Monday, September 27, 2021

Two Recent Decisions Considering Non-SEP Antisuit Injunctions

Before mentioning the cases below--neither of which are SEP cases--I should note an article in this morning's Wall Street Journal that is about antisuit injunctions in SEP cases, titled China Wields New Legal Weapon to Fight Claims of Intellectual Property Theft:  A Delaware firm preparing to sue a Chinese smartphone maker for patent infringement was beaten to the punch with anti-suit injunction. 

1. I mentioned the other day that I would be returning to a post Norman Siebrasse had published on Sufficient Description addressing antisuit injunctions.  The post, titled Anti-Suit Injunction Refused, discusses the decision of Canada's Federal Court in Seismotech Safety Systems Inc v Forootan 2021 FC 773Seismotech is a complex, non-SEP dispute over the ownership of certain U.S. and Canadian patents,  involving litigation in both Canada and in California state court.  I don't need to go into all the details here, but it's interesting to see how Canadian law articulates the requirements for an antisuit injunction.  According to the court:

[33] An anti-suit injunction orders a party subject to the Court’s jurisdiction to cease litigation proceedings in a different jurisdiction. It does not purport to directly order the other court or tribunal to do anything. But the impact on proceedings in another jurisdiction, and on the other court to control its process, is clear. As the Federal Court of Appeal has described it, an anti-suit injunction is “an aggressive remedy, and contrary to judicial comity”: Apotex Inc v AstraZeneca Canada Inc, 2003 FCA 235 at para 13.


[34] The principles applicable to anti-suit injunctions in Canada remain those set out by Justice Sopinka for the Supreme Court of Canada in Amchem Products Incorporated v British Columbia (Workers’ Compensation Board), [1993] 1 SCR 897. Assessing whether an anti-suit injunction should issue involves a two-part analysis. First, the Court must determine whether the foreign court has assumed jurisdiction on a basis inconsistent with principles relating to forum non conveniens (inconvenient forum). Second, if it has, the Court must assess whether the requested injunction will deprive the plaintiff in the foreign court of a juridical advantage it would be unjust to deprive them of: Amchem at pp 931–933; Li v Rao, 2019 BCCA 264 at paras 46–48, 77.


[35] In addition to these two steps, Justice Sopinka referred to several “preliminary aspects of procedure.” As can be seen, the first branch of the Amchem analysis effectively assumes the foreign court has made a determination on jurisdiction. Given the importance of principles of comity, a Canadian court should not generally entertain an application for an anti-suit injunction that is merely theoretical because there is no foreign proceeding pending, and it is “preferable” that a stay or similar remedy has been unsuccessfully sought in the foreign court: Amchem at pp 930–931. These preliminary aspects are sometimes broken out as part of a five-part framing of the Amchem requirements for an anti-suit injunction: Bell’O International LLC v Flooring & Lumber Co, [2001] OJ No 1871 (SCJ) at para 9; Precious Metal Capital Corp v Smith, 2008 CanLII 64008 (ONSC) at para 18.


[36] In addition, since an anti-suit injunction is directed to an individual litigant rather than a foreign court, the Canadian court must have personal jurisdiction (in personam jurisdiction) over the individual in order to issue the order: Amchem at p 913; Veritas Investment Research Corporation et al v Indiabulls Real Estate Limited et al, 2015 ONSC 6040 at para 43; Google Inc v Equustek Solutions Inc, 2017 SCC 34 at para 38. Personal jurisdiction over an out-of-jurisdiction party may arise in three ways: presence-based jurisdiction (physical presence of the non-resident); consent-based jurisdiction (by submission, attornment, or prior agreement); or assumed jurisdiction based on the “real and substantial connection” test: Chevron Corp v Yaiguaje, 2015 SCC 42 at para 82, citing Club Resorts Ltd v Van Breda, 2012 SCC 17 (see para 79) and Muscutt v Courcelles, 2002 CanLII 44957 (ON CA) at para 19.

Applying this framework to the present dispute, the court concludes that an antisuit injunction should not issue.  Although the court has personal jurisdiction over the individual against whom the injunction was sought, the court concluded that “[t]he California State Court could reasonably, and in keeping with forum non conveniens principles, conclude it should maintain jurisdiction,” even though some of the assets in dispute are Canadian patents (and even though the California court hasn’t decided the matter itself yet).  Moreover, “[t]here is no juridical advantage it would be unjust to deprive Mr. Forootan of,” and “[t]he lack of a stay request in the California State Court speaks against issuing an anti-suit injunction.”

2. The other case worth noting here is a U.S. case, which perhaps surprisingly doesn’t actually use the term “antisuit injunction” or apply the traditional factors U.S. courts employ in determining whether to grant such an injunction.  Rather, in Nomadix, Inc. v. Guest-Tek Interactive Entertainment Ltd., No. 20-55439, 2021 WL 4027807 (Sept. 3, 2021), the Ninth Circuit held that Nomadix, in accordance with a forum selection clause in a license agreement it had concluded with Guest-Tek, could obtain an injunction preventing Guest-Tek from challenging the validity of Nomadix patents before the PTAB.  As I understand it, historically one of the most common fact patterns giving rise to a request for an antisuit injunction was when one party allegedly breached an agreement providing for disputes to be resolved in one forum (or in arbitration) by filing suit in another forum.  Here, however, the court applies just the standard factors that relate to permanent injunctions, without saying anything about the additional factors that normally are at issue when parties seek antisuit injunctions.  (For discussion of these factors, see, e.g., See Jorge L. Contreras & Michael A. Eixenberger, The Anti-Suit Injunction - A Transnational Remedy for Multi-Jurisdictional SEP Litigation, in The Cambridge Handbook of Technical Standardization Law 451, 454-55 (Jorge L. Contreras ed. 2018).)  Anyway, the court approved the entry of an injunction precluding Guest-Tek from proceeding with its PTAB petition—which, maybe you could say, isn’t a “suit” as such, but seems pretty analogous to me.


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