$392M vs $731M: The Same SEP Case, Two Courts, Double the Damages
On May 1, 2026, the same case produced two judgments on the same day. The London High Court ordered Samsung to pay ZTE $392 million. The Chongqing First Intermediate Court ordered Samsung to pay ZTE $731 million. Same patents, same facts, same parties — a difference of nearly double.
Why?
I. A Patent War That Ran Across Five Jurisdictions
Let's start with how this battle began.
ZTE and Samsung originally had a cross-license agreement signed in 2021 covering the 4G portfolio and early SEPs, expiring at the end of 2023. Renewal negotiations ran through many rounds — technical meetings, commercial meetings, several price changes — without reaching a deal.
In December 2024, Samsung sued first in the UK. The dispute then spread to China (Chongqing), Germany (Munich), Brazil, and the United States — five jurisdictions litigating simultaneously.
Key milestones:
- January 2026: CNIPA upheld the validity of two of ZTE's core 5G patents (the Polar code and reference signal patents); all of Samsung's invalidation challenges were rejected — ZTE's hand was confirmed strong.
- January 30, 2026: The U.S. District Court for the Northern District of California dismissed Samsung's FRAND contract and antitrust claims.
- April 29, 2026: The UPC Mannheim Local Division dismissed Samsung's FRAND counterclaim.
- May 1, 2026: Double judgments on the same day — $392 million in the UK, $731 million in Chongqing.
- May 7, 2026: The Munich Regional Court I ruled for ZTE on both its main claim and counterclaim, granting a German injunction.
- June 29, 2026: ZTE appealed to the UPC; the case is still evolving.
So here's the question: the UK court and the Chongqing court faced the same facts. Why did the amounts differ by nearly double?
II. Two Kinds of Math: Comparable-License Approach vs. Top-Down Approach
The answer lies in the valuation methodology.
The UK's approach: find historical benchmarks.
The core basis for UK Judge Meade was "comparable licenses" — ZTE and Samsung's old 2021 deal, and ZTE and Apple's 2020 license agreement. In his view, the price ZTE had negotiated in the past was the "market price" of its patents.
There is one logic in the UK judgment that raises eyebrows: the judge considered that Nokia and Ericsson are "litigation-active," so their higher royalty collections were "deserved"; while ZTE "always negotiates gently and dislikes litigation," so being undervalued was also "self-inflicted." In other words — if you don't litigate, your patents are naturally worth less.
Chongqing's approach: break down from the whole to the individual.
The Chongqing court used the top-down approach. First, determine the total royalty rate (aggregate rate) that all patent owners together should collect for a given technical standard (e.g., 5G). Then allocate that pie according to each company's share of patents.
How did it calculate? The court found the FRAND net royalty range for the licenses at issue to be between $717 million and $787 million, and the awarded amount of $731 million falls within that range. This $731 million includes cross-license fees for 2024–2029, plus a past portion of 5G SEP royalties for 2019–2023.
The difference between the two methods is clear with an analogy:
| Dimension | UK (Comparable-License) | Chongqing (Top-Down) |
|---|---|---|
| Core logic | What you sold for in the past is what you're worth now | Divide the whole pool proportionally |
| Evidence relied on | Historical transaction agreements | Patent essentiality + industry aggregate rate |
| Sensitivity to portfolio quality | Low (anchored to historical price) | High (more and higher-quality patents = larger share) |
| Weight given to negotiation conduct | Heavy ("no litigation = not worth much") | Focuses on technical contribution itself |
| Damages awarded | $392 million | $731 million |
Chongqing's approach did not come from nowhere. In December 2023, the same court issued the world's first aggregate 5G royalty-rate judgment in OPPO v. Nokia, setting an upper limit on the per-device license fee for 5G multi-mode phones. This time, the Chongqing court applied the same methodology to the ZTE–Samsung case.
III. What This Means for Chinese Companies
First, Chinese courts are becoming the "rule-makers" of global SEP pricing. From OPPO v. Nokia to ZTE v. Samsung, the Chongqing First Intermediate Court has made the top-down approach the standard practice in Chinese SEP adjudication through two benchmark cases. For Chinese companies expanding overseas, the likelihood of obtaining a FRAND rate ruling in their home courts is an order of magnitude higher than three years ago.
Second, the quality of your patent portfolio directly determines how much you can collect. ZTE holds 6,500 5G standard-essential patent families, and its two core patents withstood Samsung's invalidation challenges — this is the technical confidence behind the $731 million award. Conversely, if your portfolio cannot survive invalidation, no court will award you a high price.
Third, the record of your negotiations is itself evidence. The UK judgment's "if you don't litigate, you're not worth much" logic is jarring, but it sends a signal: in FRAND litigation, the finding of "who acted in good faith and who acted in bad faith" materially affects the final amount. Written records, basis for quotes, response times — these operational details can translate into hundreds of millions of dollars in court.
Three Actions You Can Take Now
1. Inventory whether your patent portfolio contains SEP-related technology. If your products use standard technologies such as cellular communications, WiFi, or video codecs, first determine: do you have your own patent contributions in these standards? If not, does your upstream chip supplier's license cover you? The exhaustion doctrine remains unsettled — the video SEP series by IPR Media (知产力) is discussing this same issue.
2. Keep negotiation records as litigation evidence. In every round of license negotiation, document your offers, the basis for them, and the other party's responses in writing. If the matter ever reaches court, the evidence chain for FRAND good-faith findings matters far more than you think.
3. Watch CNIPA's new administrative adjudication channel. On July 16, 2026, CNIPA's official reply made clear that FRAND factors should be considered in administrative adjudication of SEP disputes. Compared with multi-jurisdiction litigation that can cost tens of millions of dollars in legal fees, administrative adjudication is faster, cheaper, and more specialized. For SMEs, this may be a more pragmatic path.
Translated from Chinese original. Author: He Zigang (何自刚). Original published August 6, 2026 on najieip.com.