UK appeals court starts to realize Samsung’s interim-license declaration against ZTE lacks objective justification and necessity

Context: ZTE and Samsung must be close enough to a cross-license agreement that last week’s Munich trial was canceled (October 23, 2025 ip fray article). However, after the recent decision by the England & Wales Court of Appeal (EWCA) to hear ZTE’s appeal of Samsung’s interim-license declaration (October 15, 2025 ip fray article), a 4.5-hour hearing had been scheduled for today, and it was not canceled.

What’s new: Lord Justices Peter Jackson, Richard Arnold and Colin Birss today held the ZTE v. Samsung appellate hearing. Both sides were asked tough questions, with the greatest surprising being that even LJ Arnold, previously known for a rather expansive stance on interim-license declarations, appeared not to be sold on the reasonableness of the decision below by Mr Justice Mellor of the High Court of Justice for England & Wales (EWHC).

Direct impact: Given that ZTE will not have consented to the cancelation of a Munich trial with a reasonable likelihood of an imminent injunction unless its interests were reasonably protected, the outcome of this UK appeal may not have any bearing on the ultimate outcome between these two parties. Based on how the hearing went, a reversal appears possible, given that the driving force behind previous interim-license decisions, LJ Arnold, is far from unconditionally supporting Mr Justice Mellor’s decision.

Wider ramifications:

Mr Justice Mellor is working on a set of potentially three interim-license agreements in the disputes between Nokia on the one hand and Acer, ASUS and Hisense on the other (October 21, 2025 ip fray article). Nokia has offered its three counterparts an arbitration-adjustable license, and pointed to LJ Arnold’s publics statements in favor of arbitration as a means of setting global FRAND rates. Today LJ Arnold reiterated that view more than once. While the EWCA cannot make a formal declaration relating to the benefits of arbitration, the renewed endorsement of arbitration by LJ Arnold strengthens Nokia.

Given the recent escalation between UK and continental European courts in connection with standard-essential patent (SEP) cases (October 22, 2025 ip fray article), it would be a positive development if the EWCA finally overturned an overreaching interim-license declaration.

Whether the EWCA reverses the EWHC or affirms with the kind of reluctance on display at today’s hearing, there is no basis for the European Telecommunications Standards Institute (ETSI) to consider ZTE potentially in breach of its FRAND licensing obligation only because of its refusal to grant an interim license based on the EWHC decision that the appeals court is contemplating with greater skepticism than previous interim-license requests.
The sole difference between the interim-license proposals made by Samsung and ZTE is that the former wants the final terms to be determined in the UK while the latter prefers China, a jurisdiction that Samsung itself described as the best choice for this type of matter in its dispute with Ericsson earlier this decade.

Samsung argues that its UK FRAND action was filed two days before ZTE’s Chinese one. LJ Arnold asked Samsung’s counsel Daniel Alexander KC whether his client would be happy to have the FRAND (fair, reasonable and non-discriminatory licensing) determination made in China only because of ZTE having filed there two days earlier , (in an alternative-universe scenario), Samsung’s lawyer was visibly surprised and couldn’t come up with a convincing argument. He denied that it was just about which case is earlier-field and later added that the filing date would only be a tie-breaker if the other factors did not yield a clear result. But LJ Arnold also wanted to know whether there is then, apart from the filing date, any other argument in favor of Samsung’s insistence on a UK FRAND determination than believing that the English courts are simply superior, and that question, too, was not answered satisfactorily by Samsung’s counsel.

Affirmance is still a possibility, but the EWCA appears to have realized that a line must be drawn somewhere. That is why the decision in this case will be more interesting than in cases where it appeared that anyone seeking a FRAND determination in the UK would also receive an interim-license declaration.

Samsung’s best hope (and almost only hope) at this stage is that the court expressed concerns over ZTE potentially stopping to participate in the further UK FRAND proceedings if it prevails on this appeal. The EWCA is also wondering whether it should do something against the possibility of more than one court working on a FRAND determination between the same parties in parallel.

While there are signs of potential de-escalation, the instrument of an antisuit injunction (against patent enforcement actions that could force a defendant to bow to the patentee’s demands) came up and that would provoke anti-antisuit injunctions (AASIs) from courts in other jurisdictions. In fact, the mere reference to that possibility by the EWCA at today’s public hearing may be cited by SEP holders when they argue in foreign courts that they should be granted an AASI if the other party starts UK FRAND proceedings.

Only actions (reversals of overreaching interim-license declarations) will truly de-escalate. Should the EWCA affirm the declaration in this case, the resolve of continental European courts to push back will only be strengthened.

It also doesn’t help if the EWCA argues (as LJ Arnold did today) that it merely makes declarations as opposed to “coercive” decisions in this regard. The recent anti-interim-license injunctions (AILIs) by the Unified Patent Court (UPC) and Munich I Regional Court were based on the pragmatic perspective that being deemed out of compliance with a FRAND licensing obligation has a coercive effect in and of itself, given the potential consequences of a breach.

ZTE has been declared an unwilling licensor, but it had the courage and determination to appeal. The appeal was granted, it has now been heard, and anyone watching the recording, which will remain on YouTube for some more time, can see that ZTE’s conduct was defensible. It was not the behavior of someone seeking to extract supra-FRAND terms, but consistent with its position that Samsung can’t reasonably refuse to have FRAND terms set in a jurisdiction that was Samsung’s own jurisdiction of choice just a few years ago.

The court did not indicate when the decision would be made, but similar decisions have typically been handed down in a matter of weeks.