Sun Patent Trust seeks French courts’ first ever global FRAND decision in new Xiaomi suit

Xiaomi has been sued for alleged SEP infringement by Sun Patent Trust at the Paris Judicial Court. It is an extremely rare patent assertion by the Delaware-based IP owner and the first time an SEP holder has sought a global FRAND determination from a French court. 

Sun Patent Trust announced today that it has asserted several SEPs relating to the LTE-Advanced standard against Xiaomi, following the collapse of licensing negotiations that took place over more than four years. A global FRAND rate determination is being sought from the Paris court, while parallel SEP actions are underway in other markets including India, it has revealed. Xiaomi must license 167 patent families, Sun Patent Trust argues.

This is only the second patent enforcement campaign Sun Patent Trust has embarked on since its establishment in 2015. It has generally sought to monetise its portfolio of over 3,000 former Panasonic patents by joining pools, including programmes run by Avanci, MPEG-LA and Velos. 

However, in 2020, it sued Taiwanese implementer HTC at the US District Court for the Eastern District of Texas, alleging infringement of four patents relating to the LTE-A standard. That litigation was settled in June 2021.

This time around, the Paris Judicial Court has been asked to resolve the Xiaomi dispute because France is the home of ETSI, Sun Patent Trust states, explaining its choice of venue – a key strategic consideration for any SEP dispute. 

However, despite the presence of the key standardised telecommunications technology development body, France’s courts have until played a relatively minor role in global SEP/FRAND legal disputes. 

While German regional courts remain go-to venues for SEP owners seeking injunctive relief, the only European country whose courts have set global FRAND rates is the UK. 

China – a favourite jurisdiction for net-implementers – also recently set the terms of a worldwide FRAND licence for the first time, whereas Indian courts – which are increasingly popular among SEP holders – have also announced their willingness to decide global FRAND rates. US litigation is a frequently used tool, despite the difficulty of obtaining SEP injunctions in the world’s largest economy. Meanwhile, the Unified Patent Court and the Brazilian courts are playing increasingly prominent roles in global SEP spats. 

In contrast, there have only been a small number of French SEP lawsuits, most of which have been initiated by implementers. 

However, the Paris Judicial Court has made its willingness to hear FRAND disputes known in recent years. In 2020, it declared that it had jurisdiction to hear a global FRAND dispute between patentee Philips and Chinese implementer TCL. While Philips had opted to sue at the High Court of England and Wales, TCL had launched an action in France, citing the presence of ETSI. The Paris court agreed that it had jurisdiction, rejecting a challenge by Philips. This dispute settled before the court had chance to hand down a decision. 

Then, in 2021, the Paris Judicial Court reaffirmed its right to rule on FRAND questions – even when the patentee had not filed suit in France. Interestingly, it was Xiaomi which asked the Paris court for a FRAND determination on this second occasion. This followed assertions by Philips in the UK, Germany, the Netherlands and Spain. This dispute also settled before the French court made any rulings. 

“French judges believe they have the jurisdiction to render decisions on SEPs [and SEP licences], because France is the location of ETSI,” French Lawyer Matthieu Dhenne told IAM in late 2022. “They are willing to fix the royalties for a licence. They have not done it yet, but they want to do it.” For this reason, more and more clients were discussing potential French SEP/FRAND cases with him, Dhenne revealed.

Recent examples of SEP disputes at the Paris court are the French lawsuits filed by Nokia against Oppo. These resulted in at least two invalidity decisions against the Finnish company’s cellular SEPs. 

However, until now there appears to have been no SEP suits filed by patent owners seeking a worldwide licence rate determination from the French courts. How Sun Patent Trust fares will influence whether other IP owners follow its example.