HMD elects not to appeal Brazilian preliminary injunction in NEC audio standard case

Context: NEC filed suit against HMD in the 3^rd Business Court of the State of Rio de Janeiro on June 12, 2025, alleging infringement of a patent relating to the Advanced Audio Coding (AAC) digital audio compression standard. Based on a report produced by a court-appointed expert that found infringement, the court granted a preliminary injunction earlier this year (February 9, 2026 ip fray article) which imposes a daily fine of USD 10,000 if HMD continues to market allegedly infringing products.

What’s new: At a recent hearing, HMD confirmed that it would not appeal against the preliminary injunction, while the court-appointed expert reaffirmed their finding that HMD infringes NEC’s patent.

Direct impact: The preliminary injunction was upheld. The court’s final decision on the merits is expected towards the end of May after both parties submit closing arguments.

Wider ramifications: HMD’s apparent decision not to appeal the court’s granting of the preliminary injunction is potentially significant. It means that, if a final decision in the case leads to a permanent injunction, an appeal on the merits of the case would not suspend that injunction. This would enable NEC to commence any additional enforcement measures almost immediately after the court issues its final judgment.