Pardon my French, but the shit is hitting the fan now in Germany with respect to standard-essential patent (SEP) injunctions.
One week after I predicted that "more unhinged [SEP] injunctions [would] come down in Germany in wake of Sisvel v. Haier," a recent ruling by the Federal Court of Justice of Germany no one can be proud of but which wouldn't absolutely have to have disastrous consequences if the lower courts didn't unreasonably broaden its scope, the Munich I Regional Court enjoined Lenovo over a Nokia patent found to be essential to the (old) H.264 video codec standard.
Nokia can enforce this injunction--involving a sales ban and a recall of merchandise from the retail channel--during the appellate proceedings (unless the appeals court orders a stay) against security amounting to only €3.25 million (less than $4 million).
Just last month, a different panel of Munich judges ordered a Germany-wide Mercedes sales ban over a Sharp patent declared essential to cellular telecommunications standards, requiring collateral (for enforcement during an appeal, again unless the appeals court were to order a stay) of only €5.5 million (approximately $6.5 million). Another month earlier (i.e., August), the Mannheim Regional Court enjoined Daimler of a Nokia wireless SEP, but held that collateral to the tune of €7 billion ($8.2 billion) would be needed for enforcement during the appeal--and Nokia can't enforce that injunction now as the appeals court is weighing a stay and didn't want any enforcement to occur for the time being.
Two more wireless SEP cases against Daimler will be adjudicated by the Munich court (in that case, by the panel that handed down the Lenovo decision) later this month. In one of those cases, Conversant v. Daimler, a stay over doubts concerning the validity of the patent-in-suit is a possibility; otherwise an injunction is sure to issue.
The Nokia v. Lenovo injunction was based on the Munich court's hyperexpansive application of Sisvel v. Haier, holding that Lenovo allegedly didn't make enough of a good-faith effort to secure a license from Nokia--though for what I have heard, Lenovo made a counteroffer that would have passed the Huawei v. ZTE test as previously applied in Germany--easily.
I rarely quote company statements as I'm more interested in court filings and hearings, but in this case, prior to obtaining a copy of the decision, let me share Lenovo's official statement on the Munich ruling:
"We do not agree with the decision by the Munich Court and will be appealing the ruling. In particular, we believe Nokia has violated its own legal obligations by refusing to license its technology on Fair Reasonable and Non-Discriminatory (FRAND) terms to either Lenovo or our third-party suppliers whose parts include H.264 technology. As a major patent holder around the world Lenovo has the utmost respect for the work and investment that goes into innovating. We believe the availability of standardized technologies on FRAND terms is critical for the future of the global tech industry and the proliferation of affordable innovation to customers around the world, and that Nokia’s licensing practices threaten this access."
I may very well do a follow-up post as this is a profoundly worrying development.
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