Paris Court Issues Anti Anti Suit Injunction

On 3 March 2020, the international chamber of the Paris Court of Appeal confirmed that French courts may issue an anti anti suit injunction against two US corporations which had obtained an anti suit injunction from a US court in a patent case.

When the Paris court of appeal delivered its judgment, the French anti anti suit injunction had already proven successful, as the motion for the anti suit injunction filed before the US court had been withdrawn in the meantime. The French higher court nevertheless addressed the issue and confirmed that the Paris first instance court had the power to grant the remedy.

Background

The dispute arose between, on the one hand, various companies of the Lenovo and Motorola groups and, on the other hand IPCom, a German company.  IPCom claims it owns various patents that Lenovo and Motorola use for manufacturing their devices. Lenovo and Motorola claim that IPCom did not offer them a license on appropriate terms and conditions (fair, reasonable and non discriminatory, or FRAND), and in particular that IPCom royalty demands violate these terms.

Initial Proceedings in California

In March 2019, Lenovo Inc. (‘Lenovo US’) and Motorola Mobility LLC (‘Motorola US’) sued IPCom before a US District in San Jose, California, for breach of contract, declaratory judgment, antitrust monopolization and declaratory judgment of non violation of certain U.S. patents. The suit was predicated on the allegation that IPCom failed to offer Lenovo and Motorola a license to its alleged standards essential patents (SEPs) relevant to the 2G, 3G and 4G cellular standards on FRAND terms and conditions.

IPCom challenged the jurisdiction of the U.S. court. It explained that it is a small company, employing six people only in Germany, and it argued that its contacts with the USA were not significant enough to justify the jurisdiction of a U.S. court under the Due Process jurisprudence of the U.S. Supreme Court.

In December 2019, the U.S. court accepted that the plaintiffs had failed to make a prima facie showing of personal jurisdiction over IPCom and thus limited discovery to the issue of personal jurisdiction.

Subsequent Proceedings in England

IPCom counterattacked in England, where it initiated proceedings against Lenovo UK and Motorola UK in July 2019. I understand that IPCom claims revolve around the allegation that it owns certain patents, and that these patents were infringed by the two UK defendants.

In September 2019, Lenovo US and Motorola US sought an anti suit injunction from the US court against IPCom and requested that the California court :

(1) enjoin IPCom from prosecuting the patent infringement action IPCom filed in the United Kingdom against Plaintiffs’ U.K. affiliates; and

(2) enjoin IPCom from instituting against Plaintiffs, Plaintiffs’ affiliates, or any of their customers any action alleging infringement of IPCom’s claimed 2G, 3G and/or 4G SEPs during the pendency of this action.

In November 2019, the London High Court issued an anti anti suit injunction against Lenovo UK and Motorola UK enjoining them from preventing the continuation of the English proceedings.

The French Injunctions

In October 2019, IPCom had also initiated proceedings in Paris, but this time against the Lenovo and Motorola US and French entities.

IPCom first initiated interim proceedings and sought injunctions against all the defendants. In November 2019, IPCom also initiated proceedings on the merits against the French subsidiaries only.

On November 8th, 2019, the Paris first instance court issued two anti anti suit injunctions.

The first was concerned with the existing US application. The French court ordered Lenovo US and Motorola US to withdraw their motion for an anti suit injunction in the California proceedings, insofar as such motion related to any judicial proceedings initiated by IPCom and alleging infringements of the French part of the European patent owned by IPCom, materialising by acts on French territory.

The second was a prospective anti anti suit injunction, whereby the court enjoined Lenovo US and Motorola US from initiating any such new proceedings (i.e. seeking an anti suit injunction), before any foreign court.

Both injunctions were to be sanctioned by a civil penalty (astreinte) of € 200 000 per day of non compliance (first injunction) or per instance of violation (second injunction).

Lenovo US and Motorola US moved to give notice of partial withdrawal of their motion in the U.S., in accordance with the French injunctions.

By a judgment of 3 March 2020, the Paris Court of Appeal confirmed the power to issue the first injunction. It held, however, that the second injunction was too broad (no limitation of either its temporal or territorial scope), and did not meet the requirements for issuing interim remedies, as the goal was neither to stop actual harm, nor to prevent imminent harm.

The judgment focused on whether the general requirements for granting interim relief were met. French courts have general power under the Code of civil procedure (Article 835) to issue interim measures for the purpose of stopping manifestly illegal harm. The court found that the harm was to be enjoined by the U.S. court from initiating proceedings alleging infringement of the patent in France, and that the harm was manifestly illegal, because it violated the exclusive jurisdiction of French courts and two fundamental rights of IPCom: its right to (intellectual) property and its right to a fair trial.

The Power of French Courts to Issue Anti Anti Suit Injunctions

French courts were long hostile to anti suit injunctions. In 2004, the French supreme court for private and criminal matters (Cour de cassation) had ruled in an obiter dictum that anti suit injunctions violate French public policy as the affect the jurisdiction of French courts. However, in 2009, the Cour de cassation qualified this ruling, by holding that foreign anti suit injunctions would not violate French public policy where their aim was solely to sanction a pre-existing contractual obligation, i.e. a jurisdiction clause (in favour of a foreign court).

After the 2009 decision, they were some attempts to go one step further and seek anti-suit injunctions from French courts. As far as I know, they all failed (see, e.g., the Vivendi case in 2010).

In Lenovo, the issue was obviously different, as the parties sought a remedy against anti suit injunctions. While the court’s decision is quite remarkable, the judgment did not attempt to lay down general principles. It is a narrow decision, focused on the general requirements for granting interim measures.

Yet, two series of reasons should be more specifically underlined.

First, the court insisted that French courts had exclusive jurisdiction to rule on the infringements to a French patent (here, the French part of a European patent). This suggests that it would be more difficult to obtain a similar remedy in a contractual or tort case, where no court could seriously claim exclusive jurisdiction (except in presence of a jurisdiction clause).

Secondly, the court ruled that the U.S. anti suit injunction would violate several fundamental rights of the German plaintiff. The first was the right to property under Protocol 1 of the European Convention of Human Rights.  The second was the right to a fair trial under Article 6 ECHR, and more precisely, it seems, the right of access to court. The court explained that, because the patent of the plaintiff was to expire shortly, the anti suit injunction would, in effect, deprive IPCom from its IP right. The court added that the plaintiff could not be protected in the meantime by the U.S. court, since the French court had exclusive jurisdiction. This last proposition is not fully convincing. It is not because French courts consider their jurisdiction as exclusive that a U.S. court would necessarily decline jurisdiction.

Ultimately, Lenovo was probably a good case for issuing such an injunction. The  jurisdiction of the French court was strong, while there were already signs that the foreign court might decline jurisdiction.