Context: Huawei is far from unlikely to obtain a WiFi 6 standard-essential patent (SEP) injunction against router maker Netgear in the Unified Patent Court’s (UPC) Munich Local Division (LD) (October 30, 2024 ip fray article). The decision has been scheduled for December 18, 2024. Furthermore, there is the potential for additional injunctions in the Munich I Regional Court and a Chinese court. Earlier this year, Netgear started a geopolitically-charged U.S. litigation in the United States District Court for the Central District of California, which Huawei has asked the court to throw out in part (June 20, 2024 ip fray article), with a decision potentially coming down any day now.
What’s new: In anticipation of a loss in the UPC and other injunctions, Netgear has asked the U.S. court for an antisuit injunction and, as a fallback, an interim license. This is the first-ever antisuit attack on the UPC as well as the first-ever request for an interim license in a SEP case to have been filed with a U.S. court (and possibly even anywhere outside the UK). The hearing may take place on January 24, 2025.
Direct impact: The UPC decision will come down well before any decision on the U.S. motion, though Netgear might intend to request a temporary restraining order (TRO) in California if it indeed loses the Munich case. Netgear is already worried about the prospects of an anti-antisuit injunction (which would bar Netgear from seeking and enforcing a U.S. antisuit injunction targeting foreign proceedings) and mentions it as one of two scenarios (the other being that the antisuit injunction is denied) in which it would like, as a fallback, the U.S. district court to declare that Netgear has a global interim license comparable to Xiaomi’s recent interim license to Panasonic’s patents (October 3, 2024 ip fray article). It would be logical for Huawei to seek help from the UPC, the Munich I Regional Court and a Chinese court against these efforts to undermine their proceedings. Furthermore, the UPC may consider imposing sanctions on Netgear for its subversive conduct.
Wider ramifications: After Xiaomi’s groundbreaking win over Panasonic, a debate started in the patent law community over whether an interim license is just an antisuit injunction by any other name. Netgear’s fallback request for an interim license does nothing to assuage those concerns. The Federal Circuit’s recent revival of an antisuit injunction motion by Lenovo against Ericsson (October 24, 2024 ip fray article), while addressing only one aspect of the antisuit test, also served to encourage implementers of standards to seek antisuit relief.
First, here’s Netgear’s memorandum in support of its motion:
The timing of the motion makes it more likely than not that UPC counsel advised Netgear that they were on the losing track. A litigant would not launch such a frontal assault on a court at a time where the decision is coming up soon, but might not be final yet. This does not generate goodwill. Instead, Netgear presumably wanted to file this motion for a preliminary injunction (PI) a couple of weeks prior to seeking a TRO.
The precise terminology for what Netgear is seeking is (a) “anti-enforcement injunction” (meaning they do not want to stop Huawei from litigating, but from enforcing any injunctions) and (b) “entry of interim license,” which goes beyond the declaration of an entitlement to an interim license that Xiaomi sought and obtained in the UK.
It is the ordinary course of business that litigants will argue the fact pattern in their case resembles that of some other decision by the same court or another. Here, however, some distinctions can easily be made:
- Unlike in Microsoft v. Motorola, this here is not a dispute between two U.S. companies.
- Unlike Motorola in that case and Panasonic in the UK Panasonic v. Xiaomi case, Huawei never committed to the foreign court’s jurisdiction over the FRAND issues in the dispute. Huawei did not promise to grant Netgear a license on terms determined by the foreign court.
- Unlike Ericsson in Ericsson v. Lenovo, Huawei did not elect to sue in the U.S. to obtain a FRAND ruling.
What the Federal Circuit did in the Ericsson-Lenovo dispute (where a mandate issued to the district court for further proceedings a few days ago) was a narrow holding. It said that the U.S. proceedings would not have to be certain to dispose of the foreign cases. The potential to do so was enough. But, again, those U.S. proceedings were started by Ericsson (the enjoined party), while Netgear (the would-be enjoining party) decided to litigate in the United States.
There are different FRAND pledges at issue. Ericsson v. Lenovo is about cellular SEPs, and the Federal Circuit took a certain view on the European Telecommunications Standards Institute (ETSI) FRAND pledge. In Netgear v. Huawei, the relevant patents are WiFi 6 SEPs and the standard-setting organization is the Institute of Electrical and Electronics Engineers (IEEE).
Also, Ericsson v. Lenovo is a Fourth Circuit case (resolved by the Federal Circuit). Of all those SEP antisuit or interim-license decisions Netgear cites to, only the Ninth Circuit’s Microsoft v. Motorola opinion is binding on the district court. And that one was a dispute in which the SEP holder was a U.S. company sending letters from its U.S. headquarters to Microsoft’s headquarters (equally located in the U.S.). Furthermore, the enjoined German cases were brought by Motorola almost a year after litigation started in the U.S., only for the purpose of undermining the U.S. proceedings, while here it is Netgear that ran to a U.S. court to undermine previously-filed actions in foreign courts.
Last month, Lenovo failed to obtain an interim license in its dispute with Ericsson (November 19, 2024 ip fray article). The UK decision could have drawn a clearer line, but it showed that interim licenses are not available to each and every implementer seeking to dissuade foreign courts from granting injunctions.
Anti-antisuit relief
Netgear’s motion already mentions the possibility of an anti-antisuit injunction. Unlike Continental at a certain stage of its (ill-fated) dispute with Nokia, Netgear does not appear to have tried to obtain a pre-emptive anti-anti-antisuit injunction. At least there is no indication on the public docket.
A Chinese court may now decide to enter an anti-antisuit injunction with respect to its proceedings.
There are two German national courts in which Huawei v. Netgear cases are pending. Huawei could ask for an anti-antisuit (and anti-anti-anti-antisuit) injunction in Munich or Dusseldorf. The Munich I Regional Court has issued such injunctions more often, but the Dusseldorf Regional Court is no stranger to that concept either.
What about the UPC?
For the UPC, this is a matter of first impression. The first SEP decision that involves FRAND issues (Philips v. Belkin didn’t; September 13, 2024 ip fray article) and matters (Panasonic’s dispute with OPPO may already have settled by now; November 23, 2024 ip fray article) is scheduled for the week after next, and there already is a foreign antisuit motion pending that could torpedo a UPC proceeding.
Unfortunately for Netgear, all three legally qualified judges on the Munich LD panel have significant experience with antisuit injunctions, and two of them, in fact, made anti-antisuit history:
- Judge Tobias Pichlmaier was presiding over the Munich I Regional Court panel that granted the first-ever SEP anti-antisuit injunction (AASI) in Nokia v. Continental in 2019, which was affirmed later the same year by the Munich Higher Regional Court.
- Presiding Judge Dr. Matthias Zigann laid out the criteria for a pre-emptive combination of an anti-antisuit and anti-anti-anti-antisuit injunction in InterDigital v. Xiaomi in 2021. That decision also stated that an implementer seeking an ASI may be deemed an unwilling licensee for that reason alone.
The UPC as a specialized patent court has jurisdictional limits that general court do not face (October 9, 2024 ip fray article). But that does not mean it is entirely defenseless. Maybe the UPC will grant an AASI in this case. Alternatively or additionally, it could sanction Netgear for its efforts to undermine the UPC proceedings.
Even if one agreed, for the sake of the argument, with those who say that an interim license is the same as an antisuit injunction, courts will now have to decide whether AASI-AAAASIs can also preclude a litigant from seeking an interim license.
The Munich LD is the busiest of all UPC divisions (November 5, 2024 ip fray article), yet manages to decide important and urgent matters rather swiftly. Now Netgear’s litigation tactics may require the Munich LD to address another legal question, and it is a difficult one of first impression for the entire UPC. But the UPC knows that Netgear was only the first and won’t have been the last litigant seeking to subvert UPC proceedings from abroad.