Authors
Adrian Toutoungi

Adrian Toutoungi

Partner

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Eelco Bergsma

Eelco Bergsma

Counsel

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Authors
Adrian Toutoungi

Adrian Toutoungi

Partner

Read More
Eelco Bergsma

Eelco Bergsma

Counsel

Read More

23 June 2020

IPCom v Lenovo – Court of Appeal of Paris

  • IN-DEPTH ANALYSIS

In March 2020 the French Court of Appeal upheld a first instance decision of the Paris Court of 8 November 2019, awarding IPCom an anti-anti-suit injunction in its legal action against Lenovo. The anti-anti-suit injunction requires Lenovo (including its Motorola Mobility subsidiaries) to withdraw its motion for an anti-suit injunction in the Northern District of California.

The background to the dispute can be summarised as follows. IPCom, as is well known, owns a telecom patent portfolio which it acquired from Robert Bosch, relating to the 2G, 3G and 4G cellular standards. The jewel in the crown of the portfolio is its 100A patent (EP 1,841,268) which has been held in previous proceedings to be valid and essential to the 3G/UMTS standard. Lenovo manufactures and markets laptops with cellular capability and is also the parent company of Motorola Mobility, which manufactures and markets Moto handsets in the UK and elsewhere.

In September 2018, IPCom made a licensing offer to Lenovo. On 1 March, IPCom followed up with a formal notice to Lenovo, asking Lenovo to respond to its licensing offer by 15 March, failing which it would initiate legal proceedings to protect its rights.

Claiming that IPCom's offer was non-FRAND in light of the proposed royalty rate and the fact that the portfolio includes expired or soon-to-expire patents, Lenovo sued IPCom in the Northern District of California seeking, inter alia, that the US Court should set the terms for a FRAND licence to IPCom's SEP portfolio. One may presume that Lenovo hoped to secure a favourable jurisdiction for a FRAND determination in anticipation of IPCom bringing a claim of its own elsewhere. (For example, the FRAND methodology used by the English courts to date has been somewhat more favourable to SEP holders than other jurisdictions, providing a FRAND royalty in Unwired Planet v Huawei (Birss J) which would amount to almost double the rate set for the same portfolio of patents in TCL v Ericsson by the US district court for the Central District of California (Judge Selna). Also, many will be familiar with Judge Koh's findings in the Northern District of California that Qualcomm had violated antitrust laws (FTC v Qualcomm)).

IPCom responded by initiating proceedings for infringement of its 100A patent in the UK against the Lenovo group's UK subsidiaries. IPCom's 100A patent will have expired by the time of trial so IPCom does not seek an injunction, but IPCom has a claim for damages which IPCom says should be determined with reference to the FRAND rate for IPCom's worldwide portfolio of SEPs. It would appear that IPCom's motivation for commencing the UK proceedings was to provide a route to resolution should Lenovo not undertake to enter into any FRAND licence settled by the US Court (which it has now undertaken to do) or should the US Court refuse to issue a FRAND determination.

There began the anti-suit battle. Lenovo filed an anti-suit motion in the Northern District of California on 18 September 2019, stating that the US Court was first seised and seeking to prevent IPCom from pursuing its UK infringement claim. Lenovo also asked the District Court to prohibit IPCom from pursuing related claims in other jurisdictions.

IPCom responded by seeking a preliminary injunction for patent infringement in the French Courts and filing anti-suit motions of its own – i.e. anti-anti-suit motions - in both England and France. The anti-anti-suit motions sought to preserve IPCom's claims in those jurisdictions and to prohibit Lenovo from pursuing its US anti-suit motion. On 8 November 2019, ahead of the scheduled hearing date in the US of the anti-suit injunction motion of 14 November, the English Court granted an anti-anti-suit injunction prohibiting Lenovo's UK entities from supporting the US anti-suit motion. On the same day the Paris Court granted a further anti-anti-suit injunction, directly requiring Lenovo's US entities to withdraw their US anti-suit motion in so far as it related to the French counterpart of the 100A patent and any actions carried out on French territory by the entities of the Lenovo group, any of their wholesalers, distributors, customers and any intermediary. The French Court also prohibited Lenovo's US entities from filing any new anti-suit action before any foreign jurisdiction.

In March 2020 the French Court of Appeal upheld the French injunction, finding that the French Court was competent to hear the claim and that IPCom would be deprived of its rights if it could not prosecute its 100A patent before the French Court. However, the Court of Appeal overturned the order of the first instance court prohibiting any further anti-suit motions which might be filed by Lenovo, on the basis that the mere possibility of a future application did not justify such an order.

Read more about Nokia v Continental - Munich Higher Regional Court (October 2019) here

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