Case 2:20-cv-00380-JRG Document 1 Filed 12/11/20 Page 1 of 22 PageID #: 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`
`
`
`
`
`ERICSSON INC. AND
`TELEFONAKTIEBOLAGET LM ERICSSON,
`
`Plaintiffs,
`
`v.
`
`SAMSUNG ELECTRONICS CO., LTD.,
`SAMSUNG ELECTRONICS AMERICA, INC.,
`AND SAMSUNG RESEARCH AMERICA,
`
`Civil Action No. 2:20-cv-380
`
`
`
`
`
`Defendants.
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`
`
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`ORIGINAL COMPLAINT
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`Plaintiffs Ericsson Inc. and Telefonaktiebolaget LM Ericsson (“Ericsson” is used herein
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`to collectively refer to Telefonaktiebolaget LM Ericsson and/or Ericsson Inc.) file this Complaint
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`against Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung
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`Research America (“Samsung” is used herein to collectively refer to Samsung Electronics Co.,
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`Ltd., Samsung Electronics America, Inc., and/or Samsung Research America) and hereby allege
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`as follows:
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`NATURE OF ACTION
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`1.
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`For more than four decades, Ericsson has pioneered the development of the
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`modern cellular network. Ericsson develops infrastructure equipment that makes up the
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`backbone of modern networks; that is, the base stations and cell tower equipment that mobile
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`phones communicate with. Major mobile network operators all over the world buy solutions
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`and/or services from Ericsson, and Ericsson manages networks that serve more than one billion
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`subscribers globally. Ericsson’s equipment is found in more than one hundred and eighty
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`countries.
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`2.
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`Ericsson is widely viewed as one of the leading innovators in the field of cellular
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`communications. Due to the work of more than twenty-five thousand Ericsson research and
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`development (R&D) employees, Ericsson’s inventions are a valuable part of the fundamental
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`technology that connects phones, smartphones, and other mobile devices seamlessly using
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`cellular networks worldwide and provides increased performance and new features for the
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`benefit of consumers. As a result of its extensive research and development efforts, Ericsson has
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`been awarded more than fifty-four thousand patents worldwide. Many of Ericsson’s patents are
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`essential to the 2G (GSM, GPRS, and EDGE), 3G (UMTS/WCDMA and HSPA), 4G (LTE,
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`LTE-Advanced, and LTE-Advanced Pro) and/or 5G (NR, New Radio) telecommunications
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`standards, which are used by Samsung’s products. Ericsson’s infrastructure products likewise
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`utilize these standards.
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`3.
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`Ericsson has voluntarily and publicly committed that it is prepared to grant
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`licenses under its portfolio of patents that are essential to practice the 2G, 3G, 4G, and/or 5G
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`standards (Essential Patents) on fair, reasonable, and non-discriminatory (FRAND) terms.
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`Ericsson’s FRAND commitment is set forth in its intellectual property right (IPR) licensing
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`declarations to the European Telecommunications Standards Institute (ETSI) in accordance with
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`ETSI’s IPR Policy. Ericsson’s commitment is subject to reciprocity—Ericsson can, and does,
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`insist on a reciprocal license to a potential licensee’s Essential Patents to cover Ericsson’s
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`cellular equipment. Consistent with its FRAND commitment, Ericsson has widely licensed its
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`portfolio of Essential Patents in over one hundred agreements with members of the
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`telecommunications industry who have agreed to pay royalties to Ericsson for a global portfolio
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`license. Ericsson reinvests much of the licensing revenue it receives under these global
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`agreements into inventing future generations of standardized telecommunication technologies,
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`spending nearly five billion dollars annually on research and development.
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`4.
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`The popularity and proliferation of cellular smartphones, tablets, watches, and
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`other connected devices is based on the development of the 2G, 3G, and especially the 4G, and
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`now 5G, communication standards. Without 4G and 5G technology and Ericsson’s inventions
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`incorporated therein, smartphones and other mobile devices would not be able to provide the
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`constant on-the-go access to video, streaming media, and gaming that consumers expect today.
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`Furthermore, the widespread adoption of large screen smartphones, tablets, and corresponding
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`applications are dependent on the performance that 4G and 5G technology—and Ericsson’s
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`inventions—provide.
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`5.
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`Samsung is the largest smartphone manufacturer in the world, and also
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`manufactures cellular network infrastructure equipment. Samsung is also involved in
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`standardization, and through its own research and development efforts, has a portfolio of patents
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`that it contends are essential to the 2G, 3G, 4G, and 5G communications standards. Samsung,
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`like Ericsson, has committed that it is prepared to grant licenses under its Essential Patents on
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`FRAND terms. Samsung’s FRAND commitment is set forth in its IPR licensing declarations to
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`ETSI in accordance with ETSI’s IPR Policy.
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`6.
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`Samsung and Ericsson have in the past executed global cross-licenses, covering
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`both parties’ patents related to the 2G, 3G, and/or 4G cellular standards. Most recently,
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`Samsung and Ericsson executed a multi-year agreement in January 2014. In February 2019, in
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`advance of the expiration of the existing cross-license, Ericsson took steps to initiate negotiations
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`with Samsung towards a new license.
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`7.
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`To renew the existing license upon expiration, Ericsson proposed a global cross-
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`license, with Samsung taking a license to Ericsson’s Essential Patents and with Ericsson taking a
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`license to Samsung’s Essential Patents. Both Samsung and Ericsson understood that Samsung
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`would owe Ericsson a substantial balancing payment as part of the cross-license. Ericsson made
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`a cross-license offer under which Samsung would make a balancing payment consistent with the
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`value of Ericsson’s Essential Patents as compared to Samsung’s. All of the terms of Ericsson’s
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`offer, including the balancing payment component, were consistent with Ericsson’s FRAND
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`obligation. Samsung did not accept Ericsson’s offer, and provided a counteroffer that evidenced
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`Samsung was not negotiating in good faith towards a cross-license on FRAND terms. Instead,
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`Samsung insisted it would only be willing to a cross-license if Ericsson agreed to accept a
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`royalty for Ericsson’s Essential Patents significantly below FRAND rates. By insisting Ericsson
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`accept a balancing payment in a global cross-license substantially less than the value of
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`Ericsson’s Essential Patents, and less than FRAND, Samsung violated its FRAND commitment
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`by effectively depriving Ericsson of its right to a reciprocal license to Samsung’s Essential
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`Patents on FRAND terms. At this point, it is clear that Samsung is not willing or committed to
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`negotiating a global cross-license on FRAND terms and conditions.
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`8.
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`Samsung’s FRAND commitment is a contract between Samsung and ETSI, and
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`Ericsson has the right to enforce it as a third-party beneficiary. In addition, when Samsung
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`commenced negotiations with Ericsson, it was obligated under French law, which governs the
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`FRAND commitment, to negotiate in good faith with Ericsson, yet Samsung has failed to do so.
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`Ericsson has filed this suit against Samsung to remedy these breaches. Ericsson also seeks a
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`declaration that it has complied with its FRAND commitment, and that Samsung has not.
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`PARTIES
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`9.
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`Ericsson Inc. is a Delaware corporation with its principal place of business at
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`6300 Legacy Drive, Plano, Texas 75024.
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`10.
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`Plaintiff Telefonaktiebolaget LM Ericsson (“LME”) is a corporation organized
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`under the laws of the Kingdom of Sweden with its principal place of business at Torshamnsgatan
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`21, Kista, 164 83, Stockholm, Sweden.
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`11.
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`Defendant Samsung Electronics Co., Ltd. (“SEC”) is a Korean company with its
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`principal place of business in Suwon, South Korea. SEC has an “Information Technology &
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`Mobile Communications” division that is responsible for the design, manufacture, and sale of
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`mobile devices, such as smartphones that operate on cellular networks around the world and in
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`the United States.
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`12.
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`Defendant Samsung Electronics America, Inc. (“SEA”) is a New York
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`corporation with its principal place of business in Ridgefield Park, New Jersey, and it is a
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`wholly-owned subsidiary of SEC. SEA imports into the United States and sells in the United
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`States, including in this District, smartphones that operate on cellular networks in the United
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`States. SEA imports into the United States and sells in the United States, including in this
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`District, cellular network infrastructure equipment that operates on cellular networks in the
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`United States. SEA is also responsible for research and development related to the cellular
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`standards, smartphones, cellular network infrastructure equipment, and other mobile devices, and
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`has many employees involved in standardization.
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`13.
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`Defendant Samsung Research America (“SRA”) is a California corporation with
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`its principal place of business in Mountain View, California, and is a wholly-owned subsidiary of
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`SEA. SRA is also responsible for research and development related to the cellular standards,
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`smartphones, cellular network infrastructure equipment, and other mobile devices, and has many
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`employees involved in standardization.
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`14.
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`SEA and SRA maintain an office in this District at 6625 Excellence Way, Plano,
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`Texas 75023, with more than 1,000 employees. Defendants SEA and SRA employ engineers—
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`including in this District—that attend standardization meetings and work on research and
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`development related to the cellular standards, smartphones, and other mobile devices. These
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`engineers are the inventors on a variety of patents eventually assigned to Defendant SEC. SEC
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`has included these patents in declarations to ETSI that form the basis of SEC’s FRAND
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`commitment, contractually committing that SEC is prepared to grant licenses on FRAND terms
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`and conditions to the extent such patents are and remain essential to the 2G, 3G, 4G, and/or 5G
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`standards.
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`JURISDICTION AND VENUE
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`15.
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`This Court has subject matter jurisdiction under 28 U.S.C. §§ 1331, 1332 and
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`1338(a), and 1367.
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`16.
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`17.
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`18.
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`The amount in controversy exceeds $75,000.
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`Venue is proper in this judicial district under 28 U.S.C. §§ 1391 and 1400(b).
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`This Court has personal jurisdiction over Defendants Samsung. Samsung has
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`continuous and systematic business contacts with the State of Texas. Samsung, directly or
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`through subsidiaries or intermediaries (including distributors, retailers, and others), has
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`negotiated with Ericsson in this District, and also conducts its business extensively throughout
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`Texas, by shipping, distributing, offering for sale, selling, and advertising (including the
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`provision of an interactive web page) its products and/or services in the State of Texas and the
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`Eastern District of Texas. SEA and SRA, SEC’s wholly-owned subsidiaries, maintain an office
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`in Plano, Texas, and are responsible for (1) importing and selling smartphones, tablets, other
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`mobile devices, and cellular network infrastructure equipment that operate on cellular networks
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`in the United States, (2) research and development related to the cellular standards, smartphones,
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`cellular network infrastructure equipment, and other mobile devices, and (3) patent development
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`activities related to such research and development. SEC, SEA, and SRA regularly do business
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`or solicit business, engage in other persistent courses of conduct, and/or derive substantial
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`revenue from products and/or services provided to individuals in the State of Texas.
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`19.
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`SEC, SEA, and SRA, directly and through subsidiaries or intermediaries
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`(including distributors, retailers, and others), have purposefully and voluntarily placed one or
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`more products and/or services in the stream of commerce related to this dispute with the
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`intention and expectation that they will be purchased and used by consumers in the Eastern
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`District of Texas. These products and/or services have been and continue to be purchased and
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`used by consumers in the Eastern District of Texas.
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`20.
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`Ericsson Inc. is a corporation with its principal place of business in the Eastern
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`District of Texas. Ericsson Inc. is a wholly-owned subsidiary of LME, and is responsible, among
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`other things, for importing and selling cellular network infrastructure equipment to cellular
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`carriers in the United States. Ericsson Inc. requires a license on FRAND terms to the Essential
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`Patents of Samsung.
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`21.
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`Samsung has purposefully directed its licensing activities into the Eastern District
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`of Texas as to its portfolio of Essential Patents, as well as for Ericsson’s portfolio of Essential
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`Patents. Samsung employees have communicated, met, and engaged in patent licensing
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`negotiations with Ericsson employees living and working in this District.
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`FACTUAL BACKGROUND
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`Ericsson’s Investment in Telecommunications
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`Telefonaktiebolaget LM Ericsson was founded in 1876, and Ericsson Inc. is a
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`A.
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`22.
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`wholly owned subsidiary of Telefonaktiebolaget LM Ericsson based in Plano, Texas. Ericsson
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`supplies the cellular network infrastructure equipment used to build mobile networks across the
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`world, serving more than one billion mobile subscribers in over 180 countries. In the United
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`States, Ericsson’s equipment is used by individuals utilizing AT&T, Verizon, Sprint, T-Mobile,
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`and other cellular networks.
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`23.
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`Ericsson has a long history of innovation in the telecommunication industry and
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`in the creation of the cellular standards. In addition to supplying equipment for 2G, 3G, 4G, and
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`5G networks, Ericsson was also well-known for its mobile phone business—ending in 2012 with
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`the divestment of the popular “Sony Ericsson” brand. Years earlier, Ericsson coined the
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`“smartphone” term when unveiling its GS88 handset in 1997 and showcased an early version of
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`a tablet with its Cordless Web Screen in 2000.
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`24.
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`Ericsson prioritizes innovation and has invested $4-5 billion annually in research
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`and development. These research and development activities include participating in the
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`development of the 2G, 3G, 4G, and 5G cellular standards over the last 30+ years. Ericsson’s
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`engineers have attended hundreds of standardization meetings and made tens of thousands of
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`technical contributions to the standards.
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`25.
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`Ericsson has been at the forefront of every step of cellular standardization:
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`Ericsson launched 2G phones on the first 2G network in 1991, Ericsson made the first 3G call in
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`2001, and Ericsson built the first 4G network in 2009. And Ericsson continues to be at the
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`forefront: Ericsson completed the first 5G trial system in Europe in 2016, and Ericsson’s
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`equipment has been deployed in 5G networks in the United States.
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`26.
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`Ericsson protects its investments in research and development with intellectual
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`property. Ericsson owns thousands of patents related to wireless telecommunication technology,
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`and Ericsson continues to develop and secure intellectual property as it innovates in this industry.
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`Because Ericsson chooses to voluntarily contribute many of its research and development
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`innovations to the standard-setting process—through technical contributions in standardization
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`meetings—Ericsson has a large number of patents essential to the cellular standards. Industry
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`members attending the standardization meetings, including Samsung, choose to adopt Ericsson’s
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`technology into the standard because Ericsson’s technology is the best.
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`27.
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`Ericsson has committed that it is prepared to grant licenses to any patents
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`essential to the 2G, 3G, 4G, and 5G standards on fair, reasonable, and non-discriminatory
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`(FRAND) terms and conditions. Knowing Ericsson’s commitment to FRAND licensing, other
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`makers of cellular devices and network equipment, including Samsung, continue to include
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`Ericsson’s technology in the 5G standard.
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`B.
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`28.
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`ETSI and 3GPP
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`The European Telecommunications Standards Institute (ETSI) is an independent,
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`non-profit standard development organization (SDO) that produces globally accepted standards
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`for the telecommunication industry. ETSI has more than 900 members from more than 60
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`countries across five continents, including Ericsson and Samsung. In addition to its own
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`activities, ETSI is also one of seven SDOs that are organizational partners of the Third
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`Generation Partnership Project (3GPP), which maintains and develops globally applicable
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`technical specifications for the 2G (second generation, encompassing GSM, GPRS, as well as
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`EDGE, which is considered 2.5G), 3G (third generation, encompassing WCDMA/UMTS and
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`HSPA), 4G (fourth generation, encompassing LTE, LTE-Advanced, and LTE Advanced-Pro),
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`and 5G (fifth generation, encompassing NR) mobile systems. Together, ETSI and its members
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`have developed open standards that ensure worldwide interoperability between networks,
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`devices, and network operators.
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`29.
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`Patents play an important role in developing the telecommunication industry
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`through standardization and licensing. Many SDO members, including Ericsson, own intellectual
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`property rights (IPRs) related to technologies contributed to and standardized by SDOs. Thus,
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`technical standards adopted by SDOs may implicate member or non-member IPRs such that a
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`patent license is required from the IPR owner to implement the standard.
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`30.
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`ETSI has developed and promulgated an IPR Policy, which is a contract governed
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`by French law. The ETSI IPR Policy is intended to strike a balance between the need for open
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`standards on the one hand, and the rights of IPR owners on the other hand. ETSI requires its
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`members to use reasonable endeavors to disclose patents that are essential to practice its
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`standards or technical specifications. Clause 15.6 of the ETSI IPR Policy defines the term
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`“ESSENTIAL” to mean that “it is not possible on technical (but not commercial) grounds, taking
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`into account normal technical practice and the state of the art generally available at the time of
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`standardization, to make, sell, lease, otherwise dispose of, repair, use or operate EQUIPMENT or
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`METHODS which comply with a STANDARD without infringing that IPR.” Ericsson has fully
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`complied with all aspects of the ETSI IPR Policy.
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`31.
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`The ETSI IPR Policy includes a form “IPR Information Statement and Licensing
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`Declaration.” Ericsson owns patents that are essential to practice the 2G, 3G, 4G, and/or 5G
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`standards (“Essential Patents”). Ericsson has declared to ETSI that it is prepared to grant licenses
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`on FRAND terms and conditions under its Essential Patents. Ericsson has licensed the bulk of
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`the industry under this commitment, previously including Samsung. Ericsson has offered to
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`continue to license Samsung, but Samsung has insisted on non-FRAND rates.
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`32.
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`Ericsson’s commitment is subject to reciprocity, specifically, that it is prepared to
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`grant licenses on FRAND terms and conditions under its Essential Patents subject to the
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`“condition that those who seek licenses agree to reciprocate.” The ETSI IPR Policy explicitly
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`provides in Clause 6.1 that “[t]he above [FRAND] undertaking may be made subject to the
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`condition that those who seek licenses agree to reciprocate.” As a manufacturer of cellular
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`infrastructure equipment, Ericsson typically negotiates cross-license agreements that provide
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`Ericsson a reciprocal license to the other company’s technology. For example, Ericsson’s
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`previous licenses with Samsung were cross-licenses where Ericsson also received a cross-license
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`to Samsung’s Essential Patents.
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`33.
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`Like Ericsson, Samsung participates in standardization at ETSI and 3GPP.
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`Engineers from SEA and SRA, for example, routinely attend 3GPP meetings, and also file
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`patents related to cellular technology (which are eventually assigned to Defendant SEC).
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`Samsung contends that it has a portfolio of Essential Patents, and Samsung has contractually
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`committed to ETSI that it is likewise prepared to grant licenses under any such patents on
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`FRAND terms and conditions. Ericsson is a third-party beneficiary to this contract and can
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`enforce it.
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`C.
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`34.
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`Ericsson and Samsung’s Prior Licenses
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`Samsung designs, manufactures, and markets a portfolio of mobile devices,
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`including in the United States and this District, that comply with the 2G, 3G, 4G, and 5G
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`standards and utilize Ericsson’s Essential Patents. Samsung also designs, manufactures, and
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`markets cellular network infrastructure equipment, including in the United States and this
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`District, that complies with the 2G, 3G, 4G, and 5G standards and utilizes Ericsson’s Essential
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`Patents.
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`35.
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`Ericsson designs, manufactures, and markets infrastructure equipment, including
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`in the United States and this District, that complies with the 2G, 3G, 4G, and 5G standards and
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`utilizes Samsung Essential Patents.
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`36.
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`The parties have signed several cross-license agreements covering their respective
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`patents, including most recently a multi-year agreement in 2014.
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`D.
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`37.
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`The Parties’ Negotiations
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` Ericsson reached out to Samsung in February 2019 to begin negotiations
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`regarding a new cross-license, as is Ericsson’s typical practice when an existing license is
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`expiring. Given the lengthy negotiations (and litigation) that preceded execution of the 2014
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`license, Ericsson sought to start negotiations early. Cross-license negotiations of this magnitude
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`typically involve both technical discussions—to evaluate and challenge the strength of the other
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`party’s patents—and business discussions—to negotiate the terms of the agreement, informed by
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`the feedback from the technical discussions.
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`38.
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`The parties agreed to the objective to conclude negotiations by the end of this year
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`and began technical discussions in the spring of 2020. The technical discussions covered both
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`parties’ portfolios of Essential Patents and spanned several meetings.
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`39.
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`Then, Ericsson provided a presentation and offer in a meeting on July 20, 2020.
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`Ericsson’s proposal covered a global cross-license to both parties’ Essential Patents, covering—
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`along with patents around the world—the U.S. patents held by the parties to which their
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`respective U.S. entities potentially require licenses. This cross-license proposal contained a
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`balancing payment from Samsung to Ericsson, reflecting the parties’ relative sales and the value
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`of Ericsson’s Essential Patents as compared to Samsung’s.
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`40.
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`All the terms of Ericsson’s offer, including the balancing payment, were (and are)
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`consistent with Ericsson’s FRAND commitment.
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`41.
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`Samsung rejected Ericsson’s FRAND offer, and did not provide a counteroffer in
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`response to Ericsson’s offer until September 22, 2020. Samsung’s eventual counteroffer was
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`unreasonably low. Samsung’s counteroffer evidenced that Samsung was not negotiating in good
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`faith and not willing to enter into a cross-license on FRAND terms and, rather, would only be
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`willing to pay Ericsson a rate for Ericsson’s Essential Patents that was significantly below
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`FRAND. Samsung’s counteroffer and rejection of Ericsson’s FRAND offer are inconsistent with
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`Samsung’s FRAND commitment.
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`42.
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`Sensing that the parties were reaching impasse in the business negotiations,
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`Ericsson sent Samsung an arbitration offer on September 27, 2020. This arbitration offer
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`provided the option to resolve the global dispute between the parties via a neutral, third-party
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`determination of the appropriate FRAND rate for a global cross-license. As is typical with such
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`offers, it included a 45-day window for Samsung to accept the offer. In parallel, Ericsson
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`continued to attempt to engage in negotiations with Samsung in addition to providing the
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`arbitration offer.
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`43.
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`Samsung did not respond to Ericsson’s arbitration offer until November 10,
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`2020—44 days after it was made. Samsung did not accept Ericsson’s arbitration offer, despite
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`the impasse the parties seemed to have reached on royalty terms.
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`44.
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`Negotiations have continued, but no progress has been made. It has become clear
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`that Samsung had no intention of negotiating in good faith towards concluding an agreement
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`with Ericsson on FRAND terms and conditions. Instead, Samsung has insisted on a below-
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`FRAND royalty payment in a cross-license and, by doing so, Samsung has deprived Ericsson of
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`its right to a reciprocal global license to Samsung’s Essential Patents on FRAND terms.
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`COUNT I: BREACH OF CONTRACT
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`45.
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`Ericsson incorporates by reference the preceding paragraphs as though fully set
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`forth herein.
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`46.
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`Samsung designs, manufactures, and markets products that comply with the 2G,
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`3G, 4G, and 5G standards. Samsung contends it owns Essential Patents.
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`47.
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`Ericsson designs, manufactures, and markets products that comply with the 2G,
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`3G, 4G, and 5G standards. Ericsson also owns Essential Patents.
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`48.
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`Samsung, as the owner of patents it contends are essential, and remain essential,
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`to ETSI standards, has contractually committed to ETSI to be prepared to grant licenses to any
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`such patents on FRAND terms and conditions to third parties, such as Ericsson, who implement
`
`equipment compliant with the standards.
`
`49.
`
`Ericsson, as the owner of patents it contends are essential, and remain essential, to
`
`ETSI standards, has likewise contractually committed to ETSI to be prepared to grant licenses to
`
`any such patents on FRAND terms and conditions to third parties, such as Samsung, who
`
`implement equipment compliant with the standards, subject to reciprocity.
`
`50.
`
`Ericsson is an intended third-party beneficiary of Samsung’s contract with ETSI.
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`Likewise, Samsung is an intended third-party beneficiary of Ericsson’s contract with ETSI.
`
`51.
`
`Samsung is obligated to offer a license to its essential patents consistent with the
`
`ETSI IPR Policy and its contractual declarations, including that such license be on FRAND
`
`terms and conditions. Samsung has breached its contractual commitment, as set forth in
`
`Samsung’s IPR licensing declarations to ETSI and the ETSI IPR Policy.
`
`
`
`
`14
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`

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`Case 2:20-cv-00380-JRG Document 1 Filed 12/11/20 Page 15 of 22 PageID #: 15
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`52.
`
`Since at least late 2019, representatives from Ericsson and Samsung have been
`
`engaged in negotiations regarding a cross-license to each party’s Essential Patents.
`
`53.
`
`Ericsson made an offer to license its Essential Patents to Samsung on FRAND
`
`terms and conditions. Consistent with the parties’ FRAND commitments, Ericsson’s offer was
`
`for a global cross-license that took into account both parties’ Essential Patents and standard-
`
`compliant products and required Samsung to make a FRAND-compliant balancing royalty
`
`payment to Ericsson.
`
`54.
`
`Samsung rejected Ericsson’s offer for a cross-license and instead insisted on an
`
`unreasonably low, non-FRAND rate for the cross-license. In doing so, Samsung violated its
`
`FRAND commitment by effectively depriving Ericsson of its right as a third-party beneficiary to
`
`a license to Samsung’s Essential Patents on FRAND terms.
`
`55.
`
`Samsung’s positions are inconsistent with its contractual commitment to ETSI, as
`
`set forth in Samsung’s IPR licensing declarations to ETSI and the ETSI IPR Policy. Ericsson is a
`
`third-party beneficiary of that contract, which Samsung has breached in its negotiations with
`
`Ericsson.
`
`56.
`
`This breach has caused harm to Ericsson. Samsung’s refusal to offer a cross-
`
`license on FRAND terms and conditions has caused Ericsson to expend resources in futile
`
`negotiations, deprived Ericsson of a FRAND cross-license, and threatens Ericsson with a gap in
`
`license coverage.
`
`57.
`
`Samsung’s breach has caused Ericsson to suffer actual damages, such as
`
`Ericsson’s costs and expenses in pursuing futile negotiations with Samsung in an amount to be
`
`determined at trial. In addition, Ericsson is further entitled to obtain specific performance under
`
`French law.
`
`
`
`
`15
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`

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`Case 2:20-cv-00380-JRG Document 1 Filed 12/11/20 Page 16 of 22 PageID #: 16
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`58.
`
`Ericsson has suffered and will continue to suffer irreparable injury by reason of
`
`the acts, practices, and conduct of Samsung alleged above until and unless the Court enjoins such
`
`acts, practices, and conduct.
`
`COUNT II: BREACH OF OBLIGATION TO NEGOTIATE IN GOOD FAITH
`
`59.
`
`Ericsson incorporates by reference the preceding paragraphs as though fully set
`
`forth herein.
`
`60.
`
`French law governs the ETSI FRAND commitment, and under French law, once
`
`Samsung commenced negotiations with Ericsson for a cross-license, Samsung was obligated to
`
`negotiate in good faith. Samsung has failed to negotiate in good faith with Ericsson and thus
`
`breached its obligation. For example, rather than engage in good-faith negotiations, Samsung did
`
`not seriously engage in negotiations with Ericsson with the aim of concluding an agreement, and
`
`instead made an unreasonably low cross-license counteroffer, effectively depriving Ericsson of a
`
`license to Samsung’s Essential Patents on FRAND terms.
`
`61.
`
`Samsung’s failure to negotiate in good faith constitutes a breach of its obligations
`
`to Ericsson.
`
`62.
`
`There is a dispute between Ericsson and Samsung concerning whether Samsung
`
`has complied with its obligation to negotiate in good faith, and this controversy is of sufficient
`
`immediacy and reality to warrant the issuance of a declaratory judgment.
`
`63.
`
`Ericsson is entitled to a declaratory judgment that Samsung has not complied with
`
`its obligation to act in good faith during its negotiations with Ericsson in regard to FRAND terms
`
`for a cross-license to the parties’ Essential Patents.
`
`
`
`
`16
`
`

`

`Case 2:20-cv-00380-JRG Document 1 Filed 12/11/20 Page 17 of 22 PageID #: 17
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`64.
`
`As a result of Samsung’s breach of its duty to negotiate in good faith, Ericsson
`
`has been injured in its business or property, including Ericsson’s cost and expenses in pursuing
`
`futile negotiations with Samsung in an amount to be determined at trial.
`
`COUNT III: DECLARATORY JUDGMENT THAT ERICSSON HAS NOT BREACHED
`ITS FRAND COMMITMENT
`
`65.
`
`Ericsson incorporates by reference the preceding paragraphs as though fully set
`
`forth herein.
`
`66.
`
`Ericsson has fully complied with the ETSI IPR Policy, its FRAND obligations
`
`and all other applicable laws by, among other things, attempting to negotiate in good faith with
`
`Samsung and offering Samsung a cross-license to Ericsson’s Essential Patents on FRAND terms
`
`and conditions.
`
`67.
`
`A dispute exists between Ericsson and Samsung concerning whether Ericsson’s
`
`offer to Samsung for a global cross-license to the parties’ Essential Patents violated Ericsson’s
`
`commitment that it is prepared to grant licenses under its Essential Patents on terms and
`
`conditions consistent with Ericsson’s IPR licensing declarations to ETSI and ETSI’s IPR Policy.
`
`Samsung rejected Ericsson’s offer. There is a case or controversy of sufficient immediacy,
`
`reality, and ripeness to warrant the issuance of a declaratory judgment.
`
`68.
`
`Ericsson requests a declaratory judgment that Ericsson’s global, reciprocal cross-
`
`license offered during the negotiations with Samsung complied with Ericsson’s FRAND
`
`commitment, as set forth in its IPR licensing declarations to E