Requesting Anti-Suit Injunction precludes defendant’s willingness to take a FRAND licence
The Regional Court Munich I has issued another landmark judgement on anti-suit injunctions and so-called “anti-anti-suit injunctions”.
The decision relates to the dispute between InterDigital and mobile phone manufacturer Xiaomi, the Regional Court Munich I upheld the anti-anti-suit injunction it had granted on 9 November 2020. The judgement was issued on 28 January 2021, Regional Court Munich I – 7 O 14276/20, InterDigital v. Xiaomi. An English translation of the decision can be downloaded here:
The facts of the case
After the negotiations between the parties about a FRAND licence on InterDigital’s SEP portfolio failed, Xiaomi applied for an anti-suit injunction (ASI) in Wuhan, which was issued on 23 September 2020, prohibiting InterDigital from further proceedings against Xiaomi based on InterDigital’s SEP in foreign countries.
InterDigital reacted by applying for an anti-anti-suit injunction (AASI) in New Delhi and before the Regional Court Munich I. The High Court in New Delhi issued the AASI on 9 October 2020. The Regional Court Munich I issued the requested AASI for Germany on 9 November 2020 and confirmed the interim injunction with its most recent decision of 28 January 2021.
Both ASI and AAASI interfere with patentee’s rights and German ordre public, so that AASI and AAAASI are justified
In the Regional Court’s view, requesting an ASI is an interference with the proprietary rights of the patentee. The same applies to the application for confirmation and enforcement of an ASI or a decision prohibiting the application for an AASI (i.e. the enforcement of an AAASI). The court, therefore, found that from a German point of view, it does not matter if the defendant was granted an ASI or an AAASI, since every prohibition to assert one’s patents is an interference with the proprietary rights of the patentee. While it is true that a foreign ASI would not be recognised domestically anyway due to a violation of the ordre public, threatened or enforced coercive measures by the foreign court could nevertheless create a coercive situation for the patentee, which would de facto prevent enforcement of the patents. This is particularly true in a situation where the application for an AAASI is pending.
The court confirms that the prerequisite one-month time limit to apply for an interim injunction also applies to AASIs. The time limit begins either when the patentee should have gained awareness of the issuance of the ASI, of the existence of an application for an ASI or of the actual risk of such an application.
The court concludes that the patentees are free to file an application for appropriate countermeasures at an early stage. In addition to applying for an AASI, an order could also include the prohibition to apply for an AAASI abroad. Thus, the patentee could apply for an AAAASI.
The court states that in the future, it will always assume the required risk of first occurrence if the existence of one of the following situations is made plausible:
- The patent user has threatened a request for an ASI.
- The patent user has filed a request for an ASI.
- The patent user has filed or threatened a main action for the grant of a licence or determination of a reasonable royalty in a jurisdiction that generally grants ASIs.
- The patent user has threatened or requested the issuance of an ASI against other patent owners and there is no indication that different behaviour is to be expected in the future.
- The patent user did not declare in text form within the short time limit set by the patent proprietor not to file a request for an ASI.
Applying for an ASI regularly triggers unwillingness to take a FRAND licence
All previous applications for an ASI had been justified with the aim of protecting a main action pending in the issuing state. However, the main action was based on the argument that the patent user was willing to take a licence. The court argues that, if a patent user were really willing to take a licence, that patent user would refrain from further unlawful interference with the patentee’s property-like protected legal positions.
Therefore, a patent user who applies for an ASI or threatens to do so cannot, as a rule, be regarded as sufficiently willing to take a licence within the meaning of the case law of the Court of Justice of the European Union and the Federal Court of Justice.
If the infringer applies for an ASI, the Munich court will not examine the patentee’s FRAND offer, but issue an injunction
The Court further concludes:
“The German infringement court would therefore in all likelihood not even enter into the substantive examination of the FRAND objection. Consequently, the German infringement court would also not substantively address the question of how high an appropriate global licence fee could be. Consequently, a conflict with the subject matter of the Chinese proceedings is not to be expected.” (Translation)
As a result, the patent user can be required to declare not only their qualified willingness to take a licence after receipt of the infringement notice, but also that they will not request an ASI.
Generally, this decision seems to be a powerful countermeasure to anti-suit injunctions issued in foreign jurisdictions.
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