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Interim (preliminary) injunctions in English intellectual property litigation are rare. Among other things the Court considers whether there will be irreparable harm to the intellectual property owner.

What matters?

Interim (preliminary) injunctions in English intellectual property litigation are rare. Among other things the Court considers whether there will be irreparable harm to the intellectual property owner. Conventional wisdom is that, in most instances, there is no irreparable harm; rather the owner can be compensated in damages. There are some tentative exceptions, for example patents covering a prescription drug (which, absent an interim injunction may see irrecoverable price depreciation) or a trade mark with a reputation (which, absent an interim injunction may see significant harm to that reputation). However, these prove rare. In this article, we discuss a novel approach to obtaining an interim injunction advanced in Lenovo v Ericsson [2024] EWHC 1267 (Ch).

Background

Here, Lenovo has alleged infringement of EP (UK) 3,646,649 B1, a standard essential patent (SEP) covering aspects of 5G. The claim itself is part of a 15 year long global licensing/cross-licensing negotiation/dispute between Lenovo and Ericsson in relation to their respective SEP portfolios, with parallel proceedings in the United States, Brazil and Colombia. In the latter two, Ericsson has been successful in obtaining injunctions against Lenovo.

Applying the conventional wisdom, interim injunctions are typically not available in SEP cases. As SEPs are under an obligation to be licensed on fair, reasonable and non-discriminatory (FRAND) terms, it follows that any harm is not irreparable; rather, it can be compensated by a retrospective licence. Nonetheless, Lenovo applied for an interim injunction, running an interesting argument.

Anti-Suit Injunctions via the Back-Door

Lenovo sought to differentiate its position by including a caveat, namely the interim injunction would not apply if Ericsson were to elect one of the following alternatives:

1. To enter into a global cross-licence agreement on such FRAND terms as a court of competent jurisdiction shall determine, and not to seek or enforce any injunctive relief pending the determination of that, on the terms that Lenovo has offered Ericsson in the English FRAND proceedings currently pending in relation to another Lenovo patent under claim number HP-2023-000036; or
2. To enter into an interim cross-licence pending the determination of any global cross-licence, on the terms that Lenovo has offered Ericsson in HP-2023-000036; or
3. To enter into another agreed form of mutual regime within 14 days of the date of the order.

Lenovo explained that its motivation for applying for an interim injunction and for including the caveats was to induce Ericsson to abandon or not to enforce its injunctions in Brazil and Colombia (and any other jurisdictions); hence the text in bold (above). The effect of such an injunction would, to a degree, be akin to an anti-suit injunction. These are available in England and the court was left to speculate that Lenovo had not applied for one because it would not meet the criteria. As Mrs Justice Bacon characterised it:

"Lenovo seeks an interim injunction granted in terrorem: a sword of Damocles that will remain suspended only on the condition that Ericsson abandons the interim relief obtained in Brazil and Colombia, and its pursuit of interim relief in any other jurisdiction."

The merits

Turning to the merits of the application, the court applied the principles for grant of interim relief set out in American Cyanamid v Ethicon [1975] AC 396 (which apply equally to SEP / FRAND cases: IPCom v Xiaomi Technology [2019] EWHC 3074 (Pat)). This meant deciding: (i) Is there a serious issue to be tried on the merits? (ii) Are damages an adequate remedy for the claimant, if the injunction is not granted but the claimant succeeds at trial? (iii) If not, are damages under the cross-undertaking in damages an adequate remedy for the defendant, if the injunction is granted but the defendant succeeds at trial? (iv) If damages are not an adequate remedy for either side, where does the balance of convenience lie?

It was broadly common ground between the parties that there was a serious issue to be tried. As to whether damages were an adequate remedy, Lenovo argued that its loss would go beyond the sum that it would have earned under a FRAND licence. It reasoned that, if an interim injunction were not granted, Ericsson would be allowed to continue to operate in the UK market while Lenovo would be shut out of the Brazilian and Colombian markets. The alternative to those injunctions was for Lenovo to agree Ericsson's licensing offer which, it asserted, was supra-FRAND. The court summarised the position as follows:

"The short and obvious point is that the maintenance of injunctions in markets which are of considerable commercial significance for Lenovo enables Ericsson to exert commercial leverage on Lenovo to take a licence on the terms offered by Ericsson, during this interim period before a FRAND rate is determined [in other proceedings] ..."

Mrs Justice Bacon recognised that there was a link between the UK proceedings and the other jurisdictions, including Brazil and Columbia, with them all forming part of the same licence negotiations. However, she concluded that any loss suffered by Lenovo in Brazil and Columbia was not causally linked to the infringement of EP (UK) 3,646,649 B1 in the United Kingdom. It followed that an interim injunction could not be granted. She reasoned:

“[Commercial leverage in licence negotiations and the potential loss] is … categorically not a basis on which an interim injunction can be granted in this jurisdiction. As I have said, the purpose of an interim injunction is the protection of the right claimed in the underlying substantive proceedings. An interim injunction in relation to one patent right cannot be used purely as a threat in order to induce the defendant to conduct itself differently in respect of a different patent right in another jurisdiction. The proper course, if there is a basis for it, would be an application for an anti-suit injunction, but that is not the basis on which this application has been brought.”

What matters next?

Interim injunctions in English intellectual property litigation continue to be rare. The saving grace to this, however, is that typically intellectual property litigation will come to trial within 9-15 months, with the courts amenable to expedition. A case in point is the recent Court of Appeal decision in Amarox v. Bayer, in which the Court of Appeal addressed the appeal within 5 weeks of the first instance decision.

 

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