Context: Yesterday (May 2, 2024), InterDigital issued a press release (shared by ip fray on LinkedIn) announcing that the Munich I Regional Court awarded the U.S.-headquartered research and licensing firm a standard-essential patent (SEP) injunction against Lenovo’s 4G and 5G devices. Based on the press release, it is clear that Lenovo’s FRAND defense was rejected. Lenovo emailed a statement, which ip fray also shared on LinkedIn as well as in an email (subscriptions are available free of charge on the home page). The defendant declared itself in disagreement with the court ruling as well as InterDigital’s licensing practices.
What’s new: Meanwhile a spokeswoman for the Munich I Regional Court has informed ip fray of the case number (7 O 12029 23; the Presiding Judge of the 7th Civil Chamber is Judge Dr. Oliver Schoen (“Schön” in German)) and the patent-in-suit: EP2127420 on “implicit drx cycle length adjustment control in lte_active mode.” Furthermore, the court confirmed that the injunction applies Germany-wide, and that Lenovo has been held to owe damages.
Direct impact: The injunction can be enforced during the appeal if InterDigital provides security: €1 million with respect to smartphones and € 3 million for tablets and personal computers. Those numbers appear very low, but the reason for that is not known yet.
Wider ramifications: The most important courtroom clash between these two parties will take place next month in the London-based Court of Appeal. InterDigital is appealing a global FRAND determination by the lower court that was widely regarded as a win for Lenovo. The patent-in-suit was previously deemed essential by the Munich court: OPPO and its OnePlus affiliate were enjoined in January as China IP Today reported.
InterDigital has concluded many license agreements without litigation, in recent years particularly the renewals of its two largest deals (the Apple and Samsung licenses). Lenovo has been sued rather frequently over SEPs and is currently defending not only against InterDigital but, on an even larger scale, also against Ericsson.
InterDigital initially placed a bet on the UK courts’ willingness to enter conditional FRAND injunctions further to a global FRAND determination. But last year, two such UK decisions were not really good news for SEP holders. One was InterDigital v. Lenovo; the other was Optis v. Apple. With the benefit of 20/20 hindsight, it’s clear that InterDigital and Optis would have fared better prioritizing Germany, though enforcement during an appeal can require a huge amount of collateral, particularly against Apple (as courts look at the profits the enjoined party would lose in Germany).
Two important economic questions cannot be answered unless and until the court provides a public redacted version of the judgment:
- Why are the security amounts so low for a SEP injunction? Chances are that Lenovo will appeal not only on the merits but also seek (long before the actual appellate decision) an upward adjustment (given that other defendants have done so as well, and sometimes successfully). If the court deemed the patent essential to any implementation of 4G and 5G, it means Lenovo and its Motorola Mobility subsidiary would be shut out of the German market.
- Why was Lenovo deemed an unwilling licensee despite its public declarations that the company would accept to pay royalties based on last year’s UK determination? The UK decision is not binding on a German court, but it will be interesting to see why it was not considered persuasive. Maybe InterDigital convinced the Munich court that the numbers could change substantially on appeal.
ip fray will try to find out more about this decision and other developments in the wider dispute, such as in the UK.
InterDigital was represented by Arnold Ruess (attorneys-at-law) and df-mp (patent attorneys). Lawyers from both firms shared a LinkedIn post by ip fray to celebrate a win for their client.