Author: Parnika Choudhary, 3rd year student at Bharati Vidyapeeth University.
Date of Decision: May 3, 2021
Bench: Hari Shankar
Original Copy: N/A
Statutes involved: Civil Procedure Code, 1908, Delhi High Court (Original Side) Rules, 2018
Issues in question:
- Whether the Court has the authority to provide the requested remedy in the given case?
Background of the case:
- Interdigital, a US technology firm, is the plaintiff in this lawsuit, while Xiaomi, a Chinese electronics company, is the defendant.
- Interdigital’s use of Indian Patents IN 262910, IN 295912, IN 298719, IN 313036, and IN 320182 registered under Standard Essential Patents (SEP) without taking the appropriate licence or licence was the subject of a legal dispute between the plaintiff and the defendant.
- Following that, the plaintiff filed a lawsuit against the defendants, seeking a permanent injunction prohibiting the defendants from using the plaintiff’s SEPs in their products. On the other hand, the plaintiffs claimed that the defendants can only utilize SEPs if they enter into a FRAND licensing arrangement with them, which means that the conditions are fair, reasonable, and nondiscriminatory.
- Prior to filing the infringement action in the Delhi High Court, the defendants had filed a SEP royalty rate-setting lawsuit in Wuhan Court. In Wuhan Court, the defendants attempted to fix the plaintiffs’ worldwide SEPs’ global FRAND rate to obtain a license from the plaintiffs.
- Furthermore, the defendants requested an anti-suit injunction from the Wuhan Court in order to prevent the case from advancing to the Delhi High Court.
- In the current case, the plaintiffs sought an injunction to prohibit the defendants from enforcing the Wuhan Court’s decisions against them (anti-anti-suit).
- The court ruled on September 23, 2020, that there was no patent infringement because the action was mostly about setting FRAND-compliant royalty rates between the plaintiff and the defendant so that the defendant may use the plaintiff’s SEP technology.
- The plaintiff also filed Interlocutory Applications (IAs) under Order 39 Rules 1 and 2 of the Civil Procedure Code, 1908 and Chapter VII Rule 17 of the Delhi High Court Rules, 2018, respectively, seeking interim relief and the creation of a secrecy club.
- The summons in the current case and notice in Interlocutory Applications were issued by the Delhi High Court on August 4, 2020. On the same day, 4 August 2020, the defendant applied to the Wuhan Court for an anti-suit order to prohibit the plaintiff from pursuing the action against them.
- Although the case was still being heard in the Delhi High Court, the defendant failed to tell the court of the status of their anti-suit injunction motion or the issuing of notice to the plaintiff.
- The ruling dated 23rd September 2020 by the Wuhan court indicated that the court is in the process of delivering the summons to the plaintiff and issued an anti-suit injunction in the sense of behaviour preservation.
Judgment of the case:
- Arguments :
- Contentions that were given by the plaintiff are:
(i) The plaintiff alleged that the lawsuit was made in India under section 104 of the Indian Patents Act in order to obtain an anti-enforcement injunction against the plaintiffs’ Indian patents being infringed upon.
(ii) The plaintiffs further claimed that the Wuhan Order prevented them from seeking a legal remedy under Indian law, thereby interfering with national laws.
(iii) The order’s operation and results, according to the plaintiffs, were arbitrary and harsh.
- Contentions that were given by the defendants are:
(i) According to the defendants, the Wuhan Court is already considering the plaintiffs’ FRAND rate complaint. As a result, the issue has been treated simultaneously in two jurisdictions.
(ii) Defendants further claimed that the two courts may reach opposing conclusions, jeopardising judicial unity.
(iii) Finally, the defendants denied any involvement in a case where a foreign court promised that its order would be carried out.
- The Delhi High Court made history by confirming and declaring absolute India’s first anti-enforcement injunction ordered in favour of US technological behemoth and pioneer, interdigital, and against Chinese multinational Xiaomi Corporation in its final ruling on May 3, 2021.
- The court pointed out that the Wuhan Court overlooked the fact that the cause of action began in India because the proceedings before it involved the alleged infringement of six Indian patents.
- The Court relied on the grounds stated in a recent decision to decide that a substantial part of the cause of action arose within the Court’s jurisdiction and that the parallel suit filed is frivolous, unfair, and prevents the Plaintiff from getting relief.
- The court also noted that, despite the fact that the plaintiff was served with a notice, the processes, in this case, were not transparent since the plaintiff was never provided with a copy of the defendants’ anti-suit injunction application filed in the Wuhan Court.
- Furthermore, any overlap between the Wuhan and Indian procedures is minor, and unless the overlap renders the Indian proceedings oppressive and frivolous, the Wuhan Court saw no reason to bar Interdigital from pursuing its injunction claims against Xiaomi in India.
- Moreover, if the Wuhan Court upholds its anti-suit injunction order and orders the plaintiff to deposit fines for litigating its Indian claim, Xiaomi must compensate plaintiffs by depositing a similar sum with the Indian court.
- Under existing case law, the court distinguished between an Anti-Suit injunction, an Anti-Anti-Suit injunction, and an Anti-Enforcement injunction. The Indian order was sometimes described as being in the form of an Anti-Enforcement injunction.
- The decision of the Delhi High Court has cleared the path for new Indian legislation to govern the issuance of an anti-anti-suit or anti-enforcement injunction.
- Following this ruling, the litigants are likely to shift their attention to anti-suit injunction principles. As a result, this decision will benefit not just Indian law but also international law.