Anti-Suit Injunctions: Hypocrisy Reigns in the European Union
- Marta Beckwith
- 2 days ago
- 3 min read
Several years ago, the European Union filed an action against China in the World Trade Organization alleging that China’s use of anti-suit injunctions (“ASIs”) in standard essential patent (“SEP”) cases violated the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) (see https://www.sepessentials.com/post/the-eu-complaint-against-china-update and https://www.sepessentials.com/post/first-pop-quiz-revisited-the-eu-complaint-against-china). In that case, the EU argued that China’s “policy” of issuing anti-suit injunctions violated TRIPS.
Initially, the EU lost. The original panel found that the EU “had substantiated the precise content of the ASI policy,” i.e. it found that EU had demonstrated that China did, in fact, have a “policy” of granting ASIs. The panel however found that the EU had not demonstrated that China's ASI "policy" violated the TRIPS Agreement.
On appeal, an arbitral appellate panel upheld the original panel’s determination that China had an ASI policy. However, the appellate panel reversed when it came to the TRIPS Agreement and found that China’s “policy” of granting anti-suit injunctions violated the TRIPS Agreement.[1] Shortly thereafter, China announced that it was in “full compliance with those rulings and recommendations.”[2]
So, while China has announced it is abandoning this “policy,” the EU has itself adopted an “ASI policy”[3] that is much worse than the Chinese ASI “policy” about which the EU complained.
The EU's ASI policy has been implemented by the European Union’s Unified Patent Court (“UPC”). In particular, the UPC has a policy of issuing injunctions to prevent litigants from seeking interim licenses in other jurisdictions in cases involving SEP owners even when those SEP owners have promised to license their patents to all implementers on fair, reasonable and non-discriminatory (“FRAND”) terms. These anti-interim license injunctions are the same thing as anti-suit injunctions because they prevent litigants from seeking (or enforcing) a decision from a different jurisdiction that was decided under the law of that other jurisdiction.
For example, in a recent decision in Nokia v. Geely, the UPC granted an anti-interim license injunction preventing Geely from seeking an interim license from a Chinese court. This decision follows the “clear precedent,”—i.e., the EU’s ASI policy—established by the UPC in Interdigital v. Amazon.[4] In the Interdigital case, the UPC established its "clear" ASI policy by issuing an injunction against Amazon to prevent Amazon from seeking an interim license in the U.K., even though Interdigital had agreed to license its patents to all implementers on FRAND terms. That decision was especially egregious as the UPC did not even hear from Amazon before enjoining them—the UPC issued the injunction ex parte.
The UPC’s ASI policy leads us all into topsy-turvy land. In each of the UPC cases that establish the UPC ASI policy, the SEP owner had made a commitment to license its SEPs to all implementers on FRAND terms. The jurisdictions against which the UPC’s ASI policy have been used were simply trying to give the SEP holder the benefit of the bargain to which the SEP holder agreed: the requirement to accept a FRAND license in exchange for having the SEP holders' technology included in the standard.
The effect of the EU’s ASI policy thus is much worse than the effect of China's ASI "policy. The UPC ASI policy thwarts the very concept of FRAND licensing in order to impose the UPC’s own biased pro-SEP holder and anti-implementer opinions (see We are Incapable of Making FRAND Determinations Say More UPC and German Judges; "Inconsistency" - Europe Dithers Some More; and European Courts’ “Inconsistency” Will Not Be Solved by “Waiting and Seeing” – Case Study VoiceAgeEVS v. HMD). In other words, the EU ASI policy seeks to prevent other courts from requiring companies that committed to licensing their patents on FRAND terms to comply with their FRAND obligations.
The UPC, and the German judges that influence it, have once again put their thumb on the scale of justice in favor of SEP holders and their own limited views on SEPs and the meaning of FRAND. But what is good for the goose is good for the gander. If China’s ASI “policy” violates TRIPS, then so does the EU’s anti-interim license injunction policy. In fact, the EU’s policy is far more egregious because it thwarts the very purpose of the FRAND obligation.
[3] I use that term as loosely as did the arbitral panels. As China correctly pointed out, the EU was unable to quote the text of this so-called policy: “both the Panel and the MPIA arbitrators [failed] to identify any distinct operative content of the so-called ‘ASI policy’”. M505 Comments at 2.4.
