Tuesday, October 26, 2021

Dutch court rejects Ericsson motion for anti-antisuit injunction, but Apple may still be enjoined if need be: another jurisdiction adopts Munich approach

Ericsson means business, and it's not going to undervalue its patents in the renewal of its license agreement with Apple. Earlier this month, Ericsson filed a declaratory judgment action--on its own FRAND compliance--in the Eastern District of Texas. I've now become aware of a decision the Rechtbank Den Haag (Court of The Hague) published (in Dutch) last week. Judge D. Nobel denied an Ericsson petition for an anti-antisuit injunction against Apple. It may be counterintuitive, but all things considered the decision is clearly better for Ericsson--though it's "the loser" at first sight--than for Apple. As matter of fact, Apple itself has a history of bringing cases that serve a strategic purpose even if a court rejects a motion or complaint (such as when it demonstrated to the rest of the industry that it would enforce its design rights around the globe, even though it ultimately failed everywhere but in its home court).

There are three ways in which the decision from the Netherlands--even though technically negative--helps Ericsson:

  • Judge Nobel did not rule out in the slightest that an anti-antisuit injunction could be granted in order to pre-empt a foreign antisuit injunction that would prevent a party like Ericsson from enforcing its Dutch patents.

    The Munich I Regional Court's pre-emptive strike doctrine, which the 7th Civil Chamber under Presiding Judge Dr. Matthias Zigann laid out earlier this year in InterDigital v. Xiaomi, is clearly spreading to more and more jurisdictions. In the summer, the Dusseldorf Regional Court, whose FRAND case law used to be at the other end of the German spectrum, granted General Electric and Mitsubishi a pre-emptive anti-antisuit injunction against Xiaomi.

    The Dutch Ericsson v. Apple decision shows that other courts are also prepared to prophylactically shield patentees like Ericsson from foreign antisuit injunctions.

  • Ericsson didn't prevail this time (I'll talk about the missing link further below), but it might succeed next time: Apple now knows that the moment it seeks an antisuit injunction anywhere in the world, be it against Ericsson or anybody else, not only the Munich and Dusseldorf courts but also the Court of The Hague may strike down and protect their jurisdiction against foreign interference.

    While the Dutch decision is narrowly focused and doesn't address whether the pursuit of an antisuit injunction would weigh against an implementer's willingness to take a FRAND license (as the Munich court explained), there is--at a minimum--considerable risk for Apple that such an inference would be drawn.

  • Ericsson demanded from Apple a written declaration that it would not seek an antisuit injunction against Ericsson. Apple declined to do so, but as a result of Ericsson going to court, Apple then told the court that it had no intention of doing so. That is different from a firm written commitment because Apple could theoretically say at a later point that its representations to the Dutch court were truthful at the time, but something warranted a change of mind later on. While legally possible, such an about-face would have serious implications.

    Sometimes chess analogies can be used to explain litigation strategies. Here, Ericsson's motion--while technically unsuccessful for the time being--forced Apple to make a move (telling the court that it had no intention of seeking an antisuit injunction) that doesn't "cost" Apply anything in the short term, but just like a pawn can never go back to a previous position, this is also a one-way street for Apple: it can't seek an antisuit injunction anymore without potentially bringing up the Dutch court against it.

In a complex multifactorial type of decision, no two courts will ever apply identical standards. But in principle, the Dutch court took a similar approach as the Munich and Dusseldorf courts by looking at Apple's conduct vis-à-vis Ericsson as well as what Apple may have done in comparable situations involving other defendants. Not even in Munich would the refusal to promise in writing not to seek an antisuit injunction be dispositive all by itself: it's just a factor, and it appears to me (at least so far) that a patentee is deemed entitled to such a written declaration only if there are one or more other circumstances that give rise to a reasonable apprehension of an antisuit injunction being imminent.

In the Dutch case, Ericsson apparently made a representation that its own lawyers later conceded was erroneous: Ericsson said Apple previously sought an antisuit injunction in the Southern District of California against Qualcomm, but in reality, Qualcomm (unsuccessfully) moved for an antisuit injunction against Apple. And it wasn't even an antisuit injunction against patent enforcement, by the way...

However, there still is a possibility that Apple was somewhat involved with the pursuit of an antisuit injunction. In 2018, a consumer class action that attached itself to the FTC v. Qualcomm case in the Northern District of California (where Apple officially had a common interest agreement in place with the FTC) tried to prevent Qualcomm from the enforcement of a hypothetical U.S. import ban. The court denied the motion as premature. Class actions are normally all about money, and even if Qualcomm had gotten leverage over Apple by means of an ITC exclusion order, the FTC could still have carried on with its case. Therefore, the "cui bono?" analysis makes it at least plausible--and, to be honest, in my opinion even very likely--that the consumer class action was a proxy for Apple, and that Apple paid the class action lawyers. Maybe there is a way that Ericsson could find out about that by means of U.S. discovery for use in foreign proceedings.

The Dutch anti-antisuit case isn't even over. The decision indicates that some interim measures were ordered earlier in the month. I guess this was like a temporary restraining order in order to prevent Apple from seeking an antisuit injunction before the Dutch court would have made a decision on Ericsson's motion for a preliminary injunction). If so, they are not in force, but the main proceeding, which will culminate in a full trial, will continue on November 18. Apple already announced that it would then challenge the court's jurisdiction.

I'm pretty sure that Ericsson sought such an anti-antisuit injunction not only in The Hague but at least in Germany, and possibly in other countries as well. I will try to find out more, though ex parte motions are usually not discoverable until a decision comes down.

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