Radian v. Samsung - Statement of Interest filed by "Acting" U.S. Attorneys
- Marta Beckwith
- Jul 15
- 6 min read
The United States “Acting Solicitor” and “Acting General Counsel” for the U.S. Patent and Trademark Office, along with a bunch of attorneys from the U.S. Department of Justice’s Antitrust Division, recently filed a Statement of Interest (“SOI”) in the Radian Memory Systems LLC v. Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc. case (“Radian lawsuit”).[1] The Radian lawsuit involves allegations related to the NVM Express standard for flash solid-state drives. According to the NVM Express website:
NVM Express® (NVMe®) specifications define how host software communicates with non-volatile memory across multiple transports like PCI Express® (PCIe®), RDMA, TCP and more. It is the industry standard for solid state drives (SSDs) in all form factors (U.2, M.2, AIC, EDSFF). NVM Express is the non-profit consortium of tech industry leaders defining, managing and marketing NVMe technology.[2]
In the SOI, these acting attorneys argue that Radian, a non-practicing entity, is entitled to equitable relief, e.g. an injunction. The SOI argues that courts should find irreparable harm, even when the licensor is an NPE and despite the eBay decision, when patent damages are hard to evaluate.
Irreparable harm is common in patent infringement cases because patents are hard to value and damages are difficult to calculate—as shown, for instance, by the frequent wide gap between a plaintiff’s reasonable royalty calculation and a defendant’s reasonable royalty calculation, even when both parties’ damages experts survive Daubert challenges. SOI at 7-8.
In other words, if a patent owner whose primary business is licensing cannot get their act together to come up with a reasonable damage amount that is sustainable by the courts, the court should grant an injunction. Of course, that turns the issue on its head. A non-practicing entity is, by definition, an entity for which licensing is its primary business. An entity for which licensing is its primary business should be able to determine how much a license to its patents is worth, and prove that number in court. An entity whose primary business is licensing which cannot do that is either terrible at its own business, overreaching with its numbers or a combination of both.
But rather than come to this logical conclusion, the SOI argues that if a patent owner, even one for which licensing is its primary business, is unable to prove its damages, the patent owner should instead be entitled to the more drastic remedy of an injunction. The SOI says that the “large number of reversals based on flawed damages models confirms the difficulty of calculating damages.” That is not the most reasonable conclusion, and the argument incentivizes patent owners to come up with even crazier theories of damages in order to be entitled to an injunction.
And those crazy theories, in my experience, are the reason for the “large number of reversals of flawed damages models.” The problem is not that so many patent licensing entities cannot reasonably establish the license amounts to which they are entitled. Again, for NPEs, licensing is their primary business. These NPEs should be able to appropriately value their own patents and what a license is worth.
Indeed, many of these NPEs purchased the asserted patents from other parties – they put a value on it for purchase. But rather than start with this purchase price, these NPEs argue that they are entitled to many times what they paid in an arms-length negotiation that resulted in them obtaining the patents and the entire set of rights in those patents. That kind of high number, divorced as it is from the value to which that very same entity ascribed to it in order to obtain ownership of the patents, is hard to justify and hard to support.
This is the problem - in many cases, the amount the patents are really worth is quite small, but the patent owner is unwilling to accept that reality or at least to admit it in court. Not every patent and not every SEP is worth millions, tens of millions or hundreds of millions in damages. In certain spaces (such as telecommunications and networking), most patents are incremental and marginal inventions and worth very little. NPEs often obtain their patents at bargain basement prices because the originating entity recognizes that the patents are not very valuable. The NPEs however try to inflate the value in licensing discussions and in court beyond what they paid and beyond any foundation in reality. That is one of the primary reasons patent damage models are so often thrown out on appeal – because the models are trying to justify values that far exceed the reasonable value of a license to the patents.
The SOI goes even further to argue that even when damages are quantifiable, injunctions should still issue, because the “prospect of an injunction thus provides patentees with important protections to control how or to whom to license its patented technology, as well as the terms of its licenses.” The SOI also seems to endorse the theory that injunctions are necessary to “prevent potential licensees from viewing infringement as economically efficient, which would further erode the patent’s value and the patentee’s control over it.” But as we have recently seen in the U.K. when Ericsson was adjudged an unwilling licensor, there is a lot of evidence that patent licensors are “holding out” on licensing in order to try to extract unreasonable amounts of money. And having a crazy damages theory, or seeking excessive amounts during licensing discussions, is more evidence that the patent owner is at fault for holding out for unreasonable royalty amounts.
Rather than concluding that the problem is how hard it is to prove damages or that there is a need to prevent unwilling licensees, the correct conclusion is that patent owners often ask for inappropriately large license amounts that they cannot legally justify. That is why so many patent damages models are thrown out on appeal – the models simply cannot support the amount sought. We should not be rewarding patent owners for doing the wrong thing by inflating their damages beyond provability. Also, as I have previously discussed (see Time to Throw Away the Willing/Unwilling Paradigm), the issue we should be addressing is not which side is willing and which unwilling, but how much the patents are worth.
Under the U.S. system, patent owners, whether an NPE or a practicing entity, whose valid patent is infringed are entitled to an injunction when the equities weigh in their favor. Being unreasonable about the damages amount should not be a factor that weighs in a patent owner’s favor in determining which side the equities and the public good support. Instead of advocating that patent owners whose business is licensing should be entitled to a lower standard, it would be more reasonable to hold them to a higher standard because this is literally how they make money. If they cannot meet their burden to prove how much their patents are worth, they certainly should not be unfairly rewarded with an injunction. And of course, the end game for an NPE is not an injunction stopping sales but a license to the patents. That is literally their business. So why side-step requiring proof that the amount sought for this license is reasonable and supportable?
Further, if the U.S. were to adopt this model, it would leave American companies vulnerable to foreign companies and hurt American competitiveness. As I previously discussed, foreign companies have been using the German legal system, and now the European Unified Patent Court (“UPC”), to extract unfair and unjust payments for FRAND committed SEPs (and other patents) from American companies for years.[3] This has happened because Germany and the UPC grant injunctions in nearly every case.
Because of these inappropriate injunctions, U.S. companies have been forced to pay exorbitant amounts of money in a clearly unfair and discriminatory way to foreign SEP holders. This happened to the United States company Netgear when a Chinese company, Huawei, filed a lawsuit against it in the UPC and got a multi-country injunction. These foreign lawsuits have hit numerous other American companies which have been forced to settle on unfair terms because of the availability of injunctions.
We should not be bringing this problem home. Instead, to protect American companies and American competitiveness in the global marketplace, we should be working with Germany and the European Commission to reduce the availability of injunctions in foreign actions. We should just say NO to this effort to make the U.S. more like Europe. We should just say NO to holding professional licensing companies to lower standards – after all, their business is supposed to be knowing how much a license to their patents is worth.
[1] Case No. 2:24-cv-1073 (E.D. Tx). The SOI is document number 52 and was filed on June 24, 2025. Being a math geek, I must note that a radian is a mathematical term that is defined as the angle subtended at the center of a circle by an arc that is equal in length to the radius. In other words, this particular NPE has ironically selected a name that denotes mathematical precision of measurement.
