Case 3:16-cv-02787-WHO Document 372 Filed 07/24/18 Page 1 of 21
`
`Michael J. Bettinger (SBN 122196)
`mbettinger@sidley.com
`Irene Yang (SBN 245464)
`irene.yang@sidley.com
`SIDLEY AUSTIN LLP
`555 California Street, Ste. 2000
`San Francisco, California 94104
`415-772-1200 – Telephone
`415-772-7400 – Facsimile
`
`
`
`Attorneys for Plaintiffs
`HUAWEI TECHNOLOGIES CO., LTD.
`HUAWEI DEVICE USA, INC.,
`HUAWEI TECHNOLOGIES USA, INC., and
`HISILICON TECHNOLOGIES CO., LTD.
`
`
`David T. Pritikin (pro hac vice)
`dpritikin@sidley.com
`David C. Giardina (pro hac vice)
`dgiardina@sidley.com
`Douglas I. Lewis (pro hac vice)
`dilewis@sidley.com
`John W. McBride (pro hac vice)
`jwmcbride@sidley.com
`SIDLEY AUSTIN LLP
`One South Dearborn
`Chicago, Illinois 60603
`312-853-7000 – Telephone
`312-853-7036 – Facsimile
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`HUAWEI TECHNOLOGIES CO., LTD.,
`Case No. 3:16-cv-02787-WHO
`HUAWEI DEVICE USA, INC., and
`HUAWEI TECHNOLOGIES USA, INC.,
`
`Plaintiffs / Counterclaim-
`Defendants,
`
`
`
`
`HUAWEI’S REPLY IN SUPPORT OF ITS
`MOTION FOR SUMMARY JUDGMENT
`WITH RESPECT TO:
`
`1. SAMSUNG’S ANTITRUST CLAIM
`
`2. NON-INFRINGEMENT OF
`SAMSUNG’S ’350 PATENT CLAIM
`
`3. NON-INFRINGEMENT OF
`SAMSUNG’S ’130 PATENT CLAIMS
`
`4. NON-INFRINGEMENT OF
`SAMSUNG’S RE105 PATENT
`
`5. NON-INFRINGEMENT OF
`SAMSUNG’S ’825 PATENT CLAIMS
`
`
`Hearing Date: August 8, 2018
`Time: 2:00 p.m.
`Location: Courtroom 2, 17th Floor
`Judge: Hon. William H. Orrick
`
`REDACTED VERSION OF DOCUMENT
`SOUGHT TO BE SEALED
`
`
`v.
`
`SAMSUNG ELECTRONICS CO., LTD.,
`SAMSUNG ELECTRONICS AMERICA,
`INC.,
`
`
`Defendants / Counterclaim-
`Plaintiffs,
`
`and
`
`SAMSUNG RESEARCH AMERICA,
`
`Defendant,
`v.
`
`HISILICON TECHNOLOGIES CO., LTD.,
`
`Counterclaim-Defendant.
`
`
`
`
`
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`Case 3:16-cv-02787-WHO Document 372 Filed 07/24/18 Page 2 of 21
`
`TABLE OF CONTENTS
`
`SAMSUNG’S ANTITRUST CLAIM IS SUBJECT TO SUMMARY JUDGMENT. ............. 1
`A.
`Samsung Cannot Establish Actionable Exclusionary Conduct. .................................... 1
`B.
`Samsung Cannot Establish Harm To Competition. ....................................................... 5
`C.
`The Act of State Doctrine Bars Samsung’s Antitrust Claim. ........................................ 6
`
`B.
`
`SAMSUNG HAS NOT PRESENTED A QUESTION OF MATERIAL FACT ON THE
`TECHNICAL ISSUES .............................................................................................................. 8
`’350 Patent - Selection of Different Quantization Coefficients Is Not Determining a
`A.
`Cell-Specific Ratio. ....................................................................................................... 8
`Samsung’s Improper Claim Constructions Are Contrary to Plain Meaning. ................ 9
`’130 Patent - “Mapping the Data Information to
`1.
`Remaining Symbols” Occurs After Mapping a
`Reference Signal To a Middle Symbol. ......................................................... 10
`’105 Patent – “FT Pre-Coded Symbols” Cannot
`Contain Control Information.......................................................................... 11
`’825 Patent – Applying the Plain Meaning of
`Indicating, the Huawei Accused Products Do Not
`Receive System Information Indicating a Group of
`IDs. ................................................................................................................. 13
`
`2.
`
`3.
`
` CONCLUSION ....................................................................................................................... 15
`
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`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`ACTV, Inc. v. Walt Disney Co.,
`346 F.3d 1082 (Fed. Cir. 2003)................................................................................................12
`
`Aerotec Int’l, Inc. v. Honeywell Int’l, Inc.,
`836 F.3d 1171 (9th Cir. 2016) ...................................................................................................2
`
`Apple, Inc. v. Motorola Mobility, Inc.,
`886 F. Supp. 2d 1061 (W.D. Wis. 2012) ...............................................................................3, 6
`
`Cadence Pharm. Inc. v. Exela PharmSci Inc.,
`780 F.3d 1364 (Fed. Cir. 2015)................................................................................................11
`
`Celotex Corp. v. Catrett,
`477 U.S. 317 (1986) .............................................................................................................9, 11
`
`Credit Suisse v. U.S. Dist. Court for the Cent. Dist. of Cal.,
`130 F.3d 1342 (9th Cir. 1997) ...................................................................................................7
`
`Del. Valley Floral Grp. v. Shaw Rose Nets, LLC,
`597 F.3d 1374 (Fed. Cir. 2010)................................................................................................13
`
`Dippin’ Dots, Inc. v. Mosey,
`476 F.3d 1337 (Fed. Cir. 2007)................................................................................................12
`
`Egyptian Goddess, Inc. v. Swisa, Inc.,
`543 F.3d 665 (Fed. Cir. 2008)..................................................................................................13
`
`Fed. Trade Comm’n v. Qualcomm Inc.,
`Case No.17-CV-00220-LHK, 2017 WL 2774406 (N.D. Cal. June 26, 2017)...........................2
`
`First Nat’l Bank of Ariz v. Cities Serv. Co.,
`391 U.S. 253 (1968) ...................................................................................................................2
`
`Freedman Seating Co. v. Am. Seating Co.,
`420 F.3d 1350 (Fed. Cir. 2005)................................................................................................11
`
`Fujifilm Corp. v. Motorola Mobility, LLC,
`Case No. 12-cv-03587-WHO, 2015 WL 757575 (N.D. Cal. Feb 20, 2015) .......................9, 10
`
`Gorlick Dist. Centers, LLC v. Car Sound Exhaust Sys., Inc.,
`723 F. 3d 1019 (9th Cir. 2013) ..................................................................................................5
`
`Hynix Semiconductor Inc. v. Rambus Inc.,
`527 F. Supp. 2d 1084 (N.D. Cal. 2007) .................................................................................2, 6
`
`
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`In re Online DVD-Rental Antitrust Litig.,
`779 F.3d 914 (9th Cir. 2015) .....................................................................................................3
`
`In re Phillipine Nat’l Bank,
`397 F.3d 768 (9th Cir. 2005) .....................................................................................................7
`
`In re Wholesale Grocery Prods. Antitrust Litig.,
`752 F.3d 728 (8th Cir. 2014) .....................................................................................................3
`
`Intellicall, Inc. v. Phonometrics, Inc.,
`952 F.2d 1384 (Fed. Cir. 1992)................................................................................................11
`
`Limelight Networks, Inc. v. Akamai Techs, Inc.,
`134 S. Ct. 2111 (2014) .............................................................................................................10
`
`Liu v. Republic of China,
`892 F.2d 1419 (9th Cir. 1989) ...................................................................................................7
`
`Matsushita Elec. Indus. Co., v. Zenith Radio Corp.,
`475 U.S. 574 (1986) ...................................................................................................................2
`
`McCarty v. Lehigh Val R Co,
`160 U.S. 110 (1895) ...................................................................................................................8
`
`OptimumPath, LLC v. Belkin Int'l, Inc.,
`466 Fed. App’x 904 (Fed. Cir. 2012) .........................................................................................9
`
`OptimumPath, LLC v. Belkin Int'l, Inc.,
`No. C 09-01398 CW, 2011 WL 1399257 (N.D. Cal. Apr. 12, 2011) ........................................9
`
`Pacing Techs., LLC v. Garmin Int'l, Inc.,
`778 F.3d 1021 (Fed. Cir. 2015)................................................................................................13
`
`PersonalWeb Techs. LLC v. Int'l Bus. Machines Corp.,
`Case No. 16-cv-01266-EJD, 2017 WL 2180980 (N.D. Cal. May 18, 2017) .............................9
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005)................................................................................................14
`
`Planet Bingo, LLC v. GameTech Int’l, Inc.,
`472 F. 3d 1338 (Fed. Cir. 2006)...............................................................................................11
`
`Power Mosfet Techs., L.L.C. v. Siemens AG,
`378 F.3d 1396 (Fed. Cir. 2004)................................................................................................12
`
`Rambus Inc. v. FTC,
`522 F.3d 456 (D.C. Cir. 2008) ...................................................................................................5
`
`Renishaw PLC v. Marposs Societa’ per Azioni,
`158 F.3d 1243 (Fed. Cir. 1998)................................................................................................14
`
`
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`Research In Motion Ltd. v. Motorola, Inc.,
`644 F. Supp. 2d 788 (N.D. Tex. 2008) ......................................................................................2
`
`Smart Wearable Techs. Inc. v. Fitbit Inc.,
`Case No. 17-cv-05068-VC, 2018 WL 659013 (N.D. Cal. Feb. 1, 2018) ................................13
`
`TAP Pharm. Prods., Inc. v. Owl. Pharm., LLC,
`419 F.3d 1346 (Fed. Cir. 2005)................................................................................................14
`
`TechSearch, L.L.C. v. Intel Corp.,
`286 F.3d 1360 (Fed. Cir. 2002)................................................................................................13
`
`Townshend v. Rockwell Int’l Corp.,
`No. C99-400SBA, 2000 WL 433505 (N.D. Cal. Mar. 28, 2000) ..............................................4
`
`United States v. Grinnell Corp.,
`384 U.S. 563 (1966) ...................................................................................................................1
`
`Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP,
`540 U.S. 398 (2004) ...................................................................................................................1
`
`Yeager v. Bowlin,
`693 F3d 1076 (9th Cir. 2012) ..................................................................................................13
`
`Other
`
`Restatement (Second) of Foreign Relations of the United States § 41 cmt d. (1965) .....................7
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`Samsung’s Opposition to Huawei’s Motion for Summary Judgment (“Opp.”) does nothing
`to establish the existence of a disputed issue of material fact preventing summary judgment in
`Huawei’s favor on any of the claims as to which Huawei has moved.
`
`SAMSUNG’S ANTITRUST CLAIM IS SUBJECT TO SUMMARY JUDGMENT.
`
`Samsung’s attempt to convert what is, at best, a contract dispute into an antitrust violation
`by referring vaguely to Huawei’s alleged “multi-pronged course of anticompetitive conduct” (Opp.
`1:9-10) cannot obscure the fact that there is no evidence that Huawei got its patents incorporated
`into the relevant standards by making false FRAND promises it had no intention of keeping. To
`the contrary, Samsung’s Opposition makes clear that Huawei’s conduct vis-à-vis Samsung has
`been consistent with its public declarations, which undermines any claim that Huawei had a secret
`plan to renege on its FRAND commitments. For this, and the other reasons discussed below,
`Huawei is entitled to summary judgment on Samsung’s monopolization claim.
`
`Samsung Cannot Establish Actionable Exclusionary Conduct.
`
`A.
`Although its expert Dr. Hausman analyzed Samsung’s claim as one for attempted
`monopolization,1 Samsung’s Opposition makes clear that its claim is for monopolization. Opp. 3.
`To establish a triable monopolization claim, Samsung must establish the existence of a genuine
`issue of material fact that Huawei acquired or maintained its alleged monopoly position in the
`alleged relevant technology markets by means of exclusionary conduct, rather than on the basis of
`“growth or development as a consequence of a superior product, business acumen, or historic
`accident.” Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407
`(2004) (quoting United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966)) (quotations omitted).
`In a case like this, where Huawei’s alleged monopoly position in the relevant technology markets is
`a consequence of the incorporation of timely disclosed patented technology into standards (Mot. Ex.
`1 at ¶ 55), Samsung needs to establish that Huawei convinced 3GPP and ETSI to incorporate
`Huawei’s patented technologies in the relevant standards by making false FRAND commitments
`
`
`1 Mot. Ex. 1, Hausman Rpt. ¶¶ 9, 57. Citations to “Mot. Ex.” are to the exhibits attached to the
`Declaration of John McBride in Support of Huawei’s Motion for Summary Judgment (July 3, 2018),
`ECF No. 328-1.
`
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`that Huawei had no intention to honor.2 Mot.3 6-7; Research In Motion Ltd. v. Motorola, Inc. 644 F.
`Supp. 2d 788, 798-99 (N.D. Tex. 2008). The undisputed facts undermine any such claim (Mot. 7-8),
`and nothing Samsung identifies in its Opposition creates a genuine issue to the contrary.
`As an initial matter, while Samsung is correct that issues of intent are generally factual in
`nature (Opp. 6), none of the cases it cites suggest that antitrust claims like its own are not amenable
`to summary judgment where—as set forth in Huawei’s motion and below—no reasonable jury
`could conclude on the basis of the evidence that the central statements in question were false when
`made. Matsushita Elec. Indus. Co., v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting First
`Nat’l Bank of Ariz v. Cities Serv. Co., 391 U.S. 253, 289 (1968)) (“Where the record taken as a
`whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine
`issue for trial.’”). As set forth in Huawei’s motion, there is significant authority finding summary
`judgment appropriate where—as here—the basis for a claim that a contractual commitment (like
`
`2 Samsung’s suggestion that a mere breach of a party’s FRAND commitments would be sufficient to
`support a claim for monopolization is baseless. Opp. 5; see also Mot. 5-6. Samsung misreads Judge
`Koh’s decision in Fed. Trade Comm’n v. Qualcomm Inc., Case No.17-CV-00220-LHK, 2017 WL
`2774406 (N.D. Cal. June 26, 2017), to suggest that a party may breach an “antitrust duty to deal”
`simply by seeking supra FRAND royalties after its patents have been incorporated into a standard.
`Opp. 5. But in that case the allegation Judge Koh was considering when she discussed an “antitrust
`duty to deal” was not that the SEP holder (Qualcomm) had charged rival chipset makers excessive
`royalties as a part of its scheme to monopolize the relevant markets for high-end LTE and CDMA
`chipsets, but rather that it refused to make licenses available to rival chipset makers on any terms.
`Qualcomm, 2017 WL 2774406, at *6, *19-23. Even in those “narrow” and exceptional
`circumstances where the antitrust laws impose a duty to deal on a monopolist, there is “no duty to
`deal on the terms and conditions preferred” by the monopolist’s rivals. Aerotec Int’l, Inc. v.
`Honeywell Int’l, Inc., 836 F.3d 1171, 1184 (9th Cir. 2016) (affirming summary judgment on refusal
`to deal claim where plaintiff “simply did not like the business terms” offered by the alleged
`monopolist) (citation omitted). Here, Huawei has not refused to offer a license to Samsung; there is
`simply a dispute as to the price. Thus, there can be no liability on the basis of an alleged violation of
`an “antitrust duty to deal.” The decision in Hynix Semiconductor Inc. v. Rambus Inc., 527 F. Supp.
`2d 1084 (N.D. Cal. 2007) likewise does not suggest that the antitrust laws should be used to sanction
`breach of a FRAND commitment. There, Hynix alleged that Rambus had obtained its monopoly
`position in the relevant technology markets by failing to disclose its SEPs in the standard setting
`process in violation of the SSO’s rules, and the court recognized only that such “deceptive conduct
`before a standards setting organization can be anticompetitive conduct that violates section 2 of the
`Sherman Act.” Id. at 1088-89. Finally, nothing in the letter authored by the former government
`officials and professors that Samsung cites (Opp. 5, Decl. of Sam Stake in Support of Samsung’s
`Opp’n to Mot. for Summary Judgment (“Stake MSJ Opp’n Decl.” ECF No. 358-1)Ex. 7, ECF No.
`358-8, hereafter all exhibits to referenced from this declaration will be identified as “Opp. Ex.”)
`suggests that they believe the antitrust laws can or should be used to sanction a mere breach of a
`FRAND commitment absent exclusionary conduct by the SEP holder to acquire or maintain its
`monopoly position. To the extent that they do make such a recommendation, it is contrary to the law.
`3 Huawei’s Mot. for Summary Judgment (“Mot.”) 6-7 (July 3, 2018), ECF No. 327-8.
`
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`Huawei’s FRAND commitments) was false boils down to an allegation that it was later breached.
`Mot. 7-8. Samsung’s attempt to distinguish these decisions on the grounds that they did not involve
`antitrust claims is of no moment. Opp. 8 n.7. While “[s]ummary judgment [was once] disfavored in
`antitrust cases,” the Ninth Circuit has recognized that “any presumption against the granting of
`summary judgment in complex antitrust cases has now disappeared.” In re Online DVD-Rental
`Antitrust Litig., 779 F.3d 914, 921 (9th Cir. 2015) (citations omitted); see also In re Wholesale
`Grocery Prods. Antitrust Litig., 752 F.3d 728, 732 (8th Cir. 2014) (holding “it is now beyond
`debate that ‘the Supreme Court would find an error of law in the imposition of a heightened
`standard for summary judgment in a complex antitrust case.’”) (citation omitted).4
`In attempting to establish a triable issue that Huawei’s FRAND commitments were false
`when made, Samsung emphasizes that Huawei
`
`
`
`
`. Opp. 7 & n.3-4.5 But, as Samsung acknowledges, Huawei had publicly
`announced as early as 2008 that it expected to seek a royalty for its LTE portfolio of up to 1.5%,
`which would be “negotiable in bilateral negotiations.” Opp. 6-7 (citing Opp. Ex. 1 at 208:19-22 (J.
`Ding testimony referencing Huawei public statement)); Reply Ex.6 44 at ¶ 66 (quoting Huawei
`announcement).
` there is
`nothing wrong with opening negotiations at a headline rate like 1.5%. Reply Ex. 45 at 32:19-34:24,
`Ex. 46 at 70:15-71:6, Ex. 44 at ¶¶ 23-33 (
`
`
`). The fact that Huawei
`
`
`
`
`
`
`4 Samsung’s citation to a number of decisions rejecting motions to dismiss FRAND-related antitrust
`claims (Opp. 3) likewise does not establish that such claims may not be resolved on summary
`judgment. To the contrary, summary judgment has been granted on such claims in other cases. See,
`e.g., Apple, Inc. v. Motorola Mobility, Inc., 886 F. Supp. 2d 1061, 1076-77 (W.D. Wis. 2012).
`5 Samsung acknowledges that Huawei disclosed to ETSI, and made FRAND commitments with
`respect to, the patents around which Dr. Hausman defines his alleged relevant technology markets on
`March 9, 2009, October 15, 2009, July 6, 2010, April 21, 2011, and July 5, 2013. Opp. 3 n.3.
` Opp. 3 n.4.
`6 Citations to “Reply Ex.” are attached to the Declaration of John W. McBride in Support of
`Huawei’s Reply in Support of Motion for Summary Judgment filed concurrently herein.
`
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`1
`
`—,7 would not pelmit a reasonable jlny to conclude Huawei never
`
`intended to abide by its FRAND commitments. Indeed, that ETSI adopted standards incorporating
`
`Huawei’s patented technology with full knowledge that Huawei intended to seek a royalty of 11p to
`
`1.5% undermines any antitnlst claim predicated upon Huawei’s demand for such royalties.
`
`Towns/lend v. Rockwell Int’l Corp, No. C99-4OOSBA, 2000 WL 433505, at *7 (N.D. Cal. Mar. 28,
`
`2000) (dismissing antitnlst claim where SSO had adopted defendant’s technology after disclosure
`
`of proposed licensing telms later claimed not to be FRAND).
`
`Ssmsmss sissSsssass—
`
`— (esp. 7) is sssssksss
`
`but—even if accepted as true—this shows, at most, that Huawei breached its FRAND obligations at
`
`some point after they were made. That fact cannot, as a matter of law, create a triable issue that
`
`Huawei’s FRAND commitments were false from their inception. Mot. 7—8. Nor can the fact that
`
`Huawei sought injunctive relief against Samsrmg in China in May 2016; even if Huawei’s pursuit of
`
`injtmctive relief were a breach of Huawei’s FRAND obligations, which it is not (see Mot. 9 n.8),
`
`that cannot be used to establish that the FRAND commitments Huawei made years earlier were
`
`false. Indeed, any inference that Huawei had a long-held plan to evade its FRAND obligations
`
`based on its pursuit of injtmctions or othelwise is refuted as a matter of law by the undisputed facts
`
`that Huaweim—S
`
`
`
`Rel Ex. 47 at 164212-165:17, and Ex. 48.
`
`Decl. of Sam Stake in
`
`'e FRAND Decl.” ECF No. 335-1)
`
`
`
`
`Support 0 Samsung’s Mot. to Part1a y Exc ue & Str ’e
`Ex. 4 at 1] 22; Reply Ex. 46 at139z8-12.
`8 For a discussion of the Huawei-Apple license, see Huawei’s Opp. to Samsung Mot. for Stnnmary
`Judgment 3—7 (July 17, 2018 , ECF No. 347-4.
`9 Samsun ’5 com laint that
`
` . Samsung’s
`
`111 er c aunt at,
`“Huawei had ah‘eady obtained the ‘bargaining chip’ that would help it ‘get the royalties’”
`
`iifi. 8i makes no sense. Huawei had not iet obtained an inltmction aiainst Samsuni and.
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`4
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`Case 3:16-cv-02787-WHO Document 372 Filed 07/24/18 Page 10 of 21
`Case 3:16-cv-02787-WHO Document 372 Filed 07/24/18 Page 10 of 21
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`(2) asked this Corut at the outset of the case to determine the terms of a FRAND cross-license on an
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`expedited basis (Joint Case Mgmt. Statement 2-44 (Sept. 6, 2016), ECF No. 67; Huawei’s Request
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`to Bifurcate (Sept. 20, 2016), ECF No. 84), and (3) previously committed (and remains willing) to
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`withdraw its injunction actions if Samsrmg would simply agree to any binding process (be it
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`through arbitration or in court) to obtain a neutral determination of the FRAND terms of a cross-
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`license between the parties. Mot. 8; Huawei’s Opp’n to Samsrmg’s Mot. to Enjoin 2:23-26 (Feb. 20,
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`2018), ECF No. 240.10 No rational trier of fact could conclude that Huawei intended to deceive
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`ETSI by making false FRAND commitments between 2009 and 2013 when Huawei has,
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`undisputedly, repeatedly, and continuously offered to submit a FRAND determination to a neutral
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`triblmal.ll Samsung’s effort to morph what is, at best, a breach of contract claim into an elaborate,
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`years-long scheme to violate the US. antitrust laws should be rejected.
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`B.
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`Samsung Cannot Establish Harm To Competition.
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`Samsung’s antitrust claim should also be rejected because it cannot establish the requisite
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`harm to competition. Mot. 9-10. The issue is not whether Samsung, as a “direct purchaser” in the
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`alleged relevant technology markets, is presumptively a proper plaintiff with antitrust standing
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`(Opp. 9), but rather whether the conduct Samsung complains of will “harm the competitive process
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`and thereby harm consumers,” rather than merely harming “one or more competitors” like
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`Samsung. Rambus Inc. v. FTC, 522 F.3d 456, 463 (DC. Cir. 2008) (quotation omitted); Gorh'ck
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`Dist. Centers, LLC v. Car Sound Erhaust S_vs., Inc., 723 F. 3d 1019, 1024—25 (9th Cir. 2013)
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`(antitrust plaintifl' “must demonstrate injury to competition in the market as Whole, not merely
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`injluy to itself as a competitor”). Here, the undisputed facts demonstrate the conduct about which
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`Mot. Ex. 20 at 2; Reply Ex. 49
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`at 2; Reply Ex. 45 at 24226-16.
`1° After years of negotiation and subsequent litigation, Samsrmg has maintained its position that it
`will not consent to rate—setting by the Court or an arbitral tribunal (ECF No. 303—2, p. 5 n.14),
`preferring instead to engage in limitless negotiation in furtherance of its hold-out strategy.
`1' Given this context, the fact that Huawei’s executives have acknowledged that they sought
`injunctive relief in an attempt to get Samsung to the negotiating table is hardly incriminating.
`Indeed, Huawei’s statements are consistent with Samsung’s own previously stated views on the
`appropriate use of injunctive relief. See ECF No. 240 at 21 n. 18.
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`Samsung complains—that Huawei is using injunction actions in China in an alleged attempt to
`coerce Samsung to pay excessive royalties—will have no effect on competition generally.
`Samsung does not dispute that, given that it has refused to pay Huawei any royalties to date,
`Huawei’s allegedly non-FRAND royalty demands cannot have caused any harm to competition.
`Mot. 9 (citing Apple, Inc., 886 F. Supp. 2d at 1076). And even if they are ultimately recoverable,
`which Huawei does not concede,12 Samsung’s expert Dr. Hausman admitted that Samsung’s
`litigation costs are “harms to Samsung,” not “harms to consumers.” Mot. Ex. 7 at 214:6-9. In the
`face of the realities, Samsung seeks to establish a risk of consumer harm based on Dr. Hausman’s
`claim that, “if enforced,” Huawei’s Chinese injunctions “h
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`.” Opp. 9 n.8. But in making this calculation, Dr.
`Hausman assumed without basis that an injunction in China would completely prevent Samsung
`from selling smartphones in the U.S. notwithstanding the fact that, in 2017, Samsung made
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`the smartphones it sold in the U.S. somewhere other than China. Stake FRAND Decl. Ex. 8 at
`Exhibit 6a. More importantly, given Huawei’s consistent, standing offer to forego injunctive relief
`if Samsung will agree to a neutral, third-party FRAND determination, there is no plausible scenario
`in which Samsung would be unable to avoid being enjoined in China by accepting neutrally-
`determined FRAND terms—and thus no plausible scenario where U.S. consumers or competition in
`the U.S. will be affected. Mot. 8.
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`The Act of State Doctrine Bars Samsung’s Antitrust Claim.
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`C.
`The act of state doctrine provides a final basis to reject Samsung’s antitrust claim, which is
`indisputably based on the presumption that Huawei’s lawsuits in China are improper. Samsung’s
`attempt to draw a distinction between Huawei’s “pursuit of injunctive relief” and the “Shenzhen
`Court’s judgment granting an injunction,” claiming that its theory is that only the “pursuit”
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`12 Because Samsung cannot establish that Huawei engaged in any misconduct in the standard-setting
`process itself, it cannot establish that Huawei’s challenged litigation conduct was merely a part of a
`broader and independently illegal anticompetitive scheme as required to permit the recovery of
`litigation expenses in a case such as this. Hynix, 527 F. Supp. 2d at 1098. Nor, despite Huawei’s
`requests, has Samsung produced any records relating to its litigation expenses. Reply Ex. 50 at pp.
`24-25. Thus, Samsung should be precluded from attempting to establish at trial the litigation costs it
`allegedly incurred as a result of Huawei’s alleged antitrust violation.
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`HUAWEI’S REPLY IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT; CASE NO. 3:16-CV-02787-WHO
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`“constitutes the antitrust violation,” Opp.. 10-11, fails. “Pursuit” of an injunction cannot cause any
`harm to competition—only if Huawei’s suits succeed could Samsung and/or consumers be
`impacted in any way, as Samsung’s expert admitted. Mot. Ex. 7 at 214:14-215:2. Moreover, the
`Shenzhen Court has already determined that, in light of the FRAND commitment and the parties’
`conduct, Samsung should be enjoined. That establishes that Huawei’s lawsuit and pursuit of an
`injunction was entirely proper. To find for Samsung on its antitrust claim thus necessarily requires
`this Court to evaluate the legitimacy of the Shenzhen Court’s decision.
`Samsung fails to address the Ninth Circuit’s standard for the act of state doctrine set forth in
`Credit Suisse v. U.S. Dist. Court for the Cent. Dist. of Cal., 130 F.3d 1342, 1346 (9th Cir. 1997).
`First, Samsung does not dispute that the Shenzhen Court’s injunction is “an official act of a foreign
`sovereign performed within its own territory.” Id. (citations and internal quotations omitted). While
`Samsung attempts to characterize the Shenzhen Actions as a “mere dispute between private
`parties,” and notes the Chinese government “is not a party” to that litigation (Opp. 11), that is
`irrelevant: A foreign judgment arising out of private litigation may be considered an act of state
`when it gives effect to the public interest of the foreign government. See In re Phillipine Nat’l Bank,
`397 F.3d 768, 773 (9th Cir. 2005); Liu v. Republic of China, 892 F.2d 1419, 1433-34 & n.2 (9th
`Cir. 1989); Restatement (Second) of Foreign Relations of the United States § 41 cmt d. (1965) (“A
`judgment of a court may be an act of state.”). As Huawei explained, the Shenzhen Court’s decision
`gives effect to China’s public interest in enforcing the FRAND obligation. Mot. 11-12 and Ex. 21 at
`30, 176. Samsung does not address the Shenzhen Court’s FRAND reasoning or dispute that its
`decision turns on Chinese public interest in the enforcement of FRAND obligations. See Opp. 10-
`12. Samsung also does not dispute that the relief it seeks—an injunction barring Huawei from
`enforcing the Shenzhen injunctions—would require this Court to declare the Shenzhen Court’s
`decision invalid. See Credit Suisse, 130 F.3d at 1346. The Shenzhen Court found an injunction
`should issue because Huawei had complied with FRAND while Samsung had not. To find for
`Samsung on its antitrust claim, this Court would have to determine that the Shenzhen Court erred in
`its FRAND analysis and should not have issued an injunction. Samsung’s claim is accordingly
`barred by the act of state doctrine.
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