Non-practicing entities have easy access to patent injunctions in Munich: court provides guidance on insufficient proportionality defenses and implications of antisuit injunctions for licensee's (un)willingness

The Munich I Regional Court has recently made three judgments public that provide helpful guidance to litigants concerning the legal standard applied by the world's first and foremost patent injunction venue to

• proportionality defenses in standard-essential patent (SEP) and non-SEP cases, and

• the implications of the pursuit of foreign antisuit injunctions for the determination of whether a defendant is an unwilling licensee.

I'll start with the second item because it's shorter and simpler than the other items:

In case no. 7 O 13016/21, the Seventh Civil Chamber under Presiding Judge Dr. Matthias Zigann (who has since been promoted) adjudicated on September 15, 2022 a SEP assertion by a Japanese licensing firm (probably IP Bridge) against a Chinese implementer (the name is redacted; maybe Xiaomi, but doesn't look like OPPO). I obtained a redacted copy of the judgment from the court.

In the same dispute, the court had entered an anti-antisuit injunction based at least in part on the defendant's prior action of obtaining a Chinese antisuit injunction against a different patent holder, Conversant. The plaintiff then argued in the infringement litigation that the defendant was an unwilling licensee for the same reason. The Munich court clarified that the defendant's prior pursuit of an anti-enforcement injunction against a third party may very well give rise to the entry of a pre-emptive anti-antisuit injunction, but has no bearing on whether the defendant is a willing or unwilling licensee vis-à-vis the relevant plaintiff. In other words, the court bases its (un)willingness determination exclusively on the conduct exhibited in the dealings between the two parties in question. If the defendant had sought an antisuit injunction against this particular patentee, it might have been deemed an unwilling licensee--and its products could have been enjoined--for that reason alone.

Whether or not one agrees with the notion of pre-emptive anti-antisuit injunctions, the distinction between that type of relief and the (un)willingness determination in the infringement action undoubtedly makes a lot of sense.

The court's 21st Civil Chamber (Presiding Judge: Dr. Georg Werner) has meanwhile published (on a website run by the Bavarian state government) two Nokia v. OPPO decisions (see my battlemap). The public redacted versions don't reveal the parties, but the missing bits and pieces can be deduced from the claim language and dates.

On August 5, 2022, the court granted Nokia two SEP injunctions against OPPO. At around that time, the smartphone maker left the German market, presumably due to the enforcement of a 4G SEP injunction that had previously been ordered by the Mannheim Regional Court. Meanwhile it has become known that Nokia had brought a couple of contempt motions that resulted in fines being imposed on OPPO, but the fact that OPPO withdrew from the German market shows an intent to comply. By now the more interesting question is when OPPO will obtain a German patent injunction against Nokia's mobile base stations. Nokia is challenging OPPO's patents-in-suit.

The Munich court's August 5, 2022 SEP ruling (German text) addressed a mix of FRAND and proportionality questions. A March 2022 hearing that mostly took place behind closed doors (JUVE Patent reported) was about the FRAND issues in all Nokia v. OPPO cases pending in Munich at the time. It is not known whether OPPO's proportionality defenses were also discussed on that occasion or only as part of the patent-specific infringement trials.

The August 5, 2022 decision starts with a syllabus that lays out four key principles that I'll summarize below:

1. The fact that a patent--with no distinction being made here between a SEP or a non-SEP--is being asserted by a non-practicing entity (NPE) does not suffice for a proportionality defense to succeed.

   In this case, Nokia argued (as the judgment also notes) that it is not an NPE, but makes network infrastructure and has licensed its smartphone brand to HMD (of which Nokia is a minority shareholder). The Munich court held that even if Nokia were to be deemed an NPE, that finding wouldn't enable a proportionality defense to succeed.

2. This one actually has two parts that relate to interdependencies between the FRAND defense and the proportionality defense:

   • The court says it can't be held against Nokia in the proportionality context that it offered a SEP license to OPPO, given that this is part and parcel of Nokia's FRAND obligations. In other words, the fact that this dispute is just about money and not about excluding a competitor is simply attributable to Nokia's FRAND obligation and does not, in and of itself, call into question its entitlement to injunctive relief. I already said during the German patent "reform" process that the reform would prove useless without the equivalent of eBay factor #2 (inadequacy of monetary relief)...

   • The Munich court also rejects the notion that a SEP injunction is disproportionate because the patentee sued prior to the definitive failure of FRAND licensing negotiations.

3. The third guideline rejects the notion that an injunction should not be available against a complex product. At first sight, it looks like this would apply to SEP and non-SEP cases alike. The judgment itself suggests that the Munich court may generally view a complexity argument skeptically (i.e., Munich may disagree with the reasoning in Justice Kennedy's eBay concurrence), but focuses specifically on SEP cases and notes that an implementer is entitled to a license on FRAND terms and cannot raise a proportionality defense on top. If an implementer is deemed an unwilling licensee under SEP-specific case law, there is no proportionality defense according to the court.

   As I'll show further below, the same court has meanwhile clarified that this reasoning concerning complex products applies to non-SEPs, too.

4. Finally, Nokia was not faulted for allegedly having failed to explain in detail the calculation of the royalty rate it demanded. the Munich court says that "reasonable parties" do not care about the underlying calculation or a disaggregation of the total royalty.

A few months later, the Munich court granted Nokia a third injunction against OPPO. The patent-in-suit in that case (case no. 21 O 12142/21) was EP1728352 on "secure data transfer" (such as contacts that are already stored in the cloud being downloaded when setting up a new device). That one is a non-SEP as I already noted at the time.

In its November 25 (Black Friday) decision (German text), the court made reference to--and reaffirmed the key takeaways from--its August 5 SEP ruling.

Here's my summary of the guidelines found in the syllabus:

1. The court reminds everyone of the fact that a proportionality defense will succeed only in rare exceptions (with the infringer having to plead the relevant facts and bearing the burden of proof). That is actually an understatement. Thus far, the proportionality defense has not succeeded in a single German patent case--and the so-called reform entered into force approximately 1.5 years ago. It's a monumental lobbying failure, and the fundamental problem was the lack of ambition: the pro-reform camp thought that a minor legislative change would make an impact. It has not moved the needle and I believe it never will. Near-automatic patent injunctions are alive and kicking. It would have taken a more incisive statutory amendment to bring about change (if such change is desirable, which is a separate question I'm not talking about in this post).

2. The second guideline reaffirms what the court held in the August 5 SEP decision: a patentee's NPE status does not per se make the pursuit of a patent injunction disproportionate.

3. The complexity of the enjoined product(s) does not make an injunction disproportionate either.

With a view to OPPO's German countersuits against Nokia, this means that the debate will be all about FRAND and not at all about (dis)proportionality.

Share|

'Defending American Courts Act' presently looks more like PR stunt than serious and well-thought-out legislative proposal to combat foreign interference in U.S. patent enforcement

The "Defending American Courts Act" is by far and away the lowest-quality piece of work I've ever seen from U.S. lawmakers in an IP context. It's so poorly done that even if one totally agreed, for the sake of the argument, with its sponsors' objective as laid out in that jingoistic press release, it still wouldn't make sense. That is remarkable.

The world definitely has a problem with standard-essential patent (SEP) rulings that encroach on other jurisdictions. Patents are meant to be territorial rights, strictly country-by-country (with the upcoming Unitary Patent treating the EU's Single Market as a country), but SEPs involve questions under contract and/or antitrust law. Contracts, or even just offers to enter into contracts, can have global scope, and relevant antitrust markets or determinations on whether a party's conduct was fair can be global, too.

I discussed the problem of extraterritorial overreach last May and published the slide deck I used for my contribution to a European Commission webinar on SEP enforcement.

So I'm definitely not a denier--I just advocate symmetry and rationality. It's key to understand that some extraterritorial decisions are actually just a reaction to what previously went wrong in other places. Also I've consistently praised the restraint that American courts exercise: if one party declines to be bound by a global FRAND rate-setting decision, they don't force it into such a license agreement; and even if both parties ask a U.S. court to set a global rate for them, U.S. courts don't necessarily devote time to such an effort.

The EU is complaining about Chinese antisuit injunctions. Its pending request for consultations, which is a complaint by any other name, is soon going to be put before a WTO Dispute Settlement Body (DSB) panel as it's a given that the EU won't be satisfied with China's response no matter the content. The United States could advocate its approach--being the last major jurisdiction not to force SEP holders or implementers into global license agreement--at the WTO level and/or through bilateral talks. If everyone exercised the same restraint as American courts, there wouldn't be a problem left to be solved by the proposed bill. There would be no more global rate-setting decisions in China, no more UK patent injunctions that become enforceable unless a defendant takes a license on court-ordered terms, no more German patent injunctions that come down because all that an implementer is prepared to do to avoid a German sales ban is to take a license to the German part of a given SEP portfolio.

To be fair, SEP holders do have a point when they argue that negotiated license agreements are almost always global, and piecemeal resolution requiring litigation in numerous jurisdictions isn't practical. That's a very valid policy concern. Hold-out is a serious issue in the technology industry, and there are implementers who would have to lose in maybe five or ten (if not more) jurisdictions before they would come to reason and finally take a global license. I'm not denying that part either.

Let's not spend too much time on the press release, which is replete with anti-Chinese rhetoric. Just one observation: Those "so-called 'anti-suit injunctions'" are not a Chinese legal innovation. The first Chinese SEP-related antisuit injunction came about a decade after the Microsoft v. Motorola antisuit injunction in the Western District of Washington that (for good reason) barred Motorola Mobility from enforcing a pair of Mannheim SEP injunctions. Maybe the concept of an antisuit injunction is part of the "American Intellectual Property" that Senators Thom Tillis (R-NC), Chris Coons (D-DE), Tom Cotton (R-AR), Mazie Hirono (D-HI), and Rick Scott (R-FL) accuse "the Chinese Community Party" of "stealing"--though America inherited it from the UK as a common law instrument.

It just doesn't come across as very sophisticated and thoroughly-researched when a press release makes it sound like China had contrived something strange and the reality is that it's part of American legal tradition.

Now let's finally turn to the proposed statute (S.3772). The plan is to add an additional § 274 to U.S. patent law (35 U.S.C.) relating to "foreign interference." It then defines "anti-suit injunction" as "an injunction issued by a foreign tribunal that purports to restrict the rights of a person to file or maintain [...] a claim of infringement of any claim of a United States patent in a tribunal of the United States [or the equivalent in the form of an ITC complaint]" as well as the related appeals. Those of you who have litigated SEP antisuit (and anti-antisuit) cases may already have noticed a major flaw: it's a narrow definition of an "anti-suit" injunction that doesn't--or at a minimum does not with sufficient clarity--cover "anti-enforcement" injunctions. For instance, the Microsoft v. Motorola antisuit injunction that Judge James Robart ordered in Seattle (and which the Ninth Circuit upheld) was not strictly an antisuit injunction: Motorola remained free to litigate the case (as it did) and to seek damages. It just wasn't able to enforce an injunction.

The language of the proposed statute refers only to "claims of infringement" but not to the enforcement of injunctive remedies. I've looked up various legal dictionaries. Cornell Law School's Legal Information Institute explains the term "claim" extremely well:

"A set of operative facts creating a right enforceable in court."

That dictionary also clarifies that "'claim' is slightly broader [than 'cause of action']," but in my understanding--please let me know via my contact form if you find evidence to the contrary--that does not mean it's a synonym for the enforcement of remedies.

The way those SEP antisuit injunctions typically work--and again, we don't have to look to China but can find examples in the U.S., especially the seminal one from Seattle--is that the enforcement of injunctive relief (as it has the potential to force someone into a global license deal, which would resolve a global dispute, thereby depriving all other courts of jurisdiction) is barred until the enjoining court has decided its case, which may then lead to a global license agreement that does away with the foreign infringement action.

Not only does the bill wrongly focus on "claim" (rather than the enforcement of remedies based on a claim) but it then also envisions the wrong sanctions--and especially sanctions that make no sense with respect to those alleged Chinese infringers. Just when you think it can't get worse...

The sanctions for someone leveraging a foreign antisuit injunction would be that:

• § 274 (b) Civil Action Presumptions:

  • "(1) the infringement is willful when determining whether to increase damages under section 284; and

  • "(2) the action is exceptional when determining whether to award attorney fees under section 285"

• § 274 (c) PTAB: discretionary denial of IPR petition

If we assume, for the sake of the argument, that there is a need to prevent China from stealing U.S. intellectual property, what Chinese company would really be impacted or deterred by this? Where are those Chinese companies that sell tons of smartphones and similar devices in the U.S. so that treble damages would hurt? Americans sure buy lots of China-made phones, but those are mostly iPhones...

Even if it's not about China, but say, you have a dispute between Samsung and a U.S. patent holder, it still wouldn't make sense on the bottom line. Samsung does a lot of business in the U.S., sure. So damages could be costly (though Samsung would never actually have to pay them if a foreign court meanwhile forces the patent holder into a global license agreement, which resolves the global dispute). But what would be the point in Samsung (which obtained a Chinese antisuit injunction against Ericsson about a year ago) not getting a PTAB review of the U.S. company's patents-in-suit? If the PTAB upholds those patents, great. If it doesn't, then those patents are invalid, and invalid patents aren't property. But Samsung would also do U.S. defendants a favor by eliminating patents that shouldn't have issued in the first place. Samsung and Ericsson settled quickly, but Apple is now actually recycling Samsung's 2021 PTAB petitions.

A few constructive suggestions:

• Instead of taking ill-conceived unilateral action through legislation, U.S. Senators should have more confidence in their country's courts. In this context, U.S. judges are probably in a better position to come up with solutions than the legislature. For example, Judge Rodney Gilstrap in the Eastern District of Texas granted Ericsson an anti-antisuit injunction against Samsung's Chinese antisuit injunction. It was appealed to the Federal Circuit, but then they settled.

• As I said further above, the U.S. does stand on higher ground with respect to extraterritorial patent rulings. Its antisuit injunctions come down only in exceptional cases (and interestingly, Chinese courts perform a multifactorial analysis that is far more similar to the U.S. approach than what you see in the UK or Germany). With the EU and China having a WTO dispute over the issue, the United States could and in my view should call on all other jurisdictions (including the EU and the UK) to refrain from patent rulings, including patent injunctions, that effectively force one party or the other to take a global license.

• If you want to enact a Defending American Courts Act, just make it easy--or, in fact, mandatory--for American courts to decline to recognize unilaterally-imposed global patent license agreements with respect to U.S. patents. If a UK court forces Apple to take a global portfolio license, a German court threatens to enjoin Ford unless it caves to a SEP holders demands on a global basis, or a Chinese court orders a patent holder like Dolby at an implementer's request to grant a global portfolio license--just don't recognize the U.S. part of those contracts. Let the patentee enforce those U.S. patents as if that foreign-imposed contract didn't exist in the first place, or let the implementer (such as an Apple) ask a U.S. court to set a FRAND rate for the U.S. part of the portfolio and potentially seek a refund if the foreign-imposed license agreement requires the implementer to overpay. If in the next step a party avails itself of the foreign court to impose contempt sanctions on the other party only because it wants American courts to rule on U.S. patents, the sanctions in the U.S. should be draconian so they truly deter bad behavior.

However, if it's a mid-term election year and you just want to fire some cheap shots at China, the current legislative proposal may be good enough. But only if the objective has nothing or very little to do with actually defending American courts' jurisdiction over U.S. patents.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Next defeat for Access Advance patent pool in Dusseldorf: appeals court overturns anti-antisuit injunctions against Xiaomi though it concurs in part with Munich antisuit case law

2022 has resumed where 2021 left off with respect to Access Advance's patent enforcement attempts in Germany. Between Christmas and New Year's, Turkish TV maker Vestel prevailed on a FRAND counterclaim--and an affirmative FRAND defense to injunctive relief--over the Access Advance pool and some of its licensors. The patent pool firm--which was founded by Philips, General Electric, Dolby, and Mitsubishi--has so far failed to address the serious issue of duplicative royalties.

The first court ruling in 2022 to involve Access Advance's enforcement efforts has also favored a defendant: in this case, Xiaomi, one of the world's largest smartphone makers. Yesterday, the Oberlandesgericht Düsseldorf (Dusseldorf Higher Regional Court) lifted a set of anti-antisuit injunctions granted by the lower Dusseldorf court to Philips, GE, and Mitsubishi last summer (Juve Patent reported).

The Dusseldorf appeals court's 2nd Civil Senate under Presiding Judge Dr. Thomas Kuehnen ("Kühnen" in German) reversed the Dusseldorf Regional Court's 4c Civil Chamber on the question of whether the moving parties had a Rechtsschutzbedürfnis--"need for protection under the law" (against an imminent violation)--in this particular case. The three-judge appellate panel concurred with the Munich Higher Regional Court's 2019 decision affirming a Nokia v. Continental anti-antisuit injunction, but begged to differ slightly from the Munich I Regional Court's more expansive framework as laid out in InterDigital v. Xiaomi last year by the Munich court's 7th Civil Chamber under Presiding Judge Dr. Matthias Zigann.

Just like the courts in Munich, the Dusseldorf courts believe that the pursuit of a foreign antisuit injunction against the enforcement of German patents is an illegal attack on property rights protected by Germany's de facto constitution. Even more importantly, just like the Munich I Regional Court, the Dusseldorf Higher Regional Court is of the opinion that an implementer seeking an antisuit injunction may be deemed an unwilling licensee, resulting in a sales ban once a SEP infringement has been identified.

What decided the case for Xiaomi against those HEVC Advance licensors is that there was no specific threat of Xiaomi seeking a Chinese antisuit injunction that would have prevented the patentees from enforcing their German patent rights. The mere fact that Xiaomi had obtained a Chinese antisuit injunction against InterDigital under fundamentally different circumstances was not deemed sufficient by the Dusseldorf appeals court to suspect that the same might happen in the HEVC Advance cases. (By the way, InterDigital and Xiaomi settled last summer.)

The Dusseldorf appeals court did not even see a basis for those HEVC Advance licensors to obligate Xiaomi to inform them beforehand of a motion for an antisuit injunction.

Whether the Munich I Regional Court and/or the Munich Higher Regional Court would have granted an anti-antisuit injunction when faced with the same fact pattern is hard to tell because each case is different and the lower Munich court's criteria for pre-emptive anti-antisuit injunctions are applied to the entire set of facts, with no single criterion necessarily being decisive in its own right. But there is a discernible difference between the Dusseldorf appeals court and the Munich lower court as the latter does attach some importance (in the multifactorial analysis of whether an anti-antisuit injunction should issue) to an implementer's conduct vis-à-vis other SEP holders--which the Dusseldorf appeals court is rather disinclined to take into consideration--as well as to an implementer's refusal to promise in writing not to move for a foreign antisuit injunction.

Munich's anti-antisuit case law is influential in Europe (and potentially beyond). A few months ago, a Dutch court denied Ericsson an anti-antisuit injunction against Apple (which denial was later affirmed by an appeals court) on similar grounds as the Dusseldorf appeals court's reversal of the anti-antisuit injunctions against Xiaomi, but applied some of the Munich logic.

It appears likely that the Mannheim Regional Court and its regional appeals court, the Karlsruhe Higher Regional Court, will reach similar conclusions. Mannheim is a key SEP venue and reasonably protective of IPR owners.

The legal innovator who successfully obtained the first German anti-antisuit injunction (at a minimum, the first SEP-related one) is Dr. Arno Risse ("Riße" in German) of the Arnold & Ruess firm. On an ex parte basis, it was granted by the Munich I Regional Court's 21st Civil Chamber, then under Presiding Judge Tobias Pichlmaier (who has recently been reassigned, at his request, to an antitrust-specialized division). Judge Dr. Hubertus Schacht filled in for Judge Pichlmaier (during the main vacation season) to preside over a hearing on Continental's motion for reconsideration--and affirmed the prior decision, which was ultimately affirmed by the Munich appeals court (6th Civil Senate, under meanwhile-retired Presiding Judge Konrad Retzer). Later, Presiding Judge Dr. Matthias Zigann of the Munich I Regional Court's 7th Civil Chamber further developed the criteria to be applied to motions for anti-antisuit injunctions. And now the Dusseldorf Higher Regional Court agrees with the Munich stance on anti-antisuit injunctions (including the potential stigmatization of an implementer as an unwilling licensee) to a larger extent than it differs from it on the hurdles for a pre-emptive anti-antisuit injunction.

Arguably, the Munich court's decisive action against foreign antisuit injunctions has been the primary reason why no SEP implementer appears to have employed that tactic in about two years.

Finally, I wish to thank the Loeffel Abrar firm for drawing my attention to this decision via Twitter.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

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.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Nokia tries to drown OPPO in patent infringement lawsuits, makes Germany (15 patents-in-suit and anti-antisuit injunction) center of gravity of multijurisdictional enforcement campaign

Nokia v. OPPO is presently the most massive 5G-centric patent dispute out there. In July, Nokia sued the Chinese smartphone maker--one of the largest in the world--in a multiplicity of European and Asian jurisdictions, and has made additional filings since. OPPO, which holds many 5G patents itself, has started to bring counteractions against Nokia, four of which I have found out about in Germany. The stakes are even higher in Ericsson v. Apple, but those two parties still have a license agreement in place (while the one between Nokia and OPPO expired at the end of June), which is why there aren't any Ericsson v. Apple infringement cases yet.

There is consensus in the wireless industry that Apple underpays. In a UK litigation it turned out that Apple's cumulative patent royalty costs are--and this is just an order of magnitude--at a level of about 1% of its sales. If major standard-essential patent (SEP) holders like Nokia and Ericsson can't seize the 5G opportunity to get Apple to pay a lot more this time around, it won't ever happen--or at least not for approximately another decade.

Compared to major smartphone patent disputes, Nokia v. Daimler (10 patents-in-suit) was just a B movie, though it had an effect of transcendental importance as it proved that the automotive industry can and will take car-level patent licenses in the end. OPPO is no Daimler, though. First, while car makers generally exhibit behavior that exposes them to ever more credible accusations of being unwilling licensees, OPPO does not have any history of infringement: it merely appears to disagree with some patent holders on royalty rates, but there are no signs of hold-out. Second, OPPO alone is a more sophisticated and effective litigant than the totality of Daimler and its tier 1 (i.e., direct) suppliers.

For both Nokia and OPPO, their dispute is about much more than the substantial volume the deal will ultimately represent. Nokia is known to have major renewals coming up with Samsung (where only some sideshows have been resolved) and, especially, Apple. It would benefit from a quick settlement with OPPO--on Nokia's preferred terms--with a view to those other negotiations and potential litigations. OPPO, however, will face royalty demands all the time, from a diversity of patent holders large and small, given its market position. There is no question that both Nokia and OPPO would benefit from a quick settlement, but they wouldn't be fighting each other in courts around the globe if they had already identified a royalty rate that works for either party's purposes.

In late July I found out about the first three Nokia v. OPPO trial dates (all of them in Mannheim and over a total of four patents-in-suit). I'm now in a position to provide further information on the dispute, though I fear that this is already outdated--in the sense of "non-exhaustive"--at the time of publication as Nokia may have made additional filings that haven't become discoverable.

In some cases, Nokia accuses OPPO and OnePlus devices of infringement at the same time, but there are also patents that Nokia asserts against the two affiliate entities in different venues. Presumably, OnePlus devices have higher margins on average than OPPO devices, so Nokia expects to get leverage even from an enforcement against just one of the two product brands (if the courts reach divergent conclusions or if one ruling comes down far ahead of the other). In terms of venue choices, Nokia doesn't have faith in Dusseldorf anymore with respect to SEP cases, though this may change as the Dusseldorf judges are apparently trying to make their forum more attractive for SEP litigation.

• Anti-antisuit injunction (Germany)

  In case no. 21 O 8690/21, the Munich I Regional Court's 21st Civil Chamber (Presiding Judge Tobias Pichlmaier) granted Nokia an anti-antisuit injunction ("A2SI")--along with the usual A4SI--against OPPO. The Munich court (and more recently even the Dusseldorf court) grants A2SIs/A4SIs to prevent any interference with German patent infringement actions in the form of antisuit injunctions issued by foreign courts, and the factors that go into the analysis include a defendant's conduct in other disputes. OPPO once sought a global royalty determination by a Chinese court in its (meanwhile settled) dispute with Sharp. The Munich anti-antisuit injunction also shields Nokia's actions in other German venues (Mannheim, Dusseldorf).

• Mannheim enforcement actions

  Mannheim SEP cases:

  • against OPPO and its affiliate OnePlus, a pair of cellular standard-essential patents from the same family: EP2981103 (which won Nokia an injunction against Daimler) and EP3220562 on an "allocation of preamble sequences"

  • against OPPO and OnePlus, EP2145404 on a "method and apparatus for providing control channels for broadcast and paging services" (last year Nokia felt forced to stipulate to a stay of a case against Daimler over this patent, but fared better in the parallel nullity proceeding than the Mannheim court had expected)

  • EP3557917 on a "method and apparatus for providing efficient discontinuous communication", targeting OnePlus devices here while OPPO devices are being accused in a Munich action

  • against OPPO and OnePlus, EP2087626 on "additional modulation information signaling for high speed downlink packet access" (Nokia originally asserted this patent against Daimler in Dusseldorf, but withdrew it on the eve of the trial--as the Dusseldorf court had made a preliminary reference to the ECJ, which potentially would have resulted in further stays--and refiled in Munich, where the case never went to trial due to the settlement)

  Mannheim non-SEP cases:

  • EP1700183 on a "method for secure operation of a computing device", targeting OPPO devices here while OnePlus devices are being accused in a Dusseldorf action

  • EP1741183 on a "front-end topology for multiband multimode communication engines", targeting OnePlus devices here while OPPO devices are being accused in a Dusseldorf action

  • against OPPO and OnePlus, EP1704731 on a "method and apparatus for indicating service set identifiers to probe for" (a WiFi patent)

• Munich enforcement actions

  Munich SEP cases:

  • against OPPO and OnePlus, EP2070217 on an "apparatus, method and computer program product providing multiplexing for data-non-associated control channel" (not previously seen in litigation, hearing scheduled for June 23, 2022)

  • against OPPO and OnePlus, EP2080193 on "pitch lag estimation" (not previously seen in litigation)

  • EP3557917 on a "method and apparatus for providing efficient discontinuous communication", targeting OPPO devices here while OnePlus devices are being accused in a Mannheim action listed further above

  • against OPPO and OnePlus, EP3396868 on a "method and apparatus for conveying antenna configuration information" (not previously seen in litigation)

  • against OPPO and OnePlus, EP1671505 on a "redundancy strategy selection scheme" (the Munich court previously showed a strong inclination to consider this patent standard-essential and pushed back the trial date in order to await developments in a parallel nullity proceeding, where Nokia fared better than one might have expected; meanwhile Nokia and Daimler settled)

  Munich non-SEP case:

  • EP1728352 on "secure data transfer", targeting OnePlus devices here while OPPO devices are being accused in a Dusseldorf action

• Dusseldorf enforcement actions

  No Dusseldorf SEP cases discovered so far

  Dusseldorf non-SEP cases:

  • against OPPO and OnePlus, EP2728964 on a "distributed multiradio controller"

  • against OPPO and OnePlus, EP3716560 on "processing transmission signals in radio transmitter"

  • EP1700183 on a "method for secure operation of a computing device", targeting OnePlus devices here while OPPO devices are being accused in a Mannheim action listed further above

  • EP1741183 on a "front-end topology for multiband multimode communication engines", targeting OPPO devices here while OnePlus devices are being accused in a Mannheim action listed further above

  • EP1728352 on "secure data transfer", targeting OPPO devices here while OnePlus devices are being accused in a Munich action listed further above

• High Court of Justice in England (EWHC)

  London SEP cases:

  • EP2087626 on "additional modulation information signaling for high speed downlink packet access" (also being asserted in Mannheim, listed further above)

  • a pair of cellular standard-essential patents from the same family: EP2981103 (which won Nokia an injunction against Daimler) and EP3220562 on an "allocation of preamble sequences" (also being asserted in Mannheim, see further above)

  London non-SEP case:

  • EP3716560 on "processing transmission signals in radio transmitter" (also being asserted in Dusseldorf)

• Tribunal judiciaire de Paris

  • EP1702486 on "arranging handover"

  • EP1704731 on a "method and apparatus for indicating service set identifiers to probe for" (a WiFi patent that is also being asserted in Mannheim)

• Juzgado de lo Mercantil nº 5, Barcelona

  • EP1574024 on "an apparatus and a method for providing information to a user" (not previously seen in litigation)

  • EP2615570 on "a method for secure operation of a computing device" (from the same patent family as EP1700183, a non-SEP that is being asserted in Mannheim)

These are just four Western European jurisdictions, and cases are pending elsewhere, but I have yet to obtain more information.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

China to EU: we comply with the TRIPS Agreement and if you have any questions about standard-essential patent enforcement, let's have bilateral talks

On July 6, the European Commission, which represents the EU at the World Trade Organization (WTO) level, filed an elaborate five-page "request for information pursuant to Article 63.3 of the TRIPS Agreement" (TRIPS = Trade-Related Aspects of Intellectual Property Rights) as a formal "communication from the European Union to China." Styled as a request for information for transparency's sake, the EU was expressing concerns over China's standard-essential patent (SEP) case law, particularly global FRAND rate-setting decisions and antisuit injunctions.

The very recent OPPO v. Sharp decision by the Supreme People's Court (SPC) of the People's Republic of China (PRC) already demonstrated that the Chinese judiciary considers it stance on SEPs to be balanced and perfectly compatible with the concept of international comity (which in this context means that courts in one country respect their counterparts in another).

Even clearer is the message that the Chinese government has for the EU. China does not believe to be under any obligation whatsoever to respond to the EU Commission's request for information. The five-page questionnaire drew a five-paragraph response that fits on a single page. The final paragraph invites the EU to have a direct conversation rather than a further exchange at the WTO level:

"5. China and the European Union have established the China-EU IP Working Group, and China stands ready to have further discussions through such existing bilateral channel."

The first paragraph of China's response is a declaration of its commitment to IPR protection and a reference to the bilateral contacts mentioned in the final paragraph. The second paragraph disputes a formal obligation to respond.

In the remaining two paragraphs, one can find absolutely nothing about SEPs or antisuit injunctions. Zero. Nada. It's just about China's rules for publishing judgments online and a clarification that any guidelines found in cases designated as "typical" or "big" cases still aren't generally applicable. In other words, decisions are still made on a case-by-case basis, even if some judgments have a higher profile than others.

Brevity is the soul of wit. If China had filed 10 or 20 pages defending its case law, that would have been weaker than this terse reply. It would have been defensive.

The EU now has four options:

1. The Commission's DG TRADE can say "alright, this went nowhere, we barked up the wrong tree." And let it go. Considering the effort that must have gone into the EU's five-page request, there's likely more to come though.

2. The Commission can accept China's invitation, sit down, and talk. Diplomacy. Bilateralism.

3. The Commission could bring a more formal complaint to accuse China of non-compliance with TRIPS, triggering a WTO dispute settlement procedure.

4. Theoretically, the EU could start an all-out trade war (with punitive tariffs etc.). I can't imagine that as the next step, but they might threaten with it at some point.

I'm just a neutral observer who understands the interests of European companies in patent enforcement as well as China's interests in being a key SEP jurisdiction (given that most smartphones are made there, many SEPs belong to Chinese companies, and for a number of device makers China is the largest market). Both sides have legitimate interests, but equally legitimate questions can be asked about the EU's request for information:

• Why are they concerned only about Chinese FRAND determinations and antisuit injunctions when

  • a U.S. court already entered an antisuit injunction almost ten years ago (Microsoft v. Motorola, a masterpiece of a decision) that prevented the enforcement of European (in that case, German) SEP injunctions, and

  • the UK Supreme Court (shortly before the UK formally left the EU) held in Unwired Planet v. Huawei that British courts can present implementers with the alternatives of accepting a global license agreement "made in Britain" or being forced out of the UK market?

• Why is it OK for European courts (particularly the ones in Germany) to enjoin Chinese and other companies unless they take a global license? The fact that German courts don't set the rate is secondary. A SEP holder can ask for anything that is not facially absurd, provided that the implementer is deemed an unwilling licensee.

  This also affects U.S. companies such as Apple when they get sued in Germany--and they don't get help from their courts, which decline to make global FRAND determinations unless both parties ask them to.

Given that U.S. courts exercise more restraint than their counterparts in the EU, the UK, and China, I'm not even sure it was a good idea for the EU Commission to make extraterritorial overreach in SEP enforcement a WTO issue--and even less so in light of the Biden Administration's rather implementer-friendly leanings.

Let there be no doubt: there are problems that need to be solved. I would encourage the EU and China to talk to each other, and I would also encourage the U.S. and the UK (which may override its top court's case law by legislative means) to engage in discussions with the EU (and vice versa).

What is not a solution is for the pot to call the kettle black. Given that the EU has some sweeping to do in front of its own door, China rightfully gave short shrift to an insinuation of non-compliance with the TRIPS Agreement. But that doesn't have to prevent the parties from engaging in constructive dialog, or multilateral talks that would also involve the United States and the United Kingdom.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

InterDigital on a roll, settles with Xiaomi: patent infringement complaints and anti-antisuit injunctions in Germany and India prove decisive--license covers 5G and HEVC

The summer is treating U.S. research and patent licensing firm InterDigital well. Less than a week after netting a strategic victory in a UK patent infringement case against Lenovo, InterDigital (often referred to by its stock ticker symbol, IDCC) today announced a license deal that settles all pending litigation against Chinese smartphone giant Xiaomi. The covered patents include InterDigital's 3G/4G/5G cellular portfolio as well as its HEVC (aka H.265) video codec patents.

The amounts involved are not known, but the volume must be rather significant. Just last month, Bloomberg reported that Xiaomi had overtaken Apple to become the world's no. 2 smartphone maker by unit sales. Xiaomi is truly an amazing entrepreneurial success story, and also has ambitious plans in the electric vehicle market. Maybe Xiaomi will once again manage to "come out of nothing" and rise to the top.

While InterDigital had greater leverage in litigation at this point, Xiaomi has so far been doing a good job demonstrating to patent holders that it is neither a soft target nor an unwilling licensee or "hold-out." Xiaomi seems to have learned the patent licensing and litigation game fast. Given its market share, I guess I'll have to pay closer attention to its future patent cases.

A little over a month ago, Xiaomi already settled with Sisvel.

Other than IDCC making money and being in a stronger position vis-à-vis other implementers, these are the key takeaways:

• Xiaomi tried to gain leverage from a Chinese FRAND determination action, but ultimately InterDigital's anti-antisuit injunctions from the Delhi High Court and Munich I Regional Court thwarted that litigation strategy. The Munich A2SI/A4SI in that dispute is now a landmark ruling, as Presiding Judge Dr. Matthias Zigann and his panel laid out a list of criteria that may justify even pre-emptive anti-antisuit injunctions. As a result, immediate and unconditional surrender is the only safe harbor for anti-antisuit defendants in Munich.

• InterDigital had appealed the Munich A2SI/A4SI to the Munich Higher Regional Court, but as a result of today's settlement, there won't be any review. At this stage it is questionable whether any A2SI/A4SI will be reviewed by the Munich appeals court ahead of Judge Dr. Zigann's impending promotion.

• According to Juve Patent, InterDigital's lead counsel in the Munich A2SI/A4SI action, and possibly also in the recently-filed infringement cases, was Arnold & Ruess's Dr. Arno Risse ("Riße" in German). The key SEP holders among Arnold & Ruess's clients are Nokia, InterDigital, and Sisvel. Despite the Nokia-Daimler and InterDigital-Xiaomi settlements, they'll continue to be busy. Deservedly so.

• I guess Lenovo is also going to settle with InterDigital rather soon, with a FRAND trial scheduled for early next year that can get very costly and likely won't save Lenovo money over taking a deal now.

• Every settlement frees up litigation resources, so I wonder whom InterDigital will pick as the next target from its list of unlicensed implementers. Maybe an automotive company, for a change? Most of the volume is in smartphones, though.

• Munich makes patentees money. In this case, an Indian court also played a key role. But many implementers are more vulnerable in Germany than in India.

• Chinese policy makers and judges may already be brainstorming about how they can preserve their country's jurisdiction over cellular SEPs, considering that most smartphones are manufactured in China and the country is also a huge target market. Xiaomi had its reasons for seeking a FRAND determination in China, but in the end other jurisdictions gave InterDigital decisive leverage.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Immediate and unconditional surrender is the only safe harbor for anti-antisuit defendants in Munich: IP Bridge v. Huawei decision published

On Wikipedia you can find a list of Alcatraz escape attempts. At some point--though probably not on Wikipedia--someone may put together a similar list of defendants to standard-essential patent (SEP) assertions in Munich who were forced to litigate their cases in that jurisdiction and couldn't get help from foreign courts in the form of an antisuit (or anti-injunction-enforcement) injunction:

• It all started in 2019 with Nokia v. Continental, which was related to the recently-settled Nokia v. Daimler dispute.

• The next landmark anti-antisuit case in Munich was (and still is, as the decision is being appealed) InterDigital v. Xiaomi, a case in which the Munich I Regional Court laid out various criteria for anti-antisuit injunctions and noted that the pursuit of an antisuit injunction or similar foreign decision results in a strong presumption of unwillingness to take a license. I'm still trying to find out more about the circumstances of that precedent, but haven't obtained and analyzed all of the information yet.

• As a panelist of a European Commission webinar on SEP enforcement I was preparing for a presentation on anti-antisuit injunctions and other forms of extraterritorial overreach when the Munich I Regional Court held an anti-antisuit injunction hearing in IP Bridge v. Huawei. Presiding Judge Dr. Matthias Zigann, who also spoke at the same webinar, presided over the hearing. The related decision came down on June 24 and has been published in a redacted form. I'll discuss it further below.

• One week ago Nokia announced its multijurisdictional litigation campaign against another Chinese defendant, Oppo, with Munich being one of the key venues. I guess Nokia will move for an anti-antisuit injunction in three, two, ... if it hasn't as we speak, with a week having passed already since that announcement.

  In a dispute with Sharp, Oppo sought a global FRAND determination by the Shenzhen Intermedia People's Court late last year. By Munich anti-antisuit standards, Nokia can now hold that fact against Oppo.

IP Bridge v. Huawei is important precedent because it is the first case in which the pre-emptive strike doctrine (like the "Bush Doctrine" that led to the Second Iraq War) the court already laid out in InterDigital v. Xiaomi (though in that one there actually had been some actual antisuit activity in China) proved outcome-determinative.

Notably, self-defense was a cornerstone of the legal reasoning behind Nokia v. Continental. We've now gone from self-defense to pre-emptive strikes (which are nevertheless justified with the concept of self-defense).

Munich's anti-antisuit case law is heavily tilted in favor of SEP holders. While only the actual pursuit of a foreign antisuit injunction against a SEP holder is--under the Munich appeals court's Nokia v. Continental decision--certain to justify a Munich anti-antisuit injunction, there's a laundry list of types of conduct that can be held against an implementer of a standard.

The latest IP Bridge v. Huawei decision, in which the lower Munich court affirmed its own ex parte preliminary injunction after a late-April hearing, can be paraphrased as follows:

• Huawei didn't actually move for an antisuit injunction.

• It didn't even seek a global FRAND determination in China--just one with respect to the Chinese market. The written decision now acknowledges that the wording of the relevant prayer for relief in the Chinese action cannot be interpreted as potentially also seeking an extraterritorial rate-setting decision.

• But Huawei had done so before: in its dispute with Conversant (which settled out last year).

• A Huawei executive even mentioned the Conversant case in negotiations with IP Bridge. The just-published decision leans toward finding that the said reference amounted to a threat with the pursuit of an anti-antisuit injunction. However, under its own framework, the court doesn't even need to get there as it bases its decision on the entirety of circumstances.

• What ultimately resolves the case in plaintiff's favor is that Huawei did not promise not to seek an antisuit injunction. That would apparently have been the only safe harbor for Huawei.

To describe all other harbors as "unsafe" would be a gross understatement. If there's the slightest suspicion, even if based on what you did in other cases, that you might seek an antisuit injunction (and seeking a global royalty determination is considered a first step in that direction), you'll be slapped with an anti-antisuit injunction and potentially categorized as an unwilling licensee--unless you declared in writing that you were not going to move for an antisuit injunction.

Even if you have no such history, the SEP holder may demand that you declare in writing that you'll refrain from pursuing an antisuit injunction. The SEP holder can give you a very short deadline. That's what the court already indicated in InterDigital v. Xiaomi and has now reinforced by actual application in IP Bridge v. Huawei.

There are two holdings in that decision which I disagree with, but even if the court had viewed those parts of the fact pattern differently, the outcome would have been the same:

• The court says that an anti-[injunction-]enforcement injunction ("AEI") is even worse than an antisuit injunction because it prevents the enforcement of a decision according to which someone is the rightful owner of a valid and infringed patent and has overcome all defenses. Now, I would agree with the court that if an ASI is considered an unlawful encroachment on the SEP holder's rights in Germany, so is an AEI. But I disagree with the court's holding that it's even worse. I don't think it is because an ASI is narrower than an AEI. An ASI in a strict sense would even prevent someone from seeking a decision on the merits (which entitles the patent holder to damages). But after you win a SEP injunction, even if an AEI makes it impossible for you to enforce it immediately, you may still get to enforce it the moment the AEI gets lifted (and AEIs are typically in place only for the duration of certain foreign proceedings, or they may be overturned by appeals courts even before). In U.S. cases parties moving for AEIs always argue that it is the narrowest relief, and I haven't seen a U.S. court disagree with that perspective (and I doubt I ever will).

  Again, I think the court is right to say that if an ASI can't be tolerated, an AEI can't either. But it strikes me as implausible that a narrower AEI could be worse than a broader ASI.

• What I find very problematic with a view to extraterritorial overreach is how the court brushes aside Huawei's argument that an IP Bridge action in the UK, where Huawei might be forced under the threat of the enforcement of a UK injunction to take a global license, does not justify the Chinese rate-setting case. Huawei had explained to the court that under UK case law a Chinese rate-setting decision can be taken into consideration by a UK court setting global terms. In paragraph 55, the Munich court now says that the related EWHC decision in Conversant v. Huawei "merely" states that the UK court "can" take a Chinese FRAND determination with respect to the Chinese market, but "does not have to." Therefore, the Munich court says the UK case law does not "open a procedural door" in Huawei's favor.

  This is utterly disrespectful of foreign jurisdictions. If the UK courts tell implementers that a FRAND determination in another country may inform the UK global FRAND determination, it certainly constitutes an encouragement to do so. That is so because the UK court made that statement when justifying its approach of setting global terms: it basically said that if there are Chinese patents involved and if a Chinese court sets a rate for China, the UK court won't ignore it. But the Munich court now holds it against a Chinese company that it is availing itself of a Chinese proceeding in order to inform a UK court and influence a UK decision. This is the opposite of what is called international comity. The difference between whether the UK court would be forced to adopt the Chinese rate-setting decision or whether it would give it consideration along the lines of persuasive authority (or whether it would normally adopt the Chinese decision unless it identifies reasons for disagreeing with it) is totally irrelevant. What does matter here is that the Chinese decision may help Huawei in the UK, and a German court has no business interfering with that--even if the interference is not an antisuit injunction against the Chinese case but just a finding that weighs against Huawei's defenses in the German case.

  It's a fact that defendants to German cases (SEP and non-SEP cases alike) often turned to UK courts for invalidity determinations just to have persuasive authority in place for the German cases, where defendants do not have a full invalidity defense. The IP Bridge situation is very similar, just that it's about FRAND (not validity) and between the UK and a third country such as (in this case, but not necessarily always) China.

  Maybe China should raise this issue--and others--with the World Trade Organization the way the European Commission just asked China questions via the WTO.

IP Bridge v. Huawei does nothing to lower international tensions over SEP enforcement. Antisuit and anti-antisuit injunctions may very well become a topic of discussion in the legislative process the European Commission has announced.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Munich may become the circuit with the most consistent patent case law in Germany if Judge Zigann is promoted and Judge Werner succeeds him

In 2019, on the occasion of its 10th anniverary of its Patent Local Rules, the Landgericht München I (Munich I Regional Court) commissioned an evaluation by the Max Planck Institute. The results became known last year. For the most part, they were pretty positive, but in my view, the respondents underrated the legal and technical competence of the Munich judges as compared to other German patent infringement courts, and I said so at the time.

Many respondents to the survey criticized inconsistencies between the lower court's decisions and those handed down by the Oberlandesgericht München (Munich Higher Regional Court), the regional appeals court--comparable to a U.S. appeals court for a particular circuit, though regional and higher regional courts in Germany are run by the states, not the federal government.

Consistency may already be on its way.

At the end of my post on the promotion of Judge Dr. Georg Werner to Presiding Judge, I mentioned that "[Presiding] Judge Dr. [Matthias] Zigann might move up to the appeals court in the not too distant future, and then Judge Dr. Werner could replace him as the Seventh Civil Chamber's presiding judge."

That scenario is more than plausible. Presiding Judge Konrad Retzer of the patent-specialized senate of the Munich Higher Regional Court will--based on what I've heard--retire by the end of the year. German judges can't "go senior" and still serve. When they reach the statutory age limit, their judicial career comes to an end. Just like Judge Retzer used to preside over the lower Munich court's patent-specialized panel before he moved up to the appeals court, his most plausible replacement is Judge Dr. Zigann, who brings a great depth of patent law expertise to the table--almost a decade thereof as the Presiding Judge of the court's Seventh Civil Chamber.

It's the opposite of a daring assumption that this will happen. In that case, the Seventh Civil Chamber will need a new Presiding Judge, and the court won't have to look far now that Judge Dr. Werner--previously Judge Dr. Zigann's deputy--has been promoted.

Today I've seen a clear sign that many German patent litigators are preparing for this scenario: a webinar organized by Munich's Center for Intellectual Property Law Information and Technology (CIPLITEC) drew a pretty large audience. To be fair, Zurich-based Professor Peter Picht is a gifted speaker who always has interesting information to share. But many listeners presumably wnated to learn about Judge Dr. Werner's views. He's not hearing patent cases at the moment, as he is presiding over a commercial law chamber that deals with other issues (such as design rights, if I understand correctly), yet took the time to deliver today's speech. Presumably he knows he's going to be a patent judge again in the very near term.

Today's presentation was a chance to find out where Judge Dr. Werner stands. To be honest, that's what I was primarily trying to figure out when listening. And the answer is very simple: Judge Dr. Werner stands 100% behind the Munich approach to standard-essential patent (SEP) injunctions as well as anti-antisuit injunctions.

As a side, Judge Dr. Werner previously had voting rights when he was a member of a judicial panel, and quite often he was the judge-rapporteur who authored the per curiam. This includes last September's Nokia v. Daimler SEP injunction.

Every single time Judge Dr. Werner took a position today on SEP case law, not only in connection with Nokia v. Daimler but also the availability of anti-antisuit injunctions, that is not only materially, but totally, consistent with Judge Dr. Zigann's views.

Presiding Judge Tobias Pichlmaier of the Munich I Regional Court's Twenty-First Civil Chamber is perfectly aligned with Judges Dr. Zigann and Dr. Werner. He granted the first Munich anti-antisuit injunction, and I've seen how he approaches SEP cases. There was a time when plaintiffs viewed the Munich I Regional Court as a bit of a lottery: if their case got assigned to the Seventh Civil Chamber, they were optimistic and they knew the case would be decided within about a year; but if the Twenty-First Civil Chamber got the case, everything would take longer and patentees faced an uphill battle. Not so now. Both the Seventh and the Twenty-First Civil Chamber are consistent and comparably efficient.

Very soon, Munich will have a "triumvirate" between the appeals court (then under Presiding Judge Dr. Zigann) and the lower court (with Presiding Judges Pichlmaier and Dr. Werner).

On the appeals court, Judge Dr. Zigann could be outvoted by his two side judges. But presiding judges have a lot of influence and authority. Judge Dr. Zigann won't be bound by precedent shaped by Judge Retzer. If he gets at least one sidge judge to vote with him, he can simply overrule any earlier decisions, such as the amount of security deposits required for the provisional enforcement of patent injunctions. This works differently in the U.S., where it would require an en banc decision (full-court review).

Munich's popularity as a patent litigation venue is likely to grow as a result of these likely developments.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Extraterritorial overreach in SEP enforcement: slide deck used in my presentation today (DG GROW webinar on standard-essential patent enforcement)

Last week I already wrote about today's European Commission webinar on standard-essential patent (SEP) enforcement. My immediate follow-up is to publish my slide deck (this post continues below the document):

21-05-19 Florian Mueller Sl... by Florian Mueller

While some speakers focused more narrowly on antisuit (and anti-antisuit) injunctions, the first part of my presentation put antisuit injunctions into the wider context of extraterritorial overreach. Patents are national rights, as Judge Edger Brinkman (The Hague) noted in his welcome speech today--but FRAND license determinations are often global. Looking at it from the angle of the practical effects, three types of extraterritorial overreach compromise another country's (or multiple other countries') jurisdiction over that jurisdiction's (or those jurisdictions') patents:

• an antisuit injunction precludes a party from enforcing patents in another jurisdiction;

• a court ordering parties to enter into a global license agreement may deprive the patent holder of the right to enforce those patents in a given other jurisdiction; and

• if a court coerces an implementer into a global license agreement (on terms set by the court or demanded by the SEP holder but effectively blessed by the court) under the threat of (the enforcement of) an injunction (i.e., sales ban).

Each of these scenarios obligates a party to do something it might not want to do voluntarily, and in each case that party will have to comply or a court will impose contempt sanctions. So the net effect as well as the nature of the leverage is materially the same in each of the three cases. The UK Supreme Court's Unwired Planet approach has already failed, as my fifth slide shows that there's been a flurry of antisuit injunction activity since that decision came down last summer.

How could we get out of this? I've asked that question before. Intergovernmental agreements are not going to happen anytime soon. Standard-setting organizations are in no better position to reach a consensus. The solution I propose can be implemented by any country seeking to preserve its jurisdiction over its patents. It can be implemented unilaterally. It's to decline to recognize in a given jurisdiction a license agreement imposed on a party by a foreign court (regardless of which of the three above-mentioned types of coercion it may be). If a SEP holder didn't want to be bound to a UK determination of the value of the German part of the portfolio, German courts could allow the enforcement of those patents, for the purpose of obtaining incremental payments up to a FRAND level. Conversely, if a UK court sets a royalty rate that is too high with respect to a major market like, for instance, China, the Chinese company might go to its local courts and seek a partial refund.

Courts could still force someone into a global license agreement, but effectively the courts in other jurisdictions would be in a position to correct those findings. A portfolio may not be all that strong in a given jurisdiction. Or the local rates may simply be lower.

In the Q&A chat, a valid question came up: what if a court tried to torpedo those further proceedings by means of an antisuit injunction? While that could theoretically happen, it would be a clearer "comity" (respect for other countries) issue than the antisuit and anti-antisuit escalation we're seeing. If, for example, a UK court did not allow a party to have a foreign court make adjustments with respect to that country's patents, it could not claim to just be seeking to defend its own jurisdiction.

Interestingly, Presiding Judge Dr. Matthias Zigann of the Seventh Civil Chamber of the Munich&I Regional Court referred to my views in his presentation on the same panel. Judge Dr. Zigann, if I didn't misinterpret him, appeared to agree in principle that it's a problem if courts in one country set royalty rates for foreign patents.

There will be a lot more debate over this topic. Some participants in the discussion focus on the issues facing only one side. For example, if someone is sympathetic to SEP holders, the focus will be on holdout and antisuit injunctions are described as pure evil (regardless of the fact that some jurisdictions such as the United States actually give a lot of thought to this and grant antisuit injunctions only judiciously, further to a multifactorial analysis). Conversely, some others are just concerned about the possibility of a court forcing them to take a license on terms that other jurisdictions would clearly consider supra-FRAND. My proposal, however, can benefit SEP holders as well as implementers.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Next week's European Commission webinar on SEP enforcement: speakers include USPTO official (and yours truly, too)

On Wednesday (May 19, 2021), the fifth webinar of the European Commission's popular series on standard-essential patent (SEP) topics will be held. Its title is "Enforcement of Standard-Essential Patents - current bottlenecks and possible solutions." In a previous post I mentioned I was going to be among the speakers.

Meanwhile, the EC's Directorate-General for the Internal Market (DG GROW) has published the agenda. After Judge Edgar Brinkman's (The Hague) welcome speech, Mary Critharis, the Chief Policy Offier and Director for International Affairs of the United States Patent & Trademark Office originally planned to deliver a keynote address. [Update] A few hours after this post originally went live, the Commission updated the agenda, and it now lists Patent Attorney Christian Hannon in Mrs. Critharis's place. He works for her. [/Update] I'm sure many of you will be as interested as I am in listening to Mr. Hannon's speech. After a recent decision by the DOJ to downgrade an implementer-hostile policy statement by Trump's antitrust chief, many want to find out about the Biden Administration's stance on SEP enforcement. IP policy in general, and SEP policy in particular, is shaped by multiple U.S. government agencies, among them the USPTO, of course.

An interesting fact about Mrs. Critharis's biography is that she "first joined the USPTO as a patent examiner in 1992" (and worked in that position for about eight years). Many (if not most) of the people who talk about SEP policy know very little about the technical side. It's obviously not a requirement to have read and understood at least one SEP before talking about valuation, injunctive relief etc., but a former patent examiner like Mrs. Critharis obviously knows what's actually found in those patent documents. [Update] And so does Mr. Hannon, who will appear on the USPTO's behalf. [/Update]

The first panel will focus on hold-up and hold-out. Ericsson's director of IPR policy Patrick Hofkens and Kather Augenstein (the firm that just represented Ericsson against Samsung in Germany) managing partner Miriam Kiefer will lkely disagree to at least some extent with the IP chiefs of Cisco (Dan Lang) and Continental (Roman Bonn). I do not know what positions on SEP licensing negotiations CMS attorney Aleksandra Kuznicka-Cholewa is likely to take.

Thereafter, at 4:15 PM Brussels time (10:15 AM EDT, 7:15 AM PDT), the second panel discussion will address "anti-(anti)suit injunctions."

I'm proud to be on this panel with Judge Dr. Matthias Zigann (Presiding Judge of the Seventh Civil Chamber of the Munich I Regional Court), Arnold & Ruess's Cordula Schumacher (Nokia's lead counsel against Daimler; we disagree on certain SEP-related questions, but I think she's great at what she does), and King & Wood Malleson partner Xu Jing from Beijing.

I'll put antisuit injunctions into the wider context of extraterritoriality issues in SEP enforcement and will propose a solution that any jurisdiction could implement unilaterally--and which would be perfectly symmetrical, meaning that it protects SEP holders and implementers alike against coercive action in foreign jurisdictions. As I'll take a rather broad perspective, I'll get to make the first presentation on that panel.

The third will discuss international arbitration and mediation. Lord Justice Arnold (England & Wales Court of Appeal) and Judge Sam Granata of the Court of Appeal in Antwerp (Belgium) will be joined by Cleary Gottlieb's Maurits Dolmans (who also spoke at my 2019 Brussels conference), WIPO deputy director Ignacio de Castro, and David Perkins, an independent arbitrator and mediator.

A high-ranking DG GROW official, Kamil Kiljanski (Acting Director GROW C), will bookend the webinar with his closing remarks at 5:50 PM Brussels time (11:50 AM EDT, 8:50 AM PDT).

You can register here.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|