Anti-suit injunction: German Interim injunction against Chinese ASI

The Munich Regional Court has ruled on a German injunction application of an US applicant against a Chinese Anti-Suit Injunction (ASI) – Anti-suit injunction as worldwide weapon in FRAND and SEP litigation, including “increases” to AASI, AAASI and AAAASI:

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Parties are global telecommunications groups

The plaintiff (injunctive plaintiff) is a group of companies for telecommunications services with its seat in W., Delaware, USA. It is the owner of numerous intellectual property rights in Germany and worldwide, inter alia in the field of mobile telecommunications of the second (GSM), third (UMTS), fourth (LTE) and fifth (5G) generation.

The Defendant is the Chinese group and electronics manufacturer Xiaomi (as well as its 100% owned subsidiaries from Wuhan, China) and, as of the beginning of 2020, the world’s third largest manufacturer of smartphones. The defendant also has a branch office in D. and B. respectively. In addition, the defendant also has two delivery addresses in China (Beijing and Hong Kong).

No success in FRAND licence -ASI followed

According to the injunctive plaintiff’s allegations, the plaintiff had been trying unsuccessfully for seven years to reach an agreement with the defendants on the conclusion of a FRAND licence over its SEP portfolio concerning 3G and 4G technology. Most recently, a licence offer had been made unsuccessfully in February 2020. This was followed by a back-and-forth of declaratory relief and anti-suit injunction (ASI) between the parties in the period from June 2020 to November 2020, including ASI and ASI responses (AASI, AAASI) before the Intermediate People’s Court in Wuhan, People’s Republic of China, the High Court in New Delhi, India and finally also the Regional Court I Munich.

Application on Interim injunction against Chinese ASI – in Germany

Finally, the plaintiff from the USA applied for a interim injunction before the Munich Regional Court I, which the Munich Regional Court confirmed on 9 November 2020 and also ordered enforcement of the interim injunction against the defendant from China.

The defendants from China brought an action against this decision of the LG Munich. They argued that the public service on them was ineffective and that the proceedings pending in India and China precluded the denial of another lis pendens or the affirmation of a need for legal protection.

However, in vain; in its decision of 25 February 2021 (7 O 14276/20), the Munich Regional Court confirmed the contested interim injunction of 9 November 2020. In addition, the Munich Regional Court formulated some guiding principles for a domestic injunction application against Chinese anti-suit injunction.

Chinese ASI – Public service

In principle, public service can be effected if service abroad is not possible or does not promise success. This is also the case, the Munich Regional Court explained, if the requested authority refuses legal assistance. With regard to China, the Regional Court explicitly said, that it must currently be assumed that the competent Chinese authorities refuse or significantly delay the service of court summonses and orders from Germany, especially in patent litigation.

Application for ASI and AASI

According to the Munich District Court, an application before a Chinese court for an anti-suit injunction (ASI), i.e. a Chinese ASI, or a decision prohibiting the application for a decision of the present type (anti-anti-suit injunction(AASI)) with the aim of preventing the enforcement of injunctive relief for patent infringement in Germany constitutes an interference with the proprietary legal position of the patent proprietor.

AASI, AAASI and AAAASI

The Munich Regional Court added that it was open to a patent proprietor to file an application for appropriate provisional countermeasures based on the risk of first infringement, which, instead of or in addition to orders relating to a threatened or already issued ASI (AASI), may also include orders (AAAASI) not to file an application for a provisional order (AAASI) abroad from filing an application for an injunction of the present kind (AASI).

Once again, this shows: Anti-suit injunction is a popular weapon in FRAND and SEP litigation.

Risk of first infringement

The Munich District Court explained that a risk of first infringement is particularly likely if the patent user has threatened or filed an application for an ASI against the patent proprietor or has filed or threatened to file a main action for the grant of a licence or for the determination of a reasonable global royalty for such a licence in a jurisdiction that generally provides ASIs.

Sources:

LG München I, Endurteil v. 25.02.2021 – 7 O 14276/20

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