On May 26, 2016, Judge James Selna of the Central District of California denied a motion that requested that an arbitration ruling be applied in district court litigation. TCL Communication Technology Holding Ltd. (“TCL”) filed the motion amidst a lawsuit with Ericsson over standard-essential patents.
TCL’s motion centered on an arbitration ruling in a dispute between Ericsson and Huawei Technologies Co. Ltd. The arbitration ruling held that Ericsson offered discriminatory royalty rates to Huawei for its patents. TCL’s motion sought to introduce the arbitrator’s decision to demonstrate that Ericsson also breached its FRAND obligation to TCL by offering only a discriminatory royalty rate.
Judge Selna denied TCL’s motion and found that it was not appropriate to substitute the arbitration ruling for a determination that the jury must make. Judge Selna noted the differences in the two proceedings and identified issues in the district court litigation that were not addressed in the arbitration. Judge Selna also set forth policy reasons to support his denial, stating that parties could be discouraged to arbitrate if findings made in arbitration are used to adversely impact their position in other litigation or licensing disputes. Thus, Judge Selna concluded that the doctrine of collateral estoppel should not apply in this situation.
TCL Commc’ns Tech. Holdings Ltd. v. Telefonaktenbologet LM Ericsson, No. SACV 8-14-cv-00341-JVS (C.D. Cal. May 26, 2016).