Late last August, the UK Supreme Court issued a ruling in Unwired Planet permitting UK courts to assert jurisdiction over worldwide rate-setting in standard-essential patent (SEP) disputes. I predicted that this would lead to widespread chaos, with companies picking different jurisdictions and attempting to obtain a better rate in one forum than the other. I also noted that this was only going to exacerbate existing issues with anti-suit, anti-anti-suit, and anti-anti-anti-suit injunctions.
It didn’t even take four months for my prediction to come true.
Back in 2014, Ericsson sued Samsung over a variety of SEPs. Ultimately, that litigation resulted in a cross-license between the two companies. But cross-licenses expire. With that expiration approaching, the two began negotiating for a new cross-license. But Ericsson complained that Samsung’s offer wasn’t as high as they wished it was and began to prepare to sue Samsung.
To address this, Samsung sought a FRAND rate determination from a Chinese court. Under the logic of Unwired Planet, this rate determination would apply for all Ericsson patents across the entire world. A few days later, Ericsson proceeded to sue Samsung in the Eastern District of Texas. Following on from this, Samsung asked the Chinese court for an anti-suit injunction, barring Ericsson from pursuing the issue in other courts, as well as an anti-anti-suit injunction—an order that Ericsson not be permitted to seek an anti-suit injunction in other courts that would prevent the Chinese court from carrying out its own legal responsibilities. Both injunctions were granted.
Ericsson proceeded to ignore those injunctions and requested that the Eastern District of Texas issue its own injunction against Samsung, which the Eastern District granted.
This is the world Unwired Planet leaves us in—courts in various countries trying to enjoin courts in other countries so that they can adjudicate patents that belong to yet more countries. And while this is the first example, it’s probably not going to be the last.
Unwired Planet is, as predicted, leading to worse chaos than the multiple lawsuits that Unwired Planet claimed it would prevent. Will we see SEP owners and those who develop products that incorporate SEPs agree to a global tribunal to avoid this chaos? Will we see courts retreat from their inappropriate extraterritorial power grabs and return to country-by-country adjudication? Or will we be forced to continue to deal with courts ignoring international comity to try to take power over the adjudication of the value of foreign patents?
The last option is where we are right now—and it’s by far the worst case of the three.