TCL Replies To Ericsson’s Brief Opposing Certiorari In Seventh Amendment Issue

Petitioner TCL Communication Technology Holdings filed a reply on Tuesday to Ericsson’s opposition to a writ of certiorari for the patent infringement suit, claiming that “Ericsson’s brief is an exercise in distraction.”

The petitioner averred that the Federal Circuit’s Seventh Amendment decision was “deeply flawed” because it “broke with long-standing precedent to create a jury-trial right in a case seeking the equitable relief of a specific performance.” TCL alleged that the Federal Circuit erroneously applied this rule for licensing standard-essential patents (SEPs) that are on fair, reasonable, and nondiscriminatory (FRAND) terms. Furthermore, TCL stated that Ericsson does not provide “sound reason to decline review.”

TCL claimed that while Ericsson argued that it was entitled to a jury trial, the Federal Circuit did not address these claims, so it cannot assert that it had a Seventh Amendment right to litigate the claims first. TCL stated that Ericsson’s arguments should be addressed at the merits stage.

TCL said the brief did not refer to the release payments as “equitable consideration.” Ericsson allegedly wanted the Court to require the release payment as part of the injunction, but TCL claimed that the “release payment was simply ‘a term of the injunction which completed the parties’ new license,’” that it was specific performance ordered by the court, and that it “did not change the equitable nature of the relief.” Thus, TCL argued, the release payment “retroactively restored to Ericsson that which it would have already received if the FRAND terms and conditions have previously been set, and a license not delayed.” 

The petitioner argued the court’s decision is incorrect and “Ericsson’s argument on the merits merely repeats the Federal Circuit’s errors.” Specifically, Ericsson alleged that the release payment “was compensation for past patent infringement,” however, TCL claimed that a U.S. court could not have awarded such relief because this was for worldwide sales and infringement of foreign patents too. TCL stated that the court could “achieve a worldwide resolution…because it was not awarding patent damages, but rather creating a new license as a matter of equity to put TCL in the position it would have been if Ericsson had honored its FRAND commitments from the outset.” Therefore, the release payment was a contractual term.

The company asserted that it previously asked the court “to impose in equity the license that Ericsson was obligated to have offered from the outset. The only payments to be made were thus payments from TCL to Ericsson as equitable consideration from the creation of that new license in equity.” Again, TCL claimed that the release payment was not for damages but would “condition the conferral of future benefits under a FRAND license on the payment of a backward-looking royalty.”

TCL added that the Federal Circuit’s failure to address TCL’s argument is another reason to grant review and that there is no jurisdictional barrier to review. TCL stated that the question presented is extremely important, claiming that juries setting worldwide FRAND licensing terms would “upset the division of responsibility between judge and jury.” TCL noted that five amicus briefs have been filed.  

TCL has asked the Supreme Court to review and reverse the Federal Circuit’s ruling and to “restore the traditional division of responsibility between judge and jury.” Subsequently, TCL stated that the petition for a writ of certiorari should be granted.

The petitioner is represented by Sheppard Mullin Richter & Hampton LLP and Wilmer Cutler Pickering Hale and Dorr LLP. Ericsson is represented by MoloLamken LLP and McKool Smith P.C.