BREAKING: Chongqing Court Ruling Adopts Samsung-Nokia Agreement as Comparable for Determining 5G FRAND Royalty Rates (1)
Image: Chongqing First Intermediate People’s Court
May 10, 2026
On May 10, 2026, the judgment issued on May 1, 2026 by the Chongqing First Intermediate People’s Court in ZTE v. Samsung (FRAND) was publicly released by IP Economy, setting a global cross-licensing lump sum of US$731 million.
The key findings of the judgment are as follows:
The court set royalty rates using distinct methodologies: for 2G, 3G and 4G, rates were determined by the comparable licence approach; for 5G, rates were determined by both the top-down methodology and the comparable licence approach. These together established the US$731 million lump sum.
The court confirmed that the 2021 ZTE‑Samsung Agreement does not cover 5G, which forms the basis for using separate comparables for the two sets of rates.
The court rejected Samsung’s reliance on the 2020 ZTE‑Apple Agreement as a 5G comparable, finding ZTE faced financial and cash flow distress at the time. Referencing InterDigital’s 2019 licence with ZTE, the court noted payment capacity concerns and held the negotiating environment was potentially distorted, rendering the licence inappropriate for 5G rate-setting.
In assessing the ENI licences, the court held the Samsung‑Nokia agreement was negotiated under better conditions, involved more comparable parties and business models, and was free from litigation, injunctions or arbitration, making it the more appropriate comparable.
For 5G multimode terminal products, the technical value contribution weighting of 5G:4G:3G:2G is 50:40:5:5 for the early 5G rollout period (2019–2023), and 70:24:3:3 for the mature 5G phase (2024–2029).
The aggregate cumulative royalty range for 5G standards is 4.341%–5.273% (2019–2023) and 7.8%–8.5% (2024–2029), and the court adopted the figures proposed by ZTE’s economist.
ZTE’s 5G SEP portfolio share is 7.7%, and Samsung’s 5G SEP portfolio share is 8.7%.
The US$731 million lump sum covers cross-licensing royalties for 2G–5G SEPs for the period January 1, 2024 – December 31, 2029, plus past use cross-licensing royalties for 5G SEPs for the period January 1, 2019 – December 31, 2023.
The court identified three core disputed issues between the parties in this case. The first centers on the 2021 ZTE‑Samsung agreement: how the agreement should be interpreted, whether it extends to 5G SEPs, and whether its license fee encompasses consideration for the covenant not to sue (CNS) and past liability releases.
This article firstly discusses this core dispute, and PRIP will provide detailed follow‑up coverage on the Chongqing Court’s reasoning for the remaining two disputed issues as well as the parties’ contentions.
Applicable Law
The court clarified the rules of law applicable to this case. PRC law governs the determination of SEP licensing terms, while the 2021 ZTE‑Samsung Agreement stipulates that its interpretation, validity, performance and related disputes shall be governed by the substantive law of California, USA. Accordingly, disputed contractual provisions are to be interpreted under California law.
Scope of the 2021 Agreement: Exclusion of 5G SEPs
In substance, the licensed standards under the 2021 Agreement expressly exclude 5G. Provisions concerning 4G/5G cross‑patents and the exclusion of pure 5G functions serve only to define the full licensing scope for 2G to 4G technologies, rather than extending coverage to 5G standard‑essential patents. The agreement’s preamble records the parties’ intention to conduct good‑faith negotiations on 5G and includes a standalone litigation standstill arrangement for 5G SEPs. In addition, no 5G claim charts were exchanged during negotiations. Based on the above, the agreement is confirmed to cover only 2G–4G SEPs and does not include any 5G SEP licensing.
Covenant Not to Sue (CNS)
The court ruled the 2021 Agreement’s license fee does not cover consideration for the 2024 CNS, as the agreement requires separate valuation of the CNS period in any future licence. The monetary value of past releases is not a pure contractual interpretation issue and will be addressed in agreement breakdown and rate calculation.
Monetary Valuation of Past Release Provisions
The court held past releases embody substantive rights and should in principle be valued, unless explicitly excluded. Since this was the parties’ first licence with unique negotiation circumstances and no past release consideration was discussed, full valuation would produce an unreasonably low rate. The court valued past releases at 9/32 of the full 8‑year royalty, using September 2018 (substantive negotiations start) as the reference point.
Presiding Judge Fan Wenyan, who also presided over the OPPO v. Nokia case in 2023.
Judges Zhang Yan and Xiao Yao, Judicial Assistants Tian Song and Zhang Yanjiao, and Court Clerk Zhou Xin.