International comity--the notion that sometimes there should be deference to another country's courts--practically died in the context of standard-essential patent (SEP) litigation last year when the UK Supreme Court ruled that British courts could force an implementer at injunctive gunpoint to take a global portfolio license on FRAND terms determined in London, regardless of whether it generates 99% of its sales in the rest of the world. Arguably, German courts previously contributed to this development by allowing SEP holders to insist on a global portfolio license--and by justifying an anti-antisuit injunction with the sanctity of intellectual property rights as well as the concept of self-defense.
In retrospect, the chronology of the global antisuit escalation reaffirms how wisely Judge James L. Robart and the Ninth Circuit acted in 2012 in Microsoft v. Motorola, where the circumstances clearly weighed in favor an antisuit injunction as two U.S. companies were negotiating a license in the U.S. and where a FRAND case had been pending already for about a year before Motorola started suing Microsoft in Germany in order to gain leverage. Microsoft v. Motorola was not the last U.S. SEP antisuit injunction of its kind, but it clearly didn't open the floodgates--unlike Unwired Planet v. Huawei.
We've now reached the point where the world's #1 SEP injunction revenue, the Munich I Regional Court, invites SEP holders to seek anti-antisuit and even anti-anti-anti-antisuit injunctions (A2SIs and A4SIs, as I prefer a more mathematical notation in this case) even as a pre-emptive strike before any A1SI and A3SI has come down. All that's missing from the list of potential circumstances under which to issue an A2SI and A4SI is that an implementer's mimics or horoscope indicated an intent to pursue an A1SI/A3SI...
This situation is unsustainable. I'm not finished with my related thought process, but I wanted to discuss the obvious pro's and con's of possible solutions. Please feel free to share your ideas with me via this blog's contact form. Note that the order in which I outline these hypothetical approaches does not indicate any preference or feasibility assessment.
1. Jurisdictional Darwinism
The chaos might end if one or more jurisdictions unilaterally develop a framework that gives either SEP holders or implementers a be-all-and-end-all nuclear bomb. For example, a jurisdiction could impose such draconian sanctions that no company doing business in that country (even if it merely collects license fees from there) would dare not to comply.
I don't see a need to elaborate on the pro's and con's of this one. By the way, this would not even be accurately described as "Trumpism," given that the 45th POTUS told the United Nations that countries should cooperate where it's beneficial.
All other scenarios discussed herein presuppose some degree of international cooperation, either in the form of intergovernmental treaties or a consensus that results in consistent pieces of national legislation.
2. Mandatory Worldwide Arbitration
My long-standing opposition to coerced arbitration is no secret. I reiterated that position last month (Ericsson v. Samsung). SEP arbitration is fine if the parties voluntarily (without the threat of an injunction) agree on reasonable parameters. But those parameters are specific to each situation and couldn't be defined for the whole global economy.
3. World (Standard-Essential) Patent Court
Considering how difficult it is to put a Unified Patent Court (UPC) in place in Europe, and structural differences between Anglo-Saxon Common Law, Continental European Civil Law, Chinese Law etc., the primary concern here is feasibility.
4. Worldwide Prohibition of Extraterritorial Patent Rulings
The world's major economies could agree to put an end to extraterritorial patent rulings. To be clear, by this I don't just mean royalty determinations for global portfolios, but also the UK and German approach where an implementer of a standard gets enjoined because the SEP holder's demand is considered FRAND (or, as they do it in Germany, is not so clearly non-FRAND that you could see it from the Moon).
This is politically far more doable than a World SEP Court. It would be like a nuclear non-proliferation treaty. It would definitely solve the multi-antisuit and extraterritoriality problem, but it would be criticized by stakeholders as providing no alternative to country-by-country piecemeal litigation.
5. Worldwide Prohibition of SEP Injunctions
I'd obviously like to do away with SEP injunctions except under the most egregious of circumstances, i.e., where even Judge Posner said a SEP injunction might be warranted (such as when someone refuses to pay a royalty that has been determined in a final, non-appealable or non-appealed decision, or if infringing products continue to enter a market, but payments from the infringer cannot be collected).
There would be stiff resistance to this from SEP holders everywhere--and they'd argue that this is inconsistent with the TRIPS Agreement (absent an amendment to this effect).
6. Consistent Global Framework for Antisuit Injunctions
In terms of political feasibility, this is much closer to the idea of a non-proliferation treaty than to the creation of a World SEP Court. The U.S. and China already agree on a pretty reasonable set of antisuit injunction criteria (Gallo and Unterweser in the U.S.). The problem is that Germany simplistically just says "OMG, patents!" and "self-defense!" in this context--and it may not even be the only country to do so.
Even if countries agreed on a consistent set of criteria, their application would diverge, and there could be situations where in the same dispute you see courts in two or more countries deciding not to defer.
An international agreement on antisuit injunctions would definitely be progress. But it might just relegate the problem to the national application of such framework.
7. Global Equivalent of U.S. Judicial Panel on Multidistrict Litigation
While U.S. federal district courts can resolve many venue conflicts through their adjudication of motions to transfer venue (and to consolidate cases), there's an institution that can simply determine the proper venue: the Judicial Panel on Multidistrict Litigation. Its seven members come from different circuits and districts, and they can decide to transfer cases to particular venues. The key statute is 28 U.S.C. § 1407.
Proceedings for such a transfer can be initiated by the panel "upon its own initiative" or a motion filed with the panel by a party.
There could be a global equivalent for SEP cases. A hypothetical International Panel on Multijurisdictional SEP Litigation could be composed of judges from major jurisdictions and determine whether certain disputes should be resolved in one country or another, or whether (or to what extent) parallel proceedings are tolerable because of a different focus.
Governments could put such a panel in place by means of an international treaty. National ratification would be required to make the panel's determinations binding.
The panel would develop its own case law over time, but some criteria should be laid out initially. For example, a committee of judges from multiple jurisdictions could provide case studies based on hypothetical or actual disputes.
Parties to a cross-jurisdictional dispute would have the right to request a panel determination. For example, in the Unwired Planet case, Huawei could have filed a motion with the panel, arguing that the UK was, at a minimum, forum non conveniens for a worldwide royalty determination. The jurisdictional question would never have reached the UK Supreme Court, as it would have been resolved early on at the international level.
There would have to be mandatory stays of national proceedings while the multijurisdictional panel would be making its determination. Those determinations would take a number of months, but not years (unlike infringement litigation and rate-setting cases). Also, there might be a possibility to appeal, or at least to request a rehearing.
Ideally, national courts would over time have a pretty good idea of what the international panel would decide, and would obviate those international proceedings in many cases through deference to foreign courts.
Looking forward to thoughts from my esteemed readers!
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