Two contributors to the Avanci IoT patent pool are currently suing Daimler in Germany:
Nokia has filed (at least) ten cases, five of which already have trial dates between December 2019 and May 2020 in Mannheim and Munich. Also, the Munich I Regional Court will hold first hearings in two other cases, and it's fairly likely that the subsequent second hearings, which are trials, will be scheduled during the first half of 2020 as well. In the past, the 21st civil chamber of that court used to be much slower than the other division that hears patent cases (the 7th civil chamber), but it looks like they are catching up.
After Nokia's first ten Daimler lawsuits, Foxconn-owned Sharp also filed five complaints against Daimler (in Mannheim and Munich).
At the beginning of this week, Daimler supplier Continental Automotive Systems was forced to withdraw a motion for a U.S. antisuit injunction motion with respect to the ten above-mentioned Nokia cases. As I explained in that post, it remains to be seen whether that partial withdrawal of the U.S. antisuit motion, further to a German anti-antisuit-injunction injunction ("AAII") obtained by Nokia in Munich, will be deemed sufficient--but in the meantime, before any hypothetical contemption motion would be adjudged, the Munich appeals court may very well lift the injunction.
Continental's withdrawal-in-part specifically stated that the motion was not withdrawn with respect to "the other defendants in this proceeding," and not in the same sentence, but in the wider context, the withdrawal notice reminded the U.S. court of "Sharp's separate and ongoing proceedings against Continental's customer Daimler."
At the time of the U.S. antisuit motion, the defendants were all from the following corporate groups: Avanci (a patent pool firm that doesn't hold or assert patents); Nokia; and two patent assertion entities Nokia fed with patents (Optis and Conversant). Sharp was added to the case as an additional defendant only the following month by way of Continental's first amended complaint. However, Sharp's lawyers are concerned that Continental's reference to Sharp's German cases might mean that the remaining parts of the pending antisuit motion would take aim at those Sharp v. Daimler cases.
In order to eliminate any doubt about that, Sharp's lawyers (whose appearance is limited in scope as Sharp denies to have been served properly) have now asked Judge Lucy H. Koh of the United States District Court for the Northern District of California to provide guidance (this post continues below the document):
When I read Continental's references to Sharp in its reply brief in support of the motion as well as in the partial withdrawal notice, I assumed that Sharp itself wasn't meant to be targeted, but that there could be an issue for Avanci, given that Continental, even after the partial withdrawal, seeks to enjoin Avanci and the other defendants "from acting in concert with anyone to pursue or institute such an action."
While it's understandable that Sharp's lawyers decided to file that letter out of an abundance of caution, it's hard to see why they couldn't clarify this between counsel for the parties ("meet and confer"). The letter doesn't say anything about what Continental's lawyers told counsel for Sharp--other than the fact that "[c]ounsel for Sharp only just received from Continental's counsel the full, unredacted briefing regarding the Motion on September 4, 2019."
Enjoining Sharp as a result of the currently-pending antisuit motion wouldn't make sense given that the motion targeted only the defendants named in the unamended original complaint. Beyond that, Sharp disputes in the defendants' motion to dismiss Continental's first amended complaint that it has been properly served under the Hague Convention. According to Sharp's lawyers, Continental served the complaint on Sharp USA, which is a subsidiary of Sharp Japan, but not a California subsidiary that could be deemed the foreign company's "general manger" under California state law. Also, Sharp's lawyers argue that Sharp USA "does not engage in any patent licensing business at all," so it couldn't be Sharp Japan's "general manager" for purposes of U.S. service with respect to patent licensing activities.
Should footnote 10 of the motion to dismiss correctly liken this situation (in the California Continental v. Avanci et al. case) to a couple of cases in which Continental AG, the German parent company of Michigan-based Continental Automotive Systems, allegedly "prevailed on the argument that it cannot be served through [Continental Automotive Systems, Inc.]," and should the application of that same legal standard result in a finding that Sharp Japan wasn't properly served under the very Hague Convention that Continental Automotive Systems held against Nokia's attempts to serve the first German AAII on a Germany-based board member, then that would be a major embarrassment for Continental's legal department:
"Indeed, Continental knows its attempted service on Sharp USA, rather than Sharp Japan, is improper. Continental's ultimate parent company, Continental AG, a German corporation, has repeatedly prevailed on the argument that it cannot be served through the Plaintiff here, its U.S. subsidiary, but instead must be served under the Hague Convention. See Orion Tire Corp. v. Gen. Tire, Inc., No. 92-cv-2391 AAH, 1992 WL 295224, at *1 (C.D. Cal. Aug. 17, 1992) (granting Continental AG's motion to dismiss for insufficient service and requiring service under Hague Convention); see also Leon v. Continental AG, 176 F. Supp. 3d 1315, 1318 (S.D. Fla. 2016) (requiring service on Continental AG under Hague Convention). The same is true of Sharp Japan."
In case Continental would want to bring a separate antisuit motion against Sharp, Sharp's lawyers ask Judge Koh to firstly hear the motion to dismiss, and in any event they obviously want due process, but I wouldn't expect anything else than due process from an extremely meticulous judge.
Assuming that at some point (and it may take longer than Continental hopes) Sharp Japan is properly added to the U.S. case as an additional defendant, a new antisuit motion by Continental against Sharp would again have a problem with the principle that earlier-filed cases, at least in psychological terms and with respect to the "international comity" part, are more likely to serve as a basis for enjoining parties with respect to actions in later-filed cases than the other way round. Sharp's first German lawsuit against Daimler was filed on April 12, 2019; the other four were filed between June 5 and June 28; those lawsuits in Germany against a German company were probably served within a week or, at most, two, i.e., even prior to Continental's mid-May original complaint, but Continental's first amended complaint, which finally added Sharp, was filed on July 23.
While I believe Continental and Daimler can be reasonably optimistic that the German appeals court may lift the two AAIIs very soon (in my observation, the judges on the patent senate of that appeals court are not only very experienced but also principled and, especially by comparison to some judges on the lower court, unemotional), the fact that they were too hesitant and slow with their own U.S. antisuit initiative may ultimately prove fatal to the pending motion and any subsequent antisuit motion.
Continental should have brought its complaint against Avanci much sooner, simply because the filing date of the complaint is so important for antisuit-injunction purposes, and should have had the courage and the budget to just sue all Avanci contributors immediately--or at least the ones that were already suing Daimler, or where there was a reasonable likelihood of this happening (which would probably apply to all Avanci contributors without exception).
Sharp's letter is attributable to an abundance of caution on its U.S. lawyers' part, but the overall situation is chaotic, and while (figuratively speaking) the jury is still out on the antisuit injunction motion as well as on the service-of-process question raised by Sharp Japan, a point may be reached before the end of the year when--after adverse decisions due to slowness, hesitancy, possibly even sloppiness and lack of coordination between parties and across jurisdictions--some people might begin to wonder whether Daimler and Continental are sleepwalking through the automotive patent wars. They can do better, as Continental's first-rate opposition to Avanci's venue transfer motion shows. If they don't perform consistently at the high level of that late-August opposition brief, they'll be eaten alive, also in light of the exceedingly patentee-friendly environment in Germany. I just voiced genuine apprehension.
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