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.
Share with other professionals via LinkedIn:
