Context: After bringing a geopolitically charged U.S. antitrust/FRAND and “racketeering” complaint against Huawei (February 4, 2024 ip fray article), seeking a U.S. antisuit injunction (ASI) (December 6, 2024 ip fray article), losing a Unified Patent Court (UPC) case (December 18, 2024 ip fray article) and withdrawing the ASI request due to anti-antisuit injunctions (AASIs) in three jurisdictions (December 24, 2024 ip fray article), Netgear finally settled (January 4, 2024 ip fray article).
The purpose of this article is to look at the wider track record of attempts to leverage U.S. district court proceedings as a torpedo against German and, more recently, UPC infringement actions and injunctions. In a nutshell, what worked in very specific circumstances almost 13 years ago for Microsoft has proven wasteful for some other parties, which should give anyone pause before committing to a similar investment.
2012: a highly unusual pattern gives rise to an unprecedented decision
In the legal universe like in so many other fields, there are singularities: isolated events that do not reoccur. Feats that cannot be repeated.
Microsoft’s U.S. ASI against (temporarily Google-owned) Motorola Mobility in the spring of 2012 is such a case. Seattle-based Judge James L. Robart of the United States District Court for the Western District of Washington granted a temporary restraining order (TRO) that was converted into a preliminary injunction (PI), which in turn was upheld by the United States Court of Appeal for the Ninth Circuit.
Here is the transcript of his historic TRO ruling in open court:
No U.S. ASI case – no matter where the actions to be enjoined were pending – came close to this fact pattern:
- two U.S. companies;
- initial negotiations through written correspondence between two U.S. cities;
- the parties accepted to enter into a license agreement on the terms the U.S. court would set; and
- the enjoined actions (two H.264 video codec standard-essential patent (SEP) cases in Mannheim, Germany) were filed almost a year after the original U.S. FRAND complaint, with injunctions issuing at a point when the U.S. case was also quite far along.
Against that backdrop, Microsoft’s request for an anti-enforcement injunction (Motorola was allowed to continue to litigate, but would have faced U.S. sanctions for actually enforcing any Mannheim SEP injunction) was deemed reasonable.
2019: a tire maker comes under the wheels
For approximately five years, automotive supplier Continental was trying to challenge the Avanci patent pool’s licensing terms through two U.S. lawsuits, initially against Avanci itself with Nokia among the co-defendants, and later against Nokia with Avanci being the target by extension. Both parts went nowhere. The United States Court of Appeals for the Fifth Circuit affirmed a district court’s dismissal of the case against Avanci, and “Conti” realized a petition for writ of certiorari (request for Supreme Court review) was not a promising path. Last summer, the Delaware state court litigation against Nokia was withdrawn, equally without any impact on anyone’s licensing terms and practices (July 18, 2024 ip fray article).
In the earliest phase of that five-year waste of time and money, Conti sought a U.S. ASI designed to enjoin Nokia’s German enforcement actions against Daimler (meanwhile rebranded to Mercedes-Benz). For the avoidance of doubt, we are talking in all these contexts (already beginning with Microsoft v. Motorola) about anti-enforcement injunctions: litigation per se can continue, but German patent injunctions are not self-executing and those U.S. ASI motions were all about preventing a potentially prevailing patentee (neither Motorola nor Daimler had won anything yet at the relevant time, though in Motorola’s case it was absolutely foreseeable) from pulling the trigger on an injunction and let a sales ban (in Daimler’s case, also a manufacturing ban) enter into effect.
Judge Lucy H. Koh, then of the United States District Court for the Northern District of California (meanwhile promoted to the Ninth Circuit), was not enthusiastic about Conti’s case in any regard, which is why she later granted a venue transfer motion.
Nokia’s German outside counsel – Arnold Ruess’s Cordula Schumacher (lead) and AASI mastermind Dr. Arno Risse (“Riße” in German) – made history by obtaining (and defending even on final appeal to the Munich Higher Regional Court) the first-ever German AASI. At first sight, it appeared counterintuitive that a German court would declare an ASI unlawful in its own jursidiction, yet grant an AASI, but they managed to thread the needle by considering it a necessary defensive measure (even invoking the concept of self-defense) to thwart illegal interference with German court proceedings and an equally illegal deprivation of the right to enforce certain intellectual property in Germany.
In the years after, the lower court (Landgericht München I (Munich I Regional Court)) refined its AASI case law. It also granted pre-emptive AASI/AAAASI combinations, and one of its most important holdings, which any party considering ASIs against German cases must bear in mind now, was that a party seeking an ASI may be deemed an unwilling licensee for that reason.
2023: ADVA fails with ASI attack on Huawei, settles shortly thereafter
(Huawei 1 – 0 Team Blair Jacobs)
Undeterred by Conti’s defeat, another German company, ADVA Optical Networks (which had been acquired by Adtran the year before) tried its luck in 2023. First, it filed a complaint of almost 100 pages in the Eastern District of Texas, seeking declaratory judgment of non-essentiality against a handful of Huawei patents and a FRAND determination:
The lead attorney was Blair M. Jacobs, then of McKool Smith:
We were not previously aware of that, but as we researched the facts for this article, his name came up twice.
ADVA sought a U.S. ASI against Huawei’s SEP enforcement in Germany. But Huawei then “pulled a Nokia” and obtained a Munich AASI on May 15, 2023. The Munich case no. was 21 O 5953/23, and a spokeswoman for the Munich I Regional Court has confirmed to ip fray that an AASI had issued in that case. A public redacted version is, however, not available.
Netgear settles after Huawei’s triple AASI win in UPC, Germany, China
(Huawei 2 – 0 Team Blair Jacobs)
As summarized in the first part of this article, Huawei recently had to deal with another U.S. ASI motion, and prevailed again.
Netgear’s 115-page U.S. complaint lists local counsel in the Central District of California, and then the same McKool Smith team from Washington, D.C. as in the ADVA case:
Three of those lawyers were still among the signatories of the recent motion to stay the U.S. proceedings, but had meanwhile switched firms to Spencer Fane:
Their client, Netgear, continued to rely on them, but in the end Netgear simply took the Sisvel WiFi 6 pool license. In addition to a straightforward ASI, Netgear was also seeking an interim license, but presumably realized that it was a long shot and gave up.
Insanity is trying the same thing over and over again, but expecting different results
Over the course of the last 6 years (or even 12, given that Microsoft v. Motorola was in 2012), all three U.S. ASI antisuit attacks on German courts, and now also the UPC and the Chinese judiciary, have failed because of AASIs.
Huawei itself was on the receiving end of a Munich AASI (against IP Bridge; the presiding judge at the time, Dr. Matthias Zigann, entered the recent AASI against Netgear in his capacity as a UPC judge-rapporteur) before it availed itself of the same instrument to thwart ASI attacks on its cases. It is worth noting that Huawei was enjoined not because of the actual pursuit of an ASI, but because the court felt at the time that Huawei could have expressed much more clearly its intention not to seek an ASI.
The question is now whether parties considering the U.S. route will now refrain from playing a game that has recently been impossible to win.