Chinese Court Issues Anti-Suit Injunction Re Pending Delhi HC Case by InterDigital against Xiaomi

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We’re pleased to bring to you a guest post by our former blogger Rajiv Choudhry, discussing the implications of a recent Chinese Court order granting an anti-suit injunction against InterDigital in respect of patent infringement proceedings against Xiaomi in the Delhi High Court and InterDigital’s anti-anti-suit injunction application filed against Xiaomi before the Delhi High Court response to this order.

Rajiv is a practicing advocate based in New Delhi. He specialises in IP law, with a focus on high – technology and patent law and advises/represents clients on SEP/FRAND and other issues related or unrelated to those discussed in the post. He’s also a founder member of the Fair Standards Alliance, a not-for-profit body that advocates fairness in patent licensing. The views expressed in the post are personal. Rajiv’s previous posts on the blog can be viewed hereherehere and here.

Chinese Court Issues Anti-Suit Injunction Re Pending DHC Case by InterDigital against Xiaomi

Rajiv Choudhry

In a matter brought by Xiaomi against InterDigital, a Chinese court recently (September 23, 2020) issued an anti-suit injunction against InterDigital from pursuing matters pending in the Delhi High Court. InterDigital also stands to be fined up to one million yuan per day if it were to violate the order. InterDigital has filed an anti-anti-suit injunction application at the Delhi High Court on 29th September, 2020.

Any pursuit of these matters by InterDigital before the Delhi High Court is likely to evoke a per day fine by Chinese courts. This means that the entire matter (FRAND adjudication) cannot be pursued not just injunctive relief because the same is intrinsically coupled to InterDigital’s demands at the DHC. In my view, the Chinese courts decision is absolutely correct because Xiaomi had first approached Chinese courts for resolution of the matter.

Contrary to popular belief that InterDigital had filed suit in India first – it was Xiaomi that first filed the matter in Chinese courts. On June 3, 2020, Xiaomi had filed a complaint against InterDigital in the Wuhan Intermediate People’s Court seeking a determination of the FRAND royalty terms payable for InterDigital’s 3G and 4G SEPs.  More importantly, this is a request to determine global royalty rates made before a Chinese court.

This means that InterDigital’s India action was a response to the Xiaomi’s court filing.

In addition, the India filing was a deliberate attempt by InterDigital to scuttle or at least severly dilute the matter before the Chinese courts. This is because Xiaomi’s sales in India would be severely impacted given any adverse order from the Delhi High Court and the Chinese court decision would be significantly diluted if a decision issued from our Delhi High Court.

Another factor against InterDigital is that it is a pure R&D company and does no manufacturing – and hence there would be no impact on InterDigital.  Public interest is also a factor in favour of the anti-suit injunction.

InterDigital’s Anti-Anti-Suit Injunction Application before Delhi HC

InterDigital has also filed for an anti-anti-suit injunction before the Delhi High Court on 29th September, 2020 as given in one of its regulatory filings. While it is clear that InterDigital is not averse to taking its chances before the Delhi High Court, the Chinese court will most certainly see this filing as a blatant disregard of its orders regardless of whatever has been put out by InterDigital.
This is because InterDigital has been careful to say in the filing that the Chinese court order pertains only to 3G / 4G and not H.265/ HEVC (video codecs). All I can say is that this is a stretched argument by any standard – that HEVC and 3G / 4G patents pertain to different end points.

The defendant is the same ‘Xiaomi’ and end result of InterDigital’s actions whether for HEVC / H.265 patents or 3G / 4G patents will be the same – either Xiaomi gives them FRAND royalty (FRAND definition to be argued by InterDigital ) or Xiaomi faces an injunction. This is clearly in the teeth of the orders issued by the Wuhan People’s Court.

Matters Pending Before Delhi HC

The matters pending before the Delhi High Court are:

InterDigital had filed these matters on 29th July, 2020 against Xiaomi  and the first complaint (CS. COMM. 295/2020) alleges infringement of five of IDCC’s patents related to 3G and/or 4G/LTE standards: Indian Patent Nos. 262910; 295912; 298719; 313036; and 320182.

The second complaint (CS. COMM. 296/2020) alleges infringement of three of IDCC’s patents related to H.265/HEVC standards: Indian Patent Nos. 242248; 299448; and 308108.

In these proceedings, InterDigital is seeking compensatory and punitive damages for Xiaomi’s infringement of the asserted patents as well as injunctive relief to prevent further infringement of the litigated patents in India, unless Xiaomi elects to take a license on terms determined to be FRAND by the Delhi High Court.

A Bloomberg release issued earlier yesterday (article behind pay-wall), a snippet of which provides:

InterDigital Says China Taking on India Court in Xiaomi Fight

InterDigital said a court in Wuhan, China, issued an order that would prevent it from seeking an injunction against handset maker Xiaomi in India over the use of wireless technology for the 3G and 4G standards.

InterDigital faces a fine of as much as one million yuan ($147,000) per day if it violates the order, the company said in regulatory filing…

IDCC said the Chinese order limiting its actions in India was imposed without any prior notice to the company, nor did it have a chance to be heard
IDCC said it filed a petition in the Delhi High Court…”

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