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Law profs to Federal Circuit: China’s antisuit injunction case law is consistent and compatible with U.S. approach, Ericsson’s anti-antisuit injunction against Samsung should be overturned

Many people in other parts of the world, especially in Europe, don’t like to hear this, but this world isn’t as multipolar as some would have it. Instead, there are simply two economic superpowers, the U.S. and China, who are rivals in many ways and whose political systems are fundamentally different, but quite often it is in their interest to work together. Coopetition, so to speak.

Ignorant of that reality, the anti-antisuit injunction Ericsson obtained in the Eastern District of Texas against Samsung’s antisuit injunction from the Wuhan Intermediate People’s Court is premised on a disdain for China as a patent jurisdiction–and the underlying assumption that what’s good for China must be bad for the U.S., and vice versa. Like a zero-sum game. The Texas court also wrongly accused Samsung of hypocrisy due to a misunderstanding that happened to me as well: Samsung’s requests for U.S. import bans (in response to similar petitions by Ericsson) didn’t involve SEPs.

Antisuit injunctions (ASIs), anti-antisuit injunctions (A2Sis), anti-anti-antisuit injunctions (A4SIs) and recently even anti-anti-anti-anti-antisuit injunctions (A4SIs; see this Juve Patent article of Februar 26 on a Munich ruling) are a mess–if not mayhem–that needs to be addressed through an international treaty sooner or later (sooner if you ask me, but definitely not in the form of mandatory arbitration). Until a sustainable solution has been put in place, the question is when a national court should defer to a foreign court–or keep escalating until someone will issue an A5SI, A6SI or whatever else might earn an entry in the Guinness Book of Records.

Are U.S. interests served by the Federal Circuit lifting the A2SI from Texas, or by affirmance?

Affirmance would mean to accelerate the race to the bottom–a race that U.S. courts couldn’t win in the end due to constitutional constraints. Someone else would always find ways to impose more drastic sanctions. The U.S. has a well-respected jurisdiction and a huge market. It stands more to gain from de-escalation.

De-escalation, however, involves deference. In Ericsson v. Samsung, that’s deference to a Chinese court’s ASI (and A3SI) that came down in an earlier-filed case, and under circumstances where Ericsson doesn’t really have strong arguments why a dispute between a European and an Asian company, at the heart of which you have a FRAND licensing pledge under French law, must be resolved in Texas. If two American companies were embroiled in a FRAND dispute, and one of them went to Germany and obtained an ASI (and additionally an A2SI, A3SI, A4SI, …), questions would have to be asked. Similarly, if a company generated most of its sales of SEP-implementing products in the U.S. market, and the SEP holder was a non-practicing entity, a U.S. court might simply be the logical forum. But Ericsson v. Samsung is not the kind of dispute that U.S. courts absolutely have to adjudicate.

It may be counterintuitive, but there actually are reasons for which the U.S. judiciary would have less of a problem with Chinese antisuit injunctions than, for example, their German counterparts. An amicus curiae brief filed yesterday with the Federal Circuit by six law professors (Jorge Contreras of the University of Utah, Ann Bartow of the University of New Hampshire, Michael Carrier of Rutgers Law Schooo, Chrstia Laser of the Cleveland-Marshall College of Law, Joshua Sarnoff of DePaul University, and Peter Yu of Texas A&M University) explains just how consistent and compatible Samsung’s Chinese antisuit injunction is with the U.S. Gallo and Unterweser case law (this post continues below the document):

21-03-01 Professors' Am… by Florian Mueller

In connection with Nokia v. Continental I already criticzed in 2019 that German courts have a pretty one-dimensional perspective on anti-antisuit injunctions. Basically, they hold that a patentee’s interests in enforcement are sacrosanct, and any interference by other jurisdictions is unacceptable. Therefore, the Munich appeals court upheld Nokia’s A2SI despite the fact that German courts cannot enter ASIs, without conducting any Gallo/Unterweser type of multifactorial analysis. Just black or white. Antisuit is always bad, so let’s do anti-antisuit.

China’s more differentiated approach to antisuit injunctions bears a strong resemblance to Gallo and Unterweser, including that the impact on international comity is considered. By contrast, German courts simply consider any antisuit injunction, no matter how well-reasoned by U.S. standards, to represent a terrible and unacceptable encroachment. From that one-dimensional (if not zero-dimensional) analysis they conclude that they’re free to retaliate.

China’s antisuit injunction regime is just as differentiated and balanced as the standard applied in the U.S., while Germany has yet to develop a more sophisticated approach than its current “an eye for an eye, a tooth for a tooth” anti-antisuit regime. Of course, Germany is just an example, but a particularly relevant one in the context of patent litigation. Others will do the same, or even worse. In those cases, there’s a pressing reason for U.S. courts to retaliate–but not when a jurisdiction, even if a country’s political system may be distinct from Western democracies, adjudicates antisuit injunctions in a manner consistent with the U.S. Gallo and Unterweser case law.

The professors have a point. The Federal Circuit could lift Ericsson’s Texas A2SI based on a finding that the Wuhan Intermediate People’s Court rightfully protected its jurisdiction on a basis that is materially consistent with how a U.S. court could have arrived at the same decision. In doing so, the Federal Circuit would set an example, and the U.S. could then expect China to honor American antisuit injunctions under comparable circumstances. The alternative is chaos–if we want to call chaos an alternative in the first place.

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View the original article here: Law profs to Federal Circuit: China’s antisuit injunction case law is consistent and compatible with U.S. approach, Ericsson’s anti-antisuit injunction against Samsung should be overturned

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