Traditionally, patent litigation has a tendency to endlessly drag on.
Think about the pravastatin case in France for example (which I am not brave enough to keep reporting on).
But some cases are really fast movers. Such is IPCom v. Lenovo. In my previous post, published a couple of weeks ago, I reported on the anti-anti-suit injunction issued by the judge in charge of emergency interim proceedings (juge des référés) on November 8, 2019.
The ink on the post was barely dry, or its pixels were barely on, or whatever the right metaphor is, that the Paris Cour d’appel issued its ruling further to Lenovo’s appeal against the November 8 judgment (first brought to my attention by Jérôme Tassi on LinkedIn).
For a detailed summary of the facts of the case, please refer to the previous post.
For the most part, the appeal judges agreed with the juge des référés.
They confirmed that she had jurisdiction over the petition filed by the would-be licensee / infringement defendant Lenovo under article 46 Code de procédure civile, as IPCom would suffer a potential harm in France if the anti-suit injunction were issued in the U.S., affecting IPCom’s right to sue in France.
They also held that the anti-suit injunction, if issued by the Californian judge, would be a manifestly unlawful disturbance, in view of the French courts’ exclusive jurisdiction on matters of infringement of patent rights on the French territory, and in view of the property rights and the right to a fair trial enshrined in the European Convention on Human Rights and in the Charter of Fundamental Rights of the European Union. This was true even if the potential anti-suit injunction was only temporary. Therefore, the juge des référés was right when she ordered Lenovo to withdraw the motion for anti-suit injunction in the U.S.
However, the court canceled the second part of the référé order, which prohibited Lenovo from filing any other similar motion in front of any foreign court. This is because there is no longer any such motion currently pending, and no indication that a similar motion would be filed again. Therefore, the above manifestly unlawful disturbance has ceased and there is no imminent threat of the same.
In summary, there is formally no more anti-anti-suit injunction in place in France. But since the court agreed with the juge des référés‘ assessment, it would probably be unwise for Lenovo to give it another try.
But this is not the only development of the case that I would like to report on.
An even more interesting twist is that, in parallel to the ongoing FRAND determination lawsuit in the U.S., IPCom sued Lenovo (et al.) for patent infringement in France based on EP 1841628 (hence, of course, the anti-suit discussion in the first place). In addition to the action on the merits, IPCom also filed a motion for preliminary injunction (PI) in front of the juge des référés (not the same one as the one who issued the anti-anti-suit injunction, mind you).
On January 20, 2020, the judge issued his judgment, rejecting IPCom’s motion for PI.
I will skip the first part of the judgment, which deals with an alleged invalidity of the complaint – the argument did not work but is worth looking at if only to have the pleasure of reading a reference to the ordinance of Villers-Cotterêts of 1539, the oldest piece of legislation still in force in France, enacted more than 250 years before the monarchy started losing its head.
I will also skip the second part of the judgment, in which Lenovo disputed IPCom’s standing to sue, challenging the chain of transfer of the patent and the recordal of this chain of transfer with the French patent register. This objection was also rejected by the judge.
No, the real interesting part is the discussion on the merits of IPCom’s motion.
Remarkably, the judge heavily relied on the Enforcement Directive (2004/48/EC) and more specifically on the 22nd recital:
It is also essential to provide for provisional measures for the immediate termination of infringements, without awaiting a decision on the substance of the case, while observing the rights of the defence, ensuring the proportionality of the provisional measures as appropriate to the characteristics of the case in question and providing the guarantees needed to cover the costs and the injury caused to the defendant by an unjustified request. Such measures are particularly justified where any delay would cause irreparable harm to the holder of an intellectual property right.
Although the Code de la propriété intellectuelle does not explicitly mention this principle of proportionality of provisional measures, the judge considered that it does apply.
And in the present case, he considered that this proportionality principle would be breached if the preliminary injunction was ordered as requested by the patent proprietor.
Here are a couple of important facts to bear in mind in this case.
First, the EP’628 patent was declared as essential for the UMTS (3G) standard. Therefore, it is supposed to be implemented by all laptops, mobile phones and tablets of the defendants (marketed under the brands Lenovo, ThinkPad and Yoga). The motion for PI accordingly targeted all of these devices.
Second, the EP’628 patent was set to expire on February 15, 2020. Therefore, the PI, if issued, would just last for a few weeks.
The judge stated that the PI would be justified if IPCom could demonstrate that the infringement of the patent was likely, but also that the absence of a PI would cause harm which could not be repaired by damages. The judge further stated that the negative economic consequences for the defendants should also be taken into account, and more specifically whether they could be adequately repaired if the patent were ultimately found invalid or not infringed.
IPCom argued that it would suffer irreparable harm in the absence of a PI due to the annihilation of the value of its patent portfolio.
The judge was unpersuaded, as IPCom cannot lose any market share, because it does not market any devices. The sole harm suffered by IPCom is the lack of license revenues, which can be repaired by damages to be set by the court at a later stage.
The judge further noted that a PI would have long-lasting effects on the market even after the upcoming expiry of the patent on February 15, 2020, since the public would turn away from the Motorola, Lenovo, ThinkPad and Yoga devices. The loss of income would thus be very large. In addition, a recall of products from the market would tarnish the corporate image of the defendants in the long run and significantly disrupt distribution networks. In short, the PI and recall of products from the market would result in negative economic consequences which could not be adequately repaired by damages, if IPCom were to ultimately not prevail on the merits.
The judge’s conclusion was the following:
[…] The requested measures, set to last for a few weeks in view of the expiry date of the patent of February 15, 2020, are manifestly disproportionate and may result in an imbalance in the situation of the parties conferring an undue advantage to the patentee which may then be able to impose a license not meeting with FRAND requirements.
Frankly, I don’t really see how the judge could possibly have decided otherwise. The message is clear: SEP owners need to be more reasonable when they go to court.
In the meantime, the parties seem to be back to square one.
Cour d’appel de Paris, pôle 5 chambre 16, March 3, 2020, Lenovo Inc. et al. v. IPCom GmbH & Co. KG, RG No. 19/21426.
Tribunal judiciaire de Paris, ordonnance de référé, January 20, 2020, IPCom GmbH & Co. KG v. Lenovo SAS et al., RG No. 19/60318.