Context: Earlier this month, the Unified Patent Court’s (UPC) Mannheim Local Division (LD) held hearings in the Panasonic v. Xiaomi and Panasonic v. OPPO standard-essential patent (SEP) disputes. The latter went forward, but the former got stayed right at trial start (October 9, 2024 ip fray article) as a result of an appellate victory by Xiaomi that led to an interim license (October 3, 2024 ip fray article).
What’s new: Today, Mr Justice Richard Meade of the High Court of Justice for England & Wales (EWHC) stayed the Panasonic v. Xiaomi and Panasonic v. OPPO FRAND trials that were originally slated to begin on Monday (October 28, 2024), granting consent orders submitted by the parties further to de facto settlements. Separately, the UPC responded to an inquiry by ip fray concerning the Munich LD’s case schedule in Panasonic v. OPPO, indicating that they were quite aware of the UK proceedings and that they might have given some weight (though it will never be known how much) to a UK FRAND determination.
Direct impact: It’s clear that the parties have reached a commercial agreement and just have to do some paperwork now, but their UK, UPC, German and Chinese litigations are history.
Wider ramifications: This pair of SEP disputes raised new issues such as Panasonic having reneged on a commitment to leave Xiaomi alone as long as they take a license on UK court-determined terms and OPPO’s idea of having FRAND rates determined for different geographies in different jurisdictions (China for price-sensitive markets, UPC for the others). It made history with Xiaomi’s interim license. And it showed that UK FRAND proceedings have the potential not onyl to bring about global settlements but also to influence UPC decisions, even though some UPC panels and some German national courts may be unreceptive to them.
In the early afternoon by European time, ip fray broke the news of the Panasonic-Xiaomi settlement (October 25, 2024 LinkedIn post by ip fray).
A short while later, OPPO also submitted a proposed consent order (for the same reason: the parties were in the process of finalizing a settlement) to the EWHC. Meanwhile, Mr Justice Meade has entered both orders (further commentary below the two documents):
As a result, there won’t be a FRAND trial next week. There won’t be any adversarial proceedings between these parties anymore for at least a long time. Xiaomi will presumably withdraw its EU antitrust complaint (September 25, 2024 ip fray article) as well as its Chinese countersuit over home appliance patents. The European Commission’s Directorate-General for Competition (DG COMP) could theoretically still launch formal antitrust investigations, but typically doesn’t do so in the absence of a pending complaint.
Xiaomi and OPPO, while both Chinese consumer electronics makers, are different in some important respects. For instance, OPPO has left a major market (Germany) as a result of patent injunctions; Xiaomi hasn’t. Xiaomi definitely invested more in its defense, and it paid off: the historic achievement of an interim license by Kirkland & Ellis ( Nicola Dagg, Steven Baldwin, Jin Ooi and Andrew Marks) and Daniel Alexander KC was an absolute game changer. OPPO benefited indirectly. While OPPO had not committed to a license on FRAND terms determined by the UK judiciary and therefore wouldn’t have met a key requirement for an interim license, the Panasonic-Xiaomi settlement would have been known to the UK judiciary when deciding on the OPPO matter.
The interim license made it impossible for Panasonic to engage in hold-up against Xiaomi. Nor was there a risk of hold-out: under the interim license, Panasonic would have received payments. In those circumstances, it made most sense for the parties to conserve resources and work out a rational solution.
In a but-for world in which they wouldn’t have settled, the UK FRAND determination, which Mr Justice Meade told his UPC and German colleagues would normally have come down before Christmas (July 31, 2024 ip fray article), might have influenced the related Panasonic v. OPPO proceedings in the UPC:
- Panasonic was unlikely to obtain an injunction over the first patent-in-suit that went to trial in the UPC’s Mannheim LD, as both the validity and the declared essentiality of the patent were in doubt. As a result, the next opportunity for Panasonic to get a UPC Mannheim injunction against OPPO would have been after the UK FRAND determination.
- The Munich LD had determined that procedural considerations also weighed against holding a Panasonic v. OPPO hearing before the end of the year. The court scheduled Panasonic v. OPPO hearings for January 2025, which are now unnecessary. If they had taken place, that new schedule (as opposed to a November 2024 hearing) would have enabled the Munich LD to hear and decide the FRAND part of the Panasonic v. OPPO cases together, and this with knowledge of the outcome of the Mannheim Panasonic v. Oppo case (a decision was scheduled for December 6, 2024), and possibly also of the UK Panasonic v. Xiaomi/OPPO FRAND determinations. This (including the potential availability of the UK FRAND decision) was indeed confirmed to ip fray by a spokeswoman for the UPC.
It will never be known what the UK FRAND determination would have been, and whether it would have upped the ante in the UPC’s Munich LD for Panasonic or for OPPO. But it is clear now that Mr Justice Meade’s letter to his foreign colleagues would not have been ignored by all of them. It’s clear that the UPC’s Munich LD would at least have taken a look at the outcome of those FRAND proceedings.
Two major SEP hearings will take place next week:
- On Wednesday (October 30), and potentially continuing the following day, the UPC’s Munich LD will hear Huawei v. Netgear. There is nothing in that dispute that is comparable to the UK parts of the Panasonic v. OPPO and Panasonic v. Xiaomi disputes. Netgear ran to a U.S. court (Central District of California), which recently heard Huawei’s motions to dismiss in part and to strike in part (June 20, 2024 ip fray article), but that is just a litigation tactic centered around geopolitics rather than a genuine FRAND dispute.
- On Thursday (October 31), outside counsel for the European Commission will deliver oral argument in the Munich Higher Regional Court, arguing that the European Court of Justice (ECJ) meant Huawei v. ZTE to be applied in a strictly sequential fashion (August 4, 2024 ip fray article).