Thursday, November 14, 2019

Munich appeals court likely to reverse Nokia's anti-antisuit injunction against Continental: Judge Koh may have to rule on third antisuit motion soon

Before we go to today's Munich appellate hearing, let me just say that this week's Component-Level SEP Licensing conference in Brussels exceeded expectations, which applies to the quality of the presentations of those who strongly advocate component-level licensing obligations under antitrust and contract law as well as of those who are skeptical of, or even adamantly opposed to, at least one of those legal bases--everyone I invited was terrific. I'll publish the slides no later than this coming weekend. Now, the latest from Nokia v. Continental.

3 1/2 months ago I voiced a concern over what appeared to be a contradiction in the Munich I Regional Court's decision to grant Nokia an ex parte (i.e., without notice or hearing) anti-antisuit injunction against Continental, barring the automotive supplier from shielding Daimler from Nokia's numerous German patent infringement actions:

There's something odd about the anti-antisuit-injunction injunction. The order notes that antisuit injunctions of the kind that exists in the U.S. are not known in Germany. But then the court somehow threads the needle and actually does issue an antisuit injunction for the purpose of thwarting a potentially-upcoming antisuit injunction from overseas.

A month later, when the Munich court entered another such injunction (against a different Continental legal entity), I wrote "[t]he appeals court may very well find that two wrongs don't make a right."

That's precisely what's most likely to happen this evening by Central European Time (morning by Pacific Standard Time), though it won't become known until tomorrow morning local time.

To be fair, Presiding Judge Tobias Pichlmaier of the 21st civil chamber of the lower court--in a speech delivered a couple of weeks ago--as well as the late-August decision (which came after briefing and hearing, unlike the ex parte in July) were definitely more nuanced than the first, hastily-prepared decision. Still, Presiding Judge Konrad Retzer of the 6th Civil Senate of the Oberlandesgericht Muenchen (Munich Higher Regional Court) started today's appellate hearing with a summary of the factual and legal issues that included two grounds of reversal:

  1. A preliminary injunction might not be warranted as no Continental antisuit motion against Nokia is currently pending in the United States. But Nokia's lead counsel, Arnold Ruess's Cordula Schumacher, accurately pointed out that Judge Lucy H. Koh of the United States District Court for the Northern District of California had not resolved the issue on a definitive basis: Continental could refile. I would file under lawyer's hyperbole that she said Judge Koh had twice "invited" Continental to refile. Once: yes. Twice: well, the denial of Continental's motion for an anti-anti-antisuit temporary restraining order merely noted that Continental had been told they could bring another motion for a preliminary injunction, but it's in the eye of the beholder whether that's an invitation.

  2. Judge Retzer appeared to be unconvinced by the attempt to distinguish the German anti-antisuit injunction from a U.S. antisuit injunction only because of a narrower scope (relating to a motion rather than an entire litigation). While he credited the lower court for its diligent analysis of some other aspects of the matter, he appeared to view this part as reversible error. Also, being the incarnation of equanimity, he did not appear receptive to an equality-of-arms argument (U.S. court can issue antisuit injunctions, so--Nokia said--German courts should provide a countermeasure). Neither did Nokia's self-defense argument get much traction: Judge Retzer explained that self-defense is when a court can't help you before it's too late, and not when you can still go to or defend yourself in court. The analogy he used was somewhat similar to Second Amendment activists' "when seconds count but the cops are minutes away" argument.

    Recent anti-antisuit decisions in Paris and London didn't bear any non-negligible weight with the German appeals court either as they didn't (because they couldn't) address the questions to be resolved under German law.

The court declared its intent to reach a decision today, but it would be late, so Judge Retzer asked parties, counsel, and the general public (like me) to go home and call his chambers tomorrow morning.

The decision will be final as preliminary-injunction rulings cannot be appealed to the Federal Court of Justice.

Affirmance of Nokia's anti-antisuit injunction would be a major surprise. Also, while the presiding judge's initial outline also mentioned the intermediary or complicit liability of Continental AG with its indirect U.S. subsidiary Continental Automotive Systems as a potentially outcome-determinative issue with respect to one of the two injunctions, that question wasn't discussed in the hearing--presumably because it won't have to be reached.

Nokia voluntarily joined two U.S. standard-setting organizations--ATIS and TIA--and made U.S. FRAND declarations. In doing so, Nokia submitted to U.S. in personam and in rem jurisdiction, which entails, ínter alia, the possibility of antisuit injunctions. Continental couldn't have enforced its rights as a third-party beneficiary in any other jurisdiction than the U.S., where the automotive supplier has significant business activity in the Wolverine State as well as the Golden State. Assuming that Nokia's anti-antisuit injunction (which was in any event a brilliant tactical move and definitely had an impact, though probably a short-lived one) gets lifted, Continental is likely to refile in the U.S.--where the standard for an antisuit injunction is fairly high and may not be met in this case.

In a related development, Judge Koh canceled the hearing on the Avanci-Nokia venue transfer motion, which she often does when the parties' briefs constitute a sufficient basis for adjudication. But there may be a hearing--in a week from today--on the defendants' joint motion to dismiss.

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