Interdigital Technology Corporation v. Xiaomi Corporation

IMPORTANT ISSUE

Whether the plaintiffs are entitled to seek a restraint against execution or enforcement, by the defendants, of the order dated 23rd September, 2020, passed by the Wuhan Court regarding anti-suit injunction.

SUMMARY

Subject matter of patent: 3G and 4G Standard Essential Patents (SEPs)

FACTUAL MATRIX

1. The plaintiffs approached this Court on 29th July, 2020 by way of the present suit alleging infringement, by the defendants, of certain Standard Essential Patents (SEPs).
2. Before this suit, the defendants had filed an SEP royalty rate-setting suit before the Wuhan Court on 9th June, 2020. The defendants sought, in the said complaint, fixing of a global FRAND royalty rate, on the basis of which they could obtain licence from the plaintiffs, to operate and use the technology covered by the entire patent portfolio of the plaintiffs, which would include the suit patents.
3. Summons, in the present suit, were issued on 4th August, 2020. On the same day, the defendants had filed an anti-suit injunction application before the Wuhan Court for a restraint, against the plaintiffs, from prosecuting the present suit before this Court.
4. By order dated 23rd September, 2020, Wuhan Court issued directions to withdraw or suspend the application for any temporary injunction/permanent injunction against the defendant before any court in India/China and fined the plaintiffs.
5. By the present application, the plaintiffs seek an injunction, against the defendants, from enforcing, against them, the aforesaid directions issued by the Wuhan Court.

SUBMISSION BY PLAINTIFF

1. The impugned order of anti-injunction suit completely divested the plaintiffs of their right to prosecute their suit. It effectively denied, to the plaintiffs, the right conferred by sections 48 and 108 of the Patents Act, as well as Order XXXIX Rules 1 and 2 of the CPC.
2. The defendants had sought to wrongly contend that the plaintiff’s suit was for settling the FRAND rate for grant of licence for the global portfolio of the plaintiffs’ patent. The suit was only directed against infringement of the plaintiff’s Indian suit patents. The mere filing of a FRAND rate setting case in Wuhan could not divest this Court of the powers conferred by Section 108 of the Patent Act or Order XXXIX of the CPC.
3. In this sense, the impugned order was destructive of comity of courts, as it starkly disregarded the rights of the courts in India to decide the claim of infringement of Indian patents, the jurisdiction in respect of which vested in Indian courts alone.
4. This Court has the power and authority to injunct the impugned order and as consequence of the impugned order, the plaintiffs would have to suffer continued infringement of the suit patent, without any licence being taken by the defendants and without the plaintiffs being allowed to oppose such infringement before this Court, being the only court competent to adjudicate.
5. It was submitted that mere overlap, even if it existed, did not justify issuance of an anti-suit injunction as had been done by the Wuhan Court.

SUBMISSIONS BY RESPONDENTS

1. The impugned order, dated 23rd September, 2020, of the Wuhan Court, did not extinguish the plaintiff’s right either to prosecute its suit for infringement of its Indian patent, or even its application for interlocutory injunction preferred therein. It merely delayed the recovery, by the plaintiffs, of the royalty claimed by it.
2. The claims of the parties before the two fora, as well as reliefs prayed therein, were identical. The considerations of FRAND rate determination, in the two proceedings, were overlapping.
3. It was submitted that that anti-enforcement injunction/anti-anti-suit injunctions were extremely rare species of judicial interdiction, which were not easily to be passed by courts. It is also submitted that, as there was no dispute regarding the competence of the Wuhan Court to pass the impugned order, this Court ought not to interfere therewith, as any such interference would be destructive of the principle of comity of courts.
4. It is submitted that the plaintiffs had been duly issued notice of the complaint, by the Wuhan Court, but has deliberately chosen to remain absent. Also, in fact, the plaintiffs were guilty of suppression, as they never informed this Court of the pendency of the said complaint despite being fully aware thereof.

HELD

1. The court explained that it is totally impermissible for a Court in one sovereign jurisdiction to injunct the party before it from pursuing its cause against infringement of its intellectual property before another sovereign jurisdiction, where such latter jurisdiction is the only forum competent to adjudicate the claim of infringement, save and except where continuation of the infringement proceedings are vexatious or oppressive to the proceedings pending before the former, injuncting, court.
2. Thus, the defendant shall remain restrained, during the pendency of the present suit, from enforcing, against the plaintiffs, the order dated 23rd September, 2020, passed by the Wuhan Court.
3. The court directed that in the event of any orders passed by the Wuhan Court, or any other measures being taken, against the plaintiffs, towards deposit of the fine of RMB 1 million per day, as directed by the order dated 23rd September, 2020 of the Wuhan Court, the defendants shall, within one week of passing of the said order (which period may be reduced or extended at that stage, if necessary), secure such amount of fine, imposed on the plaintiffs, by depositing, with the Registrar General of this Court, an equivalent amount, by way of crossed cheque/demand draft, and the plaintiff shall be entitled, on such deposit, to withdraw the said amount, or have been transferred to the account of the plaintiffs.

Citation: MANU/DE/0839/2021
Case No: CS(COMM) 295/2020
Copy of judgement