While Huawei's testimony strongly supports the FTC's case against Qualcomm (Day 2 report), and Huawei is not hypocritical with respect to the "no license-no chips" pressure tactics since it doesn't (because it couldn't even if it wanted to) capitalize on such leverage, Huawei's claims that Qualcomm's royalty demands (allegedly accounting, at least at some point, for 80%-90% of Huawei's total patent licensing costs) are supra-FRAND are mirrored by Samsung saying the same (just not the 80%-90% thing) about what Huawei is seeking to extract from Samsung.
Sidley Austin's David Giardina appeared at the FTC trial on Huawei's behalf (regarding a sealing matter) on Friay, and is also listed as a member of Huawei's outside legal team in the Samsung dispute, such as under the motion Huawei brought yesterday in order to avoid that the Huawei v. Samsung (the trial will take place in April or September) would hear Samsung's allegations of Huawei having breached its FRAND obligations (this post continues below the document):
19-01-07 Huawei Motion to S... by on Scribd
The purpose of this post is not to express an opinion on the merits of Huawei's motion since Huawei's argument is based on allegations of Samsung not having presented certain kinds of damages evidence, and for lack of access to the evidentiary record there's no way of knowing, at least until Samsung has responded to the motion, how much substantiation of a damages claim related to Huawei's alleged breached of its contractual FRAND licensing obligations Samsung has or has not provided so far.
To explain briefly, Huawei argues that neither California law nor French law (governing the ETSI FRAND declaration) allow the recovery of legal fees as breach-of-contract damages, and in Huawei's opinion Samsung's FRAND-related breach-of-contract claim has therefore been reduced to a purely equitable issue that should be resolved in a bench trial instead of being put before the jury. In order to enable such modification of the trial structure, Huawei is also willing to waive its own analogous damages claims. Also, Huawei is trying to eliminate the need for a jury determination of damages Huawei may owe Samsung for patent infringement. Samsung apparently requested an amount that is so small Huawei would rather pay it than have a jury trial over them. In the second Apple v. Samsung case, Samsung (represented by the same firm, Quinn Emanuel, as against Huawei) also sought rather small amounts of damages in order to make Apple's damages claim appear unreasonable (and indeed, the jury gave Apple only about 5% of what it sought). In Huawei v. Samsung, there is however an enormous discrepancy because Samsung's U.S. business is very substantial while Huawei doesn't have a high market share (and the overall political landscape doesn't favor Huawei's U.S. operations).
Huawei's efficiency argument appears to be a pure pretext to me. It's highly debatable that in a case where even Huawei concedes a jury trial is inevitable (because of Huawei seeking damages from Samsung) it's a good idea to have a bench trial in addition to the jury trial. But even if there was, on the bottom line, an efficiency gain, that's simply not what Huawei is really interested in.
Toward the end of Huawei's filing, it becomes much clearer what this is really about (at least once one mentally replaces Huawei's concern about jury "confusion" with Huawei simply not wanting the jury to hear allegations that could influence the way the jury views Huawei's overall role in this dispute:
"Moreover, holding a bench trial on the parties’ FRAND claims will avoid the risk that the jury will be confused, distracted or overwhelmed by being asked to decide, in a two-week trial, the parties' FRAND claims together with infringement and invalidity claims for up to nine patents."
In jury trials it's extremely important to consider the psychological effect that argument, tstimony and documents may have on a jury's general attitude toward a party. A professional judge is in a far better position than a jury to separate reputational issues from legal ones. Huawei knows that Samsung, by arguing its FRAND-related breach-of-contract claim to the jury, would indirectly increase the likelihood of the jury holding certain Huawei patents invalid, or not infringed, or to come down on the lower end of a range of damages figures. This would depend on whether Samsung's counsel and witnesses would succeed in portraying Samsung as a victim of reckless conduct by Huawei. Simply put, it's about whether the jury will see Huawei (which without the slightest doubt is the aggressor in that dispute while Samsung apparently would just like to be left alone) as a bad guy and bully, and Samsung as innocent nice guys.
However, while that is a psychological issue, I don't see a strong argument here that the jury might confuse issues. The questions of patent infringement, patent validity, and related damages are really disparate from the question of whether Huawei breached its FRAND commitment--so disparate that even laypeople can't realistically be confused, especially since Huawei's counsel would be able to ask jurors not to conflate unrelated issues.
On a closely related note, the Federal Circuit heard Huawei's appeal (under Ninth Circuit law) of Samsung's antisuit injunction last month. I listened to the recording, but it's hard to predict what will come out of it. Huawei got some traction for sure with its allegations of this being a case of "holdout" (portraying Samsung as an "unwilling licensee"), but with the Huawei v. Samsung trial being held this year, it could be that the Federal Circuit will affirm Judge Orrick's decision given that the remaining amount of time during which the preliminary injunction will be in effect is somewhat limited. If Samsung had made a similar commitment as Microsoft had in its famous Motorola case (against the background of which the antisuit dispute between Huawei and Samsung must be analyzed), which was that Microsoft committed to taking a license on court-determined FRAND terms, then Huawei's appeal would probably have been a non-starter. But the fact that Samsung did not do exactly the same things as Microsoft did back in the day could decide the appeal in Huawei's favor, though I don't believe Microsoft's commitment was really necessary to satisfy the criteria for an antisuit injunction. As many readers know, I've always been concerned about the "unwilling licensee" loophole giving SEP abusers too much leverage.
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