Samsung v ZTE: English High Court sets $392m FRAND lump sum in global SEP cross-licence dispute

Mr Justice Meade handed down judgement on 1 May 2026 in Samsung Electronics Co, Ltd v ZTE Corporation [2026] EWHC 999 (Pat), resolving a dispute over the renewal terms of a global standard-essential patent (SEP) cross-licence between the two telecommunications giants. The case arose after the parties' 2021 Patent Licence Agreement (PLA) expired and negotiations for a renewal broke down — not over whether a licence should exist, but over its price.

The central valuation dispute

Samsung's primary position was that the most probative comparables were licences to ZTE's own portfolio: the 2021 PLA and a 2020 licence between ZTE and Apple (ZTE-Apple 2020), collectively termed the "Big Two". ZTE, by contrast, relied on three Samsung in-licences — with Ericsson, Nokia, and InterDigital — grouped as the "ENI" licences, arguing these better reflected fair market value. ZTE's pleaded figure was $731m.

Meade J rejected the ENI licences entirely as comparables. Two reasons were decisive. First, the portfolios of Ericsson, Nokia, and InterDigital were materially different in composition and geographic scope from ZTE's. ZTE's portfolio was characterised as significantly more China-centric, containing a higher proportion of single-member patent families and fewer triadic or IP5 families — structural differences that Dr Baron's unchallenged expert evidence demonstrated could not reliably be neutralised by simple numerical scaling. Second, the ENI licensors' well-established willingness and ability to litigate — securing injunctions swiftly, particularly in Germany — meant their agreements almost certainly incorporated a substantial non-FRAND premium reflecting injunction risk rather than the underlying technology alone.

The NDDS licences (Samsung's agreements with NEC, Docomo, Datang, and Sharp) were also assessed but found to be inconsistent and unreliable as a group. The variation in implied rates between the NDDS and ENI groupings was so extreme — and the explanatory factors so difficult to disentangle — that no reliable FRAND corridor could be drawn from Samsung's in-licences as a whole.

Adjustments for non-FRAND factors

Meade J accepted that the Big Two were the appropriate starting point but found both were significantly depressed by non-FRAND pressures. ZTE had entered both negotiations signalling an urgent need for cash following severe US sanctions, was inexperienced in outbound licensing relative to its counterparties, and had minimal appetite or capacity for litigation. It was, in the judge's assessment, materially outmatched.

ZTE-Apple 2020 was preferred over the 2021 PLA for two reasons: it expressly covered 5G and was therefore cleaner to unpack, and it required smaller and more tractable subjective adjustments. The 2021 PLA suffered additional complications — Samsung had effectively obtained coverage of most 5G-related rights without corresponding payment, and the covenant not to sue provisions gave rise to contested interpretation issues (resolved in Samsung's favour on both points).

Three upward adjustments were made to the ZTE-Apple 2020 lump sum: 12.5% for a first-licensee discount, 5% for underperformance on 5G, and an 80% past sales discount applied during unpacking to reflect ZTE's constrained negotiating position. These produced a combined notional uplift of 21% to the Apple lump sum before repacking.

On methodology, Dr Lopez's dollar-per-unit (DPU) approach was preferred over Dr Chowdhury's uncapped ad valorem method, which was found to produce distortions disproportionate to differences in average selling prices. Future sales projections were calculated using Counterpoint data, consistent with ZTE's right to adopt a recognised industry source. Multimode weightings followed the Chongqing Court's approach in Nokia v Oppo: 80:10:10 for 4G and 50:40:5:5 for 5G.

ZTE's top-down cross-check was rejected as excessively sensitive to stack share assumptions and cap levels, rendering it incapable of assisting in choosing between the competing comparables.

Non-royalty terms and outcome

On non-royalty terms, the court found in Samsung's favour. ZTE had agreed in 2025 renewal negotiations to replicate the 2021 PLA's broader scope — covering non-cellular SEPs and non-cellular products — before withdrawing that agreement close to trial without explanation. Meade J characterised the withdrawal as tactical rather than principled, and held that the only FRAND structure properly before the court was the one Samsung sought.

The court-determined licence carries a FRAND lump sum balancing payment of $392m, with Samsung as net payer. The parties were directed to make submissions on the form of order and confidentiality redactions.