On October 24, 2024, the Federal Circuit issued a precedential opinion that may have implications for litigation involving standard essential patents (SEPs). Telefonaktiebolaget LM Ericsson v. Lenovo (United States), Inc., No. 24-1515 (Fed. Cir. Oct. 24, 2024). The Court vacated the district court’s denial of Lenovo’s request for an antisuit injunction to prevent Ericsson from enforcing injunctions obtained in Colombia and Brazil, and remanded the case for further proceedings below. In doing so, the Federal Circuit clarified that the “dispositive” requirement of the general framework for analyzing foreign-antisuit-injunction requests may be met even where a foreign antisuit injunction would not resolve the entire foreign proceeding, but only the foreign injunction.
The dispute between Ericsson and Lenovo centers on the 5G wireless-communication standard developed by the European Telecommunications Standards Institute (ETSI). Both companies hold SEPs necessary for complying with this standard and have made FRAND commitments, which are contractual obligations to license these patents on fair, reasonable, and non-discriminatory terms.
On October 11, 2023, Ericsson filed a lawsuit in the United States alleging that Lenovo infringed its U.S. 5G SEPs and breached its FRAND commitment by failing to negotiate in good faith. Two days later, Lenovo sued Ericsson in a court in the United Kingdom asking that court to determine FRAND terms for a global cross-license. Shortly thereafter, Ericsson sued Lenovo in Colombia and Brazil and secured preliminary injunctions in those countries against Lenovo for alleged infringement of its SEPs.
After the Colombian and Brazilian injunctions against Lenovo were entered, Lenovo moved the United States District Court for the Eastern District of North Carolina to issue an antisuit injunction to prevent Ericsson from enforcing the foreign injunctions. Under the framework for analyzing foreign-antisuit-injunction requests, as articulated in Microsoft Corp. v. Motorola, Inc., 696 F.3d 872 (9th Cir. 2012), there is a threshold requirement that “the parties and issues must be the same in both the domestic and foreign suits, and the domestic suit must be dispositive of the foreign action to be enjoined.” The court then looks at whether at least one of several antisuit-injunction factors applies. The district court denied Lenovo's motion after concluding that the threshold requirement had not been met because it reasoned that, to be dispositive, the domestic suit must necessarily result in a global cross-license. Lenovo appealed.
The Federal Circuit first examined whether the district court had correctly interpreted the “dispositive” requirement in view of Microsoft. The Federal Circuit disagreed with the district court’s conclusion that, because the domestic suit would not necessarily result in a global cross-license, it was thus not dispositive. The Federal Circuit concluded “that the ‘dispositive’ requirement can be met even though a foreign antisuit injunction would resolve only a foreign injunction (and not the entire foreign proceeding).”
The Federal Circuit emphasized that the critical issue was whether Ericsson’s FRAND commitment precluded it from seeking SEP-based injunctive relief without first negotiating in good faith. The Court found that, for FRAND commitments to be meaningful, an SEP holder that has made such a commitment “cannot just spring injunctive actions against other standard implementers” without, at a minimum, having first complied with obligations imposed by the commitment to negotiate in good faith over a license to its SEPs. Therefore, the Court concluded that whether Ericsson complied with its obligation would be dispositive of its ability to pursue the Colombian and Brazilian injunctions if decided in Lenovo’s favor.
Having found error in the district court’s assessment of the threshold requirement, the Federal Circuit vacated its decision and remanded for the district court to assess the antisuit-injunction factors, which the district court had not reached.
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