Context: Yesterday, the Unified Patent Court’s (UPC) Mannheim Local Division (LD) surprisingly entered an injunction in Panasonic v. OPPO (for a detailed analysis of the FRAND part of the decision, see this November 22, 2024 ip fray article), a standard-essential patent (SEP) case that had seemingly ceased to be (October 25, 2024 ip fray article). It was the court’s first SEP injunction that came down over a FRAND affirmative defense.
What’s new: Many hours after the injunction itself, the Mannheim LD’s Presiding Judge (and here, judge-rapporteur) Professor Peter Tochtermann published an order denying an 11th-hour (Thursday afternoon) motion by OPPO designed to delay the announcement of the decision (PDF (in German)). The order is heavily redacted, but it is easy to deduce that the philosophical agreement announced in October has not yet resulted in a final agreement, given that Panasonic (successfully) opposed OPPO’s motion for a stay. What is definitely clear is that the court had already advised counsel on November 4 that a decision was going to be handed down on November 22 (as it indeed was). And by the time OPPO requested a stay, the judgment had already been signed by at least a majority of three judges and potentially also by the fourth.
Direct impact: It ain’t over till it’s over. The fact that Panasonic opposed OPPO’s motion for a stay by way of direct correspondence on or after Monday (November 18) shows that there was enough of a disagreement between the parties these days, despite the philosophical agreement on a settlement that gave rise to the late-October stipulated stay of the UK FRAND proceedings, for Panasonic to have preferred a judgment. Panasonic must have had a reason to keep up the pressure on OPPO that way.
Wider ramifications:
- There is no Panasonic v. Xiaomi case where a court held a trial and is now working on a decision. But as ip fray learned from Michael Ma of PRIP, the website of the Chinese patent office (CNIPA) does not provide an indication of the formal withdrawal of any OPPO or Xiaomi requests to invalidate certain Panasonic patents. The last hearing list there is dated November 18 (this week’s Monday) and envisions a December 5 oral hearing concerning patent no. CN101809911. Therefore, it is possible that there is also still something left to be resolved even between those parties.
- Yesterday’s FRAND injunction was not the only UPC landmark ruling to be published that day. The Hague LD’s decision in Plant-e v. Arkyne is also of transcendental importance as it identified an infringement by way of equivalence (November 22, 2024 ip fray article).
Sequence of events
As explained further below, the UPC could have done a better job indicating to the general public what it was doing and why. But at least there is now some clarity, many hours after the decision was published, as to the chronology of events:
October 3: Xiaomi wins a UK appeal against Panasonic and is deemed entitled to an interim license (October 3, 2024 ip fray article). At that point, the only thing left to be resolved in that dispute was the FRAND rate, with a UK FRAND trial coming up later that month. But OPPO did not say that it would enter into an agreement on global terms set by the UK judiciary, so the interim-license decision does not apply to it in any way.
October 8: The court starts the combined technical hearing (over the same patent) in Panasonic v. Xiaomi and Panasonic v. OPPO. After the court’s introduction of the panel and initial explanations of the significance of this pair of cases, counsel for both Panasonic and Xiaomi requests a stay of that case. Presiding Judge Professor Tochtermann hesistantly accepts to do so, raising doubts about whether at that stage, with the court already having prepared for the trial, the motion for a stay was still timely.
October 9: The court hears Panasonic’s and OPPO’s FRAND arguments (October 9, 2024 ip fray article). At the end of the hearing, it schedules a decision for 10 AM local time on December 6, 2024, but already advises the parties that it could also come down two weeks earlier. In other words, December 6 was the most conservative and not the earliest date according to the court’s plans at the time. The court promised to give them advance notice of a scheduled announcement should it be moved up.
October 25: On the last business day before the scheduled Panasonic v. Xiaomi & OPPO FRAND hearing, Mr Justice Richard Meade of the High Court of Justice for England & Wales (EWHC) first stays the Xiaomi and then also the OPPO case, both based on joint motions by the respective parties indicating a principal settlement (October 25, 2024 ip fray article). It was clear that they had not yet hammered out all the details, but that they were philosophically in agreement on the main terms on which to put those disputes to rest. On that basis, a long FRAND trial would have been a waste of court and party resources.
The following information is based on what showed up on the UPC website yesterday:
October 26: Counsel for Panasonic sends an email to the court and to OPPO’s counsel. The content of that email is not known due to redactions. The timing suggests that the court was advised of the fact that the UK FRAND hearing date had been vacated.
November 4: Presiding Judge Professor Tochtermann sends an email to the parties, informing them of the announcement being moved up to November 22 (yesterday). According to the latest order, the parties had not sent any further communication to the court regarding a settlement by the time the new ruling date was communicated. Also, there was some communication by Panasonic’s counsel to the court and to OPPO’s counsel later that same day (November 4), the content of which is unknown due to redactions, except that the order reveals that nothing was said about whether or not Panasonic was still interested in a decision in this case. It is a reasonable, but not absolutely reliable, inference that the court was advised of the fact that the parties were working on a settlement, but not quite there yet.
Monday, November 18: There is some correspondence between Panasonic and OPPO in which OPPO (as one can deduce from what the order says) proposes a joint stipulation to request a stay, an invitation that Panasonic declines. Grammatically, the public redacted version of the court order is ambiguous. It is possible that OPPO proposed the stay on November 18, but Panasonic disagreed later; it is also possible that OPPO proposed the stay even prior to November 18, but that Panasonic disagreed on November 18. One or the other happened on November 18 (or maybe even both). But there wouldn’t be any further communication by the parties to the court for another three days.
Tuesday, November 19: Presiding Judge Professor Tochtermann electronically signs the (public version of the) judgment at 5:35 PM Central European Time. Judge Boettcher signs at 7:11 PM that day, and Technically Qualified Judge Loibner at 9:19 PM. At this point, a majority is in place.
Thursday, November 21:
- At 10:01 AM, Judge Brinkman signs. The fact that he signed two days after the three German judges who formed a majority may be another clue to him potentially not having been in agreement with each and every aspect of the decision. There could also have been logistical reasons for the delay.
- At 2:53 PM, a clerk also signs the decision.
- In the afternoon, thus at least a couple of hours and possibly several hours after the court had already obtained all (or at least all judges’) signatures, OPPO’s counsel files a motion (opposed by Panasonic based on correspondence between the parties)
- to stay these proceedings (including the revocation and FRAND counterclaim proceedings) and to vacate the November 22 ruling date, or, as a fallback,
- to postpone the ruling date from November 22 to a later date, which should not be sooner than December 6 (the provisional ruling date set at the end of the October 9 oral hearing).
Friday, November 22:
- In the (mid to late) morning, the judgment shows up on the court’s website. That decision does not mention OPPO’s motion as it could not: all four judges had already signed the order prior to that last-minute motion. The fact that the announcement took place constituted an implicit denial of the motion. It is also possible that OPPO was advised informally (by email or telephone call) of the failure of its motion.
- At 11:14 PM, thus approximately 12 hours after publication of the judgment, Presiding Judge Professor Tochtermann, in his capacity as judge-rapporteur, electronically signs the order denying OPPO’s motion for a stay. Apparently, that order is then uploaded immediately to the court’s website.
Picture of announcement
Late Friday afternoon, the UPC made a photo of Presiding Judge Professor Tochtermann at the announcement in open court available:
Reasons for the denial
The order denying the motion for a stay refers to two different statutory grounds for a stay of proceedings.
Rule 295(d) of the UPC’s Rules of Procedure (RoP) relates to a joint stipulation by the parties. That was obviously not the case here.
Rule 295(m) is a catch-all that allows a stay “in any other case where the proper administration of justice so requires.” The redacted version of the order does not reveal on what basis OPPO argued that the court should stay the proceedings over Panasonic’s objection. By far the most likely reason is that OPPO told the court that the parties were close to a settlement. But just like one cannot be just a little bit pregnant, it is also a binary question of whether the parties have agreed to the extent that a plaintiff drops the case. The court order notes Panasonic’s entitlement to a decision, and chides OPPO for having left the court in the dark “until the last second” as to whether a judgment should come down or not.
It is easy to imagine that the UPC panel, or its majority in case one of the judges dissented (if so, that would most likely have been Judge Brinkman declining to accept a very German approach to FRAND), very much cherished the opportunity to enter the new judiciary’s first adjudication of a FRAND affirmative defense. And ip fray stands by its suspicion of forum-selling. That said, OPPO’s 11th-hour motion for a stay was doomed to fail as far as one can tell based on how the judge-rapporteur explains the denial.
Unreliable UPC calendar — violation of procedural rules?
There is a major difference between UPC divisions in how much of an effort they make to keep the public calendar up to date. The Dusseldorf LD plans and announces far ahead. The Munich LD does not publish scheduled events as far ahead as the Dusseldorf LD does, but so far no decisions came down without an “announcement hearing” (sic) being listed on the UPC’s website. But what happened yesterday in Mannheim was a “public” announcement of a decision without the general public even being told on the UPC’s website that it was coming. The UPC is going to get a new case management system, with help from the European Patent Office (EPO), but in any event it should also keep its public calendar up to date.
It is another question (and not for this article to explore further) whether yesterday’s announcement was procedurally deficient due to that failure to invite the general public (Article 45 of the UPC Agreement).
Illogical sequence of publication of decisions in given case
It would be good practice for the UPC (and this is not a Mannheim-specific issue) to maintain a logical sequence of its published decisions.
For instance, if an infringement decision makes reference to a previous decision rejecting a revocation (counter)claim, the underlying validity determination should come out prior to the infringement ruling. The parties themselves may (or may not) receive the decisions in the logical order, but so should the general public.
Here, the infringement ruling came out yesterday in the (mid or late) morning, but the order denying OPPO’s motion for a stay was signed and published around midnight. It is obvious that the 104-page infringement ruling had been in the making for some time, while OPPO’s motion on the eve of the (scheduled) announcement could not be adjudicated sooner. Given that the announcement had presumably (even if not in a way visible to the general public) been scheduled for a specific time, it was admittedly difficult to maintain the logical sequence. But there would have been ways to solve that problem:
- The announcement could have been postponed from the morning to the afternoon or to Monday.
- In his role as judge-rapporteur, Presiding Judge Professor Tochtermann could also have entered, and published, a very short order denying the motion for a stay and indicating that the reasons would be stated later. That would at least have made it clear that the judgment came down because a motion by OPPO to stay the announcement was denied.
The UPC is still in its infancy. By and large, everything is already going very well. The confusion in this case shows room for improvement, which is just normal.