appellate Brief

Case: 18-1979 Document: 42 Page: 1 Filed: 08/27/2018
2018-1979
United States Court of Appeals

for the Federal Circuit
HUAWEI TECHNOLOGIES CO., LTD., HUAWEI DEVICE USA, INC.,
HUAWEI TECHNOLOGIES USA, INC.,
Plaintiffs/Counterclaim Defendants-Appellants,
HISILICON TECHNOLOGIES CO., LTD.,
Counterclaim Defendant,
– v. –
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA INC.,
Defendants/Counterclaimants-Appellees.
SAMSUNG RESEARCH AMERICA,
Defendant-Appellee.
On Appeal from the United States District Court for the Northern
District of California in Case No. 3:16-cv-02787-WHO
Honorable William H. Orrick, III, United States District Judge
NON-CONFIDENTIAL BRIEF FOR APPELLEES
KEVIN P.B. JOHNSON CHARLES K. VERHOEVEN

VICTORIA F. MAROULIS CARL G. ANDERSON
QUINN EMANUEL URQUHART QUINN EMANUEL URQUHART
& SULLIVAN, LLP & SULLIVAN, LLP
555 Twin Dolphin Drive, 5th Floor 50 California Street, 22nd Floor
Redwood Shores, California 94065 San Francisco, California 94111
(650) 801-5000 (415) 875-6600
– and – charlesverhoeven@quinnemanuel.com
THOMAS D. PEASE
CLELAND B. WELTON II
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
51 Madison Avenue, 22nd Floor
New York, New York 10010
(212) 849-7000
Attorneys for Defendants-Appellees Samsung Electronics Co., Ltd., et al.
AUGUST 27, 2018
COUNSEL PRESS, LLC (888) 277-3259
FORM 9. Certificate of Interest Form 9
Rev. 10/17
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
v.
Case No.
CERTIFICATE OF INTEREST
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(petitioner) (appellant) (respondent) (appellee) (amicus) (name of party)

certifies the following (use “None” if applicable; use extra sheets if necessary):
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1. Full Name of Party (Please only include any real party publicly held companies
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4. The names of all law firms and the partners or associates that appeared for the party or amicus now
represented by me in the trial court or agency or are expected to appear in this court (and who have not
c
or will not enter an appearance in this case) are:
d e f f g h i f d j k l m n d o i m p q r d k k e s i f t u u v w x k i f y o e p j o d m z p { x m | o e p o } i h ~ d h i m { m e i f i | ~ { k j i k h j m { i s e u j } i { i s e v j m k z f { j j i x | o i m i { h i f u m j e { i m j j p f {
| j k f i { j s e f i f { k j o e { i m i m j p r o m { i m e z z i d | | i { i m ~ m i { j k e z z i i e k { e | o i j k i f { v o e k e r p j m f o j k k f k f j m e p o p o j e m h { } i i { } e | o i m u m { r i h
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FORM 9. Certificate of Interest Form 9
Rev. 10/17
5. The title and number of any case known to counsel to be pending in this or any other court or agency
that will directly affect or be directly affected by this court’s decision in the pending appeal. See Fed. Cir.

R. 47. 4(a)(5) and 47.5(b). (The parties should attach continuation pages as necessary).

Date Signature of counsel
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TABLE OF CONTENTS
CERTIFICATE OF INTEREST .................................................................................i
TABLE OF AUTHORITIES ..................................................................................... v
STATEMENT OF RELATED CASES ....................................................................ix
PRELIMINARY STATEMENT ............................................................................... 1

STATEMENT OF THE ISSUE ................................................................................. 4
STATEMENT OF THE CASE .................................................................................. 4
A. The Parties ............................................................................................. 4
B. Huawei’s FRAND Obligations And Excessive Royalty Demands

............................................................................................................... 5
C. Huawei’s Patent Hold-Up Campaign .................................................... 8

D. The Shenzhen Court Injunctions ........................................................... 9
E. The District Court Orders .................................................................... 11

1. The Antisuit Injunction ............................................................. 11
2. The Order Denying Huawei’s Motion To Alter Or Amend

The Injunction ........................................................................... 14
SUMMARY OF ARGUMENT ............................................................................... 16
ARGUMENT ........................................................................................................... 20
I. STANDARD OF REVIEW ........................................................................... 20
II. THE DISTRICT COURT ACTED WITHIN ITS DISCRETION IN

GRANTING AN INJUNCTION ................................................................... 21
A. Under Governing Law The District Court Acted Well Within Its
Discretion In Granting A Temporary Injunction Pending A
Decision On The Merits ...................................................................... 21
1. The District Court Correctly Found That This Case And

The Shenzhen Suits Share Common Parties And Issues .......... 24
ii
2. The District Court Reasonably Found Unterweser

Satisfied ..................................................................................... 25
(a) The District Court Reasonably Found That

Enforcing The Shenzhen Injunctions Would
Prevent The District Court From Exercising Its
Jurisdiction To Decide This Dispute .............................. 25
(b) Enforcing The Shenzhen Injunctions Would Violate
Public Policy Disfavoring Injunctions For SEP
Infringement ................................................................... 30
(c) The District Court Reasonably Found That The

Equities Disfavor Permitting Huawei To Enforce
The Shenzhen Injunctions Or To Compel Samsung
To Arbitrate A Dispute Absent Agreement To Do
So .................................................................................... 33
(d) The Timing Of The Parties’ Pleadings Is Irrelevant ...... 36

3. The District Court Reasonably Found That Its Temporary
Injunction Will Impose No Intolerable Impact On Comity ...... 39
B. The District Court Correctly Applied Governing Ninth Circuit

Law In Granting The Antisuit Injunction............................................ 45
1. Gallo Supplies The Sole Test For Determining The

Propriety Of An Antisuit Injunction Under Ninth Circuit
Law ............................................................................................ 45
2. The District Court In Any Event Reasonably Concluded

That The General Injunction Factors Are Satisfied .................. 50
(a) Enforcement Of The Shenzhen Injunctions Would

Cause Irreparable Harm To Samsung By Forcing
Cessation Of Chinese Operations Or Acceptance Of
Non-FRAND Licensing Terms ...................................... 50
(b) The Balance Of The Equities Favors A Temporary

Stay Of Enforcement Of The Shenzhen Injunctions ...... 52
(c) The Public Interest Favors A Temporary Stay Of
Enforcement Of The Shenzhen Injunctions ................... 53
iii
CONCLUSION ........................................................................................................ 54
PROOF OF SERVICE ............................................................................................. 56
CERTIFICATE OF COMPLIANCE ....................................................................... 57
CONFIDENTIAL MATERIAL OMITTED

The material omitted on pages 4-5 of the brief describes Samsung’s
confidential manufacturing and sales information. The material omitted on pages
10 and 28 describes Huawei’s confidential information about licensing.
iv
TABLE OF AUTHORITIES
Cases
Al Ramahi v. Holder,
725 F.3d 1133 (9th Cir. 2013) ..............................................................................47
Applied Med. Distrib. Corp. v. Surgical Co. BV,

587 F.3d 909 (9th Cir. 2009) ......................................................... 12, 21-23, 46-50
Apple Inc. v. Motorola, Inc.,

757 F.3d 1286 (Fed. Cir. 2014) ............................................................... 31, 32, 52
Apple, Inc. v. Motorola Mobility, Inc.,

2012 WL 5416941 (W.D. Wis. Oct. 29, 2012) ...................................................31
Apple Inc. v. Motorola Mobility, Inc.,

2012 WL 7989412 (W.D. Wis. Nov. 8, 2012) ....................................................35
Caplan v. Fellheimer Eichen Braverman & Kaskey,

68 F.3d 828 (3d Cir. 1995) ..................................................................................51
Chamberlain Grp., Inc. v. Techtronic Indus. Co.,

676 F. App’x 980 (Fed. Cir. 2017) ......................................................................52
Deckers Corp. v. United States,
752 F.3d 949 (Fed. Cir. 2014) .............................................................................47
E. & J. Gallo Winery v. Andina Licores S.A.,

446 F.3d 984 (9th Cir. 2006) .......................................... 11, 12, 16, 18, 20, 22-25,
32, 37-39, 41, 45-50
eBay Inc. v. MercExchange, L.L.C.,
547 U.S. 388 (2006) ............................................................................................49
Ericsson, Inc. v. D-Link Sys., Inc.,

773 F.3d 1201 (Fed. Cir. 2014) ...........................................................................35
Gilbane Federal v. United Infrastructure Projects FZCO,
2014 WL 4950011 (N.D. Cal. Sept. 24, 2014)....................................................46
Glaxo Grp. Ltd. v. TorPharm, Inc.,

153 F.3d 1366 (Fed. Cir. 1998) ...........................................................................32
v
Glazing Health & Welfare Fund v. Lamek,

2018 WL 3470601 (9th Cir. Mar. 21, 2018) ................................................ 47, 50
Howsam v. Dean Witter Reynolds, Inc.,

537 U.S. 79 (2002) ..............................................................................................34
i4i Ltd. P’ship v. Microsoft Corp.,

598 F.3d 831 (Fed. Cir. 2010) .............................................................................20
Ilyia v. El Khoury,
2014 WL 12683678 (W.D. Wash. May 16, 2014) ..............................................46
Jones v. United States,

846 F.3d 1343 (Fed. Cir. 2017) ...........................................................................28
Kendall v. Visa U.S.A., Inc.,

518 F.3d 1042 (9th Cir. 2008) .............................................................................28
Laker Airways Ltd. v. Sabena, Belgian World Airlines,

731 F.2d 909 (D.C. Cir. 1984) ................................................... 22, 26, 27, 29, 39
Microsoft Corp. v. Motorola, Inc.,

696 F.3d 872 (9th Cir. 2012) ......................................... 3, 5, 11, 16, 20-23, 25, 30,
33, 34, 36, 39, 40-44, 46-50

871 F. Supp. 2d 1089 (W.D. Wash. 2012) .................................. 25, 46, 48, 50, 52

2013 WL 6000017 (W.D. Wash. Nov. 12, 2013) ...............................................29
Miller v. Gammie,
335 F.3d 889 (9th Cir. 2003) ...............................................................................47
Novartis Pharm. Corp. v. Abbott Labs.,

375 F.3d 1328 (Fed. Cir. 2004) ...........................................................................28
Oracle Am., Inc. v. Myriad Grp. AG,
2012 WL 146364 (N.D. Cal. Jan. 17, 2012) .......................................................46
Parasoft Corp. v. Parasoft S.A,

2015 WL 12645754 (C.D. Cal. Feb. 19, 2015) ...................................................46
vi
Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren,

361 F.3d 11 (1st Cir. 2004) .......................................................................... 26, 29
Realtek Semiconductor Corp. v. LSI Corp.,

946 F. Supp. 2d 998 (N.D. Cal. 2013)................................................................. 30
Sanofi-Aventis Deutschland GmbH v. Genentech, Inc.,

716 F.3d 586 (Fed. Cir. 2013) .............................................................................20
Santa Margherita, S.p.A. v. Weine,

2013 WL 12125539 (C.D. Cal. Aug. 28, 2013) ..................................................28
Scott v. Gino Morena Enterprises, LLC,

888 F.3d 1101 (9th Cir. 2018) .............................................................................49
TCL Commc’n Tech. Holdings, Ltd. v. Telefonaktiebolaget LM Ericsson,

2017 WL 6611635 (C.D. Cal. Dec. 21, 2017) ....................................................28
United States v. Dunn,

728 F.3d 1151 (9th Cir. 2013) .............................................................................47
In re Unterweser Reederei GMBH,

428 F.2d 888, 896 (5th Cir. 1970) ..................................................... 12, 21, 25, 50
Williamson v. Citrix Online, LLC,

792 F.3d 1339 (Fed. Cir. 2015) ...........................................................................31
Winter v. Nat. Res. Def. Council, Inc.,
555 U.S. 7 (2008) .............................................................................. 14, 18, 46-48
Zynga, Inc. v. Vostu USA, Inc.,

2011 WL 3516164 (N.D. Cal. Aug. 11, 2011) ....................................................26
Other Authorities
Apple falls behind Huawei in smartphone market share: IDC, Marketwatch,
https://www.marketwatch.com/story/apple-falls-behind-huawei-in-
smartphone-market-share-idc-2018-07-31 .............................................................5
Mark A. Lemley & Carl Shapiro, Patent Holdup and Royalty Stacking,
85 Tex. L. Rev. 1991 (2007) ............................................................................5, 31
vii
US Smartphone Market Share: By Quarter, Counterpoint Research,

https://www.counterpointresearch.com/us-market-smartphone-share/..................4
viii
STATEMENT OF RELATED CASES

No appeal from this same civil action was previously before this or any other
appellate court. Counsel are not aware of any case pending in any U.S. court or
agency that will directly affect or be directly affected by this Court’s decision in the
pending appeal. But inasmuch as this appeal concerns whether Appellants are
enjoined from enforcing injunctions issued by the courts of China, Appellees
identify the following as cases in the Guangdong High Court of China that may be
directly affected by this Court’s decision in the pending appeal:
715/816’: (2018) Canton Civil Final Case No. 307
731/840’: (2018) Canton Civil Final Case No. 308
ix
PRELIMINARY STATEMENT
Plaintiffs-Appellants Huawei Technologies Co., Ltd., Huawei Device USA,
Inc., and Huawei Technologies USA, Inc. (together, “Huawei”) and Defendants-
Appellees Samsung Electronics Co., Ltd., Samsung Electronics America Inc., and
Samsung Research America (together, “Samsung”) have attempted since 2011 to
negotiate a cross-license on fair, reasonable, and non-discriminatory (“FRAND”)
terms to their portfolios of patents declared essential to the ETSI and 3GPP UMTS
(3G) and LTE (4G) telecommunications standards. Although Samsung considered
different license structures and made significant concessions on royalty terms,
Huawei inexplicably ping-ponged back and forth between different types of licenses,
while woodenly clinging to its demand that Samsung pay its so-called “standard”
royalty rate of 1.5% of the sales price of smartphones and other devices that employ
the standards in question. As discovery has shown, even with the modest
concessions Huawei has offered, its demands are unreasonable and discriminatory
because they exceed any valuation that is recognized as appropriate in the industry
as well as terms Huawei extended to others, and Samsung has rightly refused to
accept them.
In 2016, Huawei filed this lawsuit in the Northern District of California,
requesting damages for patent infringement, a decree that Samsung breached its
contractual FRAND obligations in its negotiations with Huawei, a declaration of the
1
terms and conditions of a worldwide cross-license under the parties’ standard-
essential patent (“SEP”) portfolios, and injunctive relief barring Samsung from
seeking injunctions on its SEPs anywhere in the world. Within a day, Huawei
secretly filed actions on SEPs within the same portfolio in Shenzhen, China, seeking
only injunctive relief as a remedy for Samsung’s alleged infringement. The
Shenzhen court has now issued injunctions on two of Huawei’s asserted SEPs;
however, those injunctions are subject to de novo review on Samsung’s pending
appeals.
The Shenzhen injunctions are, as a Huawei executive announced to the world
in 2016, a hugely valuable “bargaining chip,” allowing Huawei to engage in a form
of patent holdup that courts consistently deem wrongful and contrary to public
policy. Because Samsung cannot shut down its manufacturing and retail operations
in China (as the injunctions would require) without enormous cost, enforcement of
the Shenzhen injunctions would effectively force Samsung to acquiesce to Huawei’s
exorbitant royalty demands. The Shenzhen injunctions would also moot the district-
court litigation, depriving the U.S. court of the opportunity to decide the questions
that Huawei and Samsung have presented.
In the order now on appeal, the district court (Orrick, J.) entered a temporary
antisuit injunction to avoid those results by staying Huawei’s efforts to enforce the
Shenzhen injunctions until the district court can resolve the overlapping issues set
2
for trial in December. That order was a reasonable exercise of discretion under
controlling Ninth Circuit law. Public policy supports the district court’s decision to
protect its own jurisdiction to decide the controversy now before it, and both public
policy and basic notions of equity militate strongly against Huawei’s brazen
campaign of patent holdup. The district court’s limited antisuit injunction also does
not offend comity, as the Ninth Circuit recognized on materially identical facts in
Microsoft Corp. v. Motorola, Inc., 696 F.3d 872 (9th Cir. 2012)—the controlling
decision to which Huawei has no sound answer. The order here, as in Microsoft and
its predecessor cases, concerns only private parties and a contractual relationship
that has no bearing on any government body or any aspect of international relations.
Huawei’s suggestion that the antisuit injunction is preventing the cases from
proceeding in parallel is backwards. The district court’s injunction does not prevent
Huawei from litigating appeals that are now pending in the Chinese courts or from
asserting damages claims against Samsung for the underlying alleged patent
infringement. The antisuit order only prevents Huawei from enforcing the Shenzhen
injunctions now, thereby ensuring that the U.S. case can also proceed unimpeded.
The district court acted well within its discretion in ordering such a narrowly
circumscribed, time-limited stay of enforcement of a foreign injunction. Its order
should be affirmed.
3
STATEMENT OF THE ISSUE

Whether the district court acted within its discretion in temporarily enjoining
Huawei from enforcing a Chinese court’s injunctions against Samsung’s practice in
China of two declared standard-essential patents that Huawei admits are subject to
FRAND licensing obligations.
STATEMENT OF THE CASE
A. The Parties
Samsung is a leading manufacturer of smartphone devices, selling more than
200 million LTE handset units worldwide per year. Appx5191.1 In the United States
it is estimated to have a 25% share of the smartphone market.2
Samsung conducts much of its smartphone manufacturing activity in China,
its second-largest production hub. Appx3. Samsung has invested more than
billion into constructing and maintaining its Chinese production facilities, which
employ some people and produce more than million units per year.
Appx5191-5192. These facilities are essential to meet global demand for Samsung’s
smartphones. For example, Samsung exported approximately percent of its
1
See US Smartphone Market Share: By Quarter, Counterpoint Research,
https://www.counterpointresearch.com/us-market-smartphone-share/ (accessed
Aug. 27, 2018).
2
Id.
4
China-produced smartphones (over million units) to the United States in 2015
and 2016 (the latest years in which annual data is available). Appx5191-5192.
In addition to manufacturing, China is one of Samsung’s large handset
markets. Appx5192. In 2016, Samsung sold million LTE devices in China for a
total revenue of over billion, equivalent to about percent of Samsung’s
worldwide sales. Appx5192.
Huawei, headquartered in Shenzhen, China, is also a manufacturer of
smartphone devices. Appx117. According to market analysts, Huawei has recently
“leapfrogged” Apple to become the number two seller (by units) in the world.3
B. Huawei’s FRAND Obligations And Excessive Royalty Demands

Both Samsung and Huawei participated in developing the 3G (“UMTS”) and
4G (“LTE”) telecommunications standards established by the European
Telecommunications Standards Institute (“ETSI”), both of which are essential to
modern mobile phones and similar devices. See Appx122. Such standards benefit
consumers, businesses, and society as a whole by allowing for “interoperability” as
well as “lower product costs and increased price competition.” Microsoft, 696 F.3d
at 876. But standards also create the possibility of patent “holdup,” see Mark A.
Lemley & Carl Shapiro, Patent Holdup and Royalty Stacking, 85 Tex. L. Rev. 1991,
3
Apple falls behind Huawei in smartphone market share: IDC, Marketwatch,
https://www.marketwatch.com/story/apple-falls-behind-huawei-in-smartphone-
market-share-idc-2018-07-31 (accessed Aug. 27, 2018).
5
2016-17 (2007), and therefore ETSI (like other standards organizations) requires
SEP holders to commit to license their SEPs on FRAND terms to participants in the
standard. Appx163-164. Samsung and Huawei have both executed such
undertakings with respect to their 3G and 4G SEP portfolios. These undertakings
are governed by French law. Appx639. Of importance here, these FRAND
obligations between Samsung and Huawei are subject to ETSI’s optional condition
precedent that a party must comply with its own FRAND obligations before it can
claim a violation of the FRAND commitment by the counterparty. See, e.g.,
Appx2194, Appx2199 (Huawei declarations opting into condition precedent);
Appx2609, Appx2615 (Samsung declarations specifying that its FRAND
undertakings are subject to reciprocity condition).
In August 2011, Huawei approached Samsung seeking a cross-license to the
parties’ respective 3G and 4G SEP portfolios. Appx5195-5196. By that time,
Huawei had announced to the industry that it would demand a “standard” one-way
royalty of 1.5% of the sale price of devices like smartphones and tablets for its
LTE/4G SEPs. Appx5458. The industry consensus, however, was that the aggregate
royalty burden for all such SEPs should be a single-digit percentage, approximately
6-8%. Appx5459-5460. Huawei’s demand thus amounted to 18-25% of the
aggregate rate for all SEPs owned by every firm. Huawei has never justified that
demand; in particular it does not contend that it holds a corresponding proportionate
6
share of total industry SEPs, and it does not contend that any other smartphone
manufacturer has accepted that rate in a negotiated license.
In March 2012, Huawei demanded that Samsung pay a running royalty of
1.5% of the selling price of every phone Samsung sells around the world. See
Huawei Br. 12-13 (citing Appx7263). Thereafter, the parties met regularly for four-
and-a-half years, but did not agree on the terms and conditions appropriate for a
cross-license. While Samsung and other industry participants may have initially
understood that Huawei’s 1.5% demand was a mere headline rate to be negotiated
downwards (see Appx5458), Huawei maintained that demanded rate throughout its
pre-suit negotiations with Samsung—notwithstanding Huawei’s characterization
(Br. 13). See, e.g., Appx7399-7400 (Huawei’s final pre-suit offer of December 31,
2015). As to other critical terms defining the structure and scope of the cross-
license, Huawei changed its position repeatedly. See Appx5408-5431; see also
Appx5360-5364 (describing Samsung’s evidence of Huawei’s failure to comply
with its FRAND licensing obligations).
During the course of negotiations Samsung made reasonable offers to Huawei
in the hopes of reaching a resolution. Samsung originally proposed that Huawei
make a balancing payment due to Samsung’s larger and stronger patent portfolio
(Appx5373), then later proposed a royalty-free cross license (Appx5433), and then
compromised further in July 2015 by offering to pay Huawei a net royalty fee
7
(Appx5430). That offer was based on an existing royalty rate set by the Guangdong
High Court of China at Huawei’s request in a case involving a portfolio of Chinese
SEPs owned by InterDigital. See Huawei Br. 13 (citing Appx7428); see also
Appx5330 (describing Samsung’s offers). Huawei refused these offers.
C. Huawei’s Patent Hold-Up Campaign

On May 25, 2016, Huawei secretly filed the first of what would be twenty-
one actions against Samsung affiliates in various courts across China, including ten
cases filed in Shenzhen, where Huawei is based. See Appx5180-5183. Eight of
Huawei’s Shenzhen actions alleged that Samsung’s Chinese operations infringed
Huawei’s declared SEPs; in those cases, Huawei elected not to seek damages, but
requested only that the Shenzhen court enjoin Samsung’s alleged infringement.
Appx5180; Appx5342-5346. Samsung’s affiliates were served by the Shenzhen
court on June 7, 2016. Appx5180-5181.
These injunction actions are part of Huawei’s explicit policy to engage in
patent holdup. Jianxin Ding, Huawei’s Head of Intellectual Property, admitted as
much in a talk delivered to the China Competition Policy Forum in October 2016,
not long after Huawei filed its lawsuits—touting the “staggering impact on the
market” of an injunction, and explaining Huawei’s strategy specifically with respect
to Samsung:
Even if [an] injunction order were to be enforced, does Huawei really

want to kick Samsung out of China? Is it possible? Of course not. …
8
At the end of the day, [the] purpose is to get the royalties in return,
while using [the] legal action as a bargaining chip.
Appx5637 (emphasis added).
In parallel to its injunctive relief actions in China, Huawei filed this action in
the Northern District of California on May 24, 2016, alleging that Samsung had
infringed eleven of Huawei’s U.S. SEPs and that Samsung had breached a
contractual obligation to license its own SEPs on FRAND terms, and seeking
damages and an order enjoining Samsung from “seeking injunctive relief against
Huawei (including affiliates) in any jurisdiction with respect to any alleged
infringement of any patent essential to 3GPP standards.” Appx1983-2029.4
D. The Shenzhen Court Injunctions

Huawei obtained the desired “bargaining chip” for its patent hold-up strategy
on January 11, 2018, when the Shenzhen court issued injunctions that would bar
Samsung from practicing two of Huawei’s Chinese SEPs. See Appx5550-5551.5
The Chinese patents are counterparts to two of Huawei’s asserted patents, U.S.
4
Huawei also sought a declaratory judgment setting the terms and conditions of a
SEP cross-license between the parties (Appx1998-2000), but it withdrew that claim
by stipulation after Samsung moved for judgment on the pleadings. Dkt. 354.
5
This order for case number 840 refers to the 201010137731.2 patent; it is not
disputed that the order in case number 816 is a materially similar injunction as to the
201110269715.3 patent. Appx5.
9
Patent Nos. 8,369,278 and 8,885,587. Appx5; Appx5181.6 Because the Chinese
patents at issue in these actions are declared to be essential to practicing the ETSI
4G standard, and thus to production of modern smartphones, enforcement of any
such injunction would effectively force Samsung to shutter its manufacturing
operations in China. Appx5191-5192. The injunction orders therefore threatened
“impacts percolating around the world” because they “would likely force” Samsung
“to accept Huawei’s licensing terms, before any court has an opportunity to
adjudicate the parties’ breach of contract claims.” Appx17.
The Shenzhen court discussed Huawei’s and Samsung’s pre-suit licensing
offers. Appx5519-5546. But the Shenzhen court was not presented with and never
evaluated any breach of contract claims, as presented in the U.S. action. Appx17.
The Shenzhen court also did not evaluate the financial merits of Huawei’s
offers in light of key evidence obtained through discovery in the U.S. district court.
For example, the Shenzhen court did not give any indication it considered the royalty
rates in Huawei’s , nor did it decide whether Huawei’s offers
to Samsung were discriminatory in light of that evidence. See Appx5355-5356
(Shenzhen court describing submission of confidential evidence by Huawei and
6
On March 16, 2018, Huawei dropped the asserted claims of the ’278 patent from
the district court action. Dkt. 255-3.
10
Samsung’s response); Appx7241-7242 (Huawei’s summary of its evidence
presented in Shenzhen); Appx5519-5546 (Shenzhen court analysis).
Samsung appealed both injunction orders. Appx5182; (2018) Canton Civil
Final Case No. 307; (2018) Canton Civil Final Case No. 308. The injunctions from
the Shenzhen court cannot go into force unless and until the Guangdong High Court
affirms. Appx5551. The order provides that Huawei can agree after the appeal that
the injunction will not be enforced, and that the court will decline to enforce the
injunction if the parties agree to an SEP cross-license. Appx5550-5551.
E. The District Court Orders
1. The Antisuit Injunction

Faced with the threat of a shutdown of its operations in China, Samsung
moved the district court for an order enjoining Huawei from seeking to enforce the
Shenzhen court’s injunction, pending completion of trial in this case. Appx101; see
Appx5151-5178; Appx7507-7525. The district court granted the motion on April
13, 2018. Appx1-21.
Acknowledging that a court should exercise its power to enjoin a foreign
proceeding “sparingly” (Appx6), the district court (Orrick, J.) applied the “three-part
inquiry” established by the Ninth Circuit’s decision in E. & J. Gallo Winery v.
Andina Licores S.A., 446 F.3d 984 (9th Cir. 2006), and applied in Microsoft:
11
First, [the court] determine[s] “whether or not the parties and the issues
are the same” in both the domestic and foreign actions, “and whether
or not the [domestic] action is dispositive of the action to be enjoined.”
Second, [the court] determine[s] whether at least one of the so-called

“Unterweser factors” applies.
Finally, [the court] assess[es] whether the injunctions “impact on

comity is tolerable.”
Microsoft, 696 F.3d at 881 (quoting Gallo, 446 F.3d at 991; citing Applied Med.
Distrib. Corp. v. Surgical Co. BV, 587 F.3d 909 (9th Cir. 2009), and In re
Unterweser Reederei GMBH, 428 F.2d 888, 896 (5th Cir. 1970); internal paragraph
breaks added).
Applying the Gallo test, the district court found that the first factor is satisfied
because “[b]oth sides agree that the parties are functionally the same” (Appx10), and
because each party had “presented” the court “with a breach of contract claim based
on the other’s alleged failure to abide by its commitments to ETSI” (Appx13). The
district court explained that the issues were identical in the two actions because “the
availability of injunctive relief for each party’s SEPs depends on the breach of
contract claims,” such that “the contractual umbrella over the patent claims
controls.” Appx13.
As to the second factor, the court concluded that the “bulk of precedent”
supports a conclusion that U.S. public policy disfavors both “injunctive relief on
SEPs” and “anticompetitive conduct and breaches of contract.” Appx16. The
district court also ruled that enforcement of the Shenzhen injunctions would
12
undermine the court’s own “ability to determine the propriety of injunctive relief in
the first instance” and that enforcement of those injunctions would be an attack on
its jurisdiction. Appx17. As the district court explained, enforcement of the
injunctions would “frustrate[] this court’s ability to adjudicate issues properly before
it” and would diminish “[t]he integrity of this action.” Appx17. Further, the district
court recognized that Huawei had obtained an illicit “bargaining chip,” and ruled
that enforcing the Shenzhen injunctions would “interfere[] with equitable
considerations by compromising the court’s ability to reach a just result in the case
before it free of external pressure on Samsung to enter into a holdup settlement
before the litigation is complete.” Appx17-18 (internal citations omitted).
Finally, the court found that an antisuit injunction would have no more than a
“negligible impact” on international comity. Appx19-20. This is a “private
contractual dispute” which “does not raise any public international issue.” Appx20.
The district court’s injunction, moreover, “would have no impact on the Chinese
courts,” but would only “restrain Huawei from enforcing any injunction order”
(Appx20 (emphasis added))—leaving the Chinese courts unencumbered should they
choose to enforce their injunctions sua sponte. Further, the injunction is narrow in
scope—it affects only two patents, and precludes only enforcement of an injunction,
leaving Huawei free to defend its interests in China by other means, for instance, by
litigating Samsung’s de novo appeals or pursuing claims for damages. Appx20.
13
And in any event, the district court directed that its injunction would last only “until
[the district court] ha[s] the opportunity to determine the propriety of injunctive
relief for the parties’ SEPs” (Appx20), meaning that the injunction will only
necessarily be in effect until the court resolves the issues presented by the trial that
is set for December 2018. During that time, the Chinese injunctions are likely to
remain stayed as a result of Samsung’s appeals, which remain pending.
2. The Order Denying Huawei’s Motion To Alter Or Amend

The Injunction
Huawei moved to alter or to amend the antisuit injunction on April 20, 2018.
Appx107. Samsung opposed the motion (Appx8563-8578), and the district court
denied Huawei’s motion on June 19, 2018. Appx22-27. The court first explained
that it had already “considered and rejected” Huawei’s legal argument that the
general injunction factors described in Winter v. Natural Resources Defense
Council, Inc., 555 U.S. 7 (2008), also govern in the foreign antisuit context, and that
Huawei had “not convinced [the court] that the decision was in error.” Appx23. The
court nevertheless analyzed the Winter factors, and concluded that its antisuit
injunction was warranted even under that framework. Appx23-24. First, the court
found that “Samsung faces irreparable harm in closing its manufacturing plant and
ceasing the sale of infringing devices in China” if the Shenzhen court’s injunction
were enforced. Appx23. Second, the court concluded that the balance of the equities
favors Samsung (which would face “lasting effects” from enforcement of the
14
Shenzhen court’s injunction) over Huawei (which would experience only a
temporary delay in enforcement). Appx23. And third, the court ruled that “the
public interest lies in this court adjudicating the propriety of injunctive relief for the
parties’ … SEPs.” Appx23-24.
The district court also rejected Huawei’s contention that the timing of the
parties’ pleadings was somehow dispositive, ruling that the timing of Samsung’s
counterclaims was in fact immaterial because “Huawei’s own breach of contract
claim put the parties’ compliance with FRAND” before the court. Appx26. And in
any event, the court observed that the timing question was only one of “several
reasons why the injunction’s impact on comity is tolerable,” and that Huawei’s
argument did not affect the other factors that the district court had considered—
namely, that it “involves a private contractual matter,” it “is against Huawei, not the
Chinese courts,” and it “is limited in scope to two patents, a specific form of relief,
and may last less than six months.” Appx27.
Huawei filed an amended notice of appeal on July 3, 2018. ECF 20. Huawei
moved to expedite the appeal, but this Court denied the motion. ECF 27. Huawei
has not sought a stay of the district court’s injunction pending appeal.
15
SUMMARY OF ARGUMENT
The district court acted well within its discretion in applying governing law to
enjoin any effort by Huawei to enforce the Shenzhen court’s injunctions on declared
SEPs pending an imminent trial on overlapping claims Huawei chose to bring here.
Under established Ninth Circuit law set forth in Gallo and applied to similar
circumstances in Microsoft, the district court has discretion to grant an injunction
against a party’s conduct in foreign litigation upon finding that: (1) the parties and
issues in the foreign case overlap with those in the domestic case; (2) the foreign
proceedings would violate U.S. policy or are otherwise inequitable; and (3) the
antisuit injunction would not have an “intolerable” impact on international comity.
Huawei concedes the first factor in the analysis, and it identifies no abuse of
discretion in the district court’s analysis of the other two.
The district court reasonably found that allowing Huawei to enforce the
Shenzhen injunctions would violate U.S. policy by depriving the district court of the
opportunity to decide the issues that the Huawei and Samsung have presented to
it. If the Shenzhen injunctions were enforced, Samsung would have little choice but
to moot the case by accepting Huawei’s unreasonable and discriminatory royalty
demands in order to avoid the massive cost of shutting down its activities in China.
That result would further violate well-recognized U.S. policies against SEP
holdup. Indeed, Huawei publicly admitted its strategic plan is to use the Chinese
16
injunctions as a “bargaining chip” to force Samsung to accept inflated royalty
rates—which is the essence of improper patent holdup—and not to actually try to
exclude Samsung from China.
The district court also reasonably found that international comity will not be
intolerably offended by its grant of antisuit relief. This is a commercial dispute
between private parties; it does not affect any governmental entity or touch on any
aspect of international relations. The district court’s injunction restrains only
Huawei, not the Chinese courts. Huawei, moreover, remains free to pursue in
Chinese courts (for example) claims for damages, and to defend the Shenzhen
court’s injunctions on Samsung’s de novo appeals. The injunction is also limited
both in scope (it affects only two patents) and in duration (it lasts only until the
district court resolves the issues set for trial this year). Huawei’s principal
complaint—that the district court’s order would encourage collateral attacks on
foreign judgments—misses the mark because, as Huawei admits, the Shenzhen
orders are neither currently enforceable nor entitled to preclusive effect in this
action. Moreover, the circumstances here are specific to a global patent holder who
files for injunctive relief on SEPs abroad and at the same time files a breach of
FRAND claim based on the same SEPs in the United States. Huawei provides no
evidence that any other company has or should be expected to do that. The district
17
court did not abuse its discretion in concluding that comity would not be offended
by allowing this action to proceed unencumbered by Huawei’s holdup efforts.
Huawei is wrong in its alternative argument that the district court was required
to apply the general preliminary-injunction factors described in Winter in
determining whether to grant Samsung’s motion for foreign antisuit relief. Huawei’s
reliance on the Supreme Court’s 2008 decision in Winter is misplaced, because the
Ninth Circuit (whose law governs this appeal) has twice ruled in post-
Winter decisions that the three Gallo factors supply the sole test for assessing the
propriety of an antisuit injunction. Huawei offers no basis or justification for
revisiting the Ninth Circuit’s holdings on this point.
Even if Huawei were correct on the law (it is not), it still has not shown an
abuse of discretion warranting reversal. All agree that Gallo at least supplants
Winter’s “likelihood of success” prong in the foreign antisuit context, and the district
court’s findings amply support the other three prongs of the general injunction
test. It is not credibly in dispute that Samsung would be irreparably harmed either
by closure of its Chinese operations or by compelled acceptance of non-FRAND
licensing terms in order to dismiss Huawei’s lawsuits. Rather than deny this point,
Huawei points to its own alternative proposal to arbitrate the parties’ FRAND
dispute, but that suggestion is unworkable given the complexity of the dispute. No
arbitrator is suited to decide all of the necessary and disputed questions of business
18
planning and judgment necessary to resolve this dispute, and Huawei cannot be
permitted to use its Chinese injunctions to compel Samsung to accept the distinct
irreparable harm of unwillingly submitting the dispute to an arbitrator in the present
circumstances.
The remaining general injunction factors also lie in Samsung’s favor. The
balance of the equities decisively favors Samsung, because the district court’s
injunction imposes no irreparable harm on Huawei. To the contrary, Huawei has
acknowledged (through participation in the standards at issue) that FRAND royalties
provide adequate compensation for others’ use of its SEPs. Huawei is free to seek
such royalties (by bringing claims for damages) notwithstanding the district court’s
order, which (again) proscribes only Huawei’s enforcement of the unduly
burdensome injunctive relief issued by the Shenzhen court. And in the absence of
cognizable harm to Huawei, the public interest both strongly favors Samsung’s
continued ability to participate fully in the smartphone marketplace, and strongly
disfavors Huawei’s SEP holdup strategy.
***
None of the district court’s rulings were incorrect, let alone an abuse of
discretion. Under the deferential standard of review here, the district court’s
determination to stay Huawei’s enforcement of the Shenzhen injunctions should be
affirmed.
19
ARGUMENT
I. STANDARD OF REVIEW
The question whether the district court properly granted an antisuit injunction
is not unique to patent law, see, e.g., Gallo, 446 F.3d 984 (reversing denial of antisuit
injunction in case involving wine distribution), and therefore this Court “appl[ies]
the law of the regional circuit in which this appeal would otherwise lie,” i4i Ltd.
P’ship v. Microsoft Corp., 598 F.3d 831, 841 (Fed. Cir. 2010); see Sanofi-Aventis
Deutschland GmbH v. Genentech, Inc., 716 F.3d 586, 590-91 (Fed. Cir. 2013)
(citing, inter alia, Gallo, 446 F.3d 984, and applying Ninth Circuit law to this issue).
The district court’s decision is reviewed for abuse of discretion. Microsoft, 696 F.3d
at 881. “Abuse-of-discretion review is highly deferential to the district court,” and
dictates that the appellate court “must uphold a district court determination that falls
within a broad range of permissible conclusions in the absence of an erroneous
application of law.” Id. (citations and internal quotation marks omitted). An order
subject to such deferential review may be reversed “only when” the appellate court
is “convinced firmly that the reviewed decision lies beyond the pale of reasonable
justification under the circumstances.” Id. (citations and internal quotation marks
omitted).
20
II. THE DISTRICT COURT ACTED WITHIN ITS DISCRETION IN

GRANTING AN INJUNCTION
A. Under Governing Law The District Court Acted Well Within Its
Discretion In Granting A Temporary Injunction Pending A
Decision On The Merits
Under controlling Ninth Circuit law, a foreign antisuit injunction is justified
if (1) “the parties and the issues are the same” between the two actions, Gallo, 446
F.3d at 991, such that “the first [domestic] action is dispositive of the [foreign] action
to be enjoined,” Applied Med., 587 F.3d at 915; (2) one of the “Unterweser factors”
applies, e.g., the foreign proceeding would frustrate a policy of the forum court, or
would prejudice equitable considerations, see Gallo, 446 F.3d at 990; and (3) the
antisuit injunction’s “impact on comity is tolerable,” id. at 991. After conducting a
thorough analysis of the facts of this case, the district court reasonably determined
that a temporary foreign antisuit injunction is warranted here. Appx1-21. Huawei
fails to show that this determination was an abuse of the district court’s broad
discretion.
As the district court rightly recognized, the Ninth Circuit’s decision in
Microsoft is instructive here. There, Motorola had offered Microsoft a license to a
worldwide portfolio of SEPs on terms that Microsoft considered to be unreasonably
high, and therefore not compliant with Motorola’s RAND obligations. Microsoft,
696 F.3d. at 879. Microsoft responded by filing suit in federal district court, alleging
that Motorola’s excessive demands were in breach of its contractual RAND
21
commitment. Id. With the case pending, Motorola obtained injunctions in German
courts, based on infringement of European SEPs that fell within the portfolios being
litigated in the U.S. action. Id. Microsoft then moved in the federal district court
for an antisuit injunction to bar Motorola from enforcing the German injunctions,
explaining that the U.S. district court’s resolution of the contract claims would
dispose of the German action by deciding the question of the availability of
injunctive relief. See id. at 880.
The district court agreed and granted the antisuit injunction. The Ninth Circuit
affirmed, concluding that the district court had reasonably interpreted Motorola’s
conduct in Germany “as a procedural maneuver designed to harass Microsoft with
the threat of an injunction removing its products from a significant European market
and so to interfere with the court’s ability to decide the contractual questions already
properly before it.” Id. at 886.
The district court in Microsoft also reasonably found that the impact on comity
with Germany would be tolerable, explaining that the case was “a private dispute
under … state contract law” that “d[id] not raise any ‘public international issue.’”
Id. at 888 (quoting Gallo, 446 F.3d at 994). “Moreover, the antisuit injunction
swe[pt] ‘no broader than necessary,’” because it only prevented Motorola from
enforcing its injunction, and did not otherwise prevent enforcement of its patent
claims (e.g., through damages claims). Id. (quoting Laker Airways Ltd. v. Sabena,
22
Belgian World Airlines, 731 F.2d 909, 933 n.81 (D.C. Cir. 1984)). And “[e]ven that
bar could expire as soon as the district court has had an opportunity to adjudicate the
contractual issues before it,” so the injunction was also of limited duration. Id. It
did not matter that “German and U.S. courts may differ” regarding central issues in
the case, because “the mere fact that different jurisdictions answer the same legal
question differently does not, without more, generate an intolerable comity
problem.” Id. Indeed, “an anti-suit injunction in the service of ‘enforcing a contract’
between private parties does not ‘breach[] norms of comity,’ even if, absent that
contract, one party might have enjoyed different procedural or substantive
advantages under another country’s law.” Id. (quoting Gallo, 446 F.3d at 994).
Based on that analysis, the court found no abuse of discretion—explaining that “the
record ma[de] clear that the district court gave thoughtful consideration to the
importance of international comity,” and that “‘[a]t most, there [were] competing
comity concerns, so it cannot fairly be said’ that the district court’s preliminary
injunction ‘would have an intolerable impact on comity.’” Id. at 889 (quoting
Applied Med., 587 F.3d at 921).
This case parallels Microsoft in every material respect. Although Huawei
preemptively filed this action (rather than waiting for Samsung to do so), it has
sought and obtained foreign injunctions that would interfere with the district court’s
ability to decide the questions that are now properly before it, and which would
23
inequitably prejudice Samsung by putting its entire Chinese operation at risk of
imminent shutdown based on infringement of just two out of thousands of SEPs.
Given the private nature of the dispute and the injunction’s limited substantive and
temporal scope, the district court reasonably found that its antisuit injunction would
have no intolerable impact on comity. Because the district court acted reasonably
and well within the bounds of its discretion, its antisuit injunction order should be
upheld under controlling Ninth Circuit law.
1. The District Court Correctly Found That This Case And The
Shenzhen Suits Share Common Parties And Issues
On the first prong of Gallo, the district court correctly ruled that “the parties
are functionally the same” as between this case and the Shenzhen actions. Appx10.
Huawei does not challenge that finding on appeal.
The district court also correctly ruled that this case and the Shenzhen actions
share common issues and that this case is potentially dispositive of the Shenzhen
action. As the court explained, “the availability of injunctive relief for [Huawei’s]
SEPs depends on the breach of contract [viz., FRAND] claims” asserted in this
action. Appx13. That is, if the district court finds that Huawei did not comply with
its contractual FRAND obligations, that would foreclose Huawei’s enforcement of
injunctive relief on its SEPs. See Appx13; Appx25-26. Put differently, “[t]he
contractual umbrella over the patent claims” controls the result, Microsoft, 696 F.3d
at 883, and “dictates that this action is dispositive of Huawei’s Chinese actions”
24
insofar as Huawei seeks injunctive relief for infringement of SEPs. Appx13.
Huawei does not argue otherwise.
2. The District Court Reasonably Found Unterweser Satisfied

The district court also did not abuse its discretion in concluding (Appx17) that
the second Gallo prong is satisfied. See Microsoft, 696 F.3d at 881; Gallo, 446 F.3d
at 989. Enforcement of the Shenzhen injunctions would frustrate U.S. policies
favoring protection of federal jurisdiction and disfavoring patent hold-up, and would
work an inequity by forcing Samsung to choose between shuttering its Chinese
operations and accepting Huawei’s supra-FRAND licensing demands under duress
while this action is still pending. The Ninth Circuit found Unterweser satisfied on
analogous facts in Microsoft, 696 F.3d at 886, and this Court should do the same.
(a) The District Court Reasonably Found That Enforcing

The Shenzhen Injunctions Would Prevent The District
Court From Exercising Its Jurisdiction To Decide This
Dispute
As the district court found (see Appx17), permitting Huawei to enforce the
Shenzhen injunctions would force Samsung to settle Huawei’s global litigation
campaign on Huawei’s terms. The result would be to terminate this action before
the district court has an opportunity to decide the case, “frustrat[ing] th[e] court’s
ability to adjudicate issues properly before it,” and thereby diminishing “the integrity
of the action before th[e] [U.S.] court[s].” Microsoft Corp. v. Motorola, Inc., 871 F.
Supp. 2d 1089, 1100 (W.D. Wash.), aff’d, 696 F.3d 872 (9th Cir. 2012).
25
The district court’s ruling on this issue was not an abuse of discretion. At the
outset, there is no doubt that the “need to protect the court’s own jurisdiction” is a
“clear policy that all federal courts recognize,” Zynga, Inc. v. Vostu USA, Inc., 2011
WL 3516164, *3 (N.D. Cal. Aug. 11, 2011), and that therefore “the need for an
antisuit injunction crests” where “a party institutes a foreign action in a blatant
attempt to evade the rightful authority of the forum court,” Quaak v. Klynveld Peat
Marwick Goerdeler Bedrijfsrevisoren, 361 F.3d 11, 20 (1st Cir. 2004); accord Laker
Airways, 731 F.2d at 927 (“Injunctions are most often necessary to protect the
jurisdiction of the enjoining court….”). Nor is there any real question that enforcing
the Shenzhen injunctions would frustrate this policy by imposing such a burden on
Samsung that it would be forced to settle involuntarily out of court—depriving the
district court of the opportunity to exercise its jurisdiction over the dispute.
Appx17.7 The district court did not act unreasonably in determining to prevent
enforcement of the Shenzhen injunctions in order to maintain the integrity of its own
adjudicative process.
7
Huawei asserts without citation or explanation (Br. 39) that “the Shenzhen
[c]ourt’s injunctions have no impact on the district court’s ability to rule on [the
contract] claim,” but it disregards the obvious practical effects that the injunctions
would have if they were to go into force: Samsung would have to settle the case on
non-FRAND terms, leaving the district court with nothing to decide. See Appx17.
26
Huawei does not deny that U.S. courts have a strong policy in favor of
protecting their own jurisdiction. Instead, Huawei claims that the district court
committed an exceedingly narrow “legal error” by “assigning to itself … the
exclusive power to decide [the parties’ compliance with their FRAND obligations]
‘in the first instance’” (Huawei Br. 36 (emphasis added)). The allegation, though
never clearly stated, appears to be that once the Shenzhen court purported to decide
certain FRAND issues in issuing its injunctions, the district court was no longer free
to enforce U.S. policy by taking action to protect its own jurisdiction over claims
that Huawei itself placed in issue. But that contention is not supported by any
citation (see id.) or coherent legal argument.
Huawei’s position, in any event, is wrong. Huawei acknowledges (Br. 35)
that parallel proceedings “should ordinarily be allowed to proceed simultaneously,
at least until a judgment is reached in one which can be pled as res judicata in the
other.” Laker Airways, 731 F.2d at 926-27. Thus, the district court should
independently decide all the issues presented to it, unless the judgment of another
forum precludes it from doing so. Here, Huawei appears to suggest that the
Shenzhen court’s decisions have such preclusive effect8—but it offers no support for
8
See Br. 8 (“That should have ended the matter. If two cases present a common
issue, and one case is decided first, that decision controls…”)
27
that assertion. “[T]he party seeking to rely upon issue preclusion” bears the burden
to establish that it applies, Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1050-51 (9th
Cir. 2008),9 and Huawei has failed to meet that burden by failing to show that the
Shenzhen court’s decisions preclude relitigation of the contractual FRAND issues
that Huawei placed in issue here.
Nor could Huawei make such a showing. For example, issue preclusion does
not apply where there are “difference[s] in legal standards” applied in the foreign
courts and in the U.S. court, e.g., Santa Margherita, S.p.A. v. Weine, 2013 WL
12125539, *7-8 (C.D. Cal. Aug. 28, 2013) (collecting cases), and here Huawei has
not shown that the Shenzhen court applied the same FRAND standard that would
apply in the district court. In particular, the Shenzhen court did not consider the full
spectrum of . See supra, at 10. Nor did it compute
FRAND royalty rates and adjudicate whether Huawei’s offers complied with those
benchmarks. Appx5519-5546 (Shenzhen court analysis). United States courts
recognize that whether an offer complies with FRAND depends heavily on the
financial terms of the offer and its relationship to a FRAND royalty. See TCL
Commc’n Tech. Holdings, Ltd. v. Telefonaktiebolaget LM Ericsson, 2017 WL
9
Accord Jones v. United States, 846 F.3d 1343, 1361 (Fed. Cir. 2017); Novartis
Pharm. Corp. v. Abbott Labs., 375 F.3d 1328, 1333 (Fed. Cir. 2004) (both applying
same principle).
28
6611635, *57 (C.D. Cal. Dec. 21, 2017) (evaluating whether offers complied with
FRAND by comparing financial terms to expert testimony on FRAND rates);
Microsoft Corp. v. Motorola, Inc., 2013 WL 6000017, *3 (W.D. Wash. Nov. 12,
2013) (RAND royalty benchmark determination constitutes “an integral element of
Microsoft’s breach of contract claim”). For at least that reason (and for other reasons
that Huawei does not address), there is no basis to conclude that the Shenzhen court’s
orders would have preclusive effect on the FRAND issues in this action.
This Court, however, need not even reach the question whether the Shenzhen
court’s orders would ever have preclusive effect, because Huawei concedes (Br. 35)
that, as the cases in China now stand, the Shenzhen orders “cannot yet be given
preclusive effect here.” Unless and until the Chinese appellate court affirms the trial
court’s orders, there is no final judgment “which can be pled as res judicata,” Laker
Airways, 731 F.2d at 926-27, and therefore the district court did not abuse its
discretion in determining to protect its jurisdiction against the Shenzhen injunctions’
potential collateral effects.
Put differently, the district court reasonably concluded that Huawei ought not
be permitted to leverage the Shenzhen injunctions—covering only two out of
thousands of SEPs—as a means “to evade the rightful authority of the forum court”
to decide the parties’ contractual FRAND dispute. Quaak, 361 F.3d at 20. That
assessment “is not illogical, implausible, or without support from inferences that
29
may be drawn from facts in the record,” Microsoft, 696 F.3d at 886 (citations
omitted), and it therefore should be upheld on abuse-of-discretion review.
(b) Enforcing The Shenzhen Injunctions Would Violate

Public Policy Disfavoring Injunctions For SEP
Infringement
Even apart from the district court’s proper invocation of the policy favoring
protection of its own jurisdiction, the antisuit injunction is also supported by
“specific domestic policies against injunctive relief on SEPs and general public
policies against anticompetitive conduct and breaches of contract,” which (as the
district court found) are supported by “[t]he bulk of precedent.” Appx16 (collecting
cases). As the Ninth Circuit has explained, a contractual FRAND commitment “at
least arguably” implies a “guarantee that the patent-holder will not take steps to keep
would-be users from using the patented material, such as seeking an injunction, but
will instead proffer licenses consistent with the commitment made.” Microsoft, 696
F.3d at 884; see id. at 885 (“[I]njunctive relief against infringement is arguably a
remedy inconsistent with the [FRAND] licensing commitment.”). Indeed, “the act
of seeking injunctive relief” for SEP infringement “is inherently inconsistent” with
a FRAND licensing obligation, Realtek Semiconductor Corp. v. LSI Corp., 946 F.
Supp. 2d 998, 1006 (N.D. Cal. 2013), and “from a policy and economic standpoint,”
SEP holders “that have made licensing commitments to standards-setting
organizations should be precluded from obtaining an injunction … that would bar a
30
company from practicing the patents,” Apple, Inc. v. Motorola Mobility, Inc.,
2012 WL 5416941, *15 (W.D. Wis. Oct. 29, 2012).
Huawei has publicly admitted that it sought the Shenzhen injunctions as a
“bargaining chip” to force Samsung to accept inflated royalty rates. Appx5637; see
supra, at 8-9. Indeed, Huawei admitted its strategy is not to “kick Samsung out of
China” with its injunctions, but “to get the royalties.” Id. This blatant patent holdup
is contrary to U.S. public policy. The public has a strong interest “in ensuring that
SEPs are not overvalued,” as well as in “encouraging participation in standard-
setting organizations but also in ensuring that SEPs are not overvalued.” Apple Inc.
v. Motorola, Inc., 757 F.3d 1286, 1332 (Fed. Cir. 2014), overruled in part on other
grounds, Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1347-49 (Fed. Cir. 2015)
(en banc). Absent recognition and enforcement of these strong public interests, firms
would face increased costs, leading to substantial harm to competition and
innovation—offsetting or defeating the benefits of standardization. See Lemley &
Shapiro, supra, 85 Tex. L. Rev. at 2016-17. Routine injunctions against
infringement of SEPs would also be contrary to “the public … interest in
encouraging participation in standard-setting organizations.” Apple, 757 F.3d at
1332.
While the district court ultimately did not rely on the public policy against
enforcing SEP-infringement injunctions (see Appx17), this Court may affirm on this
31
alternative basis—which is supported by the record and the district court’s analysis
(Appx16). See, e.g., Glaxo Grp. Ltd. v. TorPharm, Inc., 153 F.3d 1366, 1371 (Fed.
Cir. 1998) (“an appellate court may affirm a judgment of a district court on any
ground the law and the record will support”). Ninth Circuit law holds that
“[p]rotecting contractual devices that provide such indispensable, essential functions
within international trade justifies the imposition of an anti-suit injunction.” Gallo,
446 F.3d at 993.10 And an antisuit injunction is therefore justified here, because
enforcement of the Shenzhen court’s injunction would offend public policy by
allowing Huawei to succeed in its express strategy of patent holdup—using the
injunction as a “bargaining chip” to “get the royalties” it is demanding from
Samsung. Appx5637.
Huawei argues the contrary (Br. 35-36) by pointing to this Court’s statements
that there is no “per se rule that injunctions are unavailable for SEPs” and that “an
injunction may be justified where an infringer unilaterally refuses a FRAND royalty
or unreasonably delays negotiations to the same effect.” Apple, 757 F.3d at 1331-32.
But invocation of that exception would require a finding that Samsung has refused
10
While Gallo addressed a forum-selection clause rather than a FRAND contract,
there is no basis to conclude that the recognized policy favoring enforcement of a
bilateral procedural agreement regarding where to resolve a dispute is more
significant than the policy favoring enforcement of an industry-wide contractual
arrangement that governs substantive rights and obligations designed in substantial
part to benefit the public at large.
32
a FRAND license or engaged in unreasonable delay—issues that have not yet been,
but will be, tried in the district court. Huawei admits that the Shenzhen court’s orders
are not res judicata, and cannot show that they will ever have issue-preclusive effect
in U.S. courts. The district court made no finding on the FRAND issue; that is a
central purpose of the trial slated for December. This Court’s narrow carve-out from
the public policy against SEP injunctions thus is not applicable on the present record.
Temporary antisuit relief is warranted so that the district court may hold a trial to
determine the critical question in this case without the specter of a compelled, non-
FRAND settlement mooting the dispute.
(c) The District Court Reasonably Found That The

Equities Disfavor Permitting Huawei To Enforce The
Shenzhen Injunctions Or To Compel Samsung To
Arbitrate A Dispute Absent Agreement To Do So
Setting U.S. policy interests aside, the district court also reasonably concluded
that equitable considerations independently support its foreign antisuit injunction.
Specifically, “in the absence of an antisuit injunction, Samsung faces the risk of
significant harm, not just in China, but with impacts percolating around the world”
because the “Chinese injunctions would likely force it to accept Huawei’s licensing
terms” in order to avoid a shutdown of Samsung’s Chinese manufacturing
operations, “before any court has an opportunity to adjudicate the parties’ breach of
contract claims.” Appx17. The Ninth Circuit upheld identical reasoning in
Microsoft, finding no abuse of discretion in the district court’s determination that
33
enforcement of a German injunction would “interfere[] with ‘equitable
considerations’ by compromising the court’s ability to reach a just result in the case
before it free of external pressure on Microsoft to enter into a ‘holdup’ settlement
before the litigation is complete.” 696 F.3d at 886 (cited in Appx17). Applying
Ninth Circuit law, this Court should likewise uphold the district court’s decision on
this issue.
Huawei’s sole contrary argument is an assertion (Br. 40) that “Huawei has
committed to accept FRAND terms set by a third party”—namely, an arbitrator. But
that says nothing about the propriety of enforcing the Shenzhen court’s injunctions.
If those injunctions go into effect, no third party would ever have an opportunity to
set “FRAND terms,” because Samsung would be forced to accept whatever
extortionate price (perhaps even 1.5% of device sales) Huawei might demand in
order to keep its Chinese operations open. Huawei’s “commitment” is an illusion,
and the district court did not err in giving it no weight. Appx18.
To the extent Huawei means to suggest that enforcing the Shenzhen
injunctions would not be inequitable because Samsung could avoid them by agreeing
to submit the determination of “FRAND terms” to an arbitrator, it is mistaken. The
law is clear that “arbitration is a matter of contract and a party cannot be required to
submit to arbitration any dispute which he has not agreed so to submit,” Howsam v.
34
Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002), and Samsung is under no
obligation to agree to arbitration.
Samsung, moreover, has ample basis to refuse arbitration of the parties’
licensing dispute, which—as the district court recognized (see Appx14) is far too
complex for resolution by anyone other than the parties themselves. Each party has
a portfolio of thousands of patents relating to mobile devices (Appx121, Appx738),
governed by the laws of multiple nations and covering numerous discrete
technologies. To determine the terms of a FRAND cross-license to those patents,
an arbitrator would have to somehow decide which patents would be subject to the
license, which products would be covered, how long the license would last, whether
a fair and reasonable license for the parties SEPs would include a covenant not to
sue for infringement of certain related non-essential patents, and of course whether
the patents are valid, enforceable, essential, and infringed—all before attempting to
assess their value. See Apple Inc. v. Motorola Mobility, Inc., 2012 WL 7989412,
at *5 (W.D. Wis. Nov. 8, 2012) (suggesting that it would be impossible to determine
a rate without answering to such questions); Ericsson, Inc. v. D-Link Sys., Inc., 773
F.3d 1201, 1230-32 (Fed. Cir. 2014) (discussing application of Georgia-Pacific
analysis to RAND-encumbered SEPs).
Samsung has not acted unreasonably in declining to arbitrate such issues,
which should be worked out among Samsung and Huawei through in arms-length
35
negotiations undertaken without threat of a business-crushing injunction. The
district court’s antisuit injunction works in furtherance of that goal, and should be
upheld.
(d) The Timing Of The Parties’ Pleadings Is Irrelevant

The Court should reject Huawei’s extended sideshow argument (Br. 34-40,
44-45) about the timing of the parties’ pleadings. Regardless of whether Huawei
filed its Chinese actions at the same time as this case (as Huawei contends, Br. 34),
or on “[t]he next day” (as the district court found, Appx4), and regardless of when
Samsung filed its counterclaims, the district court acted within the bounds of its
broad discretion in determining that to allow Huawei to enforce the Shenzhen
injunctions would be to sanction a violation of U.S. policy and to impose inequity
on Samsung. Huawei makes no contrary showing.
Huawei asserts (Br. 34; see Br. 38) that the timing of the filings is a “threshold
consideration” whose resolution “should have ended the matter.” But there is no
authority for such a proposition. Huawei cites (Br. 34) Microsoft’s reference to the
“order in which the domestic and foreign suits were filed,” 696 F.3d at 887, but it
elides the rest of the sentence, which directly contradicts Huawei’s position: The
order in which the pleadings were filed is “not dispositive,” but “may be relevant,
… depending on the particular circumstances.” Id. (emphases added). Microsoft
certainly does not impose a requirement that the domestic action be “first-filed” or
36
rule out relief in case of “simultaneous” actions. And Gallo itself demonstrates that
the domestic action need not be filed earlier. There, the domestic plaintiff sought an
antisuit injunction against Andina Licores S.A., which had initiated litigation against
Gallo in Ecuador. 446 F.3d at 986. The district court denied the motion, but the
Ninth Circuit reversed—despite the fact that the foreign litigation was filed before
the domestic action. See id. at 994. The Ninth Circuit expressly explained: “That
Andina filed first … makes no difference as to the propriety of an anti-suit
injunction.” Id. Thus, Huawei’s “threshold consideration” has no basis in Ninth
Circuit law. And in the “particular circumstances” here, see Microsoft, 696 F.3d at
887, the timing plainly is not determinative: Irrespective of timing, the district court
and this Court have the prerogative to protect their exercise of jurisdiction, and the
U.S. policy against essential-patent holdup, against Huawei’s potential to enforce
the Shenzhen injunctions.
Further, Huawei fails to show error in the district court’s analysis of why
Huawei’s claims, and not Samsung’s counterclaims, are relevant in the Gallo
analysis. In rejecting Huawei’s argument that the timing of Samsung’s
counterclaims is what matters, the district court explained: “Huawei put the same
issue [as in Shenzhen] before this court in its breach of contract claim because it
must demonstrate that it was a willing licensee and did not violate FRAND
obligations as a condition precedent to establishing that Samsung breached its
37
FRAND obligations.” Appx26. Huawei eventually concedes the point, admitting
that Huawei’s own breach of FRAND claim raises the issue of Huawei’s compliance
with FRAND obligations as a condition precedent. Br. 39 (“If the district court
found that Huawei had not complied with its FRAND obligations, it might find in
favor of Samsung on Huawei’s breach claim.”). That leaves Huawei with nothing
more than the unsupported, conclusory statement that if its breach of FRAND claim
fails in the district court, it should still be allowed injunctive relief in China. Id.
Samsung disagrees, but in any event the question before this Court is not what
remedies would be available in the hypothetical, but rather whether there are
overlapping issues between the injunction cases Huawei brought in Shenzhen and
its contractual breach of FRAND case in the U.S. As the district court noted, Huawei
has not only conceded the overlap, it has emphasized it. See Appx25 (collecting
statements by Huawei that compliance with FRAND obligations was at issue in
Shenzhen cases).
Huawei is wrong that the timing of claims is a “threshold issue” under
governing law, and is unable to defend its assertions that Samsung’s
counterclaims—as opposed to Huawei’s claims—must be considered in a timing
analysis. And on the key question of overlapping issues (whatever the timing),
Huawei is consistently in agreement with the district court’s Gallo analysis. Huawei
fails to show any abuse of discretion.
38
3. The District Court Reasonably Found That Its Temporary

Injunction Will Impose No Intolerable Impact On Comity
With respect to the final antisuit injunction requirement, the district court
reasonably found (Appx20) that the effect of such relief on international comity
would be “negligible.” See Microsoft, 696 F.3d at 881; Gallo, 446 F.3d at 991. As
the Ninth Circuit has explained: “comity is less likely to be threatened in the context
of a private contractual dispute than in a dispute implicating public international law
or government litigants,” and “‘the sweep of the injunction should be no broader
than necessary to avoid the harm on which the injunction is predicated.’” Microsoft,
696 F.3d at 887 (quoting Laker Airways, 731 F.2d at 933 n.81).
Here, the district court properly relied on the narrow “scope of the injunction”
that Samsung requested, noting that “Samsung seeks only to enjoin Huawei from
enforcing the Chinese injunctions,” and that (given the December trial date) the
injunction is “estimated to last less than six months.” Appx20. Moreover, the
district court observed, the Shenzhen injunctions are on appeal, and will not become
“final” for at least “a few months” (Appx20)—during which time there is not even
an enforceable injunction subject to the antisuit order. Indeed, this appeal could be
argued and decided before any injunction in China becomes enforceable. In an
event, the injunction’s substance is also narrow, covering only “a particular order
dealing with two patents” and “a specific form of relief”—meaning that Huawei is
free to pursue other actions and remedies in China, including by litigating the
39
pending appeals, and even by bringing new claims “to seek damages for
infringement of its Chinese parents while this action is pending.” Appx20. As the
district court observed in denying Huawei’s motion to alter or amend the injunction,
these considerations independently support its finding that “the injunction’s impact
on comity is tolerable,” separate and apart from any issue relating to the timing of
the parties’ pleadings. Appx27. Microsoft found no abuse of discretion on
materially identical facts, 696 F.3d at 888, and this Court should follow the Ninth
Circuit’s lead.
Huawei largely disregards the district court’s actual analysis, arguing instead
(Br. 43) that the antisuit injunction “gravely offends comity because it nullifies the
outcome of a complete and fair proceeding in China.” The assertion is incorrect on
multiple levels. For one thing, the Shenzhen injunctions are not “nullifie[d]”: Once
final, they may be enforced by the Chinese courts themselves, and would be
enforceable to the extent the district court’s injunction is not extended after trial.
Moreover, even assuming arguendo that proceedings in China were “fair,”11 they are
not “complete”: The Shenzhen court did not fully resolve the parties’ FRAND
11
The district court made no finding on the question of the Chinese proceedings’
fairness, but (contra Huawei Br. 47-48) there was nothing “illegitimate” about
Samsung pointing out the Chinese proceedings do not follow U.S. procedures for
liberal pre-trial discovery, and do not provide for the same rights to counsel and trial
by jury.
40
dispute (leaving, inter alia, the royalty rates and license structure to be established),
and Samsung’s appeal means that the Shenzhen injunctions themselves are not final.
Huawei is also wrong in its related contention (Br. 45-46) that the district
court’s order offends comity because it “deprives Huawei of its legitimate
intellectual property rights in China.” To the contrary, Huawei still holds all its
Chinese patents, and remains free to enforce all of them (even the two affected by
the antisuit injunction) through actions for damages. And Huawei is also free to
defend the Shenzhen injunctions against Samsung’s appeals in the Chinese courts.
The only effect of the district court’s order is temporarily to prevent Huawei from
using injunctions on two Chinese patents to short-circuit this both litigation and the
entire course of the parties’ negotiations over a FRAND cross-license that would
govern thousands of patents issued worldwide. That result, which preserves both
parties’ contractual rights and obligations, does not offend comity. To the contrary,
the Ninth Circuit has repeatedly “emphasized that an anti-suit injunction in the
service of ‘enforcing a contract’ between private parties does not ‘breach[] norms of
comity,’ even if, absent that contract, one party might have enjoyed different
procedural or substantive advantages under another country’s law.” Microsoft, 696
F.3d at 888 (emphases added; quoting Gallo, 446 F.3d at 994).
Huawei is incorrect to contend (Br. 45) that the antisuit injunction is harmful
to comity despite its limited and temporary nature “because it was expressly crafted
41
to allow the U.S. district court to sit as a court of review for the Chinese decision.”
Under controlling Ninth Circuit law, “the propriety of an anti-suit injunction” does
not “turn[] upon the merits of the foreign suit under foreign law,” and “the mere fact
that different jurisdictions answer the same legal question differently does not,
without more, generate an intolerable comity problem.” Microsoft, 696 F.3d at 888.
Thus, for instance, in Microsoft, comity did not bar the U.S. courts from granting
antisuit relief to permit independent consideration of the effects of Motorola’s
FRAND commitment, even though the German court had already ruled that such a
commitment did not foreclose an injunction. See id. at 888-89. The same result
follows here.
Huawei’s assertion (Br. 8) that the district court’s opinion will lead to a flood
of collateral attacks on foreign rulings is unfounded and ludicrous, for the
circumstances presented here are exceptional if not wholly unique. As part of its
deliberate patent holdup strategy, Huawei chose to file an action in the United States
seeking sweeping relief on a wide range of FRAND-related claims, including breach
of contract. Huawei also “simultaneously” filed a series of related SEP-based
injunction actions in its home forum abroad. The district court’s order is narrowly
tailored to those facts, follows established legal precedent, and simply permits this
action to proceed to resolution of the relief Huawei itself requested. Huawei
42
provides no basis to conclude that affirmance will open the door for all companies
that are unhappy with the results of foreign litigation to seek to enjoin those results.
Contrary to Huawei’s cursory contention (Br. 43), Microsoft is not
distinguishable on grounds that the “German court issued an injunction in a later
filed case without consideration of the parties’ FRAND obligations.” Again, the
district court correctly found that “Huawei filed the Chinese actions the day after it
filed the complaint here” (Appx20), and in any event the order of filings is “not
dispositive,” Microsoft, 696 F.3d at 887. Moreover, Huawei’s assertion (Br. 43) that
the German court in Microsoft did not “consider[] … the parties’ FRAND
obligations” is misleading: the German court in fact ruled that Motorola was entitled
to an injunction because (among other things) Microsoft could not enforce
Microsoft’s contractual FRAND obligations, and the Ninth Circuit blocked
enforcement of that injunction based on its contrary resolution of the question. See
Microsoft, 696 F.3d at 887-88. That result dictates the outcome here. And this is
particularly so given that the Chinese courts have not even issued a final decision
that could be given issue-preclusive effect in this action—meaning that there is not
even a conclusive foreign judgment to which the U.S. courts could defer if Huawei
had shown that it would be proper to do so. See supra, at 27-29.
Huawei’s argument (Br. 46) that the district court’s order “would undermine
foreign trade” is farcical. It is Huawei’s position that threatens to stifle commerce:
43
Given China’s status as a center of high-tech manufacturing, routine enforcement of
injunctions like those issued by the Shenzhen court would encourage patent holdup
while discouraging companies both from investing in foreign markets and from
participating in technological standards. To the extent “cooperation” is implicated
here (see id.), it must be a two-way street: It is not in keeping with principles of
comity or equity for Huawei to use two single-patent foreign injunctions as leverage
to force Samsung to abandon its own claims in this forum and to enter into a supra-
FRAND settlement covering the parties’ entire SEP portfolio. Nor has the district
court claimed the mantle of “sole arbiter[] of FRAND licensing disputes” (contra
Huawei Br. 47); its order is intended only to ensure that the court is able to decide
the particular issues presented to it for decision by the parties to this litigation.
Refusal of an antisuit injunction, in contrast, would turn the Shenzhen court into the
“sole arbiter” of the parties’ FRAND dispute, even though it was presented with only
a handful of single-SEP infringement claims and not the overarching “contractual
umbrella” that is here at issue. See Microsoft, 696 F.3d at 883.
Finally, nothing but speculation supports Huawei’s suggestion (Br. 48-49)
that the district court’s order will encourage foreign nations to “claim the exclusive
right to decide overlapping issues ‘in the first instance’ and to assess ‘the propriety’
of U.S. court decisions.” Again, the district court has claimed only the authority to
decide the private contractual claims presented to it—which have not been resolved
44
by the Chinese courts. Comity does not require the district court to abstain from the
exercise of that authority. Huawei has identified no abuse of discretion.
B. The District Court Correctly Applied Governing Ninth Circuit

Law In Granting The Antisuit Injunction
Unable to establish an abuse of discretion under the controlling Gallo test,
Huawei attempts (Br. 49-58) to manufacture legal error by arguing that Gallo and
its progeny do not circumscribe the inquiry, and that Samsung was also required to
satisfy the general test for establishing entitlement to preliminary injunctive relief.
That is incorrect as a matter of law, as controlling Ninth Circuit precedent makes
clear that a different test applies in the unique context of a foreign antisuit injunction.
And Huawei’s argument is in any event immaterial, for (as the district court
reasonably found) the same facts that satisfy the Gallo test also establish the
elements of the general injunction standard: Samsung faces irreparable harm if the
Shenzhen injunctions go into effect, and the balance of the equities and the public
interest both strongly favor temporary relief against enforcement of those orders so
that the district court may hold a trial.
1. Gallo Supplies The Sole Test For Determining The Propriety

Of An Antisuit Injunction Under Ninth Circuit Law
The district court correctly ruled that in the context of Samsung’s motion for
a foreign antisuit injunction, the court “need not analyze the traditional … factors
for obtaining a preliminary injunction,” but should “only focus on the three-part
45
inquiry under Gallo.” Appx8; see Appx23. As the district court concluded (Appx8),
the Ninth Circuit’s case law firmly “establish[es] a three-part inquiry for assessing
the propriety of [a foreign antisuit] injunction”—namely, the three-part Gallo test
described above. Microsoft, 696 F.3d at 881. And that is the sole test for granting
a foreign antisuit injunction under Ninth Circuit law: None of Microsoft, Applied
Medical, or Gallo analyzed any other factors in determining that a foreign antisuit
injunctive was appropriately granted. In fact, “the Ninth Circuit has repeatedly
reversed district courts for failure to issue an anti-suit injunction where the Gallo test
is met”—without considering whether the ordinary factors applicable outside the
foreign antisuit context were satisfied. Parasoft Corp. v. Parasoft S.A, 2015 WL
12645754, *6 (C.D. Cal. Feb. 19, 2015) (citing Gallo and Applied Medical). As the
district court in Microsoft explained, “the absence of any mention of the Winter
factors by the Applied Medical Distribution court” shows that those factors are
inapplicable in the antisuit context. 871 F. Supp. 2d at 1097. District courts in the
Ninth Circuit have thus repeatedly granted foreign antisuit relief without considering
the general injunction factors. See, e.g., Parasoft, 2015 WL 12645754; Gilbane
Federal v. United Infrastructure Projects FZCO, 2014 WL 4950011 (N.D. Cal. Sept.
24, 2014); Ilyia v. El Khoury, 2014 WL 12683678 (W.D. Wash. May 16, 2014);
Oracle Am., Inc. v. Myriad Grp. AG, 2012 WL 146364 (N.D. Cal. Jan. 17, 2012).
46
Huawei is incorrect to argue (Br. 49-51) that the district court was required to
undertake a full analysis of the four general injunction factors described in Winter,
555 U.S. 7. That 2008 decision predates the Ninth Circuit’s controlling decisions in
Microsoft and Applied Medical, and therefore cannot have overruled them: A “prior
circuit decision on a question of federal law is binding on a three-judge panel in the
absence of an intervening Supreme Court decision,” Glazing Health & Welfare Fund
v. Lamek, 2018 WL 3470601, *4 (9th Cir. Mar. 21, 2018) (emphasis added) (citing
Miller v. Gammie, 335 F.3d 889, 892-93 (9th Cir. 2003) (en banc)), and Winter is
not such an “intervening” decision vis-à-vis Microsoft and Applied Medical. Those
decisions therefore define the law applicable in this case. See, e.g., United States v.
Dunn, 728 F.3d 1151, 1156 (9th Cir. 2013) (panel “must follow [prior decision]
unless there is intervening Supreme Court authority or en banc authority to the
contrary”); Al Ramahi v. Holder, 725 F.3d 1133, 1138 n.2 (9th Cir. 2013) (“in the
absence of any intervening higher authority [appellate panels] are bound by” prior
decisions); accord Deckers Corp. v. United States, 752 F.3d 949, 964 (Fed. Cir.
2014) (same principle; collecting cases).
Huawei is also wrong in asserting (Br. 50-51) that Microsoft merely
“supplemented the Winter standard for cases involving antisuit injunctions,” and
held “only that Gallo can serve as a proxy for one prong of the Winter test, likelihood
of success.” That reading of Microsoft rests on a single clause of a single sentence,
47
which does not comport with the balance of the Ninth Circuit’s reasoning: The court
considered only the three-part Gallo test in affirming the district court’s injunction,
see 696 F.3d at 882-89—disregarding the district court’s alternative discussion of
the general injunction test,12 and rejecting sub silentio the appellants’ contention that
the general factors mandated reversal.13 In contending (Br. 51) that Microsoft “did
not hold” that the general injunction factors “can be ignored,” Huawei would have
this Court overlook the fact that the Ninth Circuit itself ignored those factors in
reaching its decision.
Huawei’s reading of Microsoft is also incompatible with Gallo, which ruled
that an antisuit injunction applicant “need only demonstrate that the factors specific
to an anti-suit injunction weigh in favor of granting the injunction.” 446 F.3d at 991.
Applying that holding, the Ninth Circuit did not address any of the general injunction
factors before reversing and remanding with express “instructions to enter a
preliminary injunction barring [the defendant] from proceeding with litigation in
Ecuador.” Id. at 995. And the Ninth Circuit did the same thing in its post-Winter
decision in Applied Medical—reversing and remanding “to the district court for it to
12
Microsoft, 871 F. Supp. 2d at 1102-03. The district court explained that it
considered the general injunction factors only “[f]or completeness”—
acknowledging that those factors were not necessary to its ruling. Id. at 1097 n.10.
13
See Opening Brief of Defendants-Appellants 39-46, Microsoft Corp. v. Motorola,
Inc., No. 12-35352 (9th Cir. May 30, 2012) (ECF 14).
48
order an anti-suit injunction” without considering the general four-factor test.
587 F.3d at 921.14 The Ninth Circuit could not have outright reversed and directed
entry of injunctions in those cases, without even purporting to consider the general
injunction factors, absent a holding that those factors are flatly inapplicable in the
foreign antisuit context under Ninth Circuit law.
Particularly when read in light of prior Ninth Circuit precedent, Microsoft is
not fairly read (contra Huawei Br. 51) to hold that only “the likelihood-of-success
aspect of the traditional preliminary injunction test is replaced by the Gallo test,”
696 F.3d at 884. The court applied its own prior precedents, which unmistakably
hold that Gallo overwrites the entire test. To the extent that a single clause in a 17-
page decision could be read to suggest the contrary, that clause “is dicta, as it is
not necessary to the holding in that case and does not appear to originate from
reasoned consideration,” Scott v. Gino Morena Enterprises, LLC, 888 F.3d 1101,
1110 (9th Cir. 2018), and such dicta must give way to the prior controlling decisions
14
Although Applied Medical involved not a preliminary injunction but a permanent
one requested upon entry of final judgment, see 587 F.3d at 913, it post-dated the
Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388
(2006), holding that either type of injunction generally requires irreparable harm and
favorable findings regarding the balance of the equities and the public interest.
Compare id. at 391 with Winter, 555 U.S. at 20 (same factors generally apply with
respect to preliminary relief). Thus, if the general injunction standard were
applicable to foreign antisuit injunctions (which is not the case), the Ninth Circuit
would have applied that standard in Applied Medical.
49
in Gallo and Applied Medical. See Glazing Health, 2018 WL 3470601, at *4. Those
precedents foreclose Huawei’s argument that the general injunction test should
apply.
2. The District Court In Any Event Reasonably Concluded

That The General Injunction Factors Are Satisfied
Although the Gallo test is the excusive means of “assessing the propriety of
[a foreign antisuit] injunction,” Microsoft, 696 F.3d at 881, the district court properly
found in the alternative that the generally applicable injunction factors support relief
here (Appx23). As the district court explained, the “analysis of these factors largely
tracks that of the district court in Microsoft Corp. v. Motorola, Inc., 871 F. Supp. 2d
1089, 1102-04,” and “overlap[s] … the Unteweser factors” discussed above.
Appx23. Huawei shows no abuse of discretion in the district court’s analysis.
(a) Enforcement Of The Shenzhen Injunctions Would

Cause Irreparable Harm To Samsung By Forcing
Cessation Of Chinese Operations Or Acceptance Of
Non-FRAND Licensing Terms
The district court correctly found that “Samsung faces irreparable harm in
closing its manufacturing plant and ceasing the sale of infringing devices in China.”
Appx23. And Huawei rightly does not dispute that, standing alone, the forced
closing of Samsung’s Chinese operations would constitute irreparable harm.
Instead, Huawei argues (Br. 53-54) that Samsung could “avoid any such harm” by
acquiescing to a “third-party determination of FRAND terms” or accepting a license
50
on what Huawei deems to be “FRAND terms.”15 Those alternatives, however,
would only replace one form of irreparable harm with another. If Samsung were to
submit the parties’ extraordinarily complex FRAND licensing dispute to a third
party adjudicator (see supra, at 34-36), it would lose its right to negotiate FRAND
terms—and could find itself irrevocably (and thus irreparably) locked into license
terms to which it would never have voluntarily assented. And Huawei’s putative
“FRAND” offers do not, in fact, meet the criteria for qualifying as such—Samsung
would agree to them only under the duress of the Shenzhen injunctions, and would
then find itself irreparably bound by terms are neither fair nor reasonable nor non-
discriminatory.
Thus, regardless of which of Huawei’s “options” Samsung were to “choose”
upon a hypothetical vacatur of the district court’s antisuit order, it would be faced
with irreparable harm. And that harm would not be “self-inflicted” (contra Huawei
Br. 54), because Samsung has not “acted to permit the outcome which [it] find[s]
unacceptable,” Caplan v. Fellheimer Eichen Braverman & Kaskey, 68 F.3d 828, 839
(3d Cir. 1995) (cited in Huawei Br. 54). Instead, the catalyst of Samsung’s injury
15
Again, the Shenzhen court’s putative determination that Huawei’s offers
complied with FRAND principles is not final and has not been shown to, or even
properly argued to, have preclusive effect in this action. See supra, at 27-29.
Huawei’s efforts (Br. 53, 54, 55, 57) to treat the order as determinative of the parties’
FRAND contract claims here, or of the reasonableness of their respective licensing
proposals, are entirely unsupported.
51
would be the imposition of the Shenzhen court’s injunctions, without which
Samsung faces no compulsion to assent either to an inappropriate third-party term-
setting process or to Huawei’s unacceptable licensing proposal. In contrast, if the
injunction were allowed to go into force, Samsung would be compelled to accept
one of the latter two options—to its irreparable detriment. The district court’s
antisuit injunction is an appropriate means of averting any such injury.
(b) The Balance Of The Equities Favors A Temporary

Stay Of Enforcement Of The Shenzhen Injunctions
The district court also properly found that the “balance of equities tips in
Samsung’s favor” because enforcement of the Shenzhen injunctions would place
Samsung “in an untenable bargaining position, which would have lasting effects,
whereas Huawei is only being enjoined for approximately six months.” Appx23
(citing Microsoft Corp. v. Motorola, Inc., 871 F. Supp. 2d at 1103). Huawei,
moreover, is not facing any irreparable injury of its own as a result of the antisuit
injunction, since it has committed to license its SEPs and may sue to collect any
royalties it may be owed. See Apple, 757 F.3d at 1332 (FRAND-obligated patentee
will have “difficulty establishing irreparable harm” for this reason). It is therefore
unsurprising that Huawei has not sought a stay of the district court’s antisuit
injunction pending appeal—which would have required (inter alia) a showing that
the order causes irreparable harm to Huawei. See, e.g., Chamberlain Grp., Inc. v.
Techtronic Indus. Co., 676 F. App’x 980, 984 (Fed. Cir. 2017) (unpublished)
52
(appellant’s “failure to demonstrate irreparable injury” defeated motion for stay of
injunction pending appeal).
Huawei argues (Br. 55) that that the equities are in Huawei’s favor because it
commenced a multi-forum litigation campaign “in an effort to resolve its dispute
with Samsung.” That is absurd: Absent an antisuit injunction, Huawei would
“resolve its dispute with Samsung” by using the Shenzhen injunctions as a
“bargaining chip” (Appx5637) in an explicit holdup strategy to impose unfair,
unreasonable, and discriminatory licensing terms upon Samsung. Equity and public
policy do not favor any such resolution.
Huawei’s complaint (Br. 55-56) that the district court’s “injunction is
inequitably one-sided” is answered by the fact that Samsung has not obtained any
injunction comparable to those issued by the Shenzhen court. Accordingly, there is
nothing for a reciprocal injunction to enjoin. Nor is Huawei “left without recourse”
(Br. 56) against Samsung’s as-yet-unsuccessful requests for orders enjoining
Huawei’s infringement, for Huawei is free to oppose the requests and/or to challenge
any eventual order in any lawful manner.
(c) The Public Interest Favors A Temporary Stay Of

Enforcement Of The Shenzhen Injunctions
Finally, the district court reasonably concluded that “the public interest lies in
this court adjudicating the propriety of injunctive relief” rather than allowing
Huawei to use the Shenzhen injunctions to force an end to the litigation through a
53
holdup settlement. Appx24. The public interests discussed above (see supra, at 25-
32) apply equally to this factor (contra Huawei Br. 57-58): The public interest lies
with the district court protecting the exercise of its own jurisdiction, and militates
against injunctive relief for SEP infringement.
Huawei turns the public interest upside-down in suggesting (Br. 58) that it
should be allowed to leverage the Shenzhen court’s two single-SEP injunctions to
force Samsung to pay what Huawei wrongly claims to be “reasonable
compensation[] on FRAND terms.” In fact, Huawei could recover such “reasonable
compensation” by pursuing damages claims against Samsung in the appropriate
courts. Enforcement of the Shenzhen injunctions would not further that aim, but
would instead compel Samsung to accept unreasonable, supra-FRAND terms.
Public policy strongly disfavors such a result, and thus supports the district court’s
temporary antisuit injunction. The district court did not abuse its discretion.
CONCLUSION
The district court’s orders should be affirmed.
Dated: August 27, 2018 Respectfully submitted,
/s/ Charles K. Verhoeven

Kevin P.B. Johnson Charles K. Verhoeven
Victoria F. Maroulis Carl G. Anderson
QUINN EMANUEL URQUHART & QUINN EMANUEL URQUHART &
SULLIVAN, LLP SULLIVAN, LLP
555 Twin Dolphin Dr., 5th Floor 50 California Street
Redwood Shores, CA 94065 San Francisco, CA 94111
(650) 801-5000 (415)875-6600
54
charlesverhoeven@quinnemanuel.com
Thomas D. Pease
Cleland B. Welton II
QUINN EMANUEL URQUHART &
SULLIVAN, LLP
51 Madison Avenue, 22nd Floor
New York, NY 10010
(212) 849-7000
Attorneys for Defendants-Appellees Samsung Electronics Co., Ltd. et al.
55
PROOF OF SERVICE
I hereby certify that on August 27, 2018, I caused the foregoing to be
electronically filed with the Clerk of the Court for the United States Court of Appeals
for the Federal Circuit by using the appellate CM/ECF system. Service will be
accomplished via electronic mail.
/s/Charles K. Verhoeven
Charles K. Verhoeven
56
CERTIFICATE OF COMPLIANCE
This brief complies with the type-volume limitation of Federal Circuit
Rule 32(a), because it contains 12,646 words, excluding the parts of the brief
exempted by Federal Rule of Appellate Procedure 32(f) and Federal Circuit R. 32(b).
This brief complies with the typeface requirements of Federal Rule of
Appellate Procedure 32(a)(5) and the type style requirements of Federal Rule of
Appellate Procedure 32(a)(6), because it has been prepared in a proportionally
spaced typeface using Microsoft Word 2013 in 14-point Times New Roman font.
This brief complies with the limitations set forth in Federal Circuit Rule 28(d),
because it contains 15 words (including numbers) marked as confidential.
Dated: August 27, 2018 /s/Charles K. Verhoeven

Charles K. Verhoeven
57

18-08-27 Samsung Appellate Brief

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Case: 18-1979 Document: 42 Page: 1 Filed: 08/27/2018

United States Court of Appeals

NON-CONFIDENTIAL BRIEF FOR APPELLEES

KEVIN P.B. JOHNSON CHARLES K. VERHOEVEN

Counsel for the:

2. Name of Real Party in interest 3. Parent corporations and

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Date Signature of counsel

Please Note: All questions must be answered

TABLE OF AUTHORITIES ..................................................................................... v

STATEMENT OF RELATED CASES ....................................................................ix

PRELIMINARY STATEMENT ............................................................................... 1

A. The Parties ............................................................................................. 4

B. Huawei’s FRAND Obligations And Excessive Royalty Demands

C. Huawei’s Patent Hold-Up Campaign .................................................... 8

E. The District Court Orders .................................................................... 11

2. The Order Denying Huawei’s Motion To Alter Or Amend

I. STANDARD OF REVIEW ........................................................................... 20

II. THE DISTRICT COURT ACTED WITHIN ITS DISCRETION IN

1. The District Court Correctly Found That This Case And

2. The District Court Reasonably Found Unterweser

(a) The District Court Reasonably Found That

(c) The District Court Reasonably Found That The

(d) The Timing Of The Parties’ Pleadings Is Irrelevant ...... 36

B. The District Court Correctly Applied Governing Ninth Circuit

1. Gallo Supplies The Sole Test For Determining The

2. The District Court In Any Event Reasonably Concluded

(a) Enforcement Of The Shenzhen Injunctions Would

(b) The Balance Of The Equities Favors A Temporary

PROOF OF SERVICE ............................................................................................. 56

CERTIFICATE OF COMPLIANCE ....................................................................... 57

CONFIDENTIAL MATERIAL OMITTED

confidential manufacturing and sales information. The material omitted on pages

10 and 28 describes Huawei’s confidential information about licensing.

Applied Med. Distrib. Corp. v. Surgical Co. BV,

Apple Inc. v. Motorola, Inc.,

Apple, Inc. v. Motorola Mobility, Inc.,

Apple Inc. v. Motorola Mobility, Inc.,

Caplan v. Fellheimer Eichen Braverman & Kaskey,

Chamberlain Grp., Inc. v. Techtronic Indus. Co.,

E. & J. Gallo Winery v. Andina Licores S.A.,

Ericsson, Inc. v. D-Link Sys., Inc.,

Glaxo Grp. Ltd. v. TorPharm, Inc.,

Glazing Health & Welfare Fund v. Lamek,

Howsam v. Dean Witter Reynolds, Inc.,

i4i Ltd. P’ship v. Microsoft Corp.,

Jones v. United States,

Kendall v. Visa U.S.A., Inc.,

Laker Airways Ltd. v. Sabena, Belgian World Airlines,

Microsoft Corp. v. Motorola, Inc.,

Microsoft Corp. v. Motorola, Inc.,

Microsoft Corp. v. Motorola, Inc.,

Novartis Pharm. Corp. v. Abbott Labs.,

Parasoft Corp. v. Parasoft S.A,

Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren,

Realtek Semiconductor Corp. v. LSI Corp.,

Sanofi-Aventis Deutschland GmbH v. Genentech, Inc.,

Santa Margherita, S.p.A. v. Weine,

Scott v. Gino Morena Enterprises, LLC,

TCL Commc’n Tech. Holdings, Ltd. v. Telefonaktiebolaget LM Ericsson,

United States v. Dunn,

In re Unterweser Reederei GMBH,

Williamson v. Citrix Online, LLC,

Zynga, Inc. v. Vostu USA, Inc.,

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