United States Court of Appeals 

for the Federal Circuit ______________________

TCL COMMUNICATION TECHNOLOGY 

HOLDINGS LIMITED, TCT MOBILE LIMITED, TCT 

MOBILE (US) INC.,

Plaintiffs-Appellees

v.

TELEFONAKTIEBOLAGET LM ERICSSON, 

ERICSSON INC.,

Defendants-Appellants

______________________

2018-1363, 2018-1732

______________________

Appeals from the United States District Court for the 

Central District of California in No. 8:14-cv-00341-JVSDFM, Judge James V. Selna.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

ERICSSON, INC., TELEFONAKTIEBOLAGET LM 

ERICSSON,

Plaintiffs-Appellants

v.

TCL COMMUNICATION TECHNOLOGY 

HOLDINGS LIMITED, TCT MOBILE LIMITED, TCT 

MOBILE (US) INC.,

Defendants-Appellees

______________________
2 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

2018-1380, 2018-1382

______________________

Appeals from the United States District Court for the 

Central District of California in No. 2:15-cv-02370-JVSDFM, Judge James V. Selna.

______________________

Decided: December 5, 2019 

______________________

JEFFREY A. LAMKEN, MoloLamken LLP, Washington, 

DC, argued for defendants-appellants and plaintiffs-appellants. Also represented by EMILY DAMRAU, RAYINER 

HASHEM, MICHAEL GREGORY PATTILLO, JR.; SARA 

MARGOLIS, New York, NY; NICHOLAS M. MATHEWS,

THEODORE STEVENSON, III, McKool Smith, PC, Dallas, TX; 

JOHN M. WHEALAN, Chevy Chase, MD.

 STEPHEN S. KORNICZKY, Sheppard, Mullin, Richter & 

Hampton LLP, San Diego, CA, argued for plaintiffs-appellees and defendants-appellees. Also represented by MARTIN 

BADER, MATTHEW HOLDER, ERICKA SCHULZ, KARIN DOUGAN 

VOGEL.

 DAVID S. STEUER, Wilson, Sonsini, Goodrich & Rosati, 

PC, Palo Alto, CA, for amicus curiae InterDigital, Inc. Also 

represented by MICHAEL BRETT LEVIN, MAURA L. REES.

 JOHN D. HAYNES, Alston & Bird LLP, Atlanta, GA, for 

amicus curiae Nokia Technologies Oy. 

 THOMAS ANDREW CULBERT, Perkins Coie, LLP, Seattle, 

WA, for amicus curiae Uber Technologies, Inc. Also represented by KEVIN ANDREW ZECK. 

 STEVEN J. ROUTH, Orrick, Herrington & Sutcliffe LLP, 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 3

Washington, DC, for amicus curiae Panasonic Corporation. 

Also represented by BENJAMIN PAUL CHAGNON, HANNAH 

GARDEN-MONHEIT, JOHN ARPIO JURATA, JR. 

 PETER J. AYERS, Law Office of Peter J. Ayers, Austin, 

TX, for amici curiae John Jarosz, Jeffrey H. Kinrich, Michael Chapman, Michael Wagner, Edward A. Gold, John 

Bone, David Haas, Scott Weingust. 

 MICHAEL A. BITTNER, Winston & Strawn LLP, Dallas, 

TX, for amicus curiae Peter Georg Picht. 

 JACOB KEVIN BARON, Holland & Knight, LLP, Boston, 

MA, for amicus curiae Kelce Wilson. 

 JAMES R. BARNEY, Finnegan, Washington, DC, for 

amici curiae Toyota Motor Corporation, Honda Motor Co., 

Ltd., Nissan Motor Co. Ltd., Denso Corporation, Hyundai 

Motor Company. Also represented by DAVID BRIAN 

KACEDON, JOSEPH PRESTON LONG. 

 KEVIN HARDY, Williams & Connolly LLP, Washington, 

DC, for amici curiae High Tech Inventors Alliance, Alliance 

of Automobile Manufacturers, Inc., Google LLC, Hewlett 

Packard Enterprise Company, HP Inc. Also represented 

by SAMUEL BRYANT DAVIDOFF. 

 DAVID H. HERRINGTON, Cleary, Gottlieb, Steen & Hamilton LLP, New York, NY, for amicus curiae Fair Standards 

Alliance ASBL. Also represented by ALEXANDRA 

THEOBALD; DANIEL P. CULLEY, Washington, DC. 

 JENNIFER H. DOAN, Haltom & Doan, Texarkana, TX, for 

amici curiae HTC Corporation, HTC America, Inc.

 ______________________

Before NEWMAN, CHEN, and HUGHES, Circuit Judges.
4 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

CHEN, Circuit Judge.

This appeal arises from a March 9, 2018 decision and 

order issued by the United States District Court for the 

Central District of California (the court) imposing “fair, 

reasonable and non-discriminatory” (FRAND) rates in a

binding worldwide license on Appellants (Ericsson) and 

Appellees (TCL) for Ericsson’s portfolio of standard-essential patents (SEPs) incorporated into 2G, 3G, and 4G mobile communications standards.

The court-ordered license set forth two terms relevant 

on appeal: (1) a prospective FRAND royalty rate for practicing each standard, and (2) a “release payment” computed 

based on a closely related, retrospective FRAND rate for 

“TCL’s past unlicensed sales.” To determine these rates, 

the court conducted a ten-day bench trial, where the two 

parties proposed different FRAND rates based on different 

methodologies. Rejecting both parties’ proposed methodologies as flawed, the court employed its own modified version of TCL’s proposed “top-down” approach in combination 

with comparable license evidence to compute both the prospective and retrospective FRAND rates.

The threshold issue on appeal is whether Ericsson had

a Seventh Amendment right to a jury trial on the adjudication of the “release payment” term. This inquiry turns on 

whether the relief sought by the release payment is either 

legal or equitable in nature. Because we conclude that the 

release payment is in substance compensatory relief for 

TCL’s past patent infringing activity, we hold that Ericsson 

was entitled to a jury trial on the calculation of the release 

payment amount, and that the district court deprived Ericsson of that right by determining that legal relief in a 

bench trial. For the reasons explained below, we vacatein-part, reverse-in-part, and remand for further proceedings consistent with this opinion. 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 5

BACKGROUND

Standards promote interoperability of different devices 

through the use of the same protocol. Patents declared to 

be essential to practicing a standard are often referred to 

as SEPs. This case involves a portfolio of SEPs owned by 

Ericsson incorporated into 2G, 3G, and 4G standards that 

enable mobile devices from different manufacturers and 

different networks to communicate with each other using 

the same communication protocol. 

A. ETSI and the FRAND Obligation 

Ericsson is a member of the European Telecommunications Standards Institute (ETSI), which is the international standard-setting organization responsible for 

developing 2G, 3G, and 4G standards. For a patent to become essential to an ETSI standard, ETSI members first 

submit declarations identifying which of their patents or 

applications may become essential to the standard. ETSI’s 

acceptance of a member’s patent as an SEP forms a contract between ETSI and its members. Together, the 2G, 

3G, and 4G standards incorporate the technologies claimed 

by thousands of SEPs, including over one hundred owned

by Ericsson. 

Because interoperability requires the practice of these 

standards, owners of such SEPs wield significant power

over implementers during licensing negotiations. To offset 

this power imbalance and promote interoperability, the 

contract imposes an obligation to license, referred to here 

as the “FRAND obligation,” on ETSI members. J.A. 35. As 

defined by § 6.1 of the ETSI Intellectual Property Rights 

Policy, this obligation requires members to be “prepared to 

grant irrevocable licenses” to implement their SEPs on 

FRAND terms and conditions to implementers. J.A. 36. 

Because this obligation is intended to benefit implementers 

of ETSI standards, the implementers may assert their 

rights created by the FRAND obligation as third-party beneficiaries. Id.
6 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

TCL manufactures mobile devices that implement 

these ETSI standards so that they may interoperate in the 

mobile communications environment. As a member of 

ETSI, Ericsson is bound by its contractual FRAND obligation to ETSI to be prepared to offer TCL FRAND-complaint 

terms to license its SEP portfolio. 

B. Licensing Negotiations

The parties have been negotiating licensing terms for 

over a decade. In 2007, TCL and Ericsson entered into 2G 

licenses with seven-year terms. TCL did not sell a meaningful volume of 3G phones until 2011, when the two parties began to negotiate a 3G license in earnest. In 2012, 

while the parties were negotiating, Ericsson initiated a series of foreign litigations against TCL for alleged infringement of Ericsson’s SEPs in six different jurisdictions 

(France, United Kingdom, Brazil, Russia, Argentina, and 

Germany). In 2013, TCL began selling 4G phones, and the 

parties began negotiating a license covering Ericsson’s 4G 

SEPs. That year, Ericsson offered 4G rates to TCL for the 

first time. But TCL did not consider any of Ericsson’s offers 

or counteroffers to be on FRAND terms. In a 2014 meeting, 

Ericsson made a license offer that TCL stated “look[ed]

promising.” J.A. 31.

Before the parties reached agreement, TCL filed a declaratory judgment action against Ericsson in the Central 

District of California. This was filed right before TCL’s 2G 

licenses with Ericsson were set to expire. J.A. 32. When 

negotiations finally failed, the parties agreed to engage in 

a binding court adjudication of terms for a worldwide portfolio license. J.A. 32. The adjudication of these terms is 

the subject of this appeal.

PROCEDURAL HISTORY

The case below is a consolidation of two district court

actions. The first action was initiated by TCL in March 

2014, when it filed suit against Ericsson in the Central 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 7

District of California (the California Action). The second 

action followed in June 2014, when Ericsson filed suit 

against TCL in the Eastern District of Texas (the Texas 

Action).

In the California Action, TCL sought declaratory judgment that Ericsson had failed to offer a FRAND rate to 

TCL. J.A. 469. In its prayer for relief, TCL requested that 

the court “[d]etermine the FRAND rates that TCL is entitled to,” “[d]ecree that Ericsson has not offered [FRAND] 

royalties to TCL,” and “[d]ecree that TCL is entitled to license from Ericsson any and all [SEPs] under [FRAND] 

terms and conditions.” J.A. 683. TCL also sought damages 

for infringement of its own patents, as well as various state 

law claims based on Ericsson’s contractual FRAND obligation with ETSI (e.g., breach of contract, promissory estoppel, violation of California Unfair Competition Law). J.A. 

641.

In the Texas Action, Ericsson sought damages for infringement of two individually-asserted SEPs, U.S. Patent 

No. 6,301,556 and U.S. Patent No. 6,473,506, for which 

TCL filed counterclaims of invalidity and non-infringement 

(collectively, Ericsson’s patent infringement claims and 

TCL’s related counterclaims of invalidity and non-infringement). Ericsson further requested that the court declare 

“that [it] complied with its FRAND commitments . . . or, alternatively, adjudge and declare what steps would be required for Ericsson to achieve such compliance.” J.A. 

60828. 

The two Actions were consolidated in June 2015 when 

the Texas Action was transferred to the Central District of 

California. The same day, the court granted TCL’s motion 

to enjoin Ericsson “from further prosecuting any actions alleging infringement of its 2G, 3G, and 4G patents until the 

FRAND issues are resolved” in the Central District of California. J.A. 32–33 (referring to J.A. 4687).
8 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

A. Ericsson’s Proposed License Offers to TCL

The court ordered the parties to provide contentions defining the contents of a FRAND license. J.A. 131713. In 

response, Ericsson proposed two alternative license offers, 

“Option A” and “Option B,” in its contentions. J.A. 2718–

78; J.A. 4795–857. Eventually, the court ruled that the 

FRAND determination would be made in reference to Ericsson’s Option A and B offers. J.A. 38768–70. 

Option A proposed a lump-sum payment with percentage running royalties. Under Option A for mobile phones, 

TCL would make an annual payment of $30 million for its 

first $3 billion in sales, with percentage running royalty 

rates for additional sales. These running royalty rates 

were 0.8% of the net selling price for phones with 2G 

GSM/GPRS, 1.1% for phones with 2G EDGE, 1.5% for 3G 

devices, and 2.0% for 4G devices. 

Option B proposed only running royalties with caps 

and floors. Under Option B for mobile phones, TCL would 

pay percentage running rates as follows: 0.8% of the net 

selling price of 2G/GSM/GPRS, 1.0% for 2G EDGE, 1.2% 

for 3G, and 1.5% for 4G with a $2.00 floor and a $4.50 cap. 

In both options, Ericsson proposed a “release payment”

for “TCL’s past unlicensed sales.” J.A. 33. Both parties 

agreed that the release payment would be part of the courtordered FRAND license. J.A. 131911. 

B. Discussion of Jury Trial Issues

In January 2015, the parties filed a joint report stipulating to various agreements and understandings about 

which issues should be decided by a jury. At the time, both 

legal and equitable claims were still active. TCL’s damages 

claim for breach of contract was legal. TCL’s claim for the 

court to set a prospective FRAND rate for the license was 

equitable. These two claims shared a common issue: 

whether Ericsson’s licensing offer complied with its 

FRAND obligations. J.A. 1893–94. Under Dairy Queen, 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 9

Inc. v. Wood, 369 U.S. 469, 472–73 (1962), legal claims 

must be tried first to a jury where they share common issues with equitable claims. Thus, the parties agreed to a 

two-step approach: (1) a jury would decide the common issue of whether Ericsson’s offer complied with its FRAND 

obligation, and (2) if the jury answered no, a bench trial 

would be conducted to revise terms in the offer to be compliant with FRAND. J.A. 1892–934. 

By mid-August 2016, all of TCL’s claims and counterclaims seeking damages had been dismissed or were no 

longer viable in view of other motions.1 However, Ericsson’s counterclaims seeking damages for patent infringement, which had been stayed by the court, still remained. 

While Ericsson acknowledged that the claims and 

counterclaims remaining for adjudication in the upcoming 

trial only sought specific performance or declaratory judgment as remedies, it insisted that a jury trial was required. 

According to Ericsson, the release payment term, which 

was “money for [TCL’s] past patent infringement,” was “decidedly legal” and thus entitled “Ericsson to a jury on all 

asserted claims.” J.A. 38827–28. The court disagreed. In 

a January 2017 final pre-trial conference order, the court 

acknowledged Ericsson’s assertions of its jury trial right 

but indicated that it had nevertheless decided to proceed 

with a bench trial. J.A. 48694. On the day of trial, right 

before the first witness was called, Ericsson renewed its 

 

1 On August 8, 2016, the court granted Ericsson’s 

motion for partial summary judgment as to no damages for 

TCL’s state law claims of breach of contract, promissory estoppel, and violation of California’s Unfair Competition 

Law, finding that “TCL ha[d] failed to satisfy its burden on 

summary judgment to come forward with admissible evidence to create a triable issue of fact on damages.” J.A. 

38805. 
10 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

objection, noting for the record that it had not “waived [its] 

right to a jury trial.” J.A. 51642.

C. Bench Trial

On February 14, 2017, the court commenced a ten-day 

bench trial. To assist the court in determining whether Ericsson’s alternative offers were FRAND, the parties proposed different methodologies for computing FRAND rates. 

While the parties’ competing methodologies sought to estimate the incremental value that Ericsson’s SEPs added to 

the relevant standard, they did so in different ways.

1. TCL’s “Top-Down” Implementation

TCL proposed a “top-down” approach “which begins 

with an aggregate royalty for all patents encompassed in a 

standard” and “then determines a firm’s portion of that aggregate.” J.A. 29. In other words, this approach is “topdown” because it starts by determining the value of the 

whole royalty pie corresponding to a given standard (e.g., 

2G, 3G, 4G) and then determines Ericsson’s slice of the pie 

for that standard.

To determine the maximum aggregate royalty assigned 

to each standard, TCL relied on Ericsson’s own public 

statements about what that ceiling rate should be. Ericsson made these statements prior to ETSI’s adoption of each 

standard. For example, in 2008, Ericsson indicated on its 

website that it believed the “reasonable maximum aggregate royalty level” for the then-upcoming LTE standard to 

be “6–8% for handsets.” J.A. 48.

TCL’s top-down approach computed a different 

FRAND rate for licensing Ericsson’s SEP portfolio for each 

standard based on the following general equation:

FFFFFFFFFF rrrrrrrrrrrrrr rrrrrrrr

= (mm mmmmmmmmmm aaaa aa rrrrrrrrrrrrrr rr )

× (EE EEEEEE EE′ pp pp ss )

× ( aaaa ff )
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 11

For each standard, Ericsson’s proportional share was computed by dividing the number of SEPs owned by Ericsson 

(numerator) by the total number of SEPs in that standard 

(denominator). The proportional share was then adjusted 

by various factors, such as “importance and contribution of 

each patent family,” to account for the “relative strength” 

of Ericsson’s SEPs compared to other SEPs in a particular 

standard. J.A. 41–42, 64–66. According to TCL’s top-down 

methodology, the rates proposed in Ericsson’s Option A and 

Option B were not FRAND-compliant because they substantially exceeded the FRAND rates yielded from the topdown approach. 

2. Ericsson’s Proposed Approach

Ericsson did not offer its own version of a top-down approach. Rather, to show that the royalty rates it offered to 

TCL in Options A and B satisfied FRAND, it presented evidence of (1) existing licenses it had negotiated with other 

implementers and those it had prepared for the purposes 

of business cases and (2) rates produced from an alternative methodology that sought to measure in absolute terms 

the value which Ericsson’s patents added to 4G products.2

3. “Comparable” Licenses

The parties disputed how “comparable” the existing licenses actually were to those that would be offered to TCL 

in a hypothetical negotiation. The parties agreed that four 

firms were similarly situated to TCL (Huawei, LG, HTC, 

 

2 Dubbed the “ex-Standard” approach by Ericsson’s 

experts, this evidence was not comprehensive, because it 

was limited to estimating the value of Ericsson’s SEPs incorporated into the 4G standard only. We do not discuss 

this approach in detail, because its analysis was entirely 

rejected by the court as “lack[ing] fundamental credibility,” 

J.A. 79, and Ericsson does not dispute that rejection on appeal. 
12 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

ZTE), but they disagreed on whether four others (Apple, 

Samsung, Coolpad, Karbonn) were similarly situated to 

TCL. J.A. 83.

BENCH TRIAL DECISION

Following the bench trial, the court issued a lengthy 

decision setting forth terms for a binding worldwide license 

to Ericsson’s 2G, 3G, and 4G SEPs. The court amended 

this decision in an Amended Memorandum of Findings of 

Fact and Conclusions of Law on March 9, 2018 (“bench trial 

decision”), which is the subject of this appeal. J.A. 27–141. 

Over Ericsson’s repeated assertions of its jury trial 

right, the court explained in a single sentence that it had 

decided to proceed with a bench trial after it “ruled that 

TCL’s remaining claims were equitable.” J.A. 34–35. The 

court did not address Ericsson’s argument about the legal 

nature of the release payment remedy.

The court articulated a two-step framework agreed 

upon by the parties for resolving the remaining issues. At 

the first step, the court determined whether Ericsson’s final offers proposed prior to trial satisfied FRAND. J.A. 28.3 

If the court answered no, it would proceed to the second 

step, where it would supply the material FRAND terms. 

J.A. 28–29.

A. Step 1: The court concludes that Ericsson’s offers

did not satisfy FRAND.

To determine whether Ericsson’s offers were FRAND, 

the court first turned to the different rates produced by the 

two parties’ methodologies. The court did not accept either 

 

3 As part of this inquiry, the court first determined 

whether Ericsson complied with its “FRAND obligation” by 

negotiating with TCL in good faith. The court answered 

this in the affirmative, J.A. 29, and TCL does not dispute 

that finding on appeal. 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 13

party’s proposed rates because it found their methodologies 

to be flawed. Instead, the court devised its own version of 

the top-down method to determine a “fair and reasonable” 

rate under FRAND. It then compared Ericsson’s proposed 

offers to comparable licenses to determine whether they 

were “non-discriminatory’ under the third element of 

FRAND. Based on these two approaches, it concluded that 

“Ericsson’s offers are not fair and reasonable, and are discriminatory.” J.A. 139.

1. The court uses its own modified version of TCL’s topdown approach to determine whether Ericsson’s offers are “fair and reasonable” under FRAND.

First, while the court noted that the top-down method 

was “not necessarily a substitute for a market-based approach that considers comparable licenses,” J.A. 41, it described the unique benefits of using a top-down approach 

to mitigate two main risks that arise in the SEP licensing 

context.

One risk is royalty stacking. As the court explained, 

“[s]tacking occurs when each individual SEP holder demands a royalty which when totaled exceeds the value of 

all the SEPs in a standard.” J.A. 41. Because the top-down 

approach computes the FRAND rate for a particular SEP 

or SEP portfolio by starting with the maximum aggregate 

royalty burden, reasoned the court, “it avoid[s] the possibility that licensees will be forced to pay an unreasonable 

amount in total.” Id. 

Another risk is patent owner hold-up. This occurs 

when a patent-owner seeks to extract excessive value from 

its SEPs after the implementer is “locked-in” to using the 

standard. Regardless of the value contributed to the standard by the SEP, the implementer must practice the SEP in 

order to practice the whole standard. Because the topdown approach limits the overall size of the royalty pie, the 

court reasoned that the top-down approach “can also 
14 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

prevent hold-up” because it “prevents SEP owners from 

charging a premium for the value added by standardization.” Id.

Second, while the court found “fatal flaws” with TCL’s 

analysis of the relative “importance and contribution” of 

Ericsson’s SEP portfolio compared to that of the other SEPs 

in the relevant standards, the court still found “some value 

in the technical analysis, particularly to show that Ericsson’s patent portfolio is certainly not as strong or essential 

as it has claimed.” J.A. 69. Thus, it “use[d] this finding in 

part to assist it in determining the final FRAND rate.” Id. 

Specifically, the court substituted its own values for the importance and contribution values calculated by TCL’s experts, adopting a “simple patent counting system which 

treats every patent [incorporated in the standard] as possessing identical value, and then applies the numbers that 

it found reliable from the analyses provided by TCL’s experts.” J.A. 42–43. 

Though the court admitted that it had “some reservations about the top down analysis,” it determined that 

there was “no basis to reconcile the results” of its own modified version of the top-down methodology with the substantially higher rates proposed in Option A or Option B. 

J.A. 72–75. The court therefore concluded that Ericsson’s 

offers were not fair and reasonable. J.A. 75.

2. The court uses comparable licenses to determine 

whether Ericsson’s offers are “non-discriminatory” 

under FRAND.

The court only used licenses of similarly situated licensees to determine whether Ericsson’s offers were non-discriminatory. First, the court determined which licensees 

were “similarly situated” to TCL such that their licenses 

would serve as “comparable” points of comparison. J.A. 82. 

The parties agreed that four firms were similarly situated

to TCL: Huawei, LG, HTC, and ZTE. J.A. 83. But they 

disputed whether four others (Apple, Samsung, Coolpad, 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 15

Karbonn) were also similarly situated to TCL. Ultimately, 

the court resolved the dispute based on geographic scope, 

agreeing with TCL that global firms such as Apple and 

Samsung were similarly situated to TCL (which is also a 

global firm) but that “local kings” such as Coolpad (whose 

market is primarily in China) and Karbonn (whose market 

is primarily India) were not. J.A. 84–85. Thus, the court 

concluded that the following six firms were similarly situated: Apple, Samsung, LG, HTC, Huawei, and ZTE. J.A.

84.

Second, relying on expert evidence, the court unpacked

the six “similarly situated” licenses and Ericsson’s offers to 

an effective per-unit royalty rate so that they could be compared to each other on a “common basis.” J.A. 80. In determining what form this common basis would take, the 

court rejected a dollar-per-unit rate in favor of a pure “percentage royalties without caps or floors.” J.A. 94–95. 

Finally, the court compared the unpacked effective royalty rates from the comparable licenses to those proposed 

in Ericsson’s offers and concluded that Ericsson’s offers 

were discriminatory because the unpacked effective royalty 

rates of Option A and Option B were “radically divergent 

from rates which Ericsson agreed to accept from licensees 

similarly situated to TCL.” J.A. 120. Moreover, the court 

added that “Ericsson’s use of floors in its rates is itself discriminatory.” J.A. 139. “In the absence of a credible showing that Ericsson’s SEPs add a measurable incremental 

value,” explained the court, “there is no basis for essentially discriminating on the basis of the average selling 

price where a floor would result in a higher effective rate 

for lower price phones.” Id. 

B. Step 2: The court sets prospective and retrospective FRAND rates in the license.

At the second step of the two-step framework, the court 

relied on its FRAND analysis in the first step to supply 

FRAND terms of the binding license. These terms included 
16 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

(1) a prospective FRAND rate for TCL’s future licensed 

practice of Ericsson’s SEPs and (2) a cumulative release 

payment for TCL’s past unlicensed practice of Ericsson’s 

SEPs. This release payment was calculated based on a retrospective FRAND rate that was closely related to the prospective FRAND rate computed by the court. 

To compute the ongoing FRAND royalty rate, the court

began by “looking at the combination of rates derived from 

the top down and comparable license analyses.” J.A. 120. 

The court ultimately set a FRAND royalty rate that generally fell within the range of rates produced by those two 

approaches where appropriate.4 J.A. 130.

The court used this first FRAND rate to compute the 

second “release payment” term. Specifically, the court computed the retrospective FRAND rate by discounting the ongoing FRAND royalty for present value and potential royalty stacking to arrive at a cumulative release payment to 

compensate Ericsson for TCL’s patent infringement. 

J.A. 130–33.

Pursuant to the bench trial decision, the court issued 

an Amended Final Judgment and Injunction, ordering that 

Ericsson’s patent infringement claims5 and TCL’s related 

counterclaims of invalidity and non-infringement be “dismissed without prejudice because they are moot in light of 

the equitable relief granted in the release payment.” 

J.A. 24. Specifically, the court ordered Ericsson to “release 

TCL and all customers of TCL who have purchased or used 

 

4 Because the court “could not reliably unpack 2G 

rates from any comparable license,” it adopted the rate produced by the top-down approach. J.A. 129.

5 These refer to the patent infringement claims that 

Ericsson originally filed in the Texas Action prior to consolidation with the California Action. 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 17

products herein licensed to TCL from claims for past patent 

infringement . . . .” J.A. 14.

Ericsson filed a timely appeal. Because this appeal involves the dismissal of Ericsson’s patent infringement 

claims, we have jurisdiction under 28 U.S.C. § 1295(a)(1).

DISCUSSION

The district court made four determinations in its 

bench trial decision that resolution of the issues on appeal

will impact. First, it concluded that Ericsson’s proposed 

terms to TCL were not FRAND. Second, the court set a 

prospective FRAND royalty rate for TCL’s future use of Ericsson’s SEPs, relying on a combination of methodologies, 

including its own modified version of TCL’s proposed topdown approach and comparable licenses. Third, the court 

set a “release payment for TCL’s past unlicensed sales” by 

adjusting its calculated prospective FRAND royalty rate. 

J.A. 33. The two rates computed in the second and third 

determinations were imposed in a court-ordered license 

agreement by which the parties had agreed to be bound 

prior to the bench trial. Fourth, the district court ordered 

the dismissal of Ericsson’s patent infringement claims and 

TCL’s related counterclaims of invalidity and non-infringement as moot in light of the relief granted in the release 

payment, because any damages amount from those infringement claims were already subsumed in the release 

payment determination.

On appeal, Ericsson argues that all four determinations are erroneous for two main reasons: (1) they at least 

in part should have been determined by a jury, not the 

bench,6 and (2) they were premised on various errors in the 

 

6 On appeal, Ericsson presents three independent 

reasons why it was deprived of its right to a jury trial under 

the Seventh Amendment: (1) the declaratory judgment action tried by the court was an inverted patent infringement 
18 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

court’s FRAND analysis.7 Because the first reason is sufficient to overturn all four determinations, we turn first to 

that issue in this opinion.

 

suit, which entitled Ericsson to a jury trial; (2) the court 

resolved common issues that are typically litigated in patent infringement suits for damages (e.g., determining 

which licenses are comparable, weighing expert credibility, 

and assessing various data points to rule that Ericsson’s 

offers were not FRAND) prior to adjudicating the remaining equitable claims, thereby depriving Ericsson of its right 

to a jury trial on the legal issues; and (3) by adjudicating 

the release payment amount that was retrospective monetary compensation for past wrongs, the court improperly 

determined legal relief without a jury. Because we conclude that the third reason is in itself sufficient to overturn 

all of the court’s rulings below, we do not address Ericsson’s 

other two alleged reasons.

7 Ericsson’s appeal primarily focuses on three arguments. First, it argues that the court erred in determining 

royalty rates that were “reasonable” because it employed a 

“simple counting method” that allegedly presumed each of 

Ericsson’s SEPs to possess equal value with all other SEPs 

in a standard, instead of measuring the incremental value 

that each patent added to the standard. Second, Ericsson 

argues that the court employed an unreliable methodology 

to compute Ericsson’s “proportional share” of the maximum 

aggregate royalty of all SEPs in each standard because it 

used wildly divergent approaches to calculate the numerator and denominator, resulting in under-compensation to 

Ericsson. Third, Ericsson argues that the court’s treatment of comparable licenses was fundamentally flawed because, among other reasons, it rejected dollar-per-unit 

royalty rates as per se discriminatory without pointing to 

any legal authority. 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 19

For reasons discussed below, we agree with Ericsson’s 

first point.8 Because we conclude that the release payment 

is in substance compensatory relief for TCL’s past wrongs

(i.e., practicing Ericsson’s patented technologies without a 

license), we hold that the district court deprived Ericsson 

of its constitutional right to a jury trial on that legal relief 

by requiring that Ericsson adjudicate that relief in a bench 

trial.

A. Ericsson’s Right to a Jury Trial

We review “the constitutional question of whether a 

party is entitled to a jury trial” de novo. Tegal Corp. v. Tokyo Electron Am., Inc., 257 F.3d 1331, 1339 (Fed. Cir. 

2001).

The Seventh Amendment provides that, “[i]n Suits at 

common law, where the value in controversy shall exceed 

twenty dollars, the right of trial by jury shall be preserved . . . .” U.S. CONST. amend. VII. The Supreme Court 

has interpreted “Suits at common law” to refer to actions 

that are “analogous” to 18th-century suits brought in the 

English courts of law prior to the Amendment’s adoption. 

Tull v. United States, 481 U.S. 412, 417 (1987). This preserved right extends not only to common-law forms of 

 

8 As Ericsson confirmed during oral argument, we 

need not reach any of its arguments challenging the district court’s FRAND analysis if we conclude that the district court violated Ericsson’s right to a jury trial. See Oral 

Arg. at 16:56–17:46. In light of our disposition vacating the 

district court’s FRAND analysis and remanding for the 

jury to decide in the first instance, we do not address Ericsson’s other challenges to the district court’s opinion. See, 

e.g., Honeywell Int’l Inc. v. Hamilton Sundstrand Corp., 

370 F.3d 1131, 1144 (Fed. Cir. 2004) (vacating the infringement judgment and not addressing the challenges to the 

district court’s rulings limiting damages).
20 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

action, but also to causes of action created by congressional 

enactment. Id. 

“To determine whether a particular action will resolve 

legal rights, we examine both the nature of the issues involved and the remedy sought.” Chauffeurs v. Terry, 494 

U.S. 558, 565 (1990). “First, we compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity. 

Second, we examine the remedy sought and determine 

whether it is legal or equitable in nature.” Tull, 481 U.S. 

at 417–18 (internal citations omitted). “The second inquiry 

is the more important in [this] analysis.” Chauffeurs, 494 

U.S. at 565.

In cases that have “legal and equitable claims,” and issues common to both, the court must conduct a jury trial 

on “any legal issues for which a trial by jury is timely and 

properly demanded.” Dairy Queen, 369 U.S. at 472–73. 

Just as the right to a jury trial on legal claims cannot be 

denied directly by refusing a jury-trial demand, the right 

“must not be infringed” indirectly “by trying the legal issues as incidental to the equitable ones or by a court trial 

of a common issue.” Ross v. Bernhard, 396 U.S. 531, 537–

38 (1970). The “right to a jury trial of legal issues” cannot 

be “lost through prior determination of equitable claims.” 

Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 511 (1959).

In deciding to proceed with a bench trial on all remaining issues in this case, the district court concluded that a 

jury trial was not necessary because it “ruled that TCL’s 

remaining claims were equitable.” J.A. 34–35. On appeal, 

Ericsson argues that it was deprived of its Seventh Amendment right because the court conducted a bench trial to adjudicate the release payment term, which is legal relief. 

We agree. 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 21

1. The release payment provides legal relief.

The parties dispute whether the relief provided by the 

release payment is legal or equitable. Ericsson focuses on 

the substance of the relief, arguing that the release payment is legal because it is compensation for TCL’s past patent infringement of Ericsson’s SEPs. Appellants’ Br. at 

35–37. TCL, on the other hand, argues that the release 

payment is equitable based on the form the relief takes. As 

a term included in an injunction order, TCL argues that 

the release payment constitutes specific performance for a 

term in a contract. Appellees’ Br. at 19. TCL also separately argues that the release payment is equitable because it was ordered as restitution for TCL’s past 

unlicensed sales. Id. at 26–27. According to TCL, the release payment was a “way to retroactively restore to Ericsson that which it would have already received if the 

FRAND terms and conditions had previously been set, and 

a license not delayed.” Id. at 27. 

That the release payment was ordered in the form of 

an injunction does not necessarily make it equitable. See, 

e.g., Great-West Life & Annuity Ins. Co. v. Knudson, 534 

U.S. 204, 208, 214 (2002) (holding an injunction ordering 

money funds to be legal relief because it sought to “impo[se] 

personal liability for the benefits that they conferred upon 

respondents”). Nor is the monetary nature of the release 

payment dispositive of legal relief. See, e.g., Bowen v. Massachusetts, 487 U.S. 879, 893 (1988) (holding that monetary relief was equitable because it sought reimbursement 

to which the State was allegedly already entitled, rather 

than money in compensation for losses suffered); Paice 

LLC v. Toyota Motor Corp., 504 F.3d 1293, 1315–16 (Fed. 

Cir. 2007) (holding that the court did not violate patent 

owner’s right to a jury trial by calculating an “ongoing royalty rate” for patent infringement in a bench trial). Indeed, 

not all payments of money constitute legal “damages.” 

Paice, 504 F.3d at 1316. And even if the monetary relief 

can be characterized as restitution, as TCL advocates here, 
22 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

that does not end the inquiry, because restitution can be 

either legal or equitable. Great-West Life, 534 U.S. at 212 

(“In the days of the divided bench, restitution was available 

in certain cases at law, and in certain others in equity.”). 

To determine which type of common law restitution the release payment is more analogous to, we focus on “the basis 

of [Ericsson’s] claim” and “the nature of the underlying 

remedies sought.” See id. at 213. 

We agree with Ericsson that the release payment term 

is legal in nature and thus entitled to a jury trial determination. Ericsson’s offers to TCL refer to the release payment term as “release payment for past unlicensed sales,” 

but the court consistently treated this payment as retrospective compensation for TCL’s past patent infringement. 

It is a “well-settled principle that jury trials are available 

for damages for patent infringement.” 9 C. WRIGHT & A.

MILLER, FEDERAL PRACTICE AND PROCEDURE § 2312 (3d ed. 

2018); see also Markman v. Westview Instruments, Inc., 517 

U.S. 370, 377 (1996) (analogizing “today’s patent infringement action” to “the infringement actions tried at law in 

the 18th century,” which “must be tried to a jury”).

For example, in its bench trial decision, the court defined the function of the release payment as compensation, 

explaining that both of Ericsson’s offers “specify a release 

payment intended to compensate Ericsson for TCL’s unlicensed use of Ericsson’s SEPs . . . .” J.A. 33 (emphasis 

added). In its March 9, 2018 Amended Final Judgment and 

Injunction, which was subject to both parties’ review, the 

court elaborated that the compensatory relief was for past 

patent infringement. It ordered: “Upon the receipt by Ericsson of the release payments set forth in Clause E by 

TCL, Ericsson shall release TCL . . . from claims for past 

patent infringement . . . .” J.A. 14 (emphasis added). Most 

tellingly, the court dismissed Ericsson’s counterclaims of 

patent infringement as moot in light of the release payment. J.A. 23. Thus, the court’s own actions confirm that 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 23

the release payment functions as a substitute for patent 

infringement damages.9 

TCL’s attempt to recharacterize the release payment 

as restitution for “TCL’s past unlicensed sales” is unavailing because it improperly focuses on the form of the relief, 

rather than its underlying substance. As the Supreme 

Court has explained, “for restitution to lie in equity, the 

action generally must seek not to impose personal liability 

on the defendant, but to restore to the plaintiff particular 

funds or property in the defendant’s possession.” GreatWest Life, 534 U.S. at 214. In contrast, if the basis of the 

release payment is to provide a “substitute” remedy for 

“benefits” conferred to TCL, then the claim is legal. See 

Bowen, 487 U.S. at 895 (“Damages are given to the plaintiff 

to substitute for a suffered loss, whereas specific remedies 

‘are not substitute remedies at all, but attempt to give the 

plaintiff the very thing to which he was entitled.’”) (internal citations omitted); see also Great-West Life, 534 U.S. at 

214 (“The basis for petitioners’ claim is . . . that petitioners 

are contractually entitled to some funds for benefits that 

they conferred. The kind of restitution that petitioners 

seek, therefore, is not equitable . . . but legal—the imposition of personal liability for the benefits that they conferred 

upon respondents.”). 

 

9 In dismissing Ericsson’s patent infringement 

claims and TCL’s related counterclaims of invalidity and 

non-infringement, the court explained that they were 

“moot in light of the equitable relief granted in the release 

payment.” J.A. 24 (emphasis added). The court’s label of 

“equitable relief” does not impact our conclusion that the 

release payment is in substance compensation for past patent infringement for the reasons discussed in this opinion, 

especially since the court itself characterized the release 

payment as releasing TCL from “claims for past infringement” in the same order. J.A. 14. 
24 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

Here, the “basis” of the release payment is not that 

TCL holds “particular funds” that a court could then restore to the possession of its “true owner,” Ericsson. See 

Great-West Life, 534 U.S. at 213–14. Nor is it a “reimbursement” of funds to which Ericsson was already entitled, akin 

to the equitable relief in Bowen. See 487 U.S. at 895. Rather, as payment for “TCL’s past unlicensed sales,” the release payment seeks to estimate the benefits conferred to 

TCL from selling products that practiced Ericsson’s SEPs

without a license. See Great-West Life, 534 U.S. at 214.

And given that TCL does not dispute infringement of Ericsson’s SEPs,10 it is hard to see how a payment for TCL’s 

past unlicensed sales is in substance materially different 

from damages for past patent infringement. 

At bottom, regardless of whether we characterize the 

release payment term as compensation for “past patent infringement” or restitution for “TCL’s past unlicensed 

sales,” the underlying nature of the relief is legal. Accordingly, we conclude that Ericsson was entitled to a jury trial 

on the determination of the release payment amount under 

the Seventh Amendment.

2. Ericsson did not waive its right to a jury trial on the 

release payment term.

TCL suggests that Ericsson waived its right to a jury 

trial by consenting to a bench trial on the release payment 

term. Appellees’ Br. at 16. In support, TCL points to a 

single statement made by Ericsson in its August 15, 2016 

response to TCL’s ninth set of interrogatories. Id. Therein, 

Ericsson stated: “The release payment that TCL owes Ericsson for its past unlicensed sales of 2G, 3G, and 4G 

 

10 Indeed, TCL alleged that its products “complied” 

with the 2G, 3G, and 4G standards, J.A. 444 ¶ 3, and conceded that Ericsson’s SEP families were “essential” to 

those standards. J.A. 63. 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 25

devices will be determined by the Court at the conclusion 

of this litigation.” J.A. 38867. 

When read in context of the record as a whole, we decline to interpret this isolated statement as a waiver of Ericsson’s constitutional right, because the more reasonable 

reading is to view this statement as conditioned upon an 

initial jury determination of whether Ericsson’s offers were 

FRAND. See Aetna Ins. Co. v. Kennedy, 301 U.S. 389, 393 

(1937) (“[A]s the right of jury trial is fundamental, courts 

indulge every reasonable presumption against waiver.”).

On January 20, 2015, the parties filed a joint report 

agreeing to a two-stage adjudication process where: (1) the 

jury would decide whether Ericsson’s offers were FRAND 

and (2) if not, the court would conform the offer terms to be 

compliant with FRAND. J.A. 1892. As the joint report explained, the reason why the jury had to decide the first issue was because that issue was the “key factual dispute 

underlying all of” the legal (e.g., “money damages”) and equitable claims that were then live in the case. Id. Because 

Dairy Queen requires common issues to legal and equitable 

claims to be tried to a jury first, the parties stipulated that 

this common issue “must therefore be decided by a jury.” 

Id. 

Admittedly, TCL’s claims and counterclaims seeking 

damages (e.g., infringement of its own patents, breach of 

contract) had been dismissed by the time Ericsson filed its 

interrogatory response. Because the parties’ original reason for requiring a jury determination no longer existed,

TCL argues that the court properly decided the case in a 

bench trial consistent with the rationale underlying the 

stipulated plan. Appellees’ Br. at 17–18. 

We are unpersuaded. Just because the originally articulated basis for requiring a jury disappeared does not mean 

that Ericsson waived its jury trial right resting on other 

bases. Indeed, on August 15, 2016, Ericsson filed a “courtrequested submission regarding remaining claims and 
26 TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM

requirement of a jury trial,” Ericsson explicitly identified 

the “release payment” term as an alternative basis for a 

jury trial:

[T]he nature of the remedy sought by the parties—

a binding payment obligation that requires TCL to 

pay royalties to Ericsson on a going forward basis 

and to make a release payment of money for its past 

patent infringement—entitles Ericsson to a jury on 

all asserted claims . . . . The nature of this binding 

payment obligation, i.e., the payment of money as 

compensation to Ericsson for past and future infringement by TCL, is decidedly legal. But even if 

the remedy was a mix of equitable and legal remedies, the legal remedies sought confer a jury trial 

right.

J.A. 38827–33 (emphases added). Notably, this submission 

was filed on the same day Ericsson filed its interrogatory 

response upon which TCL relies on as a waiver.

Even the court did not treat Ericsson as having waived 

its jury trial right. In a January 30, 2017 final pre-trial 

conference order, the court explicitly acknowledged that 

“Ericsson has requested a jury trial of all issues” and that 

it “overruled Ericsson’s request for a jury trial of all issues, 

which request Ericsson hereby preserves.” J.A. 48694 (internal citation omitted). Ericsson renewed its objection to 

the bench trial right before it commenced: 

Your Honor, just an administrative point. Ericsson 

just wants to make a non-waiver point. Of course, 

we’re proceeding with the bench trial. We don’t 

want to be deemed to have made an election or to 

have waived our right to a jury trial as reflected in 

our earlier motion which was denied.

J.A. 51642. In light of the record as a whole, we reject 

TCL’s contention that Ericsson waived its jury trial right. 
TCL COMMC’N TECH. v. TELEFONAKTIEBOLAGET LM 27

CONCLUSION

For the foregoing reasons, we hold that the district 

court deprived Ericsson of its Seventh Amendment right to 

a jury trial by deciding the legal relief of a release payment 

for past unlicensed sales in a bench trial. We have considered the parties’ remaining arguments and find them unpersuasive.

Accordingly, we vacate the district court’s determination of the release payment, including the underlying question of whether Ericsson’s Option A and Option B offers 

that include the release payment term are FRAND. We

also vacate the court’s determination that Ericsson’s offers 

are not FRAND and its determination of prospective 

FRAND royalty rates because both determinations were 

predicated on common issues to the improperly decided release payment. Because the release payment will be redecided by the jury, we reverse the dismissal of Ericsson’s 

patent infringement claims and TCL’s related counterclaims of invalidity and non-infringement as no longer 

moot. Finally, we remand all above determinations for further proceedings consistent with this opinion.

VACATED-IN-PART, REVERSED-IN-PART, AND

REMANDED