On December 28, Chief Judge Rodnay Gilstrap of the United States District Court for the Eastern District of Texas granted Ericsson an unprecedented--and in my view, outrageously overreaching--temporary restraining order (TRO) against Samsung's pursuit of a Chinese action intended to resolve a global FRAND rate dispute. Samsung had pre-empted Ericsson's December 12 action in Texas by bringing a complaint five days earlier in the Intermediate People's Court in Wuhan, China, a court that has previously enaged in global FRAND rate-setting. Yesterday (i.e., on New Year's Day), Samsung filed its opposition (this post continues below the document):
21-01-01 Samsung Opposition... by Florian Mueller
THe most spectacular part of that opposition filing is not even the main document, but an attached sworn declaration by former Federal Circuit Chief Judge Professor Randall R. Rader, which I published and discussed in my previous post.
Also, I guess Judge Gilstrap is simply going to convert his TRO into a preliminary injunction (PI). The TRO decision was just unbelievable. Besides the three key main issues I already criticized a few days ago, it's also telling that he set a bond of zero dollars, denying Samsung was harmed in the slightest, and the following sentence was astonishing:
"The Court finds a substantial risk of irreparable harm to Ericsson, and to the jurisdiction of this Court, if Samsung were to attempt to enforce or further pursue its antisuit injunction against Ericsson."
He couldn't have made his partiality any clearer. He viewed Samsung's Chinese antisuit injunction as an attack on the Eastern District of Texas. However, there is no basis in U.S. law for extending the concept of "irreparable harm" to a judicial district. If anything, the court's own interests in the integrity of the cases before it are part of the public interest analysis. I just find it so awkward--even in the Eastern District, which says something--that a court would list itself in an enumeration with one of the parties as the ones to be allegedly harmed by an action by another party.
It's hard to think of a clearer way to put partiality--and a court's agenda to attract and handle as many patent cases as possible--on full display.
While it looks like a conversion of the TRO into a PI is a foregone conclusion, Samsung's opposition brief nevertheless makes some points that could give even Judge Gilstrap pause--and make it a slam dunk before the appeals court (which will be the Federal Circuit, as Ericsson has meanwhile thrown in some patent infringement claims I'll discuss in my net post).
Ericsson's distorted portrayal of the circumstances of the action was basically that Samsung chose China without doing much business there (which is wrong given China's importance as a "manufacturing hub for much of the mobile industry," as Samsung puts it), and because the process is somehow less fair and transparent, a disparagement that former Federal Circuit Chief Judge Professor Randall R. Rader has debunked with his sworn declaration.
While Ericsson stressed its own operations in Texas as well as Samsung's, this is still, at the end of the day, a dispute between a Korean company and a Swedish company over patents subject to a FRAND pledge under French law. And the Ericsson patents at issue are actually owned by a Swedish Ericsson entity.
Samsung says it seeks to avoid "piecemeal litigation" in multiple jurisdictions. It appears to me that Ericsson would also like one court to set a global FRAND rate--though Ericsson might want to bring infringement claims (and requersts for injunctive relief) in multiple places. In fact, one of the strongest arguments Samsung makes against the original TRO--and it's so strong that maybe even Judge Gilstrap can't brush it aside--is that the Texas anti-anti-antisuit injunction would enable Ericsson to bring cases not only in the U.S. but also other places (such as Germany). That's a clear overreach. If the Chinese court found that Ericsson must not pursue, for instance, a German injunction, then there's no way a Texas judge who respects the law and himself could interfere with a Chinese-German antisuit situation.
The opposition brief stresses something that was clear to me just based on Ericsson's motion: the key question on which this anti-anti-antisuit absurdity turns is that a U.S. court could only grant Ericsson's motion on the basis of considering China a totally unfair jurisdiction. Well, there are a few countries in the world, which I don't want to name here, with respect to which that would make sense. But not China.
The two most intersting case references in the opposition brief are Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (or just Karaha), a 2003 decision by the Fifth Circuit to lift an antisuit injunction (and while the appeal here will go to the Federal Circuit, it will apply Fifth Circuit law), and Christianson v. Colt Indus. Operating Corp. (or just Christianson), a 1988 opinion by the Supreme Court warning against a "perpetual game of jurisdictional ping-pong" of antisuit, anti-antisuit, anti-anti-antisuit etc. injunctions. The problem of that "perpetual game" is more pressing now than ever, as I highlighted in October.
Both Ericsson and Samsung have a certain history of U.S. antisuit injunctions, but between them and other parties (such as Samsung v. Huawei). Ericsson's motion discussed parts of it, and Samsung responds. I don't think those other cases are ultimately that relevant. The controlling precedent here is found in Karaha and Christianson.
Samsung explains that the basis on which the Wuhan Intermediate People's Court granted Samsung an antisuit injunction--to protect the first-filed case (which is Samsung's Chinese action), is perfectly consistent with the fact sets based on which some key U.S. antisuit injunctions, including Judge James L. Robart's legendary Microsoft v. Motorola antisuit injunction (affirmed by the Ninth Circuit), were granted.
One of various issues with Ericsson's requested relief is that the Chinese court may impose contempt sanctions sua sponte, without Samsung even bringing a contempt motion, and then Samsung would have to pay Ericsson's fines. It's completely crazy. Seriously, Ericsson can't win this in an appeals court. It's beyond ridiculous. I've seen various motions for antisuit injunctions, and some were stronger (like Microsoft's famous one) than others (such as Continental's motion, which I criticized), but what Ericsson is doing here is an outlier.
Ericsson will reply in three days, and the hearing will be held on the 7th.
Samsung is represented by four (!) law firms in this case: Gillam & Smith (a local East Texas firm), Kirkland & Ellis, Quinn Emanuel, and antitrust-specialized firm Axinn.
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