Anti-suit injunctions and their consequences

In addition to FRAND issues, a special feature of patent litigation that continues to be contested is increasingly establishing itself in the form of anti-suit and anti-anti-suit injunctions by foreign and German courts.

In essence, it is a matter of the domestic claim to the grant of justice that is to be safeguarded. For a long time, it has been considered a violation of sovereign rights if a foreign court prohibits parties to a case pending before a domestic court from continuing that case and/or prohibits the parties from bringing a case before domestic courts (so-called anti-suit injunction).

Courts have now moved to safeguard the right to justice with a so-called anti-suit injunction. This prohibits a litigant, usually the infringement defendant, from applying to a court abroad for such an anti-suit injunction or from continuing the proceedings. What is remarkable here is that the courts do with their antidote exactly what they forbid a foreign court to do, namely to intervene in and terminate pending proceedings of another court.  This is virtually turning into a race between courts, with the number of preamble “anti” escalating.

According to LG München I, the applicant for such an anti-suit injunction can be prohibited in injunction proceedings from applying for an anti-suit injunction (ASI) or from continuing such proceedings except for the purpose of withdrawing the application. This is an encroachment on another right under Section 823 (1) of the German Civil Code (patent), which can be countered with a (preventive) injunction.

According to the OLG Munich, the issuance of a preventive injunction (Anti-Anti-Suit-Injunction, AASI) is the only effective defence against an anti-suit-injunction, by means of which the exercise of the legal position of patent owners in patent infringement proceedings pending in Germany can be secured until the conclusion of the US proceedings conducted between other parties.

It is also and in particular disputed how the cause for such a preventive injunction and thus the question of the need for legal protection is to be assessed.

According to LG München I, there are different grounds for justifying the interest in legal protection of a preventive injunction AASI. The theoretical possibility of an ASI is not sufficient for a first risk. Rather, there must be regular conduct on the part of the claim debtor from which an imminent and concrete act of infringement in the near future results.

– This may be the case if the claim debtor invokes the existence of a certain right and “threatens” to file an ASI or has already done so.

– However, this is also the case if a patent user has filed or threatens to file a main action for the grant of a licence or for the determination of a reasonable global royalty for such a licence in a jurisdiction that generally provides ASIs.

– Furthermore, there is a risk of a first action if the patent user has threatened to issue an ASI to other (third) patent owners or has already applied for such an ASI and there is no indication that the patent user, recognisable to the patent owner, has renounced this practice for the future, at least in relation to the patent owner.

– Furthermore, even silence constituted a risk of first infringement if the patent user did not declare in text form within the short time limit set by the patentee, for example in the context of the first infringement notice, that he would not file an application for an ASI.

Effective legal protection could only be achieved by a “moderate advance in time” in favour of the patent proprietor. The patent user’s interest in being spared from costly preliminary injunctions to defend against feared ASI applications was taken into account by the fact that the alternatives establishing the risk of first infringement were all based on the patent user’s actions. Accordingly, the patent user and his group companies would have it in their own hands to prevent or eliminate the risk of first mention by making suitable declarations.

But not only an (announced) ASI would trigger a preventive injunction. An action for the granting of a licence or an action for the determination of a FRAND licence could also result in a preventive injunction. The applications for an ASI that have become known so far were justified by the need to protect an action on the merits pending in the issuing state. These main actions were directed at the conclusion of a FRAND licence agreement or at the abstract determination of FRAND licence conditions, detached from a concrete conclusion of a contract. However, both types of action had in common the argumentation that the patent user was willing to license and that the absence of a licence agreement legitimising the already performed and continued worldwide acts of use was solely attributable to the patent proprietor.

If the patent user were truly willing to license, he would refrain from further unlawful interference with the patentee’s property-like protected legal positions beyond the acts of use already committed and continuing.

According to this decision of the LG München I, a patent user who files an application for an ASI or threatens to do so cannot generally be considered sufficiently willing to grant a licence (see above). Consequently, the patent user could also be required to declare not only his qualified willingness to license after receiving the infringement notice, but also that he will not request an ASI.

The case law and creation of law in the field of ASI and AASI etc. is likely to continue to escalate in the coming years and will possibly grow into a regular companion in patent law disputes. In particular, the deduction that foreign proceedings simultaneously preclude domestic FRAND defences does not seem self-evident under Art. 102 TFEU, if the core issue is that the foreign proceedings are intended to clarify the “correct” FRAND terms, in particular the amount of the royalty. After all, this speaks for the “willingness to license”, but only at prices other than those demanded. This dispute about the “right” licence fee, which is conducted in a different field, has a conspicuous connection to the unwillingness of German courts to get involved and concentrate on the rocky road of calculating the FRAND licence fee, as is easily done in the USA, UK and PR China. Instead, German practice often seeks another way out and conspicuously avoids the core of the dispute – the amount of the fair royalty. Here, too, a clarification of the issues involved under European law would be overdue and all the more urgent as the injunction proceedings will not be referred to the BGH.

 

[1] OLG Düsseldorf, decision of 10 January 1996 – 3 VA 11/95 -, juris concerning a US antisuit injunction.

[2] LG München I concedes in a decision 7 O 14276/20 (see below) that its own decision may not be recognisable and enforceable there due to a violation of Chinese ordre public.

[3] LG München I, judgment of 02 October 2019 – 21 O 9333/19 -, juris, also LG München I, judgment of 30 August 2019, 21 O 9512/19.

[4] OLG Munich, judgment of 12 December 2019 – 6 U 5042/19 -, GRUR 2020, 379

[5] LG Munich I, Judgment of 25 February 2021 – 7 O 14276/20 -, juris.

[6] Also LG Munich I, judgement of 24 June 2021, 7 O 36/21

[7] The LG München I considers submission decisions also possible in injunction proceedings, decision of 19.01.2021 – 21 O 16782/20