India’s First Anti Enforcement Injunction Order Interdigital Corporation

20th September, 2022 - 12:13 pm Categories: Legal Issues 0 Comments

When a court restrains a party to the suit or proceedings before it from institution of a case in another court, including a foreign court it is called Anti Suit Injunction. They have become common these days mainly due to the application of foreign law in contracts and arbitration clauses. Through the present judgement The Honorable High Court of Delhi has explained the different types of injunctions regarding the appropriate forum.

• Anti-suit injunctions: In which a court orders a party to proceed with the main action pending in a foreign court.
• Anti-anti-suit injunctions: If a court orders a party to proceed with an anti-suit injunction of an application filed in a foreign court for a “domestic” order.
• Injunctions against enforcement: Where a court directs one of the parties before it to enforce against the other a decree or order passed by a foreign court. They would also fall into two categories. The first, where the order whose enforcement is to be ordered is a resolution in the main dispute/complaint/other proceeding in a foreign court. The second where an injunction is sought from an anti-suit order issued by a foreign court.

^{[Picture Credit: gettyimage]}The court applied the troika test of prima facie case on the basis of balance of convenience, irreplaceable loss and finally arrived at a conclusion that granting a mere Anti Suit Injunction would render Interdigital remedial against the violations it faced. Subsequently, being the first of its kind the Indian court allowed the Anti Anti Enforcement Suit Application. Therefore, the door is currently open for the disputing parties to use for anti-anti-suit injunctions given that they’re ready to meet the true high threshold of injustice, irreparable loss, oppression, or vexation

UNDERSTANDING THE BASICS

UNDERSTANDING ‘ANTI ANTI ENFORCEMENT INJUNCTION ORDER’(ASI)

It is where the judicial authorities grant injunction against the opposite or opposing parties thereby refraining them to carry out any civil proceedings against the former in a foreign forum. It is in this specific context, which has led to the emergence of the Anti Anti Enforcement Injunction Order.

Hence, Anti Anti Enforcement Injunction Order is an injunction order that prevents parties from going ahead with an ASI suit. There is no written law about enforcement of these injunctions but the passing of these injunctions is mandated by the court as the court is an independent and sovereign body when compared to a private body such as that of a tribunal. These injunctions can only be enforced in the extreme cases where if the injunction is not passed then it can lead to gross violation and injustice.  AASI suit can be invoked only when there is already an existent presence of the ASI pending before the foreign court.

UNDERSTANDING A FEW TECHNICAL TERMS

STANDARD ESSENTIAL PATENTS

It is a typical patent and it becomes essential to a given standard when it contributes to being a participative of that standard. it mainly gives a long-term protection and control over an invention.

FRAND

Denotes an acronym for fair, reasonable and non-discriminative. It is mainly used in cases where the owner of the intellectual property rights refuses to grant a licence on the terms of FRAND.

SUMMARY OF THE FACTS

In this case an interdigitated technology corporation was a plaintiff and by way of a civil suit it had approached this honourable Delhi High court against Xiomi corporation who in this case were the defendants. The matter was mainly focused on alleging an infringement of the standard essential patents by the defendants. The defendants used to manufacture cellular handsets which were compatible with the 3G and 4G standards and technology which contained in the standard essential patents was actually held by the plaintiffs. According to the plaintiffs the SEP was a requisite licence which was peculiar in nature which was not obtained from the plaintiffs.  SEP should be fair and reasonable and must be non-discriminatory.

FACTS OF THE PROCEEDINGS IN DETAIL

Dispute between the plaintiff and the defendant is regarded as a violation of the Indian patents 320182.  The plaintiff initially filed a suit against the defendant demanding permanent in junction thereby restraining the defendants to use the defendant’s SEP in the devices or as an alternative the plaintiff contended that the defendants can use their SEP’s if they obtain prior licence according to the FRAND terms. However Even before the civil suit before the Delhi High Court, the Defendant’s approached the Wuhan court to fix the global FRAND royalty rate basis on which the defendant can obtain the licence from the plaintiffs. As a summon was served in the civil suit before the high court the defendant filed for an anti-injunction application the restrain through an injunction order against the plane tip to move forward with the civil suit before the High court.  In addition to the above suit the plaintiff also filed in the interlocutory application under order 39 rule 1 and 2 of the civil procedure code thereby seeking interim relief. On 23rd September 2020 the Wuhan court accepted the defendant’s anti-suit injunction and hence directed the plaintiff to withdraw the application filed in any other court apart from the Wuhan court. The plaintiffs were aggrieved of the anti-suit injunction order in favour of the defendants by the Wuhan court hence the plaintiffs sought for anti anti suit injunction against the defendants.

CONTENTIONS

1. If the said court has jurisdiction to grant relief  which has been sought?
2. Whether such a relief is necessary to be granted?

ARGUMENTS OF THE PETITIONER:

COUNSEL: GOURAB BANERJEE

1. The counsel of the petitioner quoted a judgement of the Calcutta High court to support their claim that Indian Courts are competent to grant anti suit injunction as an important step in the present case against the violation of SEP by Xiomi.
2. By bringing into light the decision rendered in Ecom Agro-industrial Corporation Limited V/s Mosharaf Composite Textile, the learned counsel stated that if an injunction granted by Wuhan Court is intact, the end result would be that no court over the world would be entitled to adjudicate the matter on the issue of violation of plaintiff’s SEP’s.
3. The Anti Anti Injunction is new in law and injunction arises when the party seeks discretion validating its rights
4. The learned Counsel pointed out that in cases relied by the Respondents are cases where the final judgment had been passed by courts having different jurisdiction, whereas the proceedings and the injunction against the judgment rendered was sought in different jurisdiction. Henceforth, no comparison of the same can be made
5. The Counsel for the petitioners stated that no issue of infringement of patents was presented in the suit before the People’s Court of Wuhan. The only matter dealt in the court was determination of royalty rates based on FRAND. Whereas, in contrast, the suit initiated by the plaintiff in the Delhi High Court was regarding infringement of SEP’s by the defendant.

ARGUMENTS MADE BY THE RESPONDENT:

COUNSEL: Mr Sai Krishna Rajgopal

1. The defence Counsel argued stating that the suit filed in China was before The suit filed in India, consequently the preference must be given to the Application filed in China, seeking Anti Suit Injunction.
2.  Globally recognised tests for the grant of anti-enforcement injunction by Court of one country for an order which is passed by a court in a different Country does not allow for such a case of injunction.
3. The respondents counsel highlighted the fact that the prayer sought by the plaintiff was only an interlocutory application under Order XXX 1X of the Civil Procedure Code and hence cannot go beyond the threshold of the said relief sought in the main suit .
4. Respondents contended that overlapping intervention by the People’s Court of Wuhan was absent as the Chinese courts did not order the petitioner to withdraw the claim from the Indian court .
5. Respondent alleged that such an injunction should only be put into effect in extraordinary and rare circumstances. It highlighted the point that the plaintiff was seeking Anti Enforcement Injunction and not Anti Anti Injunction or Anti Suit Injunction. the conduct of the plaintiff has to be considered to prevent ad-interim relief.
6. The respondent submitted to the court that AAI preventing an enforcement which has been passed by a foreign court is granted provided the order is procured by fraud or even if the order is passed it isn’t enforced or even if the plaintiff was devoid of the knowledge that order would be possibly passed. If plaintiff’s due to his negligence has allowed the Anti Suit Injunction proceeding in a foreign court, to proceed in the issuance of an already existing Anti Suit Injunction order, in that case the injunction wouldn’t be granted.
7. Plaintiffs relied on certain judgements to not amend the suit and have thereby not included any prayer for the grant of Anti Suit Injunction.

JUDGEMENT

The court ordered in favour of the plaintiff to grant ad-interim injunction as the only way   for a standard essential patent holder to move things ahead is the infringement action. Subsequently, it held that if the proceedings against the defendant ended, there would be no deterring factors left to violate the plaintiffs right over the patents. Further, the court also stated that unless all remedies have been exhausted by the defendant, they cannot enforce the order of Wuhan’s People’s Court against the plaintiffs.

ANALYSIS

The present order passed raising several issues. The case at the Wuhan’s Court revolved around lack of transparency by Interdigital as they failed to share the rationale for arriving at a reasonable licensing fee. With respect to the same, the alleged defendants found the licensing fee quite higher in comparison to the similar licences granted. It is quite imperative to note here that India is an important global market for mobile devices and FRAND rates would have been included in the Indian jurisdiction. At the same time, Interdigital has a lot more patents filed in China in comparison to India. Henceforth, the determination of global FRAND rates was important for China too. Xiomi did not claim the non-usage of technology of the SEP’s of Interdigital in China/India, thereby indicating their inclination for using SEP’s of plaintiff’s in either of the countries. Hence, the only issue was regarding the FRAND rates which were already pending in the People’s Court of Wuhan. It would have been better if the Delhi HC had slowed down the case, until the same was decided in China. Also, the grant if such an injunction doesn’t interfere with the jurisdiction of a sovereign and independent foreign body, its main goal is to implement the order passed by the foreign authority, within its territories. When the court holds the view that any party has been deprived of his/ her constitutional rights, in such a case it has all the rights to protect the rights and interest of the aggrieved party. Recently, the German court pointed out towards the judgement given by the Delhi High court, signifying the importance of the same .it stated that if the courts would have favoured the respondents, it would completely debar the plaintiffs to seek justice from any court over the world, hence limiting and exhausting the legal remedies available.

Subsequently, 2021 as a further development, Xiomi suffered another jolt with regards to SEP’s with Interdigital , once again leading to the loss in case in the High Court of Munich. As a result of such events happening at regular intervals, Xiomi is no longer allowed to enforce any Anti Injunction Suit from people’s court in China against Interdigital in Germany, thereby increasing the foothold of the Indian Judgment, so pronounced.

Author: Deepa Mehta – a student of  School of Excellence in Law,  in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.