Conversant v Huawei (SPC, (2019) 最高法知民终732、733、734号之二, 2020)

Dhenne Avocats · 11 October 2026

Our analysis

Summary

The Supreme People’s Court of China dismissed Conversant’s application for reconsideration and upheld the conduct preservation order of 28 August 2020, which prohibits Conversant from seeking provisional enforcement of the first instance injunction granted by the Düsseldorf Regional Court against Huawei until the Court has finally ruled on the licensing terms for Conversant’s Chinese standard essential patents. The Court confirmed the penalty of RMB 1 million per day of breach and stressed that the order, made under Chinese law, targets a party’s conduct rather than the German judgment (grounds (一) and (六)). The ruling illustrates how Chinese courts use anti-suit type relief to protect their power to set royalty rates against a European injunction.

Facts and procedure

Huawei Technologies, Huawei Device and Huawei Software brought proceedings in China for declarations of non-infringement and for the determination of licensing terms for Conversant’s Chinese SEPs; Conversant’s appeal was pending before the Supreme People’s Court. Meanwhile, the Düsseldorf Regional Court had ordered Huawei and two German group companies to cease infringing European SEPs. On Huawei’s application, the Court made the original order on 28 August 2020. Conversant applied for reconsideration on 2 September 2020, and a hearing was held on 4 September 2020.

The applicable law

Conduct preservation falls under Article 100 of the Civil Procedure Law, which the Court applied to the exclusion of German law (ground (一)). Facts relating to preservation measures are established on the preponderance of evidence (Article 86(2) of the Court’s Provisions on Evidence in Civil Proceedings) (ground (三)). Article 104 of the Civil Procedure Law and Article 12 of the Court’s Provisions on conduct preservation in IP disputes govern the discharge of such measures (ground (五)); Article 115 sets the level of fines (ground (六)).

Question

May a Chinese court seised of the determination of licensing terms for Chinese SEPs prohibit the patentee, on pain of daily fines, from provisionally enforcing a German injunction, and must that order be lifted if the patentee offers security?

Decision

The Court addressed six issues. The order, made under Chinese law, rules neither on infringement nor on the German judgment and merely suspends enforcement; it respects international comity, the Chinese proceedings having been filed first, and Conversant had itself sought orders elsewhere restraining proceedings in China (ground (一)). The Chinese judgment will set a royalty rate binding on both parties, and the two sets of proceedings partly overlap, since the German injunction rested on the FRAND character of Conversant’s offer; the order does not conflict with ruling No. 157 on jurisdiction (ground (二)). Without the order, Huawei would have to leave the German market or accept Conversant’s demand and give up its Chinese remedy, harm that the €2.4 million security would not cover (ground (三)). The balance of interests favours Huawei, Conversant’s German interest being essentially financial and Huawei having provided security matching the German damages claim (ground (四)). Security does not justify lifting the order (ground (五)), and daily fines reflect the continuing nature of any breach (ground (六)). The Court warned that the parties must not seek German injunctions to defeat the order and dismissed the application.

Key points for practice

• The Court characterised the order as a temporary suspension directed at the party, so as to present it as consistent with sovereignty and comity (ground (一)).
• Overlap between a FRAND rate-setting action and a foreign infringement action is enough to show a risk to the enforceability of the Chinese judgment (ground (二)).
• An offer of security by the patentee does not lead to the discharge of a conduct preservation order (ground (五)).
• Practical point: a SEP holder involved in Chinese rate-setting proceedings must factor in the risk of a prohibition backed by daily fines before enforcing an injunction obtained in Europe (grounds (三) and (六)).

Provisions applied

National law

Civil Procedure Law of the People’s Republic of China, Arts 100, 104, 108 and 115; Supreme People’s Court Interpretation on the application of the Civil Procedure Law, Art. 171; Supreme People’s Court Provisions on Evidence in Civil Proceedings, Art. 86(2); Supreme People’s Court Provisions on conduct preservation in intellectual property disputes, Art. 12

Case law cited

Supreme People’s Court, (2019) 最高法知民终732、733、734号之一, 28 August 2020 (original order); Supreme People’s Court, (2019) 最高法知民辖终157号, 21 August 2020 (jurisdiction)

Prepared by Dhenne Avocats from the text of the decision (WIPO Lex, Chinese text, converted unofficial version), consulted on 11 October 2026. Only the official text is authoritative.