Judge Gilstrap viewed that the equity and public interest requirements were not met in this particular patent dispute case sued by Collison Communications
Mobile R&D Cener of Samsung Electronics.
Samsung Electronics has breathed a sigh of relief by successfully fending off a request for a permanent injunction filed in a US patent lawsuit. However, the court noted in its ruling, "There is no shield to avoid an injunction just because it is a global compny,” determining that the size of the company itself cannot serve as an exception.
According to US court documents on May 21, Judge Rodney Gilstrap of the United States District Court for the Eastern District of Texas dismissed on May 17 a request for a permanent patent infringement injunction against Samsung Electronics filed by Collision Communications, a non-practicing entity (NPE).
The roots of this lawsuit trace back to a wireless communication interference reduction technology developed by the US defense contractor BAE Systems. Originally developed for military use to ensure stable connections even in congested communication environments, the patent for this technology was purchased from BAE approximately 15 years ago for commercialization purposes by Collision Communications, a small company based in New Hampshire. Collision explored the possibility of cooperating with Samsung Electronics while pursuing a business applying the technology to the 4G and 5G cellular industries.
According to court records, the two companies engaged in extensive partnership and licensing negotiations over the patent portfolio from 2011 to 2014. However, the negotiations broke down, and Collision claimed that Samsung applied similar technology to its Galaxy smartphones, tablets, and laptops. Collision filed a lawsuit in the Eastern District of Texas on December 12, 2023.
This court is one of the premier meccas for patent litigation in the US, with a series of patent verdicts worth hundreds of millions of dollars emerging just from Judge Gilstrap’s courtroom last year.
On October 10 last year, an eight-person jury in a Marshall, Texas court unanimously found that Samsung Electronics had willfully infringed upon 4 of Collision’s patents. The damages amounted to $445,494,160 (approximately 610 billion won), which was the exact amount requested by Collision. The compensation was structured as a running royalty. Under this structure, if Samsung continues to use the technology, it incurs additional compensation obligations for future sales. During the trial, Samsung argued for patent invalidity and independent development, and claimed that a compensation amount of $10,000,000 or less would be appropriate, but the jury dismissed all of these arguments.
Following the jury’s verdict, Collision went one step further. On December 10 last year, the company filed an application with the court seeking to permanently enjoin Samsung from further infringement of the patents that still had remaining validity periods among the 4 patents. If a permanent injunction were issued, disruptions could occur in the sales and importation of Samsung products equipped with the patented technology within the US. Samsung emphasized the ripple effects the injunction would cause, citing impacts on employment and supply chains in the US.
Judge Gilstrap listened to oral arguments for about 2 hours on May 11, and subsequently issued his final ruling on May 17. The core of the ruling is the application of the four-factor test established by the US Supreme Court in its 2006 eBay decision. The judge acknowledged that Collision had successfully proven two factors: irreparable injury and the inadequacy of monetary damages. However, he dismissed the injunction request, stating that Collision failed to prove the requirements that the balance of hardships between the two parties and the public interest would not be disserved.
A notable part of the ruling addresses the logic put forward by Samsung, which highlighted that it is a global enterprise with assembly plants and sales networks in 88 countries worldwide, employing approximately 370,000 people. Judge Gilstrap noted, “Just as there is no legal shield of ‘too big to fail’ from the global financial sector for global enterprises like Samsung, a shield of ‘too big to be enjoined’ likewise does not exist.”
The judge determined that simply being a large conglomerate does not grant an exception from the application of an injunction. Ultimately, however, the injunction request itself was dismissed because Collision failed to specifically prove the equity and public interest requirements.
The ruling criticized not only Samsung’s logic but also that of Collision. The judge pointed out regarding Collision that arguments claiming “the public interest supports an injunction in all cases” could not be accepted.
Another point of interest in this lawsuit is that the Antitrust Division of the US Department of Justice (DOJ) and the United States Patent and Trademark Office (USPTO) submitted statements of interest. In their statements submitted on February 27, the two agencies prefaced that they did not support either party, but presented a legal principle that the eligibility to seek an injunction should not be automatically excluded simply because the entity is an NPE. This implies that NPEs can also obtain injunctions under certain conditions, such as the difficulty of calculating patent value.
Judge Gilstrap determined that the possibility of an injunction cannot be ruled out merely because the plaintiff is a non-practicing entity (NPE). However, he viewed that the equity and public interest requirements were not met in this particular case.
From Samsung’s perspective, the worst-case scenario of a permanent injunction has been avoided, but the burden remains. The 610 billion won compensation verdict is still valid, and the obligation to pay additional royalties remains active as long as the patent continues to be used. As Samsung filed a separate motion requesting a new trial immediately following the ruling, the litigation is expected to continue through appeals and other proceedings.
Kim Eun-jin
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