Anti-Suit Injunction in International SEP and FRAND Disputes

A popular strategic tool - especially in international patent disputes - is the anti-suit injunction (ASI), i.e. a ban on litigation, often with effect in other countries. Although this is not usual to the legal concept in Europe, it is permissible in China and also in the USA. Foreign ASIs therefore meet domestic injunction applications - and have already increased to AAAASI (Anti-Anti-Anti-Suit-Injunction). The OLG Düsseldorf ruled in such an anti-suit injunction case in February 2022.

International SEP and FRAND disputes

So-called standard-essential patents (SEPs) are increasingly the focus of litigation. And these are often fought out internationally, frequently using an anti-suit injunction as a strategic tool. Usually, the initial situation is a failed license agreement under FRAND (Fair, Reasonable and Non-Discriminatory), especially in the area of telecommunications and data transfer via 4G and 5G standard.

Anti-suit injunction is particularly popular in the interplay between domestic and foreign markets. In practice, this leads to a build-up of foreign ASI and domestic injunction application against an issued ASI, with increase to Anti-Suit-Injunction (AASI) and even Anti-Anti-Anti-Suit-Injunction (AAAASI).The recent ruling of the Düsseldorf Higher Regional Court (OLG Düsseldorf, 7.2.22, 2 U 25/21), issued on February 7, 2022, contains interesting comments on this complex.

In short, the Senate in Düsseldorf expressly agreed with the legal interpretation of the Munich courts, but nevertheless ruled against the plaintiff in the specific case due to a lack of need for legal protection. In principle, this does not detract from the consensus with the Munich courts. What the Düsseldorf and Munich Senates have in common is that there is a need for further case law on the question of a preventive injunction and on the justification of a risk of first refusal.

Anti-suit injunction: jurisdiction in Düsseldorf and Munich

According to Munich jurisprudence, the operation of anti-suit injunction proceedings initiated abroad can be seen as an unlawful interference with the rights of an SEP holder. The OLG Düsseldorf endorsed this view (2 U 25/21, para. 17) - although with the restriction that this only applies if there is a need for legal protection and an injunction from Germany is objectively necessary (2 U 25/21, paras. 17-18).
In the present case before the Düsseldorf OLG, however, the application was for a preventive injunction. In this case, there is no "objective necessity" for such an injunction, ruled the OLG Düsseldorf (2 U 25/21, paras. 69-70) and allowed the appeal of the defendant. The court found that there was no need for legal protection for the issuance of the preliminary injunction sought by the plaintiff. The Senate referred to the fact that the OLG Munich "correctly emphasized" (GRUR 2020, 379, para. 59; differently LG München I, BeckRS 2019, 25536, para. 71 et seq.) that an anti-suit injunction represents a prohibition of litigation that is per se foreign to German law, for the imposition of which there is in principle already no need for legal protection. Accordingly, an exception is only conceivable if the prohibition of litigation imposed is contrary to the principles of the rule of law. However, this is not the case with a preventive application (2 U 25/21, para. 25).

Questions still open

With regard to the lack of a need for legal protection, the OLG Düsseldorf left open the question of whether the admissibility of the application is not already precluded by the fact that the injunction defendants are (only) to be prohibited from applying for an anti-suit injunction or an anti-enforcement injunction (i.e. not a ban on conducting proceedings, but a ban on enforcement), insofar as it is not guaranteed that the injunction plaintiff will be given the opportunity to comment in such proceedings before a decision is made (2 U 25/21, para. 70).

Similarly, the OLG Düsseldorf did not rule on the question of whether and under what precise conditions the lack of response to any inquiries can be taken into account when assessing the objective necessity of an anti-suit injunction because the SEP user has certain duties (or obligations) to explain.

Injunction request - an indication of unwillingness to license?

In any case, the Düsseldorf Senate distanced itself from the opinion of the Munich I Regional Court. In June 2021, the Munich court had established a link between anti-suit injunction and FRAND license unwillingness. In IP Bridge v. Huawei ((7 O 36/21)), the Munich Regional Court ruled that anyone who applies for or even threatens an ASI as an SEP user abroad is generally to be considered 'unwilling to license' in proceedings concerning licensing terms under FRAND.

In the court OLG Düsseldorf, this is seen differently. It cannot be demanded of the SEP user and possible license seeker to declare without cause in the face of a mere implying inquiry whether he is willing to waive requests for an anti-suit injunction for the duration of the infringement proceedings, the OLG Düsseldorf said (2 U 25/21, para. 53).

In this context, we would also like to mention the decision of an anti-suit injunction from the USA by the OLG Munich of 2019 (6 U 5042/19), according to which the application for an anti-suit injunction before an American court with the aim of preventing the enforcement of injunctive claims for patent infringement in Germany constitutes an impairment of the property-like legal position of the patent owner (6 U 5042/19, official lead). "When the BGH refers to the case law of the ECJ, according to which court-ordered prohibitions of litigation are incompatible with the (former) EuGVÜ and the (current) EuGVVO,..., this does precisely not apply in relation to third countries, such as the USA (BGH loc. cit., para. 30 loc. cit.)", the OLG Munich had explained (6 U 5042/19, para. 75).

SEP patents: EU complaint under TRIPs

The global competition for IP rights of SEPs and the related case law has a political dimension, too. On February 18, 2022, the European Union (EU) filed a complaint against China with the World Trade Organization (WTO) over court rulings there dating back to 2020 regarding SEP patents in the cases of ZTE v. Conversant, Xiaomi v. InterDigital, Oppo v. Sharp, and Samsung v. Ericsson.
Anyway, it may remain a political question how this aspect will be pursued.

For any questions or more information please contact our patent law firm at info@kollner.eu.

Source:
OLG Düsseldorf, 2 U 25/21
Press Release of EU Commission on February 18, 2022