Patent Infringement and Anti Injunction Suit
Introduction:
This case pertains to a patent infringement dispute involving Standard Essential Patents (SEPs) between InterDigital Technology Corporation and Xiaomi Corporation. The dispute centers on Xiaomi’s alleged unauthorized use of InterDigital’s SEPs related to 3G and 4G technologies in its cellular devices. The matter raises important legal issues concerning anti-suit and anti-enforcement injunctions, the global framework for FRAND (Fair, Reasonable, and Non-Discriminatory) licensing, and the enforcement of patent rights in India.
Detailed Factual Background:
InterDigital Technology Corporation holds SEPs necessary for the implementation of standardized 3G and 4G telecommunications technologies. These SEPs are patents that must be used to comply with international standards for mobile communication and are thus indispensable for manufacturers like Xiaomi that produce standard-compliant devices. The plaintiff alleged that Xiaomi, without obtaining a FRAND license, used these SEPs in its products sold globally, including in India. InterDigital initiated a suit for infringement before the Delhi High Court seeking injunctive relief against Xiaomi. In response, Xiaomi initiated proceedings in Wuhan, China, seeking determination of a global FRAND royalty rate and obtained an anti-suit injunction restraining InterDigital from pursuing its Indian suit.
Detailed Procedural Background:
InterDigital filed CS(COMM) 295/2020 before the Delhi High Court, alleging infringement of its SEPs and sought interim relief. On 23rd September 2020, Xiaomi obtained an anti-suit injunction from the Wuhan Intermediate People’s Court, restraining InterDigital from prosecuting its infringement suit in India. In turn, InterDigital approached the Delhi High Court seeking an anti-enforcement injunction to restrain Xiaomi from enforcing the Wuhan Court’s order in India. The Delhi High Court passed an interim order on 9th October 2020, and after hearing the parties, delivered its final ruling on 3rd May 2021.
Issues Involved in the Case:
Whether Xiaomi could enforce the anti-suit injunction granted by the Wuhan Court in India to restrain the ongoing Indian patent infringement proceedings?Whether InterDigital was entitled to an anti-enforcement injunction against Xiaomi to prevent enforcement of the Wuhan Court’s order?
Detailed Submission of Parties:
InterDigital argued that Xiaomi’s attempt to restrain Indian proceedings by invoking the Wuhan anti-suit injunction violated its fundamental right to legal redress in India and interfered with the Indian court’s jurisdiction over Indian patents. InterDigital emphasized that patent rights are territorial and that Indian courts alone have the authority to decide issues involving Indian patents. The Wuhan Court’s order, if enforced in India, would infringe Indian public policy and constitutional rights. Xiaomi contended that the matter was global and involved determination of FRAND royalty rates, which justified a centralized determination in the Wuhan proceedings. Xiaomi claimed that the anti-suit injunction was aimed at avoiding multiplicity of litigation and conflicting decisions across jurisdictions.
Discussion on SEP, FRAND, and Anti-Suit Injunction:
A Standard Essential Patent (SEP) is a patent that claims an invention which is necessary to comply with a technical standard, such as those for mobile communication protocols like 3G or 4G. Because of their essential nature, SEPs must be licensed to all implementers under FRAND terms to ensure fair access to the standardized technology while compensating patent holders.
FRAND refers to the obligation imposed on SEP holders to license their patents on Fair, Reasonable, and Non-Discriminatory terms. This ensures that SEP holders cannot abuse their market position by demanding exorbitant royalties or engaging in discriminatory licensing.
An anti-suit injunction is a judicial order that restrains a party from initiating or continuing legal proceedings in another jurisdiction. Conversely, an anti-enforcement injunction restrains the enforcement of such an anti-suit injunction in the domestic jurisdiction. These remedies are contentious as they touch upon the sovereignty of courts and the principle of comity, i.e., mutual respect between courts of different jurisdictions.
Detailed Discussion on Judgments along with Complete Citation and Context:
The Court referred to IPCom GmbH & Co KG v. Lenovo Technology (UK) Ltd. [2019] EWCA Civ 38, which highlighted the exceptional nature of anti-enforcement injunctions and their impact on foreign judicial orders. The Court also relied on Huawei v. Conversant Wireless Licensing S.A.R.L. [2020] UKSC 37, where the UK Supreme Court upheld jurisdiction to determine global FRAND royalty terms and emphasized that courts could proceed with FRAND cases despite parallel foreign proceedings. In Modi Entertainment Network v. WSG Cricket Pte Ltd., (2003) 4 SCC 341, the Supreme Court of India held that anti-suit injunctions can be granted when foreign proceedings are oppressive, vexatious, or interfere with the domestic forum’s jurisdiction. The Court cited Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803), to affirm the right of litigants to seek redress under Indian law and the importance of judicial review.
Detailed Reasoning and Analysis of Judge:
The Delhi High Court reasoned that patent rights are inherently territorial, and Indian courts have exclusive jurisdiction over the enforcement of Indian patents. The Court held that the enforcement of the Wuhan Court’s anti-suit injunction in India would infringe InterDigital’s constitutional rights under Articles 14 and 21 and undermine India’s public policy. The Court concluded that comity of courts cannot override a litigant’s right to access Indian courts, particularly in patent disputes governed by Indian law. The Court further reasoned that granting an anti-enforcement injunction was necessary to protect Indian sovereignty and judicial autonomy.
Final Decision:
The Delhi High Court granted an anti-enforcement injunction, restraining Xiaomi from enforcing the Wuhan Court’s anti-suit injunction in India. The Court held that Indian courts are competent to adjudicate disputes concerning Indian patents and no foreign court could restrict access to Indian legal remedies.
Law Settled in this Case:
The judgment establishes that Indian courts have exclusive jurisdiction over Indian patent disputes and that foreign anti-suit injunctions cannot restrict access to Indian courts. The case also affirms the enforceability of anti-enforcement injunctions to uphold Indian public policy and constitutional rights. Further, the judgment clarified that the principles of comity cannot override the territorial jurisdiction of Indian courts in patent matters.
Case Title: Interdigital Technology Corporation & Anr. vs Xiaomi Corporation & Ors.
Date of Order: 3rd May 2021
Case No.: CS(COMM) 295/2020
Neutral Citation: 2021 SCC OnLine Del 4671
Name of Court: High Court of Delhi at New Delhi
Name of Judge: Hon’ble Mr. Justice C. Hari Shankar
Disclaimer:The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi
