In the past two years, China has become a hot battlefield for standard-essential patent (SEP) cases, attracting the attention of SEP holders and implementers. Several landmark decisions have been issued that carry special significance, such as:
Oppo v Nokia (5G top rate set);
Advanced Codec Technologies (ACT) v Oppo (legal standard for a comparable licence clarified);
TCL v Access Advance (jurisdiction of Chinese courts on global licensing rates of foreign patent pools); and
Panasonic v Oppo (the relationship of the plaintiff’s original claim and the defendant’s counterclaim, specifically in SEP cases).
Beijing Intellectual Property Court addresses key issue in Panasonic v Oppo
The Beijing Intellectual Property Court’s ruling in Panasonic v Oppo is the most recent of the above cases.
Panasonic sued Oppo for SEP infringement based on Chinese patent 201310008637.0. No damages were claimed and the purpose of the lawsuit was to push forward licensing negotiations.
Oppo filed a counterclaim of fair, reasonable, and non-discriminatory (FRAND) rate setting, requesting the court to make a ruling on the licensing terms for 3G and 4G SEPs owned and licensed by Panasonic for phones manufactured and sold by Oppo in mainland China, including the royalty rates.
The important issue in this case was whether Oppo’s counterclaim and Panasonic’s original claim could be jointly handled in one case, given their different scope. In Chinese judicial practice, according to the Civil Procedure Law, if the scope of patents and the products involved in SEP infringement cases are different from those in a FRAND rate-setting case, such cases do not meet the general acceptance requirements for counterclaims. Based on this, Panasonic argued that the counterclaim filed by Oppo should not be accepted, and that it did not request to calculate and pay the damages based on the licensing fee in this case, so the claim and the counterclaim did not involve the same facts, not necessarily jointly handled.
The Beijing Intellectual Property Court did not accept the above opinions and reasoned as follows: “In order to determine whether the patentee has violated FRAND licensing obligations and whether the implementer has violated the obligation of good faith negotiation, in addition to examining the negotiation behaviour of both parties, it is also necessary to examine whether [the] licensing conditions proposed by both parties during the negotiation are obviously unreasonable. This licensing condition is not only for the patent involved, but for all 3G and 4G SEPs licensed by Panasonic. In order to determine whether the licensing conditions proposed by both parties are obviously unreasonable, it is necessary to determine the scope of reasonable licensing conditions. The content of FRAND rate-setting cases is precisely licensing conditions. Therefore, based on this special logic, although the counterclaim and the original claim in this case are not based on the same legal relation, both the counterclaim and the original claim cover the examination on the same fact that the patentee and the implementer are negotiating licensing terms for the patents involved and the relevant SEP portfolios. There is a high degree of correlation and [a] causal relationship between the counterclaim and the original claim, and therefore the counterclaim should be accepted and handled together.”
After this ruling, both parties settled to reach global cross-licensing and future cooperation plans, resolving lengthy SEP disputes between the parties.
The above opinions of the Beijing Intellectual Property Court show the confidence of the court in handling SEP cases. From a strategic perspective, SEP right holders should evaluate how to construct the claims in an SEP lawsuit so as to put themselves in a favourable position.
Trends emerging in Chinese cases involving SEP disputes
The above case is an example of one of the general trends in Chinese courts’ handling of SEP cases: ruling or mediation by a court at first, and then settlement.
Another patentee, the US-based ACT, has been rather aggressive in launching SEP litigations in China and has brought SEP infringement cases against TCL (before the Shanghai Intellectual Property Court), Xiaomi, Vivo, Oppo (before the Nanjing Intermediate People’s Court’s intellectual property tribunal), and Meizu (before the Fuzhou Intermediate People’s Court’s intellectual property tribunal) in the past six years.
In February 2019, ACT, which sued TCL for infringing six SEPs involving the AMR-WB speech audio coding standard. The court ruled in favour of ACT in May 2024, with damages and licensing rates determined. In April 2025, the Supreme People’s Court successfully mediated the cases and the two parties signed a settlement contract.
The trend of litigation being followed by a settlement is also true for domestic entities in SEP disputes. In January 2025, Shenzhen Longsys filed a lawsuit against Shenzhen Metorage in the Nanjing Intermediate People’s Court. The patent involved memory interface technology, which is an SEP for the production of memory cards. The plaintiff requested a licensing fee. The court pushed forward mediation between the two parties and ultimately facilitated a package licensing plan for 171 semiconductor storage patents. This case is the first time that domestic companies have reached a licensing agreement on mainstream memory card SEPs.
As a general trend, Chinese courts are putting a great deal of effort into the mediation of SEP cases. The Guangzhou Intellectual Property Court, an experienced and popular intellectual property special court, articulated its standing on the mediation of SEP cases by proposing “reference negotiation plans” to overcome deadlocks and problems caused by long-delayed licensing negotiations, which are customised based on industrial characteristics, the nature of the relevant standards, and standard formulation steps.
Another trend is that the comparable licence approach is more heavily relied on by Chinese courts to determine licensing fees than the top-down approach. The Supreme People’s Court judgment in the ACT v Oppo case establishes an effective legal standard on evaluating the comparability of licences, with four elements as main considerations:
Negotiation background;
Similarities of the entities;
Patents; and
Licensing terms.
After this judgment, multiple cases have followed this logic to use comparable licences as the basis to evaluate the licensing fee, such as CCC v Oppo and ACT v a Chongqing telecommunication implementer. Although these judgments are pending appeal, it is likely that settlements will be reached during the second instance.
Final thoughts on the handling of SEP cases in China
Although there are some issues that have not yet been resolved in effective judgments – such as how to evaluate the strength of a patent portfolio, to what extent expert opinions should be relied on, and adjustments of royalty rates based on implementation scale –Chinese courts can still be expected to handle SEP cases effectively. Chinese courts have the experience, confidence, and expertise to resolve difficult, complicated, and long-lasting SEP licensing disputes and achieve a sound balance between SEP holders and implementers.
