Russia Bans Sale of 61 Samsung Smartphone Models over Patent Lawsuit

On October 26, 2021, the Moscow Arbitration Court issued an order listing 61 smartphone models which Samsung may no longer import, store or sell in Russia.

The court order, which has not yet entered into force, follows the Arbitration Court’s July 2021 decision stating that Samsung infringed the Russian patent No. 2686003 owned by SQWIN SA, a financial services and mobile payment company based in Switzerland.

Back in February 2020, SQWIN brought a patent infringement action against Samsung Electronics and its Russian subsidiary Samsung Electronics Rus Company claiming that they illegally used SQWIN’s patent for an online payment transaction system within their “Samsung Pay” service, which lets users make online payments using compatible phones and other Samsung devices. In its July 2021 decision, the Arbitration Court ordered Samsung to stop using SQWIN’s patent in Russia, while the recent court order lists all Samsung smartphone models featuring the “Samsung Pay” technology which are to be banned in Russia.

Samsung has filed an appeal, which should be considered by the end of 2021. If the appeal is rejected (which is very likely because appellate courts in Russia usually uphold decisions of first instance courts), the court order will come into effect and Samsung will not be able to import and sell its smartphones featuring the “Samsung Pay” service in Russia. However, Samsung will be able to file a cassation appeal with the specialized IP Court, which normally pays close attention to patent infringement cases.

On November 15 and 19, 2021, Samsung filed invalidation actions against SQWIN’s patents with the Chamber of Patent Disputes (CPD) of the Russian Intellectual Property Office, and the first hearing is scheduled for December 24, 2021.

It remains to be seen how this case will progress. So far SQWIN has not claimed damages and legal costs, but they might do so once the patent infringement case passes all appeals. They might attempt to persuade Samsung to sign a worldwide license agreement with them, because SQWIN also has patents in China, Japan, Korea, and the US. If the first instance court decision is confirmed by higher instances, SQWIN could even decide to sue other smartphone manufacturers for using the same technology.

By: Tatyana Kulikova

For more information, please contact Tatyana Kulikova at our Russia office.