18-09-06 Huawei Reply Brief (Antisuit Appeal)

Case: 18-1979 Document: 49 Page: 1 Filed: 09/06/2018
No. 18-1979
IN THE 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
Appeal from the U.S. District Court for the Northern District of
California, No. 3:16-cv-02787-WHO, Judge William H. Orrick III
REPLY BRIEF OF APPELLANTS
Constantine L. Trela, Jr.

David T. Pritikin
David C. Giardina
Nathaniel C. Love
SIDLEY AUSTIN LLP
One South Dearborn
Chicago, IL 60603
(312) 853-7000
Counsel for Appellants
September 6, 2018
FORM 9. Certificate of Interest Form 9
Rev. 10/17
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
Huawei Technologies Co., Ltd. et al. Samsung Electronics Co., Ltd.
v.
18-1979
Case No.
CERTIFICATE OF INTEREST
Counsel for the:

(petitioner) (appellant) (respondent) (appellee) (amicus) (name of party)
■
Huawei Technologies Co., Ltd.; Huawei Device USA, Inc.; Huawei Technologies USA, Inc.
certifies the following (use “None” if applicable; use extra sheets if necessary):
2. Name of Real Party in interest 3. Parent corporations and

1. Full Name of Party (Please only include any real party publicly held companies
Represented by me in interest NOT identified in that own 10% or more of
Question 3) represented by me is: stock in the party
Huawei Technologies Co., Ltd. Huawei Technologies Co., Ltd. Huawei Investment & Holding Co., Ltd.
Huawei Device USA, Inc. Huawei Device USA, Inc. Huawei Investment & Holding Co., Ltd.
Huawei Technologies USA, Inc. Huawei Technologies USA, Inc. Huawei Investment & Holding Co., Ltd.
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
or will not enter an appearance in this case) are:
Sidley Austin LLP: Michael J. Bettinger; Cory D. Szczepanik; Curt Holbreich; Douglas I. Lewis; Ellen S. Robbins; Irene I.
Yang; John W. McBride; John P. Wisse; Kevin J. O'Brien; Leif E. Peterson, II; Nathan A. Greenblatt; Rachel R. Davidson
Clark Hill PLC: Russell E. Cass

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).
None.
9/6/2018 /s/ Constantine L. Trela, Jr.
Date Signature of counsel

Please Note: All questions must be answered
Printed name of counsel
Counsel of Record
cc:
Reset Fields
TABLE OF CONTENTS
INTRODUCTION ...................................................................................... 1
REPLY TO STATEMENT OF THE CASE ............................................... 4
A. The Parties’ License Negotiations .......................................... 4
B. Huawei’s Offers to Arbitrate ................................................... 6
C. Huawei’s Chinese Suits .......................................................... 7
D. The Shenzhen Court Decision................................................. 8
ARGUMENT ........................................................................................... 10
I. Microsoft II Offers No Support for the Anti-Suit Injunction. ....... 10
II. The Anti-Suit Injunction Does Not Satisfy the Gallo Test. .......... 15
A. The District Court’s Claimed Worldwide Right to Determine

the Propriety of Injunctions Gravely Offends International
Comity. .................................................................................. 15
B. U.S. Policy Rejects Interminable Delay of FRAND

Negotiations. ......................................................................... 22
C. A Neutral FRAND Determination Would Not Prejudice

Equitable Considerations...................................................... 24
D. Only Samsung’s Later-Filed Counterclaim Could Arguably

“Dispose of” the Shenzhen Actions. ...................................... 27
III. The District Court Failed to Follow the Supreme Court’s

Requirements for Preliminary Injunctions. .................................. 29
A. The District Court’s Decision is Contrary to Winter. ........... 29
B. The District Court’s Cursory Alternative Treatment of the

Winter Factors Cannot Sustain the Injunction. ................... 32
CONCLUSION ........................................................................................ 37
–i–
TABLE OF AUTHORITIES
Page(s)
Cases
Apple Inc. v. Motorola Inc.,

757 F.3d 1286 (Fed. Cir. 2014) ........................................... 2, 22, 23, 36
British Midland Airways Ltd. v. Int’l Travel, Inc.,

497 F.2d 869 (9th Cir. 1974) ............................................................... 18
E. & J. Gallo Winery v. Andina Licores S.A.,

446 F.3d 984 (9th Cir. 2006) ............................................................... 27
Engel Indus., Inc. v. Lockformer Co.,

166 F.3d 1379 (Fed. Cir. 1999) ........................................................... 30
Howsam v. Dean Witter Reynolds, Inc.,

537 U.S. 79 (2002) ............................................................................... 25
In re Innovatio IP Ventures, LLC Patent Litig.,

No. 11 C 2303, 2013 WL 5593609 (N.D. Ill. Oct. 3, 2013) ................. 25
Laker Airways Ltd. v. Sabena, Belgian World Airlines,

731 F.2d 909 (D.C. Cir. 1984) ....................................................... 18, 19
Microsoft Corp. v. Motorola, Inc.,

696 F.3d 872 (9th Cir. 2012) ....................................................... passim

795 F.3d 1024 (9th Cir. 2015) ............................................................. 11

871 F. Supp. 2d 1089 (W.D. Wash. 2012) ..................................... 10, 11

No. C10-1923JLR, 2013 WL 2111217 (W.D. Wash. Apr.
25, 2013) .................................................................................. 10, 11, 25
Southwall Techs., Inc. v. Cardinal IG Co.,

54 F.3d 1570 (Fed. Cir. 1995) ............................................................. 30
– ii –
TCL Comm’cn Tech. Holdings, Ltd. v. Ericsson Inc.,

No. 8:14-CV-341 JVS-DFMx, 2017 WL 6611635 (C.D. Cal.
Dec. 21, 2017) ...................................................................................... 25
United States v. Kashamu,

656 F.3d 679 (7th Cir. 2011) ............................................................... 18
Winter v. Nat. Res. Def. Council, Inc.,

555 U.S. 7 (2008) ................................................................................. 29
Other Authorities
http://europa.eu/rapid/press-release_IP-14-490_en.htm
(visited Sept. 3, 2018) ......................................................................... 26
– iii –
INTRODUCTION
Samsung does not dispute that the Shenzhen Court has already
determined that Huawei complied with its FRAND obligations and that
Samsung did not. In the face of a decision finding that it had
maliciously delayed the negotiations and “clearly violated FRAND
principles,” Samsung argues that only a U.S. court can decide whether
a party has complied with its FRAND obligations. Samsung insists that
a U.S. court can block the consequences of the Shenzhen Court’s ruling
in order to decide the issue of Samsung’s compliance with the FRAND
commitment for itself. As Samsung would have it, if Huawei had filed
suits on the same day in the United States, China, and a dozen other
countries in an effort to resolve the parties’ FRAND dispute, and the
courts of every other country had found that Samsung infringed SEPs,
had not complied with its FRAND obligations, and should be enjoined, a
trailing U.S. court could enjoin enforcement of all of those rulings. That
position makes a mockery of international comity.
Samsung’s response also asks this Court to endorse its tactic of
interminably delaying FRAND license negotiations. In Samsung’s view,
there is no remedy available if one party to a FRAND negotiation stalls
–1–
and engages in unreasonable delay. The Shenzhen Court enjoined
Samsung only after finding that Samsung had engaged in such delay—
applying the same principle this Court recognized in Apple Inc. v.
Motorola Inc., 757 F.3d 1286, 1331-32 (Fed. Cir. 2014).
Specifically, this Court has recognized that while the FRAND
commitment may contemplate negotiations between the parties to
arrive at a FRAND license, that expectation has a limit. Where one
side engages in a strategy of interminable delay, avoiding the
conclusion of a license at all costs, the threat of an injunction may be
necessary to bring that party to the table. See id. The Shenzhen Court
issued its injunctions based on just such findings.
Finally, Samsung’s response confronts the glaring flaw in the
district court’s logic, a flaw that Samsung ignored in its briefing below:
Samsung will not be harmed (much less irreparably harmed) by any
injunction in China, because, as the Shenzhen Court found, Huawei has
already offered to license Samsung on FRAND terms, and Huawei has
repeatedly committed to forego injunctions if Samsung will agree to a
neutral, third-party determination of FRAND terms for a cross-license.
That fact confirms this case has nothing to do with “patent holdup” as
–2–
Samsung claims, and that the district court clearly erred in issuing the
anti-suit injunction.
Trying to paper over that clear deficiency in its case, Samsung
now argues, for the first time, that third parties (arbitrators or courts)
are categorically incapable of determining FRAND terms, such that
even the submission of the parties’ FRAND licensing dispute to a
neutral third party would inflict irreparable harm on Samsung. That
claim is baseless, as demonstrated by numerous FRAND licensing
determinations made by district courts in recent years, as well as the
numerous public announcements of FRAND arbitrations—including
some involving Samsung itself. Moreover, to accept Samsung’s position
that the only license terms that can truly be FRAND are terms that it
says are FRAND, would wholly vitiate the FRAND commitment by
giving one party an unconstrained veto and complete control over
whether any license at all will be concluded and on what terms.
As explained further below, the district court’s anti-suit injunction
fails both the Gallo and Winter tests and offends international comity.
The injunction should be reversed.
–3–
REPLY TO STATEMENT OF THE CASE
A. The Parties’ License Negotiations
Samsung’s response badly mischaracterizes Huawei’s license
offers, which have declined from an initial offer at its publicly disclosed
royalty rate of 1.5% to significantly lower figures. Samsung’s claims
that Huawei was “woodenly clinging to its demand” of 1.5% (Resp. 1)
and that “Huawei maintained that demanded rate [1.5%] throughout its
pre-suit negotiations with Samsung” (Resp. 7) are contradicted by the
record. Samsung’s counterclaims acknowledge that Huawei since mid-
2014 has proposed per unit rates on LTE handsets, see Appx927-928,
that equate to much less than 1.5% of the price of an average Samsung
LTE smartphone. Samsung ignores Huawei’s explanation for the basis
of those per-unit rates, see Appx7398-7420, as well as the further
reductions Huawei made, see Appx7422-7423; Appx7425. Samsung’s
contention that “Huawei changed its position repeatedly” on “terms
defining the structure and scope of the cross-license” (Resp. 7) also
misrepresents the record. Huawei offered different structures to
Samsung in an effort to move toward a concluded license, including
–4–
offers to extend the scope to any portfolio of SEPs Samsung was
interested in licensing. See Appx7215; Appx7375; Appx7432.
Samsung’s description of its own offers ignores that regardless of
differences in relative portfolio strength, Samsung necessarily would be
the net payor to Huawei under any FRAND cross-license because of
Samsung’s significantly larger worldwide sales. Accordingly,
Samsung’s proposals of a license under which Huawei pays or a royalty-
free cross license (see Resp. 7) are clearly not FRAND. As for
Samsung’s single proposal under which it would pay Huawei (see Resp.
7-8), Samsung fails to explain that the offer included a nominal
payment from Samsung to Huawei for past royalties owed on
Samsung’s enormous sales exposure in prior years, but suggested that
Huawei would be the net payor of royalties to Samsung going forward.
Appx7427; Appx7429. The Shenzhen Court analyzed Samsung’s offer
and found it inconsistent with FRAND. Appx5545-5546. Samsung
offers no criticism of that analysis or explanation of why any
adjudicator would reach a different conclusion.
–5–
B. Huawei’s Offers to Arbitrate
Samsung’s allegations of “patent holdup” (e.g., Resp. 2, 8) ignore
Huawei’s offers to end the parties’ entire dispute through a neutral,
third-party determination of FRAND terms. Huawei first offered
arbitration of the parties’ FRAND dispute in May 2013 and has since
made multiple offers to arbitrate, including by drafting and sending a
formal arbitration term sheet for Samsung’s consideration. See
Appx5217-5218; Appx5405-5407; Appx5527-5530; Appx7358; Appx7449-
7451; Appx7453-7455; Appx7457-7459. Huawei confirmed throughout
its briefing below that Samsung could avoid any possibility of an
injunction in China or elsewhere if it would commit to a neutral, third-
party determination of FRAND terms for a cross-license. E.g.,
Appx6716. Samsung has refused, and in briefing on its anti-suit
injunction motion never articulated any basis why arbitration to arrive
at a FRAND cross-license would be inappropriate. The Shenzhen Court
found that Samsung’s rejection of Huawei’s arbitration proposals
“showed that Samsung had no willingness to resolve the license
negotiation dispute, had the subjective fault of maliciously delaying the
negotiations, and clearly violated FRAND principles.” Appx5530.
–6–
C. Huawei’s Chinese Suits
Samsung’s contention that Huawei “secretly filed” lawsuits in
China, including the Shenzhen Actions (Resp. 8), is not accurate.
Huawei informed Samsung by letter on May 25, 2016 that suits had
been filed that day in the United States and in China. Appx7465-7466.
Samsung also mischaracterizes a statement by Jianxin Ding,
Huawei’s head of Intellectual Property, as indicating a “policy to engage
in patent holdup.” (Resp. 8.) Samsung’s selective quotation (Resp. 8-9)
omits the context of the statement, in which Mr. Ding explains that
Huawei views injunctive relief as appropriate where, as here, an SEP
holder is “faced with potential licensees who are negotiating in bad faith
[and are] unwilling to pay fair royalties.” Appx5636-5637. That is the
same position Samsung took when pursuing an ITC exclusion order
against Apple. Appx6780-6781; Appx6857-6858. Nowhere does Mr.
Ding suggest that Huawei intends to use injunctive relief to obtain
anything other than a FRAND royalty. To the contrary, Mr. Ding
emphasized that Huawei seeks “fair royalties,” Appx5636-5637, and his
statement is fully consistent with Huawei’s position on the record in
–7–
this case—that Huawei would forego any injunction in exchange for
Samsung’s acceptance of a neutral determination of FRAND terms.
D. The Shenzhen Court Decision
Samsung’s contention that “the Shenzhen court was not presented
with and never evaluated any breach of contract claims, as presented in
the U.S. action” further misrepresents the record, and contradicts
Samsung’s prior admissions. To be sure, neither party presented the
Shenzhen Court with a formal breach of contract cause of action, but
the Shenzhen Court was asked to evaluate—and did evaluate—whether
Huawei and Samsung had complied with their respective FRAND
obligations. Contrary to its representation to this Court, in its anti-suit
injunction motion below, Samsung acknowledged that “[a]s a predicate
for its requests for injunctive relief, Huawei asked the Shenzhen Court
to resolve whether its licensing efforts with respect to its Chinese SEPs
were FRAND, and whether Samsung refused FRAND offers and
breached its own FRAND obligations,” and admitted that “the
Shenzhen Court addresses these issues in its injunction order.”
Appx5599.
–8–
Samsung attempts to undermine the Shenzhen Court’s decision by
claiming it failed to evaluate “Huawei’s offers in light of key evidence
obtained through discovery in the U.S. district court.” (Resp. 10.)
Samsung claims that “the Shenzhen court did not give any indication it
considered the royalty rates in Huawei’s SEP license with Apple, nor
did it decide whether Huawei’s offers to Samsung were discriminatory
in light of that evidence.” (Id.) Samsung did not advance this
argument in the district court. Waiver aside, the argument is without
merit. As the district court found, Samsung had “full opportunities to
present [its] evidence and arguments” in the Shenzhen proceedings.
Appx4. The Shenzhen Court states that Huawei disclosed the existence
of the Apple license to Samsung, Appx5392-5393; Appx5405-5407, and
its decision analyzes several license agreements in reaching its
conclusion that Huawei had complied with its FRAND obligations.
Appx5355-5356. Samsung does not explain why, given that it knew of
the Apple license, it failed to urge the Shenzhen Court to consider that
license.
–9–
ARGUMENT
I. Microsoft II Offers No Support for the Anti-Suit Injunction.
Samsung’s heavy reliance on Microsoft Corp. v. Motorola, Inc., 696
F.3d 872 (9th Cir. 2012) (“Microsoft II”) (see Resp. 21-24), disregards the
stark factual and legal differences between that case and this one. In
particular, Samsung’s effort to cast itself in the role of Microsoft—the
party that sought a neutral, third-party FRAND determination—is
wholly inapt.
Microsoft initiated a FRAND contract lawsuit in U.S. district
court against Motorola to establish its right to a FRAND license from
Motorola, and asked the court to set a FRAND royalty. Microsoft Corp.
v. Motorola, Inc., 871 F. Supp. 2d 1089, 1099 (W.D. Wash. 2012)
(“Microsoft I”). For the purposes of that proceeding, and in order to
obtain a FRAND license, Microsoft did not contest the essentiality or its
infringement of Motorola’s standard-essential patents. See Microsoft
Corp. v. Motorola, Inc., No. C10-1923JLR, 2013 WL 2111217, at *59,
*61 (W.D. Wash. Apr. 25, 2013) (“Microsoft III”). In short, Microsoft did
everything it could to ensure that it could obtain a license from
Motorola on FRAND terms, and the U.S. district court confirmed its
– 10 –
intent to set those terms. Microsoft I, 871 F. Supp. 2d at 1099 (“[T]he
court will conduct a trial to determine such terms, including a
determination of a RAND royalty rate.”).
In response to Microsoft’s efforts to resolve the parties’ FRAND
dispute with a neutral, third-party, U.S. district court determination,
Motorola filed its German suit in an effort to derail the U.S. FRAND
case. See Microsoft II, 696 F.3d at 879, 886. Motorola pursued that
German injunction while simultaneously demanding royalties that the
U.S. court later determined were vastly in excess of FRAND. Compare
Microsoft Corp. v. Motorola, Inc., 795 F.3d 1024, 1053 (9th Cir. 2015)
(“Microsoft IV”) (“[T]he jury could infer that demanding a 2.25% royalty
rate was not a good-faith effort to realize the value of the technology”),
with Microsoft III, 2013 WL 2111217, at *101 (court-determined RAND
royalty rates for Motorola’s patents total approximately 4 cents per
Xbox, or less than 0.02% per unit). Motorola’s suit thus served no
purpose other than to try to force Microsoft to accept non-FRAND
terms. See Microsoft IV, 795 F.3d at 1046.
Finally, as the Ninth Circuit observed, the German court “rejected
the argument that Motorola’s [F]RAND commitment . . . created a
– 11 –
contract enforceable by Microsoft,” and issued an injunction following a
finding of infringement. Microsoft II, 696 F.3d at 879. The German
court thus rejected the FRAND commitment as a contractual defense,
and issued its injunction without ever evaluating whether Motorola had
complied with its FRAND commitment. In these unique circumstances
(and applying both the Gallo and Winter tests), the district court
granted an anti-suit injunction barring Motorola from enforcing the
German injunction on standard-essential patents against Microsoft, and
the Ninth Circuit affirmed. Id. at 875.
In short, Microsoft II concerns an anti-suit injunction (1) in favor
of a party (Microsoft) that sought a neutral, third-party adjudication of
FRAND terms, (2) against a counter-party (Motorola) that sought to
derail that determination through a later-filed foreign action seeking an
injunction on SEPs in a forum that refused to acknowledge the FRAND
obligation.
Samsung cannot fill Microsoft’s role, because Samsung rejects any
notion that a neutral third party can ever determine FRAND terms.
(See Resp. 34-36, 50-52.) Further, unlike Microsoft, the party seeking
an anti-suit injunction in Microsoft, Samsung refuses to concede that
– 12 –
Huawei’s patents are standard-essential, and insists on contesting
infringement and validity of thousands of patents on a patent-by-patent
basis rather than determining a FRAND royalty at the portfolio level as
the Microsoft court did. See Appx13-15 (“If I take Samsung’s reasoning
to its logical conclusion, I see no end to this case, and certainly no way
for this action to dispose of the parties’ foreign patent actions.”).
Nor can Samsung liken Huawei to Motorola in this scenario.
Motorola filed its German suit six months after Microsoft’s U.S.
complaint in an effort to derail the U.S. FRAND case. But Huawei filed
this suit and the Chinese suits, at the same time, because it did not
know what aspects of the larger dispute each court would be willing to
resolve. It would make no sense to view Huawei’s Chinese suits as an
end run by Huawei around this action, for it was Huawei that filed this
action and thus, under Samsung’s logic, Huawei would be attempting to
derail its own lawsuit. Moreover, as Samsung concedes (Resp. 43), the
German court did not view the FRAND commitment as an enforceable
obligation, and issued its injunction without considering whether either
– 13 –
party had complied with its FRAND obligations. 1 In contrast, the
Shenzhen Court considered and decided the underlying FRAND issues
before determining that an injunction could issue because Samsung (the
infringer) had not complied with its FRAND commitment.
Huawei’s offer of neutral resolution of this FRAND dispute
conclusively determines that Microsoft II offers no support for the anti-
suit injunction. Motorola never offered to forego seeking or enforcing an
injunction against Microsoft in exchange for an agreement to a neutral
determination of FRAND terms. In fact, the entire purpose of
Motorola’s German injunction suit was to avoid any such
determination. In this case, there can be no “patent holdup” or risk to
Samsung’s manufacturing or sales operations because Samsung has
been offered both a license on terms that have been found to be FRAND,
1Huawei’s description of the German case was not “misleading” as

Samsung claims. (See Resp. 43.) The Ninth Circuit explained that the
German court “rejected the argument that Motorola’s RAND
commitment to the ITU created a contract enforceable by Microsoft,
because German law does not recognize third-party contractual rights.”
Microsoft II, 696 F.3d at 879. In other words, the German court issued
an injunction “without consideration of the parties’ FRAND
obligations,” exactly as Huawei stated. (Br. 43.) In the German court’s
view, an injunction could issue regardless of whether any FRAND
obligations existed, and regardless of whether Motorola may have
violated those obligations.
– 14 –
and the alternative of a neutral, third-party determination of FRAND
terms.
II. The Anti-Suit Injunction Does Not Satisfy the Gallo Test.
A. The District Court’s Claimed Worldwide Right to

Determine the Propriety of Injunctions Gravely
Offends International Comity.
The district court claimed an “ability to determine the propriety of
injunctive relief in the first instance,” Appx17, and declared the
“propriety of the precise relief sought in the Shenzhen actions” was for
it to decide,” Appx26. Samsung fails to identify any lawful basis for
that extraordinary claim. Samsung’s vague arguments concerning a
“need to protect the court’s jurisdiction” or need to “maintain the
integrity” of the case (Resp. 26) are circular and have no grounding in
the record, or in what would occur if the anti-suit injunction were not in
place.
First, the district court case below includes competing patent
infringement claims, competing breach of FRAND obligation claims,
and Samsung’s antitrust claim. There is no longer any claim for any
determination of FRAND terms—Samsung refused to consent to such a
determination and moved for judgment on the pleadings on Huawei’s
– 15 –
declaratory judgment claim seeking that relief. To minimize the
disputes before the district court, Huawei agreed to withdraw that
claim. 2 If Samsung were to agree to FRAND terms determined by a
neutral decision-maker (in the face of the Shenzhen injunctions), that
would not threaten the district court’s jurisdiction to decide FRAND
terms, because Samsung has rejected the district court’s authority to do
so in any event. Nor would it threaten the court’s jurisdiction to decide
the FRAND-related question actually before it, namely, whether
Samsung’s conduct up to this point has been a breach of its FRAND
obligation.
Second, a neutral determination of FRAND terms would pose no
more threat to the district court’s jurisdiction over the patent
infringement claims than would parties’ settlement negotiations or
mediation in any ordinary patent case. The FRAND determination
would conclude with a worldwide FRAND cross-license—something
Huawei seeks and Samsung claims it seeks. With such a cross-license
in place, some of the relief sought by Samsung’s antitrust or contract
2 There are currently more than 30 issues presented in summary

judgment and Daubert motions pending before the district court. See
No. 3:16-cv-2787, Dkt. No. 391 (tentative rulings on parties’ motions).
– 16 –
claims (largely consisting of preventing Huawei from enforcing
injunctions) would be moot, and any damages claims could proceed.
The only possible “threat” Samsung might conjure up is that a neutral
FRAND determination would mean that it could no longer hope for an
outcome under which the court permits Samsung to continue its tactics
of interminable negotiation without ever concluding a FRAND cross-
license. Even if such a strange result were possible (and Samsung does
not explain how), there would be no equitable basis to favor it.
Samsung agrees 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.’” (Resp. 27,
quoting Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d
909, 926-27 (D.C. Cir. 1984).) As Huawei explained, that principle
confirms the district court’s error. (Br. 35.) Samsung’s only rejoinder is
that the Shenzhen Court’s decision (currently on appeal) is not yet final,
such that issue preclusion would not yet attach. (Resp. 27-29.)
Samsung is confused. If issue preclusion already attached such that the
Shenzhen Court’s decision could be pled as res judicata, that would
defeat Samsung’s breach of FRAND contract claim in the U.S. district
– 17 –
court, and would require judgment in Huawei’s favor on its own breach
of FRAND contract claim.3 The district court here would have nothing
left to decide. But Huawei is not taking the position that the district
court cannot proceed to trial in December on the parties’ claims, or that
the district court is already bound by the Shenzhen Court’s decision.
Rather, the question is whether (as the district court claimed), the
U.S. court is the only court permitted to proceed to an authoritative
conclusion, as among the parallel proceedings in the U.S. and China.
Laker Airways establishes (in the passage Samsung cites and relies on,
Resp. 27) that both the U.S. and Chinese courts may proceed. Samsung
does not dispute that the Shenzhen Court had every right to adjudicate
3 Samsung’s suggestions that the Shenzhen Court’s decision would not

have preclusive effect were never made to the district court and are
both incorrect and irrelevant. First, U.S. courts “generally give
preclusive effect to [a] foreign court’s finding as a matter of comity.”
United States v. Kashamu, 656 F.3d 679, 683 (7th Cir. 2011). Second,
any differences in the evidence presented or arguments advanced by the
parties (see Resp. 28) would not defeat collateral estoppel. “It has long
been the law that unless a foreign country’s judgments are the result of
outrageous departures from our own notions of ‘civilized jurisprudence,’
comity should not be refused.” British Midland Airways Ltd. v. Int’l
Travel, Inc., 497 F.2d 869, 871 (9th Cir. 1974), citing Hilton v. Guyot,
159 U.S. 113, 205 (1895). Third, Samsung’s suggestion that the
Shenzhen Court failed to analyze the financial terms of Huawei’s offers
(see Resp. 28-29) is refuted by the record. See Appx5541-5544.
– 18 –
the patent infringement dispute placed before it, to analyze the parties’
FRAND conduct, and to issue an injunction. Neither Huawei’s
simultaneous complaint here, nor Samsung’s trailing counterclaims,
“cut off the preexisting right of an independent forum to regulate
matters subject to its prescriptive jurisdiction.” Laker Airways, 731
F.2d at 927.
Samsung’s argument that “the propriety of an anti-suit injunction
does not turn on the merits of the foreign suit under foreign law” (Resp.
42, quotation marks omitted) only confirms the district court’s error.
The district court announced that it would decide “the propriety of the
precise relief sought in the Shenzhen actions.” Appx26. In other words,
the district court would evaluate for itself whether the Shenzhen Court
had reached the right decision.
Samsung’s attempts to diminish the anti-suit injunction’s offense
to comity by pointing to its duration and narrow subject matter (Resp.
39-41) are ineffective. As to the duration of the injunction, the
December jury trial date Samsung identifies (Resp. 39) does not
determine when the district court will resolve any question of equitable
relief associated with Samsung's breach of FRAND or antitrust claims.
– 19 –
Even if the jury were to find for Samsung on such claims,4 there is no
date certain upon which the district court will rule on Samsung’s claims
for equitable relief.
As to the injunction’s scope, dismissing the Shenzhen Court's
reasoned, 200-page decision as “only a particular order dealing with two
patents” (Resp. 39, quoting Appx20) highlights the grave disrespect to
that court’s decision. The order is the final written decision
documenting the adjudication of two of Huawei’s patent-infringement
lawsuits against Samsung. Suppose a foreign court enjoined
enforcement of the judgment of a U.S. district court in a patent-
infringement case on the same rationale—that it was merely a
“particular order dealing with two patents” and “a specific form of
relief.” (Resp. 39.) This Court could hardly be expected to view that as
a “narrow” ruling or a “tolerable” offense to comity.
Samsung also argues that the anti-suit injunction did not “nullify”
the Shenzhen injunctions because “they may be enforced by the Chinese
4The district court has tentatively granted Huawei’s motion for

summary judgment on Samsung’s antitrust claim, see No. 3:16-cv-2787,
Dkt. No. 391 (tentative rulings on parties’ motions), and the Shenzhen
Court already determined that Huawei did not breach its FRAND
obligations.
– 20 –
courts themselves.” (Resp. 40.) That concession further confirms the
district court’s error. If Samsung will be enjoined regardless of what
Huawei does, the district court’s extraordinary offense to international
comity served no purpose. On the other hand, if the Chinese courts will
not enforce the injunctions sua sponte, the district court’s action
nullifies the outcome of the Shenzhen proceedings by preventing
Huawei from seeking enforcement of a remedy to which the Chinese
courts have found it entitled. Moreover, if the Chinese court were to
directly enforce its injunctions, that would only confirm (contrary to
Samsung’s claims, see Resp. 17) that the enforcement of the FRAND
obligation is a public policy concern, not merely an aspect of a
commercial dispute between private parties.5
Samsung confusingly argues that there is less offense to comity
because the Shenzhen cases “are not ‘complete’” in that the Shenzhen
Court “did not fully resolve the parties’ FRAND dispute” because “the
royalty rates and license structure” were not determined. (Resp. 40-41.)
5In any event, Samsung’s assertion that comity concerns are not
implicated where the litigation involves a dispute between private
parties is misplaced—virtually all anti-suit injunction cases involve
such “private” actions, yet comity is always an important consideration.
– 21 –
But determination of “the royalty rates and license structure” is not a
part of the Shenzhen proceeding, for neither party asked that court to
make that determination. And, of course, according to Samsung, no
case could ever fully resolve the parties’ FRAND dispute, because
Samsung insists that no neutral third party could ever adjudicate
FRAND terms. (See Resp. 34-36.) The Shenzhen Court, with a panel of
three judges that held 24 days of hearings and produced a 200 page
decision, completely adjudicated all of the issues placed before it—i.e.,
whether in view of the parties’ FRAND obligations and conduct in
connection with them, an injunction should issue against any Samsung
infringement of Huawei’s Chinese SEPs—and the district court’s anti-
suit injunction has entirely nullified that adjudication.
B. U.S. Policy Rejects Interminable Delay of FRAND

Negotiations.
Samsung’s argument that Gallo’s second prong is satisfied
because the Shenzhen Actions would “frustrate U.S. policies” (Resp. 25)
contradicts this Court’s views on the availability of injunctions on
standard-essential patents as set forth in Apple, and Samsung’s own
prior positions. See Appx6780-6781; Appx6857-6858. Apple holds that
there is no “per se rule that injunctions are unavailable for SEPs,” and
– 22 –
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. Tellingly, Samsung’s
discussion of U.S. policy on this question saves for the end any mention
of this Court’s Apple holding. (See Resp. 30-33.) Samsung argues that
“invocation of that exception would require a finding that Samsung has
refused a FRAND license or engaged in unreasonable delay.” (Resp. 32-
33.) But that is exactly the finding the Shenzhen Court made:
Samsung “had no willingness to resolve the license negotiation dispute,
had the subjective fault of maliciously delaying the negotiations, and
clearly violated FRAND principles.” Appx5530.
None of Samsung’s citations to other decisions (Resp. 30-32)
undermines this Court’s conclusion in Apple, and Samsung does not
even suggest that they do. Instead, Samsung again invokes the spectre
of “blatant patent holdup” (Resp. 31) without any attempt to explain
how a neutral FRAND determination (of terms Samsung admits both
parties are contractually obligated to offer and accept) could possibly
constitute “holdup.” Paying FRAND royalties for standard-essential
patents is not holdup. It is exactly what both Huawei and Samsung
– 23 –
bargained for when they participated in standard-setting and submitted
FRAND declarations.
C. A Neutral FRAND Determination Would Not

Prejudice Equitable Considerations.
Samsung also attempts to support the district court’s finding
under the second prong of Gallo with further, inapt analogies to
Microsoft II. (See Resp. 33-34.) As explained above, that case provides
no support for Samsung’s position or the district court’s findings.
Motorola attempted to use the threat of German injunctions to avoid
any adjudication of FRAND terms. By short-circuiting the FRAND
determination underway in Microsoft’s contract suit in the Western
District of Washington, Motorola sought to force Microsoft to enter into
a license on Motorola’s unilateral, non-FRAND terms. See Microsoft II,
696 F.3d at 880. Here, if anything, Huawei has used the Shenzhen
Court’s ruling for the opposite purpose—to urge Samsung to finally
agree to a neutral determination of FRAND terms that will end the
parties’ dispute.
Samsung’s argument that it would be prejudiced by submitting
the parties’ FRAND dispute to third-party adjudication (Resp. 34-36) is
both waived (because Samsung never made this argument below) and
– 24 –
without merit. First, Howsam v. Dean Witter Reynolds, Inc., 537 U.S.
79, 83 (2002), is irrelevant, because it concerns the “question whether
the parties have submitted a dispute to arbitration”—in other words,
whether there is an enforceable agreement to arbitrate. Huawei has
never argued that the parties have some contractual agreement
requiring Samsung to arbitrate a FRAND cross-license. Instead,
Huawei offered to submit the parties’ FRAND dispute to a neutral
third-party, allowing Samsung to avoid any consequences for having
been found to infringe and to have failed to comply with its FRAND
obligations in China.
Second, Samsung’s contention that resolution of the parties’
licensing dispute is beyond the capabilities of any neutral third-party
(Resp. 35) is contradicted by multiple district court decisions setting
FRAND license terms,6 as well as the numerous public announcements
of FRAND arbitrations—including those involving Samsung itself, see
Appx7190 (announcing outcome of Nokia-Samsung arbitration). In fact,
6See, e.g., Microsoft III, In re Innovatio IP Ventures, LLC Patent Litig.,

No. 11 C 2303, 2013 WL 5593609 (N.D. Ill. Oct. 3, 2013), and TCL
Comm’cn Tech. Holdings, Ltd. v. Ericsson Inc., No. 8:14-CV-341 JVS-
DFMx, 2017 WL 6611635 (C.D. Cal. Dec. 21, 2017).
– 25 –
under its consent decree with the European Union, Samsung committed
that it would not pursue injunctions against licensees who agree to a
court’s or arbitrator’s determination of FRAND terms for a license to
Samsung’s standard-essential patents. 7
Samsung’s lengthy list of supposedly complex issues (Resp. 35)
presents little genuine complexity. Determining “which patents are
subject to the license” is simple—the patents that the parties have
committed to license on FRAND terms, through signed declarations to
the standard-setting organizations. “Which products would be covered”
are those that comply with the relevant standards. Indeed, the parties
effectively reached agreement on all but the economic terms of a cross-
license in the course of the mediation ordered by the Shenzhen Court.
See Appx5444-5445. A neutral third party is fully capable of resolving
any remaining disputed FRAND terms, as the above-cited district court
cases and arbitrations demonstrate.
There is nothing inequitable about a neutral determination of
FRAND terms. The district court’s anti-suit injunction cannot be
7See http://europa.eu/rapid/press-release_IP-14-490_en.htm (visited

Sept. 3, 2018).
– 26 –
defended on the basis of Samsung’s argument (never raised below) that
such a determination would “prejudice equitable considerations” under
the second prong of Gallo.
D. Only Samsung’s Later-Filed Counterclaim Could

Arguably “Dispose of” the Shenzhen Actions.
The first prong of Gallo addresses “whether or not the first action
is dispositive of the action to be enjoined.” Microsoft II, 696 F.3d at 882,
quoting Gallo. As Huawei explained (Br. 37-38), the only aspect of this
case that is even possibly “dispositive” of the question of Huawei’s
entitlement to injunctions on SEPs in China was presented by
Samsung’s August 2016 counterclaims, months after Huawei filed the
Shenzhen Actions. While the Ninth Circuit has said that ordering of
the actions may not be “dispositive,” it is clearly “relevant . . . depending
on the particular circumstances.” Microsoft II, 696 F.3d at 887. The
only example Samsung provides of an anti-suit injunction against an
earlier-filed foreign action is Gallo itself (see Resp. 37), where the
earlier-filed foreign action breached the parties’ forum-selection clause.
See E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984, 994 (9th
Cir. 2006). There are no such circumstances here—to the contrary,
– 27 –
Huawei could file a lawsuit for infringement of Chinese patents only in
China.
Samsung also relies on the district court’s contention that
Huawei’s complaint raised related FRAND issues, because “Huawei’s
compliance with FRAND obligations” could be a condition precedent to
any finding of FRAND breach by Samsung. (Resp. 38.) But as Huawei
explained (Br. 37-38), if Huawei were unsuccessful on its own breach
claim, that would not make its complaint “dispositive of” the Shenzhen
Actions. Samsung “disagrees,” but fails to explain why. (Resp. 38.)
Instead, Samsung claims that the only question is “whether there are
overlapping issues” between the U.S. and Shenzhen cases. (Id.)
“Overlapping issues” is not the test, however. There must be a common
issue such that “the first action is dispositive of the action to be
enjoined.” Microsoft II, 696 F.3d at 882. Here, the U.S. action is not the
“first action.” And even if it were, adjudicating the claims presented in
Huawei’s complaint would not dispose of the Shenzhen Actions.
– 28 –
III. The District Court Failed to Follow the Supreme Court’s

Requirements for Preliminary Injunctions.
A. The District Court’s Decision is Contrary to Winter.
Samsung fails to identify any lawful basis for the district court’s
refusal to follow the Supreme Court’s Winter test, which applies “[i]n
each case” requesting injunctive relief. Winter v. Nat. Res. Def. Council,
Inc., 555 U.S. 7, 24 (2008).
Samsung suggests that district courts in the Ninth Circuit have in
some instances issued anti-suit injunctions without analyzing the
Winter factors, and that some Ninth Circuit decisions approving of anti-
suit injunctions do not analyze them either. (Resp. 46.) But other
district courts’ failure to follow Supreme Court precedent cannot justify
the district court’s ruling here. Moreover, in Microsoft II, the Ninth
Circuit stated that only “the likelihood-of-success aspect of the
traditional preliminary injunction test is replaced by the Gallo test.”
696 F.3d at 883-84. Samsung dismisses this as “a single clause of a
single sentence” (Resp. 47), but it is the Ninth Circuit’s only explicit
statement concerning the interplay between Gallo and the Winter
factors. Microsoft II came after both Gallo and Applied Medical, so to
the extent those decisions could be read to conflict with Winter (see
– 29 –
Resp. 48-49), the Ninth Circuit’s later decision in Microsoft II made
clear that both Samsung’s position and the district court’s analysis are
incorrect: the Winter factors apply in anti-suit injunction cases.8
Samsung does not attempt to distinguish Winter, or otherwise
argue that its view of the Gallo test can be reconciled with Supreme
Court precedent. Instead, Samsung’s apparent view is that the district
court’s decision should be affirmed because it is consistent with Ninth
Circuit cases that Samsung says conflict with Winter. This Court
should reject a reading of Microsoft II and the Ninth Circuit’s other
anti-suit injunction cases that would create such a conflict (the Ninth
Circuit should be presumed to have followed the Supreme Court’s
instructions), and it should certainly not affirm the district court’s
8 Contrary to Samsung’s argument (Resp. 48), it is irrelevant that the

Ninth Circuit did not address the district court’s analysis of the Winter
factors in its decision. Appellate courts routinely affirm district court
decisions without explicitly addressing every aspect of the lower courts’
analysis, or every argument raised by the appellants. E.g., Southwall
Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1584 (Fed. Cir. 1995). See
also Engel Indus., Inc. v. Lockformer Co., 166 F.3d 1379, 1382-83 (Fed.
Cir. 1999) (“The scope of the issues presented to this court on appeal
must be measured by the scope of the judgment appealed from . . . not
by the arguments advanced by the appellant.”).
– 30 –
decision on the ground that the Ninth Circuit has been ignoring
Supreme Court precedent.
Samsung also advances an erroneous timing argument, claiming
that the district court was free to ignore Winter because Applied
Medical (2009) and Microsoft II (2012) post-date Winter (2008), such
that Winter is not “an intervening Supreme Court decision.” (Resp. 47.)
That is a bizarre view of the primacy of Supreme Court decisions.
Where the Supreme Court has announced the law, that announcement
controls, whether it pre-dates or post-dates contrary circuit court
precedent. Moreover, here there is no “prior circuit decision” holding
that the traditional preliminary injunction factors do not apply in the
anti-suit injunction context. Samsung points out only that some
decisions address Gallo without expressly discussing Winter, and then
over-reads that silence as a “holding” that Winter does not apply. (Resp.
48-49.) Even if there were such a Ninth Circuit holding, this Court
cannot follow it because it would directly conflict with Winter.
– 31 –
B. The District Court’s Cursory Alternative Treatment of

the Winter Factors Cannot Sustain the Injunction.
1. Samsung Would Not Be Irreparably Harmed by a

Third-Party Determination of FRAND Terms.
As Samsung concedes, the district court’s only statement about
irreparable harm relied on the hypothetical scenario that Samsung
would have to “clos[e] its manufacturing plant and ceas[e] the sale of
infringing devices in China.” (Resp. 50, quoting Appx23.) But the
district court failed to consider that this would never occur if Samsung
agreed to the FRAND terms the Shenzhen Court found that Huawei
offered or to the neutral third-party determination of FRAND license
terms that Huawei repeatedly offered over the past five years. See
supra at 4-6. Huawei emphasized this point to the district court. See
Appx6716; Appx6728; Appx6733; Appx6737-6738; Appx8538 (“[I]t is not
correct that Samsung faces a ‘risk of harm to [its] operations in China,’
. . . because Samsung can avoid any possibility of an injunction by
agreeing to a FRAND determination by a neutral third party.”) (citing
Appx1-2). The district court clearly erred by ignoring it, because
Samsung would never need to face the “harm” the court relied on.
– 32 –
On appeal, Samsung raises a new argument: that a neutral,
third-party determination of FRAND terms would itself cause
irreparable harm. (Resp. 50-52.) Samsung never made this argument
to the district court, and it is waived. Even if it were not, as explained
above (supra at 24-27) this “irreparable harm” theory is factually and
legally baseless. Neutral third-parties including courts and arbitrators
have resolved FRAND disputes by determining FRAND terms on
numerous occasions in recent years. Granting Huawei a license on
FRAND terms is not irreparable harm—in fact, it is exactly what
Samsung bargained for when it filed binding declarations with the
standard-setting organizations, committing to license its SEPs on
FRAND terms. Nor is accepting a FRAND license to Huawei’s patents
on FRAND terms irreparable harm—when it implemented the
standards in its products, Samsung did so fully aware that it would
likely need to license standard-essential patents, which others
(including Huawei) had committed to license on FRAND terms.
Samsung’s real argument is that it refuses to accept anyone else’s
determination of FRAND terms for a cross-license with Huawei. In
other words, a royalty is only FRAND if Samsung says it is. The
– 33 –
FRAND “negotiation” that Samsung envisions would therefore end only
if Huawei gave up and accepted whatever terms Samsung insists on.
That is not a negotiation, and it is not consistent with the FRAND
commitment.
2. The Balance of Equities Favors Huawei.
As Samsung concedes, the district court’s only suggestion that the
balance of equities tips in Samsung’s favor turns on the same failure to
acknowledge that Samsung could accept a neutral FRAND
determination and avoid any injunction. (Resp. 52.) With that error
corrected, no equities weigh in Samsung’s favor. 9
Samsung’s argument that the equities do not tip toward Huawei
because “Huawei has not sought a stay” of the antisuit injunction (Resp.
52) makes no sense. The district court’s (erroneous) view was that the
enforcement of an injunction in China would threaten “the integrity of”
the case before it. Appx17. Just as a court that has enjoined the
9 Similarly, Samsung’s argument that it is the victim of an “explicit

holdup strategy to impose unfair, unreasonable, and discriminatory
licensing terms” (Resp. 53) requires accepting both that the Shenzhen
Court’s finding that Huawei’s offers complied with FRAND can be
wholly disregarded and that a neutral FRAND determination is
impossible.
– 34 –
demolition of a building would be unlikely to stay that injunction to
allow the demolition to proceed, so too here there is little question that
the district court would have denied a stay, because a stay would have
re-introduced the availability of the Chinese injunctions that the court
erroneously held would demolish the integrity of this action.
Finally, as Huawei explained, the district court has not enjoined
Samsung from enforcing any injunction it obtains in China against
Huawei. Samsung concedes it is pursuing such injunctions (calling
them “as-yet-unsuccessful requests,” Resp. 53), and does not deny that
it has also pursued injunctions on SEPs against others in the past (see
Br. 55-56). Samsung’s flippant response—“Huawei is free to oppose the
requests and/or to challenge any eventual order in any lawful
manner”—affirms the inequity of its position: Samsung can pursue
injunctions on SEPs against others, but any similar injunctions sought
against Samsung necessarily must reflect “an explicit holdup strategy
to impose unfair, unreasonable, and discriminatory terms” and
therefore can be blocked with an anti-suit injunction. (Resp. 53.)
– 35 –
3. The Proposed Anti-Suit Injunction Is Not in the

Public Interest.
Samsung offers little in defense of the district court’s bare
assertion that the “public interest lies in this court adjudicating the
propriety of injunctive relief.” Appx24. Samsung’s argument that the
district court was “protecting the exercise of its own jurisdiction” (Resp.
54) ignores that the Shenzhen Court had every right to review the
parties’ FRAND conduct and issue an injunction in a case filed at least
simultaneously with this case. Samsung offers no explanation of why
the U.S. court should be entitled to “protect[ ]” its jurisdiction at the
expense of the Chinese court. No public interest is served by a U.S.
district court sitting in review of a decision of a Chinese court as if it
were a Chinese appellate court.
Samsung’s contention that the public interest “militates against
injunctive relief” on SEPs (Resp. 54) again fails to address the firm
alignment between the Shenzhen Court’s decision and this Court’s
decision in Apple. Samsung suggests a per se rule against injunctions
on standard-essential patents under any and all circumstances, but
there is no such rule. (See Br. 57-58.) Samsung then argues (again)
that a neutral, third-party determination of FRAND terms would
– 36 –
“compel Samsung to accept unreasonable, supra-FRAND terms.” (Resp.
54.) The public interest lies in supporting the ability of courts and
neutral arbitrators to resolve FRAND disputes. Accepting Samsung’s
position amounts to a declaration that courts and arbitrators are
incompetent to do so. There is no public interest in protecting a party
like Samsung that refuses to accept even a neutral third-party’s view of
FRAND, and insists instead on interminable negotiation and delay.
CONCLUSION
For the foregoing reasons, the Court should reverse the district
court’s grant of a preliminary anti-suit injunction.
Dated: September 6, 2018 Respectfully submitted,
s/ Constantine L. Trela, Jr.

David T. Pritikin
David C. Giardina
Nathaniel C. Love
SIDLEY AUSTIN LLP
One South Dearborn
Chicago, IL 60603
(312) 853-7000
– 37 –
CERTIFICATE OF COMPLIANCE
This brief complies with the type-volume limitation of Federal
Rule of Appellate Procedure 32(a)(7)(B). The brief contains 6,984
words, excluding the parts of the brief exempted by Federal Rule of
Appellate Procedure 32(a)(7)(B)(iii) and Fed. Cir. 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). The brief has been
prepared in a proportionally spaced typeface using Microsoft Word 2016
in 14-point Century Schoolbook font.
Dated: September 6, 2018 s/ Constantine L. Trela, Jr.

SIDLEY AUSTIN LLP
One South Dearborn
Chicago, IL 60603
(312) 853-7000
CERTIFICATE OF SERVICE
I certify that foregoing Reply Brief was filed electronically using
the Court’s case management and electronic case filing (CM/ECF)
system, which will serve notice on all registered users.
Dated: September 6, 2018 s/ Constantine L. Trela, Jr.

SIDLEY AUSTIN LLP
One South Dearborn
Chicago, IL 60603
(312) 853-7000

18-09-06 Huawei Reply Brief (Antisuit Appeal)

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18-09-06 Huawei Reply Brief (Antisuit Appeal)

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Case: 18-1979 Document: 49 Page: 1 Filed: 09/06/2018

IN THE UNITED STATES COURT OF APPEALS

HUAWEI TECHNOLOGIES CO., LTD., HUAWEI DEVICE USA,

HISILICON TECHNOLOGIES CO., LTD.,

SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS

SAMSUNG RESEARCH AMERICA,

REPLY BRIEF OF APPELLANTS

Constantine L. Trela, Jr.

Counsel for the:

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

Clark Hill PLC: Russell E. Cass

9/6/2018 /s/ Constantine L. Trela, Jr.

Date Signature of counsel

REPLY TO STATEMENT OF THE CASE ............................................... 4

A. The Parties’ License Negotiations .......................................... 4

B. Huawei’s Offers to Arbitrate ................................................... 6

C. Huawei’s Chinese Suits .......................................................... 7

D. The Shenzhen Court Decision................................................. 8

I. Microsoft II Offers No Support for the Anti-Suit Injunction. ....... 10

A. The District Court’s Claimed Worldwide Right to Determine

B. U.S. Policy Rejects Interminable Delay of FRAND

C. A Neutral FRAND Determination Would Not Prejudice

D. Only Samsung’s Later-Filed Counterclaim Could Arguably

III. The District Court Failed to Follow the Supreme Court’s

A. The District Court’s Decision is Contrary to Winter. ........... 29

B. The District Court’s Cursory Alternative Treatment of the

Apple Inc. v. Motorola Inc.,

British Midland Airways Ltd. v. Int’l Travel, Inc.,

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

Engel Indus., Inc. v. Lockformer Co.,

Howsam v. Dean Witter Reynolds, Inc.,

In re Innovatio IP Ventures, LLC Patent Litig.,

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

Microsoft Corp. v. Motorola, Inc.,

Microsoft Corp. v. Motorola, Inc.,

Microsoft Corp. v. Motorola, Inc.,

Microsoft Corp. v. Motorola, Inc.,

Southwall Techs., Inc. v. Cardinal IG Co.,

TCL Comm’cn Tech. Holdings, Ltd. v. Ericsson Inc.,

United States v. Kashamu,

Winter v. Nat. Res. Def. Council, Inc.,

Samsung did not. In the face of a decision finding that it had

maliciously delayed the negotiations and “clearly violated FRAND

in order to decide the issue of Samsung’s compliance with the FRAND

countries in an effort to resolve the parties’ FRAND dispute, and the

position makes a mockery of international comity.

Samsung’s response also asks this Court to endorse its tactic of

interminably delaying FRAND license negotiations. In Samsung’s view,

there is no remedy available if one party to a FRAND negotiation stalls

and engages in unreasonable delay. The Shenzhen Court enjoined

applying the same principle this Court recognized in Apple Inc. v.

Motorola Inc., 757 F.3d 1286, 1331-32 (Fed. Cir. 2014).

Specifically, this Court has recognized that while the FRAND

commitment may contemplate negotiations between the parties to

arrive at a FRAND license, that expectation has a limit. Where one

side engages in a strategy of interminable delay, avoiding the

conclusion of a license at all costs, the threat of an injunction may be

issued its injunctions based on just such findings.

Finally, Samsung’s response confronts the glaring flaw in the

Samsung will not be harmed (much less irreparably harmed) by any

injunction in China, because, as the Shenzhen Court found, Huawei has

already offered to license Samsung on FRAND terms, and Huawei has

repeatedly committed to forego injunctions if Samsung will agree to a

neutral, third-party determination of FRAND terms for a cross-license.