Derakhshan on the BGH’s Extraterritorial Damages Decision

As Inoted a couple of months ago, the German Federal Supreme Court recently issued a decision, the Judgment of May 7, 2024, X ZR 104/22— Verdampfungstrockneranlage, holding that the owner of a German patent may recover compensation for losses suffered outside of Germany, as long as there is an act of infringement within Germany, and a sufficient causal connection between that act and the foreign losses.  The decision has now been published in the 16/2024 issue of GRUR (pp. 1201-05), with commentary by Caman Derakhshan at pp. 1205-07.  The author states that, in view of this decision and the BGH’s Judgment of Nov. 14, 2023, I ZR 30/21—Polsterumarbeitungsmaschine (discussed here), authorizing awards for springboard convoyed goods and services, the German courts may experience a surge of damages claims; and he notes that both decisions appear to stand for the principle that the patentee is entitled to recover damages for losses caused by a cognizable act of infringement, even if those losses are suffered outside the term or subject matter of protection (as in Polsterumarbeitungsmaschine), or outside the geographical extent of protection (as in Verdampfungstrockneranlage).  The author suggests, however, that it may be difficult to untangle the extent of the damages which should be attributed to the domestic conduct, especially where (as in the present case) the domestic conduct is an offer that arguably could have been made outside of Germany; and that, more generally, courts may face difficulties quantifying the appropriate monetary relief.  He closes by posing the question whether the BGH’s reasoning might mean that, in the inverse case—in which an offer in a foreign, patent-free country leads to infringing conduct in Germany—the benefit of the foreign offer must be deducted from the domestic damages award, but believes that under the current state of the law this is scarcely conceivable.     

Aubrey, Guledjian & Huang on Antisuit Injunctions

Anne-Raphäelle Aubrey, Tigran Guledjian, and Eric Huang have published an article titled Anti-Suit Injunctions in the United States in the SEP and FRAND Context:  Recent Developments and Overview, GRUR-Patent 2024, 343.  Here is the abstract:

This article discusses the use of anti-suit injunctions (ASIs) and the use of ASIs in the context of Standard-Essential Patents (SEPs) and Fair, Reasonable, and Non-Discriminatory (FRAND) licensing disputes.  First, we introduce anti-suit injunctions and outline the three-step test for assessing the propriety of an ASI in the United States, which includes satisfying two threshold requirements, applying the “Unterweser” factors, and assessing the injunction’s effect on international cmity.  Second, we discuss specific cases in which U.S. courts addressed request for anti-suit injunctions in the FRAND context and consider the factors these courts relied on to grant or deny anti-suit injunctions.  Third, we summarize the recent February 2024 Ericsson v. Lenovo decision int eh Eastern District of North Carolin.  We consider the Court’s reasoning for declining to issue and anti-suit injunction against Ericsson and how this decision first in with previous U.S. anti-suit injunction cases.  Finally, we consider how the U.S. approach to ASIs differs from approaches in China and Europe.

The decision the authors refer to, Ericsson v. Lenovo, can be accessed here, and was also the subject of a post on ip fray in February.  Lenovo US and Motorola Mobility sought an ASI against Ericsson’s enforcement of preliminary relief granted by courts in Brazil and Colombia.  In denying the request, the court distinguished the Ninth Circuit’s 2012 decision in Microsoft v. Motorola on the ground that, in the present action, the granting of an ASI would not necessarily be dispositive of the litigation, since Lenovo had not committed to accepting the U.S. court’s possible determination that Ericsson’s offer is FRAND.

Also in the same issue of GRUR-Patent is the second part of Dr. Leistner’s article on SEPs and the UPC, which I noted earlier this week, and a short commentary by Dr. Johann Pitz on the BGH’s decision on extraterritorial damages in its Judgment of May 7, 2024, X ZR 104/22— Verdampfungstrockneranlage, which I previously discussed here.  

New Papers on SEPs and the UPC

1. Matthias Leistner has published a two-part series in GRUR-Patent.  The first part is SEPs in the UPC-System: The Issue of Market Dominance after Huawei/ZTE, GRUR-Patent 2024, 272.  The second part is SEPs in the UPC-System: How the UPC should implement Huawei/ZTE, GRUR-Patent 2024, 328.  The abstract for both is:

This two-part article discusses how SEP disputes should be handled before the Unitary Patent Court. The first part addresses the double nature of the Huawei/ZTE framework for the enforcement of SEPs: It explains how the obligations for the enforcement of SEPs, laid down in Huawei/ZTE, equally follow from EU competition law as well as from the FRAND undertakings in conjunction with the Union law principle of good faith. The second part will discuss how the UPC should treat cases, where two generally willing licensees cannot reach agreement on FRAND terms and conditions. It will show ways how the UPC, based on the Huawei/ZTE case law, by way of an active case management could stimulate arbitration settlements and, as an ultima ratio, engage in the setting of FRAND terms and conditions thereby following the example of the English courts.

The second article presents an interesting analysis of how the UPC could wind up determining FRAND royalties.

2. Enrico Bonadio and Magali Contardi have published The Unified Patent Court and standard essential patents, 46 EIPR 571 (2024).  Here is the abstract:

The article wants to verify what role the UPC may carve out in the SEPs landscape, especially in relation to FRAND determination and availability of injunctions. This study is useful as litigants have already started disputing SEPs before the UPC. In Section II we expand on specific FRAND issues the UPC may soon be called to decide, including whether the new court would push or not for royalties based on a whole SEPs portfolio; the global licence approach; whether FRAND royalties should be capped at the value of the technology itself before the standardisation decision; whether the fee should be based on components or on the final end-product; and the comparable licences methodology. Section III then shifts the analysis to injunctions and the proportionality test. Section IV concludes.