Recently, the United States Court of Appeals for the Federal Circuit issued an opinion in Telefonaktiebolaget LM Ericsson v. Lenovo (United States), Inc., No. 2024-1515, 2024 U.S. App. LEXIS 26863 (Fed. Cir. Oct. 24, 2024), vacating a district court’s denial of a motion for an antisuit injunction.
The European Telecommunications Standards Institute (“ETSI”) has a policy through which standard-essential patent (“SEP”) holders make a declaration that SEPs can be licensed under “fair, reasonable[,] and non-discriminatory” terms (a “FRAND commitment”). Parties have an obligation to negotiate such a license in good faith. Lenovo and Ericsson each made a FRAND commitment. Ericsson filed the instant action against Lenovo alleging: that Lenovo infringed Ericsson’s patents, that Lenovo breached its duty to negotiate its FRAND commitment in good faith, and that Ericsson complied with its FRAND obligations to Lenovo. Ericsson also asked the district court to set the FRAND rate for a global cross-license if Ericsson’s offer was inconsistent with its FRAND obligations. After Ericsson was granted foreign injunctions, Lenovo moved the district court to enter an antisuit injunction that would prohibit Ericsson from enforcing its injunctions. The district court denied the motion and Lenovo appealed.
The Federal Circuit reversed. The Court discussed the framework outlined by the Ninth Circuit in Microsoft Corp. v. Motorola, Inc., 696 F.3d 872 (9th Cir. 2012). For the purposes of the appeal at issue, the Court noted that it only needed to resolve the first threshold part of the framework, which assesses whether the parties and the issues would be the same between the foreign and domestic suits and whether the domestic suit would be dispositive of the foreign action to be enjoined.
The Court held that this dispositive requirement was met. It explained that Ericsson’s FRAND commitment required Ericsson to comply with its obligation to negotiate in good faith, an issue before the district court, before it was able to pursue SEP-based injunctive relief. The Court rejected Ericsson’s argument that for the domestic suit to be dispositive of the foreign action it needed to resolve the entire foreign action rather than just the injunction. The Court explained that the availability of the injunction was central to the “dispositive” analysis even though it depends on the potential that a party prevails in the domestic suit rather than the entire foreign proceeding. The Court remanded the case.
