Motorola Mobility Llc & Anor v Ericsson Ltd & Anor

Factual and Procedural Background

This appeal arises from an order dismissing an application for an interim injunction sought by the Plaintiff against the Defendant to restrain acts alleged to infringe a European Patent (UK) No. 3 646 649 ("EP 649") until final judgment. The patent at issue is declared essential to a 5G telecommunications standard under the European Telecommunications Standards Institute ("ETSI") framework, making it a standard-essential patent ("SEP"). Both parties own global portfolios of SEPs and are bound by ETSI's Intellectual Property Rights ("IPR") Policy to license these portfolios on fair, reasonable, and non-discriminatory ("FRAND") terms, with an expectation of a global cross-license between them.

The dispute concerns the terms of this cross-license, including which party should receive net payments. Although the parties exploit each other's SEPs, they operate in different markets: the Plaintiff manufactures consumer devices, while the Defendant supplies products and services to mobile network operators.

Parallel proceedings have been initiated in the United States (Eastern District of North Carolina) and in the English Patents Court, each party committing to accept the other's court determination for the cross-license terms. Until determination, neither party has a license to the other's portfolio. The Defendant disputes validity and infringement but accepts serious issues to be tried, arguing that damages or royalties from a cross-license would be adequate remedies, opposing the interim injunction sought.

The Plaintiff contends that damages would not be adequate due to alleged illegitimate pressure exerted by the Defendant through injunctions obtained in Brazil and Colombia and relief sought from the United States International Trade Commission ("ITC"), which could exclude the Plaintiff’s products from the US market. The Plaintiff’s requested injunction is conditional, seeking to restrain infringement acts unless the Defendant agrees to enter into or negotiate a cross-license or interim regime on terms proposed by the Plaintiff.

The original judge held that damages would be adequate since the losses claimed by the Plaintiff arise from enforcement actions in other jurisdictions, not from infringement in the UK. The judge did not consider the balance of risk of injustice due to this conclusion. Both parties dispute which side the balance favors.

The background includes the absence of a global dispute resolution mechanism within ETSI’s IPR policies, leading to multiple national court proceedings. The Plaintiff and Defendant have engaged in ongoing litigation and negotiations, including offers of arbitration and counteroffers, with significant litigation also ongoing in Brazil, Colombia, and the United States.

The Plaintiff has issued multiple claims in England and Wales concerning patent validity, infringement, and FRAND terms, with some applications for expedition of trials granted and others refused. The Defendant has undertaken to accept the US court's determination of FRAND terms, but the Plaintiff has not reciprocated for the English court's determination.

In Brazil and Colombia, the Defendant has obtained preliminary injunctions against the Plaintiff’s sales of 5G devices, which the Plaintiff alleges are exerting illegitimate commercial pressure. The Plaintiff claims to have offered to pay royalties during these injunctions in exchange for stays or non-enforcement, which the Defendant refused.

The Plaintiff’s application for an interim injunction in England is based solely on an allegation of patent infringement and does not seek anti-suit injunctions or specific enforcement of ETSI IPR Policy obligations, nor has it pleaded or provided evidence of breaches of such obligations under French law, which governs the policy.

Legal Issues Presented

1. Whether damages or royalties payable under a cross-license would be an adequate remedy to the Plaintiff if the Defendant is found to infringe the patent in question.
2. Whether the balance of risk of injustice favors granting or refusing the interim injunction sought by the Plaintiff.
3. Whether the application of the American Cyanamid principles to this case fetters the court’s discretion to grant an interim injunction in the context of SEP and FRAND disputes.
4. Whether the relief sought by the Plaintiff amounts to impermissible anti-suit injunction relief by the back door and whether the Defendant’s conduct is unconscionable within the FRAND regime.

Arguments of the Parties

Appellant's Arguments (Plaintiff)

• Damages or royalties would not be an adequate remedy because the Defendant is exerting illegitimate commercial pressure through injunctions in Brazil, Colombia, and the US, potentially forcing the Plaintiff to accept supra-FRAND royalty rates.
• The injunction sought is conditional and aims to prevent such pressure, either by restraining infringement or by compelling the Defendant to enter into an interim or final cross-license on terms to be determined.
• The Defendant’s conduct is unconscionable and inconsistent with their obligations under the ETSI IPR Policy.
• The American Cyanamid principles should not restrict the court’s discretion to consider losses not directly caused by infringement but connected to the broader FRAND context and mutual obligations.
• The relief sought is not anti-suit injunction relief by the back door, as it does not require withdrawal of foreign claims but aims to maintain a level playing field pending determination.

Respondent's Arguments (Defendant)

• Damages or royalties under a cross-license would be an adequate remedy for the Plaintiff if the patent is infringed and valid.
• The losses claimed by the Plaintiff arise from enforcement actions in other jurisdictions and are not caused by infringement in the UK; thus, they do not justify an injunction.
• The Plaintiff’s fear of being forced to accept supra-FRAND rates is speculative and does not negate the adequacy of damages.
• The relief sought amounts to impermissible anti-suit injunction relief by the back door, which the Plaintiff has not properly applied for.
• The Defendant’s conduct in obtaining injunctions abroad is an exercise of lawful rights under local laws and is not unconscionable.
• The American Cyanamid principles properly guide the court’s discretion and require a causal connection between infringement and harm to the Plaintiff’s rights sought to be protected.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by affirming the established legal framework for interim injunctions, centered on the American Cyanamid principles, which require a serious question to be tried, adequacy of damages, and consideration of the balance of convenience.

The court accepted that if the patent is valid and infringed, damages or royalties under a cross-license would quantify the Plaintiff’s losses for acts in the UK. However, the losses the Plaintiff relies upon arise primarily from enforcement actions in Brazil and Colombia, not from infringement in the UK. This disconnect undermines the causal link required for an injunction.

The Plaintiff’s argument that the Defendant’s enforcement actions in other jurisdictions exert coercive pressure leading to supra-FRAND licensing terms was acknowledged but ultimately rejected because the court’s jurisdiction to grant an injunction is limited to protecting rights directly connected to the infringement in question.

The court examined the Plaintiff’s contention that the American Cyanamid principles should not be construed narrowly to exclude consideration of broader interests or losses not directly caused by infringement. It referred to recent Supreme Court authority emphasizing the breadth and evolving nature of equitable injunctions but concluded that the specific relief sought here did not engage that broader jurisdiction, particularly as no anti-suit injunction was sought or pleaded.

The Defendant’s conduct in obtaining injunctions abroad was found to be lawful and not unconscionable absent a breach of ETSI obligations, which was not pleaded or evidenced for determination on this application.

Finally, the court noted that the best resolution is the prompt determination of FRAND terms by one court, as recognized in prior judgments, leaving open future regulation of the parties’ positions pending that determination, but not through the interim injunction sought.

Holding and Implications

The appeal is dismissed.

The court refused the interim injunction sought by the Plaintiff, holding that damages or royalties under a cross-license would be an adequate remedy for infringement in the UK. The losses claimed by the Plaintiff arising from enforcement actions in foreign jurisdictions were not causally connected to the alleged infringement in the UK and thus did not justify injunctive relief.

No new legal precedent was established. The decision underscores the court’s adherence to established principles governing interim injunctions in SEP and FRAND disputes and highlights the limitations on equitable relief where harm arises outside the jurisdiction or from enforcement actions distinct from the infringement alleged.