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Patents Court grants anti-anti-suit injunction preventing anti-suit proceedings in China

Posted on 25 July 2022

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The Supreme Court's 2020 decision in Unwired Planet v Huawei cemented the attractiveness of the English courts as a forum for resolving disputes over standard essential patents (SEPs), given the court's willingness to set FRAND terms for a global SEP portfolio having found infringement of a UK patent. However, the English courts are not the only courts that are prepared to offer relief on this basis - the courts of the People's Republic of China (PRC) will also set global terms. This global picture presents the risk of inconsistent outcomes, and interesting, and often complex, jurisdictional questions.

In a recent decision (Philips v Oppo & ors), the Patents Court has granted SEP-owner Philips an anti-anti-suit injunction against various Defendants on the basis that there was a sufficiently imminent threat that those Defendants would seek anti-suit relief in the PRC courts. The Patents Court concluded that seeking such relief would be vexatious, oppressive and unconscionable, in that it would prevent a UK court determining infringement of a UK patent.

Background

Philips, the patentee, has asserted three patents which it says are essential to one or more of 3G or 4G standards in relation to various mobile devices sold in the UK. Its claim is against three sets of Defendants (grouped as the Oppo Defendants, the OnePlus Defendants and the RealMe Defendants).

In early May 2022, Mellor J made an anti-anti-suit injunction (without the Defendants being on notice of the application). This order prevented the Defendants from seeking anti-suit relief from a foreign court or tribunal, namely any relief that would 'interfere with, restrain, prevent, require the withdrawal of, or seek to penalise' Philips for pursuing its claim in the Patents Court. The Defendants opposed continuation of the anti-anti-suit injunction, but offered a contractual undertaking (as opposed to one to the Court) that they would give seven days' notice before seeking any such anti-suit relief from the PRC courts.

Decision

The key issue before the Patents Court was whether there was a sufficient and sufficiently imminent threat that the Defendants would seek anti-suit injunctive relief in the PRC courts. In assessing the Defendants' central argument that there was no real threat of them doing so, the Patents Court considered the earlier case of Sharp v Oppo, where Oppo had sought and obtained an anti-suit injunction in the PRC, which had the effect of ending German infringement proceedings. The Patents Court also considered public statements Oppo had subsequently made, in which it had claimed a major win, based largely on the availability of global rate-setting in the PRC, but also to a significant extent on the availability of anti-suit relief in the PRC.

On its own, the Patents Court concluded that the Sharp v Oppo history would have led to a good inference that Oppo would be willing to do the same again when strategically advantageous. However, the Patents Court also considered further issues. First, it assessed proceedings where Oppo had not sought anti-suit injunctive relief in the PRC (including claims involving Nokia, and InterDigital). Despite these examples, the Court considered there was still a sufficiently imminent risk that the Defendants would seek anti-suit relief in the PRC. Secondly, the Patents Court expressed concerns that the use of the word 'interfere' in the anti-anti-suit relief sought could hinder the commencement of a parallel rate-setting case in the PRC courts, enforcement of a judgment from those courts, and also prevent the Defendants from taking certain procedural arguments in such an action. The order was also revised to change 'foreign' to 'PRC'.

The Patents Court was satisfied that, in granting anti-anti-suit injunctive relief, it was not restricting the ability of the PRC courts to conduct global rate-setting if the Defendants brought proceedings there and those courts considered it appropriate. Rather, the Patents Court was simply 'defend[ing] the English court's proceedings' in relation to infringement of a national patent, namely a UK patent. Whilst the Defendants' offer of undertakings on a contractual basis was not appropriate, the Patents Court would be prepared to accept undertakings from the Defendants to the court instead of granting an injunction.

Comment

This judgment draws into focus the significant strategic complexities which underpin global SEP litigation. Whilst the English Patents Court can rightly expect to be a chosen venue for telecoms patents case in the coming years, it has also acknowledged the need to case manage these actions in light of decisions properly taken in other courts.

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