zte answer.pdf

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

VRINGO, INC., et ano. Plaintiffs, v. ZTE CORPORATION, et ano. Defendants

Civ. No. 14-cv-4988 (LAK)

ZTE CORPORATION, Plaintiffs, v. VRINGO, INC., et ano.

Defendants

Civ. No. 15-cv-0986 (LAK)

PARTIAL ANSWER OF PLAINTIFF ZTE CORPORATION

Plaintiff ZTE Corporation (ZTE), by its undersigned counsel, hereby answers Counts II

and III of the Counterclaims1 dated February 27, 2015 (the Counterclaims) filed against them

by Vringo, Inc. and Vringo Infrastructure, Inc. (collectively, Vringo) as follows:

1. ZTE admits the allegations of paragraph 1 on information and belief.


3. ZTE admits the allegations of paragraph 3.

4. ZTE neither admits nor denies the allegations of paragraph 4, which state

conclusions of law to which no response is required; to the extent a response is required, ZTE 1 ZTE has filed a motion to dismiss Count I of the Counterclaims; this Partial Answer responds

only to Counts II and III.

Case 1:15-cv-00986-LAK Document 61 Filed 04/27/15 Page 1 of 19

denies the allegations except admits that Vringo purports to bring an action for a declaratory

judgment.


conclusions of law to which no response is required; to the extent a response is required, ZTE

denies the allegations except admits that Vringo purports to plead alternative claims for breach

of contract.


conclusions of law to which no response is required. To the extent a response is required, ZTE

denies knowledge or information sufficient to form a belief as to the truth of the allegations of

paragraph 6.



admits that there are a number of actions pending between Vringo and ZTE around the world but

denies knowledge or information sufficient to form a belief as to the truth of the remainder of the

allegations of paragraph 7.


conclusions of law to which no response is required.


conclusions of law to which no response is required.

10. ZTE denies knowledge or information sufficient to form a belief as to the truth of

the allegations of paragraph 10.






13. ZTE admits that technical standards play a crucial role in the development of

wireless technologies and that standards facilitate the adoption and advancement of technology,

as well as the development of interoperable products. ZTE also admits that service providers and

device manufacturers agree on compatible technology specifications for related products or

services, a process that involves SDOs or SSOs, such as the European Telecommunications

Standards Institute (ETSI). ZTE denies the remaining allegations of paragraph 13.


the allegations of paragraph 14 except admits that ETSI is an independent, non-profit SSO that

produces globally-accepted standards in the telecommunications industry and has created or

helped to create numerous telecommunications stands, including the 2G/GSM,

3G/WCDMA/UMTS, and 4G/LTE cellular communication standards.

15. ZTE denies the allegations of paragraph 15 except admits that ETSI has adopted

an Intellectual Property Rights Policy (the IPR Policy) and respectfully refers the Court to that

document for a complete statement of its terms.

16. ZTE denies the allegations of paragraph 16 except respectfully refers the Court to

the IPR Policy for a complete statement of its terms.



denies knowledge or information sufficient to form a belief as to the truth of the allegations of

paragraph 17.










denies the allegations except admits that a holder of standard essential patents has an obligation

to license its SEPs on FRAND terms and conditions.



denies the allegations except admits that holders of SEPs are bound by certain FRAND

obligations, including the obligation to license their SEPs on FRAND terms and conditions, that

ZTE is a member of ETSI, that ZTE issued a General IPR Licensing Declaration to ETSI dated

November 16, 2010 and respectfully refers the Court to that document for a complete statement

of its terms.

23. ZTE denies the allegations of paragraph 23.


25. ZTE denies the allegations of paragraph 25 except admits that some companies

publish proposed rates for licensing of their intellectual property rights and respectfully refers the

Court to the full text of Exhibit 3 for a complete statement of its contents.


26. ZTE denies the allegations of paragraph 26 except admits ZTE issued the press

release identified as Exhibit 4 and respectfully refers the Court to Exhibit 4 to the Counterclaims

for a complete statement of its contents.



admits that Exhibit 1 is an excerpt from the ETSI IPR Policy and respectfully refers the Court to

the full ETSI IPR Policy for a complete statement of its terms.



denies the allegations of paragraph 28.


the ITC decision referenced therein for a complete statement of its contents.


Exhibit 6 to the Counterclaims for a complete statement of its contents.


the Mannheim Regional Court decision referenced therein for a complete statement of its

contents.

32. ZTE admits that the act of an SEP owner using the leverage of the standard

setting process to seek to extract higher royalties than could have been received prior to the

adoption of the standard has been referred to as patent hold-up. ZTE denies knowledge or

information sufficient to form a belief as to the truth of the remainder of the allegations of

paragraph 32 except respectfully refers the Court to Exhibit 8 to the Counterclaims for a

complete statement of its contents.



the allegations of paragraph 33 except admits, on information and belief, that Vringo purports to

have purchased a patent portfolio from Nokia Corporation that includes a number of patents that

have been declared to ETSI as potentially being or becoming essential to a proposed standard or

technical specification.



denies the allegations of paragraph 34 except admits that to the extent the Vringo SEPs are

essential, Vringo must grant licenses under those patents on FRAND terms and conditions.




37. ZTE denies the allegations of paragraph 37, except admits that ZTE sells

equipment installations using GSM, UMTS and/or LTE technology.

38. ZTE denies the allegations of paragraph 38 except admits that ZTE Corporation

and Vringo had a meeting at the Shenzhen headquarters of ZTE Corporation and that the parties

discussed licensing but have not agreed on the terms of any license.

39. ZTE denies the allegations of paragraph 39 except admits that ZTE Corporation

has discussed licensing with Nokia but those parties did not agree on the terms of any license.

40. ZTE denies the allegations of paragraph 40 except admits ZTE has not entered

into a license with Vringo.


41. ZTE denies the allegations of paragraph 41, except admits Vringo has brought

lawsuits against ZTE Corporation and its subsidiaries in countries including Australia, Brazil,

France, Germany, India, Malaysia, the Netherlands, Romania and the United Kingdom.


43. ZTE denies the allegations of paragraph 43 except admits that on September 25,

2012 Vringo wrote ZTE informing ZTE that it had acquired a portfolio of unidentified patents

and patent applications and respectfully refers the Court to the document referenced therein for a

complete statement of its terms.


45. ZTE denies the allegations of paragraph 45, except admits that on October 5,

2012 Vringo initiated patent infringement proceedings in the UK High Court against ZTE (UK)

Limited.

46. ZTE denies the allegations of paragraph 46 except admits that on November 15,

2012, Vringo filed a lawsuit against ZTE and ZTE Deutschland GmbH and on December 3, 2012

Vringo filed another lawsuit in the UK against ZTE (UK) Limited.


the letter referenced therein for a complete statement of its terms.

48. ZTE denies the allegations of paragraph 48, except admits that on February 20,

2013 Vringo expanded its German litigation against ZTE and ZTE Deutschland GmbH.

49. ZTE denies the allegations of paragraph 49, except admits that on March 14, 2013

ZTEs UK counsel sent a letter to Vringos counsel and respectfully refers the Court to that letter

for a complete statement of its terms.


50. ZTE denies the allegations of paragraph 50, except admits that on March 22, 2013



51. ZTE denies the allegations of paragraph 51 except admits that on March 28, 2013

Vringo provided a proposed license sheet (the Term Sheet) and respectfully refers the Court to

the Term Sheet for a complete statement of its terms. ZTE specifically denies Vringo has made a

FRAND offer.

52. ZTE denies the allegations of paragraph 52 except admits that on March 28, 2013

Vringo provided the Term Sheet and respectfully refers the Court to the Term Sheet for a

complete statement of its terms. ZTE specifically denies Vringo has made a FRAND offer.



55. ZTE denies the allegations of paragraph 55, except admits that on April 2, 2013,

Vringo filed a lawsuit in France against ZTE and ZTE France SASU. ZTE respectfully refers

the Court to the pleadings in the lawsuit in France for a complete and accurate statement of the

parties positions.

56. ZTE denies the allegations of paragraph 56, except admits that on April 18, 2013



57. ZTE denies the allegations of paragraph 57 except admits that on May 17, 2013

Vringos Australia counsel sent a letter to ZTE (Australia) Pty Ltd. and respectfully refers the

Court to that letter for a complete statement of its terms.



ZTE sent a communication and respectfully refers the Court to that document for a complete

statement of its terms.


Vringos Australian counsel sent a letter and respectfully refers the Court to that letter for a

complete statement of its terms.

60. ZTE denies the allegations of paragraph 60 except admits that on June 11, 2013,

Vringo filed a lawsuit in Australia against ZTE (Australia) Pty Ltd.

61. ZTE denies the allegations of paragraph 61 except admits that in a lawsuit

brought by Vringo in the High Court of Justice in England, Chancery Division, Patents Court,

Vringo asked the court to decide whether its offer of a global portfolio license was FRAND

before the court made any determination as to the validity or infringement of the patents at issue,

and that the High Court denied Vringos request for the reasons set forth in its approved

judgment dated June 6, 2013, to which the Court is respectfully referred for a complete statement

of its contents.

62. ZTE denies the allegations of paragraph 62 except admits that on November 7,

2013 Vringo filed a lawsuit in India against ZTE and other parties, including ZTE Telecom India

Private Limited.

63. ZTE denies the allegations of paragraph 63 except that in November 2013 Vringo

proposed meeting to discuss a resolution and that the parties agreed to meet in Shenzhen on

December 10, 2013.

64. ZTE denies the allegations of paragraph 64 except admits that Vringo provided

ZTE Corporation with a proposed non-disclosure agreement on November 27, 2013.


65. ZTE denies the allegations of paragraph 65 except admits that it returned a signed

copy of the non-disclosure agreement (the NDA) on December 9, 2013 in the original form

provided by Vringo and respectfully refers the Court to the NDA for a complete statement of its

terms.

66. ZTE denies the allegations of paragraph 66 except admits that Vringo and ZTE

Corporation had a meeting on December 10, 2013 at which Vringo provided a presentation (the

Presentation) and respectfully states that the text of the Presentation, which Vringo did not

submit, contains a complete statement of its contents. ZTE is prepared to submit the

Presentation to this Court, to the extent doing so would not be inconsistent with the contents of

the Courts July 9, 2014 Order.

67. ZTE denies the allegations of paragraph 67 except admits that on February 21,

2014 ZTE Corporation filed a complaint (the Chinese Complaint) against Vringo and Vringo

Infrastructure, Inc. in the Shenzhen Municipal Intermediate Peoples Court in Shenzhen,

Guangdong Province, Peoples Republic of China.

68. ZTE denies the allegations of paragraph 68 and respectfully refers the Court to the

decision referenced therein for a complete statement of Courts decision.


text of ZTE and ZTE Deutschland GmbHs request and the appellate decision referenced therein

for a complete statement of their terms.

70. ZTE denies the allegations of paragraph 70 except admits that on January 24,

2014 ZTEs UK counsel sent a letter to Vringos UK counsel and respectfully refers the Court to

that letter for a complete statement of its terms.



the allegations of paragraph 71 except admits that ZTE Corporation, ZTE (UK) Limited, ZTE

Deutschland GmbH, ZTE France SASU, and Zhongxing Corporation, S.L. filed a complaint with

the European Commission on April, 10, 2014 (the ZTE EC Complaint) alleging that Vringo

violated antitrust laws and admits that Vringo filed a response on June 18, 2014 and respectfully

refers the Court to those documents for a complete statement of their terms.


73. ZTE denies the allegations of paragraph 73 except admits that on April 14, 2014

Vringo filed a lawsuit in Brazil against ZTE and ZTE do Brasil Indstria, Comrcio, Servios e

Particapaes LTDA. and respectfully refers the Court to the documents referenced therein for a

complete statement of their terms.

74. ZTE denies the allegations of paragraph 74 except admits that at the end of April

2014, Dutch customs performed a seizure that, ZTE understands, was initiated through a request

for action filed by Vringo.


ZTE initiated summary proceedings and respectfully refers the Court to the documents

referenced therein for a complete statement of their terms.

76. ZTE denies the allegations of paragraph 76 except admits that The Hague Court

in the Netherlands authorized Vringo to have a bailiff seize evidence at the office of ZTE

Netherlands B.V.

77. ZTE denies the allegations of paragraph 77 except admits that The Hague Court

in the Netherlands authorized Vringo to have a bailiff seize evidence at the office of ZTE

Netherlands B.V.



79. ZTE denies the allegations of paragraph 79 except to admit that on June 23, 2014,

Vringo filed a lawsuit in Malaysia against ZTE and ZTE Malaysia Corporation Sdn. Bhd.,

alleging infringement of MY 142706.

80. ZTE denies the allegations of paragraph 80 except admits that on June 23, 2014

Vringo filed a lawsuit in Romania against ZTE and others, including ZTE Romania SRL and

respectfully refers the Court to the documents referenced therein for a complete statement of

their terms.

81. ZTE denies the allegations of paragraph 81 except admits that on July 2, 2014

Vringo filed a lawsuit in the U.S. District Court for the Southern District of New York against

ZTE and ZTE (USA) Inc. alleging breach of the NDA and requesting preliminary relief, and that

on July 7, 2014 the Court entered a temporary restraining order (TRO) which was reflected in

a written order dated July 9, 2014, which remains in effect.

82. ZTE denies the allegations of paragraph 82, except to admit that on July 4, 2014,

ZTE, ZTE Deutschland GmbH, and ZTE Netherlands B.V. initiated a lawsuit against Vringo in

the District Court of Rotterdam and respectfully refers the Court to the documents referenced

therein for a complete statement of their terms.

83. ZTE denies the allegations of paragraph 83, except to admit that on July 24, 2014,

ZTE, ZTE Deutschland GmbH, and ZTE Netherlands B.V. initiated proceedings in the District

Court in The Hague, Netherlands and refers the Court to the documents referenced therein for a

complete statement of their terms.


84. ZTE denies the allegations of paragraph 84, except admits that on July 31, 2014

Zhongxing Corporation S.L. filed a lawsuit in Spain against Vringo and respectfully refers the

Court to the complaint in that action for a complete statement of its terms.

85. ZTE denies the allegations of paragraph 85, except admits on August 19, 2014

Vringo initiated infringement proceedings in The Hague and respectfully refers the Court to the

documents referenced therein for a complete statement of their terms.

86. ZTE denies the allegations of paragraph 86, except admits on September 16, 2014

a hearing was held before the District Court in The Hague and respectfully refers the Court to the

documents referenced therein for a complete statement of their terms.

87. ZTE denies the allegations of paragraph 87, except admits on September 16,

2014, ZTE Romania appealed the Romanian preliminary injunction and respectfully refers the

Court to the documents referenced therein for a complete statement of their terms. In addition,

ZTE admits upon information and belief that, in January 2015, Vringo sent letters to

telecommunications providers and distributors notifying them of the injunction.


89. ZTE denies the allegations of paragraph 89, except admits on October 23, 2014,

ZTE Netherlands B.V. filed proceedings against Vringo in the District Court of The Hague and

respectfully refers the Court to the documents referenced therein for a complete statement of

their terms.

90. ZTE denies the allegations of paragraph 90, except admits on November 28, 2014

the UK High Court issued an order and respectfully refers the Court to the documents referenced





93. ZTE denies the allegations of paragraph 93 except to admit that Vringo filed a

lawsuit against ZTE and ZTE Services Deutschland GmbH in the Regional Court in Dusseldorf,

Germany for infringement of the German part of 1 212 919.



denies the allegations except admits that on December 18, 2014 ZTE (UK) Limited filed a

request with the UK High Court and respectfully refers the Court to the documents referenced




96. ZTE denies the allegations of paragraph 96, except admits that on February 5,

2015 ZTE Corporation and ZTE (USA) Inc. filed petitions requesting Inter Partes Review of

patents alleged to be assigned to Vringo and respectfully refers the Court to the documents

referenced therein for a complete statement of their terms.


2015 ZTE filed a complaint against Vringo in U.S. District Court for the District of Delaware

and respectfully refers the Court to the complaint for a complete statement of its terms.


2014 ZTEs counsel notified Vringos counsel in the NDA litigation about the Delaware action.


complaint referenced therein for a complete statement of its terms.


100. ZTE denies the allegations of paragraph 100 and respectfully refers the Court to

the complaint referenced therein for a complete statement of its terms.


the complaint referenced therein for a complete statement of its terms.



104. ZTE denies the allegations of paragraph 104 except to admit that Vringo

withdrew its infringement claims against ZTE (UK) Limited on the UK parts of EP 1 808 029,

EP 1 221 212 and EP 1 186 119.

105. ZTE denies the allegations of paragraph 105 expect admits that on January 2,

2013, InterDigital filed a Complaint against ZTE and ZTE (USA) Inc. that resulted in an

investigation before the U.S. International Trade Commission, that InterDigital sought an

exclusion order against ZTE products based upon alleged infringement of purported standards

essential patents, and that the International Trade Commission found no violation of Section 337.

106. ZTE denies the allegations of paragraph 106 except admits that on January 2,

2013 InterDigital brought a patent infringement lawsuit against ZTE and ZTE (USA) Inc. in the

U.S. District Court for the District of Delaware.

107. ZTE denies the allegations of paragraph 107 except admits that on March 22,

2013 it served an answer and counterclaims in the InterDigital Delaware case and respectfully

refers the Court to that answer for a complete statement of its terms.


the document referenced therein for a complete statement of its terms.

* * * *


ANSWERING COUNT II

119. ZTE incorporates its responses to paragraphs 1 through 118 as if fully set forth

herein.


conclusions of law to which no response is required; to the extent a response is required ZTE

denies the allegations except admits that Vringo purports to plead Count II of its Counterclaims

in the alternative.


ZTEs complaint for a complete statement of its allegations.






127. ZTE denies the allegations of paragraph 127, except admits that Vringo purports

to seek special performance.


ANSWERING COUNT III

129. ZTE incorporates its responses to paragraphs 1 through 128 as if fully set forth

herein.


conclusions of law to which no response is required; to the extent a response is required ZTE


denies the allegations except admits that Vringo purports to plead Count III of its Counterclaims

in the alternative.


ZTEs complaint for a complete statement of its allegations.







138. ZTE denies the allegations of paragraph 138, except admits that Vringo purports

to seek a declaration.

PRAYER FOR RELIEF

ZTE denies that Vringo is entitled to any relief.

DEFENSES

ZTE incorporates by reference the facts set forth its Complaint as if fully set forth herein.

1. ZTE reserves all affirmative defenses available under any applicable law and its

right to assert additional defenses if discovery in this action makes known facts that support such

defenses. To the extent that the defenses below raise matters on which plaintiffs bear the burden

of proof at trial, ZTE does not adopt or assume that burden by virtue of this pleading.

2. Vringo is not entitled to relief due to a failure to state a claim on which relief can

be granted.


3. Vringo is not entitled to relief because it lacks standing to assert the

counterclaims.

4. Vringo is not entitled to relief because the counterclaims are not ripe.

5. Vringo is not entitled to relief because any alleged injury is not immediate or

irreparable.

6. Vringo is not entitled to relief because, to the extent ZTE has breached any

obligation, Vringo has an adequate remedy at law.

7. Vringo is not entitled to relief because any alleged damages or harm were not

caused by ZTE or its actions.

8. Vringo is not entitled to relief under the doctrine of unclean hands.

9. Vringo is not entitled to relief under the doctrine of estoppel.

10. Vringo is not entitled to relief under the doctrine waiver.

11. Vringo is not entitled to relief under the applicable statute of limitations.

12. Vringo is not entitled to relief under the applicable statute of frauds.

13. Vringo is not entitled to relief due to a failure of condition precedent.

14. Vringo is not entitled to relief because, to the extent ZTE did not perform any

contractual obligation, ZTEs nonperformance was excused due to Vringos breach, anticipatory

breach, or anticipatory repudiation of the contract and/or the implied covenants of good faith and

fair dealing.


WHEREFORE, ZTE respectfully requests judgment granting the following relief:

(a) Dismissing Counts II and III of Vringos Counterclaims with prejudice;

(b) Awarding ZTE its costs of defending this action, including attorneys fees, costs and disbursements; and

(c) Granting ZTE such other and further relief as this Court deems just and proper.

Dated: Chicago, IL April 27, 2015

Respectfully submitted, /s/ Jeffrey J. Catalano Jay H. Reiziss BRINKS GILSON & LIONE 1775 Pennsylvania Ave, NW Suite 900 Washington, D.C. 20006 (202) 296-6940 (Phone) (202) 296-8701 (Fax) [email protected] Jeffrey J. Catalano BRINKS GILSON & LIONE 455 N. Cityfront Plaza Drive Suite 3600 Chicago, IL 60611 (312) 321-4200 (Phone) (312) 321-4399 (Fax) [email protected] ATTORNEYS FOR ZTE CORPORATION


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