Context: This is a roundup of decisions handed down by the Unified Patent Court’s (UPC) Court of Appeal (CoA), and reported by ip fray on LinkedIn, since the prior UPC roundup (September 14, 2024 ip fray article). Note that during that period, ip fray discussed one CoA decision, which dealt with security, in a separate article (September 17, 2024 ip fray article). A roundup of recent first-instance decisions will follow soon.
1. FRAND disclosures: OPPO’s appeal against Panasonic thrown out but issues could come back
In two weeks, the Mannheim Local Division (LD) will hear standard-essential patent (SEP) cases brought by Panasonic against OPPO and Xiaomi. The first day (October 7) will be devoted to the technical merits of one of Panasonic’s various SEPs-in-suit, and the FRAND (fair, reasonable and non-discriminatory licensing) discussions will transcend the two cases over that one patent.
The procedural situations between the two disputes could hardly be more different. OPPO wants a Chinese FRAND determination for the world’s price-sensitive markets and one from the UPC, based on a counterclaim it brought, for some more affluent geographies. Xiaomi agreed, not privately but in the course of UK court proceedings, with Panasonic that a global royalty determination should be made in London by Mr Justice Richard Meade, a former patent litigator who is among the world’s most well-respected patent-specialized judges. But Panasonic had second thoughts and preferred to obtain SEP injunctions in the UPC and German national courts. There are some judges in the UK who have no love for that kind of gamesmanship and Panasonic may lose an appeal concerning the declaration of an interim license, or even if the appeal was formally rejected, Panasonic could be slapped with a strong recommendation to seek an antisuit injunction (September 22, 2024 ip fray article).
Another difference is that OPPO has already left the German market and may be less concerned about being forced out of other European markets, while Xiaomi has a very significant market share in Germany and some other European countries.
What happened between OPPO and Panasonic is that OPPO asked the Mannheim LD for document production orders:
- They wanted to see Panasonic’s other third-party SEP license agreements and not just the three that Panasonic selected to present to the UPC. They may know them anyway, but as a result of the UK (and not the UPC) proceedings. OPPO says those other agreements could indicate that Panasonic’s royalty demands are not FRAND.
- OPPO also asked for a production order directed at itself with a view to its own license agreements with other SEP holders than Panasonic.
The Mannheim LD denied, and OPPO appealed. The appeal was assigned to the CoA’s second panel (Presiding Judge Rian Kalden, Judge Ingeborg Simonsson and Judge Patricia Rombach; the latter was involved with, but didn’t necessarily cast a vote in favor of, the disgraceful Sisvel v. Haier decision by the Federal Court of Justice that the European Commission has meanwhile exposed as being in clear contravention of EU law).
At first sight, it looks like OPPO’s two document production requests were denied without prejudice. Theoretically, they can bring them back.
For their own license agreements with third parties, the UPC first wants them to talk to those third parties before seeking a discovery order. In practical terms, that is a waste of time because the likelihood of parties waiving confidentiality is negligible. But the court obviously wants as much of a case to be resolved without having to rule, and that is OK.
But the request for Panasonic’s other SEP license agremeents should have been granted in ip fray‘s opinion. The CoA held that the Mannheim LD was right to deny OPPO’s request because the LD’s jurisdiction over OPPO’s FRAND counterclaim was unclear. While ip fray, too, has doubts that defendants can gerrymander the globe as they please and ask for North American FRAND rates to be set by the UPC and Latin American ones by a Chinese court, there is now a risk of the Mannheim LD enjoining OPPO on the basis of being an unwilling licensee without actually analyzing whether Panasonic’s offer was FRAND.
An injunction coming down on that basis would mean prejudice to OPPO. It would be too late then to get access to relevant evidence.
Interestingly, the Mannheim LD’s Presiding Judge (Dr. Peter Tochtermann) did not jump on the Sisvel v. Haier bandwagon at the time when he was serving on the Mannheim Regional Court and the other patent infringement division of that court (under Presiding Judge Dr. Holger Kircher) already adopted the (in the EU Commission’s and ip fray‘s opinion) impermissible interpretation of Huawei v. ZTE that the implementer’s subsequent conduct would be analyzed prior to the FRAND compliance of the SEP holder’s offer. Only after the Federal Court of Justice resolved that question, every court throughout Germany followed suit, though theoretically they could still have decided differently and could also have referred the matter to the ECJ, which would likely have resulted in a major embarrassment for the Federal Court of Justice.
As a UPC judge, Presiding Judge Dr. Tochtermann would now have the chance to go back to where he was right and others in Germany were wrong. But that will be difficult without all the relevant license agreements on the table. It’s a matter of common sense that if a SEP holder (in this case Panasonic, but it could be any other) gets to cherrypick the three SEP license agreements it presents to the court, there are likely other agreements that are less consistent, if not grossly inconsistent, with the SEP holder’s royalty demand.
The UPC should become an important SEP enforcement venue. But it should not become a “heads the SEP holder wins, tails the implementer loses” jurisdiction like Germany either. ip fray is not taking a position here on whether OPPO is a willing or unwilling licensee. But the facts should be put on the table, and Panasonic’s terms must be analyzed in a way that can be reasonably reconciled with the European Commission’s interpretation of Huawei v. ZTE, which is not formally binding but compelling and which the European Court of Justice would most likely affirm for that reason.
2. Nokia revocation claim against non-practicing entity is stayed pending German nullity appeal
Nokia is trying to shoot down a patent asserted by licensing firm Mala Technologies in the UPC (CD Paris) as well as in Germany. But in Germany, things didn’t work out well in the Federal Patent Court, which upheld the patent. Nokia is appealing that decision, hoping that the Federal Court of Justice may reverse.
If you ask Mala, Nokia’s UPC action should go away at least with respect to validity in Germany. That’s not the opinion of the CoA’s first panel (Presiding Judge Dr. Klaus Grabinski, Judge-rapporteur Peter Blok and Judge Emanuela Germano). But given the state of affairs in the German proceedings, Mala won a stay.
3. Volkswagen’s early-stage objections against Network System Technologies fail again
Volkswagen and its almost-wholly-owned Audi subsidiary wanted an infringement case by Network System Technologies thrown out on various ground. At least they wanted the question of damages jurisdiction for the UK (and presumably Ireland) resolved sooner rather than later. They also argued that the opt-out of the patent-in-suit was invalid, raised a standing issue and argued the claims were unsubstantiated. None of that had convinced the Munich LD, nor did it impress the CoA’s second panel.
4. Spain’s Ona Patents must litigate in English (language of patent) against Apple and Google despite parallel proceedings in German court
The CoA’s second panel sided with Apple and Google against Spanish licensing firm Ona Patents over a language-of-proceedings issue. Ona Patents wanted to litigate in German, but not all of the judges on the panel speak that language, and none of the parties is headquartered in a German-speaking country.
Concerns have been raised (also in the debate under ip fray‘s LinkedIn post) over whether Big Tech defendants like Apple and Google are ultimately always going to be able to defend themselves in English (provided that it’s the language of the patent-in-suit) against small plaintiffs. ip fray believes that the fact pattern in this case is special and the situation should not be overgeneralized, but obviously it would be irreconcilable with the idea of the UPC as a multi-country, multilingual court if in the end a majority of all cases were litigated in English before a couple of German LDs.