CLIP of the month: The rise in anti-suit injunctions in global FRAND disputes

09.10.2020

This month’s CLIP is an article by Jorge Contreras, Professor of law at the University of Utah, commenting on the increasing importance of anti-suit injunctions (ASIs) in ‘global standard wars’ in the telecommunications sector. In recent years there has been a trend of litigants in FRAND disputes seeking ASIs, as well as anti-anti suit injunctions (AASIs), which prevent a party seeking or enforcing an ASI in the first place. To make matters even more complicated (not to mention tongue-twisting), the possibility of anti-anti-anti suit injunctions (AAASIs) has also arisen and the article argues there is no theoretical limit to the use of such procedural mechanisms which might go ‘all the way down’. You can find the article here.

The article provides a useful overview of each of the FRAND disputes to date in which the issue of ASIs (as well as AASIs and AAASIs) has arisen and notes that, whilst civil law jurisdictions are generally reluctant to issue ASIs (unlike the UK and US), they have been willing to issue AASIs which prevent the enforcement of ASIs. If an AASI can nullify the effect of an ASI, Contreras questions why parties would not seek AAASIs to prevent a litigant from seeking or enforcing an AASI. Although AAASIs are rare, they are not unknown and the author highlights how the issue recently emerged in a FRAND dispute between Continental and Nokia in the United States. The article by Contreras also comments that use of these procedural mechanisms risks both a ‘race to the bottom’ among jurisdictions (in order to be attractive to litigants) and a ‘race to judgment’ among parties (in order to seize jurisdiction in their preferred court).

The rise in ASIs, AASIs and AAASIs only seems to be on an upward trajectory. In the short time since  Contreras’ article was published the issue of ASIs has arisen again in two cases in China (notably, a civil law jurisdiction). The Supreme People’s Court of China issued (and upheld on appeal) an ‘anti-enforcement’ injunction with significant daily financial penalties, if violated,  preventing Conversant from enforcing an injunction ordered by the German court against Huawei until there is a final ruling in the Chinese proceedings. Separately, the Wuhan Intermediate Court issued an ASI preventing Interdigital from seeking injunctive relief against Xiaomi and/or any form of FRAND determination from any other court globally, specifically targeting Indian proceedings which had been filed by Interdigital. It is rumoured that Interdigital is retaliating by seeking an AASI from the Indian court.  The UK Supreme Court also recently acknowledged the risk of ASIs in its judgment in Unwired Planet which confirmed that the English courts have jurisdiction to set the terms of a global FRAND licence and grant a UK injunction if an implementer does not accept those terms (see more on the judgment here).

What is clear is that procedural wrangling may be just as critical in future FRAND disputes as the substantive competition law and/or FRAND issues.

Francion Brooks

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Emma Mackie

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