Bloomberg reported earlier today, and Lenovo has meanwhile confirmed to me, that Nokia is enforcing a standard-essential patent (SEP) injunction it obtained from the Munich I Regional Court against computer maker Lenovo after posting collateral to the amount of 3.25 million euros (less than $4 million). Lenovo has asked the Munich Higher Regional Court to stay the enforcement of the injunction.
Munich has evolved into the world's most unbalanced patent litigation venue, leaving even the Wac(k)o Division of the Western District of Texas far behind:
While the Court of Justice of the EU made it pretty clear in its 2015 Huawei v. ZTE decision that a SEP holder's royalty demand needs to be analyzed prior to the implementer's counteroffer, the Munich I Regional Court prefers to put the cart before the horse, not because it would be appropriate but simply for the purpose of "forum selling."
The Federal Court of Justice of Germany has an antitrust panel whose presiding judge is a longstanding patent extremist, and its Sisvel v. Haier ruling is pretty bad, but the Munich court already reversed the sequence of the Huawei v. ZTE analysis long before Sisvel v. Haier and is now taking it to an extreme that basically puts all implementers at a SEP holder's mercy: if you don't accept an offer (unless it's completely crazy, such as demanding 50% of a company's sales), you're simply considered an unwilling licensee.
One of the two patent infringement panels of the Mannheim Regional Court, the Second Civil Chamber, adopted the Munich line under competitive pressure (again, "forum selling"). But at least the Mannheim court has a traditional approach to the determination of the collateral that must be posted if an injunction is to be enforced during the appellate proceedings, basing the amount on the wrongful-enforcement damages that would actually be done if, for instance, Daimler's production were to grind to a halt. In Munich, however, they just take the perspective that an unwilling licensee should simply have taken a license (without the court even ascertaining that the royalty demand is FRAND), and therefore sets ridiculously low amounts for the security to be provided, such as 5.5 million euros in a Sharp v. Daimler case and, as I already mentioned above, a measly 3.25 million euros (less than $4 million) in this Nokia v. Lenovo case. (It's another story that Daimler is a 19th-century company with a 20th-century corporate culture and will end up paying a hefty price for its decision to cave to Sharp.)
It fits into the overall picture that the Munich court relies on plexiglass shields to protect judges and counsel against COVID-19, even though experts agree that such shields are useless and even "absurd."
The first two of those problems could be solved at least in part by the patent-specialized senate of the appeals court, the Oberlandesgericht München (Munich Higher Regional Court). That panel of appellate judges is, however, regrettably slow, hesitant, and it appears at times that they don't take much of an interest in the economic realities of the world outside their ivory tower. In December 2019, the lower Munich court granted Qualcomm a non-SEP injunction against Apple that was wrong for at least three independent reasons as the appeals court concluded, in an order to stay enforcement, more than three months later. In the meantime, Apple had already come under pressure to re-incorporate Qualcomm chips into the iPhone models in question. And if the appeals court had taken another week or two, its decision would never have seen the light of day as the global dispute between Apple and Qualcomm would already have been settled by then.
If the Munich appeals court wanted to prevent reversible lower-court decisions from causing irreversible economic harm, it could do what its equivalent in Karlsruhe did in a Nokia v. Daimler case this year. Judge Andreas Voss ("Voß" in German), who presides over the Karlsruhe Higher Regional Court's patent-specialized panel, gave Nokia a pretty clear indication that if they didn't commit to refrain from enforcement, he'd order a micro-stay for the period during which his court would weigh Daimler's motion for a stay during the entire appellate proceedings. But in that Apple v. Qualcomm case, the Munich appeals court said that a micro-stay was only an option if, essentially, a company would go out of business.
Nokia's SEP enforcement campaign against Daimler has hit a snag with the Dusseldorf Regional Court poised to refer certain legal questions relating to component-level SEP licensing to the CJEU. Nokia even tried a Hail Mary pass by making a new round of licensing offers to some of Daimler's suppliers. That lack of success on the automotive front makes it all the more important for increasingly trollish Nokia to demonstrate to the wider tech industry that it will vigorously enforce any injunctions unless the amount of security is unaffordable and/or an appeals court takes swift and decisive action.
Presumably those advocating patent injunction reform in Germany will point policy makers to the Nokia v. Lenovo mess.
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