The opinion, authored by Judge Prost and joined by Judges Lourie and Reyna, is here. Lenovo had sought injunctions prohibiting Ericsson from enforcing injunctions it had obtained in Colombia and Brazil. In case you’re late to the game, the court lays out the procedural posture of the case:
Lenovo and Ericsson have, for some time now, attempted to agree on a global cross-license to SEPs of the other, which would include Ericsson’s 5G SEPs. . . . With an agreement remaining out of reach, they took legal action—both here and abroad.
On October 11, 2023, Ericsson made what it calls a “final licensing offer” to Lenovo and, that same day, filed the instant suit against Lenovo. . . . Ericsson’s complaint alleges that Lenovo infringed four of Ericsson’s U.S. 5G SEPs and breached its FRAND commitment at least by failing to negotiate in good faith. The complaint also seeks a declaration that Ericsson has complied with its FRAND commitment regarding its offer to Lenovo. And, if Ericsson’s offer is found to be inconsistent with its FRAND commitment, the complaint asks the district court to determine a FRAND rate for a global cross-license between the parties.
Two days later, on October 13, 2023, Lenovo sued Ericsson in the United Kingdom, asking the court there to determine FRAND terms for a global cross-license between the parties. Lenovo would later, on December 15, 2023, ask that court for an injunction prohibiting Ericsson from infringing one of Lenovo’s U.K. 5G SEPs.
Ericsson, for its part, initiated proceedings against Lenovo in Colombia and Brazil on November 20 and 21, 2023, respectively. Ericsson alleged that Lenovo infringed its Colombian and Brazilian 5G SEPs, and it sought a preliminary injunction in each country prohibiting infringement of those respective patents. It secured injunctions in both countries—in Brazil on November 27, 2023, and in Colombia on December 13, 2023.
On December 14, 2023—after the Colombian and Brazilian injunctions against Lenovo were entered—Lenovo asserted counterclaims in the district-court suit. Lenovo’s amended counterclaims, filed the next day, roughly mirror the claims in Ericsson’s complaint; they allege that Ericsson infringed four of Lenovo’s U.S. 5G SEPs and breached its FRAND commitment at least by failing to negotiate in good faith. The counterclaims also seek a “judicial declaration that sets the FRAND terms and conditions for a global patent cross-license” between the parties.
On December 29, 2023, Lenovo moved the district court to enter an antisuit injunction prohibiting Ericsson from, among other things, enforcing its Colombian and Brazilian injunctions.
The district court, in denying Lenovo’s motion, began by setting forth the three-part analytical framework—drawn largely from the Ninth Circuit’s opinion in Microsoft Corp. v. Motorola, Inc., 696 F.3d 872 (9th Cir. 2012)—that it would apply to Lenovo’s foreign antisuit-injunction request. Under this framework, there is a first, “threshold” requirement: the parties and issues must be the same in both the domestic and foreign suits, and the domestic suit must be dispositive of the foreign action to be enjoined. . . . Second, the domestic court considers whether at least one of the antisuit-injunction factors applies, including “whether the foreign litigation would (1) frustrate a policy of the forum issuing the [antisuit] injunction; (2) be vexatious or oppressive; (3) threaten the issuing court’s in rem or quasi in rem jurisdiction; or (4) where the proceedings prejudice other equitable consideration[s].” . . . Third, the domestic court considers the antisuit injunction’s impact on comity. . . .
The district court concluded that the instant suit was not dispositive of the foreign action, and it therefore denied the requested antisuit injunction without reaching the second and third parts of the analysis. . . . In part because of how it understood Microsoft, the court reasoned that, to be dispositive, the domestic suit would have to result in a global cross-license between the parties. . . . In the court’s view, however, the instant suit would not necessarily lead to this result. For example, although Ericsson had asked the district court to set a FRAND rate for a global cross-license, that request was contingent upon Ericsson’s offer being found inconsistent with its FRAND commitment in the first place. So, the court reasoned, if it determined that Ericsson’s offer was consistent with its FRAND commitment, then the court would have no occasion to resolve Ericsson’s request to set a rate for a global cross-license. . . . Further, the court noted, Lenovo had not stipulated to agree to Ericsson’s offer even if the offer was determined to be consistent with Ericsson’s FRAND commitment. . . . As to Lenovo’s counterclaim seeking a declaration of a FRAND rate for a global cross-license, while the court acknowledged it—and even seemed to characterize it as not contingent—the court nonetheless maintained its conclusion that the instant suit would not necessarily lead to a global cross-license between the parties (pp. 4-5).
The Federal Circuit concludes that the district court erred in resolving the dispositiveness issue. To cut to the chase, the court rejects the court’s, and Ericsson’s, reading of Microsoft as standing for the proposition that a domestic action is dispositive only if will necessarily result in a global cross-license. Rather, “the ‘dispositive’ requirement can be met even though a foreign antisuit injunction would resolve only a foreign injunction (and not the entire foreign proceeding), and even though the relevant resolution depends on the potential that one party’s view of the facts or law prevails in the domestic suit” (p.18). Applying that standard here, the court concludes that the domestic action is dispositive. Again, I will quote at length because there is a lot of important content here:
. . . Lenovo maintains that Ericsson’s FRAND commitment precludes Ericsson from pursuing SEP-based injunctive relief unless it has first complied with the commitment’s obligation to negotiate in good faith over a license to those SEPs. If Lenovo is correct on this contract-interpretation issue, then the suit before the district court would meet the “dispositive” requirement, since whether Ericsson has complied with its good-faith-negotiating obligation is an issue before the district court. For the reasons below, we conclude that Lenovo is correct on this contract-interpretation issue. . . .
. . . we conclude that a party that has made an ETSI FRAND commitment must have complied with the commitment’s obligation to negotiate in good faith over a license to its SEPs before it pursues injunctive relief based on those SEPs. Given the SEP-related concerns underlying the FRAND commitment, if the FRAND commitment means anything of substance, it must mean that an SEP holder that has made such a commitment cannot just spring injunctive actions against other standard implementers without having first complied with some standard of conduct. That standard of conduct, we conclude, must be—at a minimum—the very one imposed by the FRAND commitment’s good-faith-negotiating obligation. . . .
. . . Ericsson argues that ETSI has rejected a rule that would categorically bar SEP-based injunctions. . . . But the interpretation we adopt does not categorically bar such injunctions . . . it just conditions their pursuit on, at a minimum, the SEP holder having first complied with the good-faith-negotiating obligation imposed by the FRAND commitment itself. . . .
Ericsson’s main pushback is that the Colombian and Brazilian tribunals should be deciding this contract-interpretation issue, as opposed to the district court or this court. . . . Initially, we note that, to the extent this argument is intended to show that an antisuit injunction here is inappropriate under any circumstances, it would seem to prove quite a bit. As the Ninth Circuit explained in Microsoft when addressing a similar concern,
the mere fact that different jurisdictions answer the same legal question differently does not, without more, generate an intolerable comity problem. If that were the case, then there could virtually never be a foreign anti-suit injunction: Parallel proceedings in different jurisdictions would have to be permitted to proceed any time the two jurisdictions had different rules of law, which is almost always the case.
696 F.3d at 888. In any event, we think this argument is better considered as part of the second or third parts of the foreign-antisuit-injunction framework, which the district court has yet to reach. The argument simply has less to do with the “dispositive” requirement. The FRAND commitment itself is the same as between the instant suit and the Colombian and Brazilian proceedings, and just because tribunals in those countries might differ on their resolution of the same issues—e.g., whether that commitment precludes pursuing injunctive relief without the good-faith-negotiating obligation having first been complied with—does not mean that the issues are not the same for purposes of the threshold requirement in the foreign-antitrust-injunction framework.
Ericsson finally argues, in a similar vein, that the “dispositive” requirement is not met because the Colombian and Brazilian injunctions “arise from independent foreign patent rights issued by foreign sovereigns and enforced only within their borders.” . . . The issue here, however, is not just one of patent rights; it is one of contract. . . .
In sum, we conclude that the “dispositive” requirement of the foreign-antisuit-injunction framework is met here. That is because (1) the ETSI FRAND commitment precludes Ericsson from pursuing SEP-based injunctive relief unless it has first complied with the commitment’s obligation to negotiate in good faith over a license to those SEPs; and (2) whether Ericsson has complied with that obligation is an issue before the district court. Accordingly, if the court determines that Ericsson has not complied with that obligation, that determination will dictate the impropriety of Ericsson’s pursuing its SEP-based injunctive relief. . . .
None of this is to say that Lenovo will ultimately demonstrate itself entitled to its requested antisuit injunction20 (pp. 18-25).
20 Further, our opinion and disposition here in no way suggest a view as to whether, on the facts, Ericsson has or has not complied with its good-faith-negotiating obligation.
So, if I am understanding correctly, the bottom line appears to be that a party moving for an antisuit injunction satisfies the first part of the test by showing that the domestic action would potentially be dispositive of the propriety of seeking the challenged relief in the foreign action. In other words, although the court (citing Microsoft) initially phrases the first part of the test as “the domestic suit must be dispositive of the foreign action to be enjoined,” it really means “may be dispositive.” The court cites passages from the district and appellate court decisions in Microsoft that are consistent with this interpretation; so it’s really just a matter of the propriety of Ericsson’s seeking injunctive relief being an issue before the district court.
Whether in this case the other parts of the test are satisfied will be determined on remand and thus remains to be seen. The court also leaves unresolved the relevance of Lenovo’s domestic counterclaim, stating that the district court’s reasoning why the counterclaim was “insufficient to meet the ‘dispositive’ requirement is not entirely clear to us. Nothing in this opinion should be read to foreclose the court from further considering that theory in the event if becomes relevant” (p.25 n.19).
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