Delhi High Court
Interdigital Technology ... vs Xiaomi Corporation & Ors. on 3 May, 2021
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 17th December, 2020
Decided on: 3rd May, 2021
I.A. 8772/2020 in
+ CS(COMM) 295/2020
INTERDIGITAL TECHNOLOGY CORPORATION
& ORS. ..... Plaintiffs
Through: Mr. Gourab Banerji, Sr. Adv.
assisted by Mr. Pravin Anand, Ms. Vaishali
Mittal, Mr. Siddhant Chamola, Ms. Manisha
Singh and Ms. Pallavi Bhatnagar, Advs.
versus
XIAOMI CORPORATION & ORS. ..... Defendants
Through: Mr. Neeraj K. Kaul, Sr. Adv.
assisted by Mr. Saikrishna Rajagopal, Mr.
Siddharth Chopra, Ms. Sneha Jain, Ms.
Garima Sahney, Ms. Stuti Dhyani, Ms.
Charu Grover, Ms. Anu Paarcha, Mr. Vivek
Ayyagari, Dr. Victor Vaibhav Tandon, Mr.
Arjun Gadhoke, Mr. Avijit Kumar, Mr.
Aniruddh Bhatia, Ms. Pritha Suri and Ms.
Chanan Parwani, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
% JUDGMENT
A. The Issue
1. This judgment adjudicates IA 8772/2020, whereby the plaintiff
has sought, (i) an injunction, against Defendant Nos. 1 to 8, restraining
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them from enforcing, against the plaintiff, an anti-suit injunction order
dated 23rd September, 2020, passed by the Wuhan Intermediate
People's Court, ("the Wuhan Court"), pending final disposal of the
present proceedings, (ii) a direction to the defendants to immediately
withdraw Case No. (2020) E 01 Zhi Min Chu No. 169.1, filed by them
before the Wuhan Court, (iii) a direction, to the defendants, to
immediately withdraw the anti-suit injunction application, filed by
them, before the Wuhan Court in the aforesaid complaint, and, (iv)
imposition, on the defendants, of costs equivalent to the costs likely
to be imposed on the plaintiffs by the Wuhan Court.
2. Mr. Gaurab Banerjee, learned Senior Counsel for the
plaintiffs/applicants, submits that his clients were not pressing prayer
(ii) in the application, and had no objection to the defendants'
pursuing their suit/complaint before the Wuhan Court. He submits that
his clients are, however, pressing prayers (i), (iii) and (iv).
3. By order dated 9th October, 2020, I had injuncted the
defendants, ad interim, from enforcing against the plaintiffs, the
directions contained in the order dated 23rd September, 2020, of the
Wuhan Court. It was made clear, however, that the observations and
findings contained in the said order were only ad interim in nature and
were not binding when the application would be taken up for final
hearing. The application has, thereafter, been heard finally.
4. Detailed arguments were advanced, on behalf of the plaintiffs/
applicants, by Mr. Gaurab Banerjee, learned Senior Counsel,
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instructed by Mr. Pravin Anand, learned counsel and, on behalf of the
defendants/respondents in the application, by Mr. Neeraj Kishan Kaul,
learned Senior Counsel instructed by Mr. Saikrishna Rajgopal, learned
counsel.
5. The submissions of learned Senior Counsel have been detailed
and varied, and have provided the Court considerable food for
thought. Needless to say, in adjudicating the present application, I
have treated the case as, effectively, presented on a tabula rasa, and
have not taken into account, therefore, the observations and findings
contained in the order dated 9th October, 2020 supra.
B. Facts
6. CS(COMM) 295/2020 alleges infringement, by the defendants,
of certain Standard Essential Patents (SEPs), held by the plaintiff and
registered in their name. According to the plaintiffs, the defendants
manufacture cellular handsets, compliant with 3G and 4G standards
which required, for their operation, technology contained in the SEPs
held by the plaintiffs. Usage of such technology, without due
authorisation, asserts the plaintiffs, amounts to infringement. The
plaintiffs acknowledge that, given the peculiar incidents of SEP
infringement law, they cannot monopolise, to themselves, the rights to
use the SEPs and that, as a trade-off for being granted patent rights in
respect thereof, they are also required to allow willing licensees to
obtain licences from them, on the basis whereof such licensees could
also operate the technology. These licences are, however, required to
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be granted by the plaintiffs, and availed by the licensees, at rates
which are fair, reasonable and non-discriminatory (FRAND). As such,
in the suit, the plaintiffs have not sought an absolute injunction,
against the defendants, from using the SEPs held by the plaintiffs, but
have sought for an injunction in the event the defendants are not
willing to obtain licences, from the plaintiffs, for use of the said SEPs,
at FRAND royalty rates. The SEPs concerned are Indian patents IN
262910, IN 295912, IN 298719, IN 313036 and IN 320182, referred
to, hereinafter, as IN 910, IN 912, IN 719, IN 036 and IN 182, for
convenience.
7. Determination of the FRAND rate at which the defendants
could obtain licences, from the plaintiffs for using their SEPs is,
therefore, unquestionably an inalienable part of the present litigation.
8. Prior to the plaintiffs approaching this Court by way of the
present suit on 29th July, 2020, the defendants had filed an SEP royalty
rate-setting suit ("the Wuhan Suit" referred to, in the proceedings
before the Wuhan Court, as "the complaint"), before the Wuhan Court
on 9th June, 2020. The defendants sought, in the said complaint, fixing
of a global FRAND royalty rate, on the basis of which they could
obtain licence from the plaintiffs, to operate and use the technology
covered by the entire patent portfolio of the plaintiffs, which would
include the suit patents.
9. Summons, in the present suit, were issued by this Court on 4th
August, 2020. On the very same day, the defendants filed an anti-suit
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injunction application before the Wuhan Court for a restraint, against
the plaintiffs, from prosecuting the present suit before this Court.
10. By order dated 23rd September, 2020, the enforcement whereof
the present application seeks to injunct, the Wuhan Court issued the
following directions:
"1. Upon service of this ruling, the Respondents
InterDigital, Inc. and InterDigital Holdings, Inc. as well as the
affiliates thereof shall immediately withdraw or suspend their
application for any temporary injunction before the High
Court of Delhi at New Delhi of India against the Applicants
Xiaomi Communications Co., Ltd., Xiaomi Home
Commercial Co., Ltd., and Beijing Xiaomi Mobile Software
Co., Ltd. as well as its affiliates in terms of the 3G and 4G
SEPs involved in the present case;
2. Upon service of this ruling, the Respondents
InterDigital, Inc. and InterDigital Holdings, Inc. as well as the
affiliates thereof shall immediately withdraw or suspend their
application for any permanent injunction before the High
Court of Delhi at New Delhi of India against Applicants
Xiaomi Communications Co., Ltd., Xiaomi Home
Commercial Co., Ltd., and Beijing Xiaomi Mobile Software
Co., Ltd. as well as its affiliates in terms of the 3G and 4G
SEPs involved in the present case;
3. The Respondents InterDigital, Inc. and InterDigital
Holdings, Inc. as well as the affiliates thereof shall not, during
the trial of the present case, apply for any temporary or
permanent injunction before any courts in either China or any
other countries and regions against the Applicants Xiaomi
Communications Co., Ltd., Xiaomi Home Commercial Co.,
Ltd., and Beijing Xiaomi Mobile Software Co., Ltd. as well as
its affiliates in terms of the 3G and 4G SEPs involved in the
present case;
4. The Respondents InterDigital, Inc. and InterDigital
Holdings, Inc. as well as the affiliates thereof shall not, during
the trial of the present case, apply for enforcing any temporary
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or permanent injunction that has been granted or is likely to
be granted by any courts in either China or any other countries
and regions against the Applicants Xiaomi Communications
Co., Ltd., Xiaomi Home Commercial Co., Ltd., and Beijing
Xiaomi Mobile Software Co., Ltd. as well as its affiliates in
terms of the 3G and 4G SEPs involved in the present case;
5. The Respondents InterDigital, Inc. and InterDigital
Holdings, Inc. as well as the affiliates thereof shall not, during
the trial of the present case, file lawsuits before any courts in
either China or any other countries and regions requesting to
adjudicate the royalty rate of the royalty disputes in terms of
the 3G and 4G SEPs involved in the present case against the
Applicant's Xiaomi Communications Co., Ltd., Xiaomi
Homecare commercial Co., Ltd., and Beijing Xiaomi Mobile
Software Co., Ltd. as well as its affiliates;
6. Frozen the guarantee fund, RMB 10 million yuan,
provided by the Applicants Xiaomi Communications Co.,
Ltd., Xiaomi Homecare commercial Co., Ltd., and Beijing
Xiaomi Mobile Software Co., Ltd. for the behavior
preservation application;
7. Other claims in the behavior preservation application
of the Applicant's Xiaomi Communications Co., Ltd., Xiaomi
Home Commercial Co., Ltd., and Beijing Xiaomi Mobile
Software Co., Ltd. shall be rejected.
In the event of the Respondents InterDigital, Inc. and
InterDigital Holdings, Inc. violating this ruling a fine of RMB
1 million yuan per day shall be imposed, calculated
cumulatively from the date of the violation."
11. By the present application, the plaintiffs seek an injunction,
against the defendants, from enforcing, against them, the aforesaid
directions issued by the Wuhan Court.
C. Rival Contentions
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12. Mr. Gaurab Banerji, learned Senior Counsel for the plaintiffs,
advanced, essentially, the following contentions:
(i) The impugned order completely divested the plaintiffs of
their right to prosecute their suit. The contention, of the
defendants, that the order merely delayed recovery of royalty
from the defendants, was not correct. The suit of the plaintiffs
was not for recovery of royalty against grant of licence, but was
for injuncting infringement of the plaintiffs' Indian suit patents,
and was preferred under Section 104 of the Patents Act, 1970
("the Patents Act"). The impugned order of the Wuhan Court
effectively restrained the plaintiffs from prosecuting their action
for protection of the patents granted by the Indian government
and was, to that extent, also an assault on the sovereign function
of the State. It effectively denied, to the plaintiffs, the right
conferred by Sections 48 and 108 of the Patents Act, as well as
Order XXXIX Rules 1 and 2 of the CPC. The defendants had
sought to wrongly contend that the plaintiffs' suit was for
settling the FRAND rate for grant of licence for the global
portfolio of the plaintiffs' patent. The suit was only directed
against infringement of the plaintiffs' Indian suit patents. The
mere filing of a FRAND rate setting case in Wuhan could not
divest this Court of the powers conferred by Section 108 of the
Patent Act or Order XXXIX of the CPC. Reliance was placed,
in this context, on the judgments in IPCom GmbH & Co KG v.
Lenovo Technology (United Kingdom) Ltd1, Lenovo (United
1
(2019) EWHC 3030 (Pat)
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States) Inc. v. IPCom GmbH & Co KG2, Conversant Wireless
Technologies S.A.R.L v. Huawei Technologies Co. Ltd.3
(referred to, hereinafter, as "Conversant v. Huawei"), Huawei
Technologies Co. Ltd. v. Conversant Wireless Technologies
S.A.R.L4 (referred to, hereinafter, as "Huawei v. Conversant")
and Unwired Planet International Ltd v. Huawei Technologies
(UK) Co Ltd5.
(ii) In this sense, the impugned order was destructive of
comity of courts, as it starkly disregarded the rights of the
courts in India to decide the claim of infringement of Indian
patents, the jurisdiction in respect of which vested in Indian
courts alone. Reliance was placed, in this context, on the
judgment in SAS Institute Inc. v. World Programming Ltd6.
The impugned order effectively injuncted this Court from
proceeding with the present suit, or with the injunction
application preferred therein, under Order XXXIX of the CPC.
(iii) Mr. Banerji took exception to the defendants having
sought to invoke the principle of comity of courts. He submitted
that, where the order of the foreign court was in defiance of the
public policy of the domestic court, no principle of comity of
courts could inhibit the domestic court from protecting itself
against the assault on its public policy. For this purpose, he
relied on the judgment of the Supreme Court in Satya v. Teja
2
RG 19/21426 - No Portalis 35L7-V-B7D-CBAZK
3
[2018] EWGC 808 (Pat)
4
[2019] EWCA Civ. 38
5
[2020] UKSC 37
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Singh7. He also submitted that comity was a two-way street.
For this purpose, reliance was placed on IPCom GmbH & Co
KG v. Lenovo Technology (United Kingdom) Ltd8, Huawei v.
Conversant4 and, Owens-Illinois v. Webb9.
(iv) In this context, the aspects which are relevant for
consideration, were
(a) whether the defendants were required to be
restrained, during the pendency of the present suit, from
pursuing or enforcing the anti-suit injunction order dated
23rd September, 2020 of the Wuhan Court,
(b) whether the defendants were required to be
directed to withdraw their anti-suit injunction application,
filed before the Wuhan Court, insofar as it impacted the
proceedings in this court and IA 6440/2020, filed by the
plaintiff for interlocutory injunction under Order XXXIX
of the CPC, and
(c) whether the defendants were required to be
directed to deposit, with this Court, the amount of
fine/penalty which would be payable by the plaintiff in
accordance with the impugned order dated 23rd
September, 2020 of the Wuhan Court, for continuing to
prosecute IA 6440/2020 before this Court.
6
(2020) EWCA Civ 599
7
(1975) 1 SCC 120
8
[2019] EWHC 3030 (Pat)
9
809 S.W.2d. 899 (Tex. App 1991), decided by the Court of Appeals of Texas on 9th July, 1991
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The merits of the plaintiffs' plea for interim injunction
against infringement of the suit patents, forming subject
matter of IA 6440/2020, were irrelevant insofar as the
present application was concerned, and the defendants
had needlessly advanced detailed submissions thereon.
(v) That this Court has the power and authority to injunct the
impugned order dated 23rd September, 2020 passed by the
Wuhan Court, was apparent from the judgment of the Supreme
Court in Modi Entertainment Network v. W.S.G. Cricket Pte.
Ltd.10 and Dinesh Singh Thakur v. Sonal Thakur11, the
judgment of the High Court of Calcutta in Devi Resources
Limited v. Ambo Exports Limited12 and the judgment of this
Court in U.O.I. v. Vodafone Group PLC United Kingdom13.
These decisions held, inter alia, that, where the grant of anti-
suit injunction would directly interfere with pending
proceedings in a foreign court, the Indian court must be slow in
granting injunction. In the present case, however, grant of
injunction against enforcement, by the defendants, of the order
dated 23rd September, 2020 of the Wuhan Court, would not
adversely impact, in any manner, the complaint filed by the
defendants in Wuhan. Inasmuch as the order dated 23rd
September, 2020, of the Wuhan Court, injuncted the plaintiffs
from prosecuting its claim for a restraint, against the defendants,
10
(2003) 4 SCC 341
11
(2018) 17 SCC 12
12
2019 SCC OnLine Cal 7774
13
2018 SCC OnLine Del 8842
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from infringing the suit patents and, consequently, effectively
rendered the suit futile, on pain of costs of ₹ 1 crore for every
day during which the plaintiffs continued to prosecute the
present proceedings, the order dated 23rd September, 2020 of
the Wuhan Court was vexatious and oppressive in its operation
and effect.
(vi) Clearly, therefore, a prima facie case was made out in the
plaintiffs' favour, for grant of injunction as sought in this
application (barring prayer (ii) which the plaintiffs gave up).
The consequence of the impugned order was that the plaintiffs
would have to suffer continued infringement of the suit patent,
without any licence being taken by the defendants and without
the plaintiffs being allowed to oppose such infringement before
this Court, being the only court competent to adjudicate the lis.
The considerations of balance of convenience and irreparable
loss, too, therefore, operated to justify grant of injunction, as
sought in this application.
(vii) On the aspect of "overlap" of the proceedings pending
before this Court in the present suit and in IA 6440/2020 with
the complaint filed by the defendants in the Wuhan Court, it
was submitted that mere overlap, even if it existed, did not
justify issuance of an anti-suit injunction as had been done by
the Wuhan Court. Moreover, submits Mr Banerjee, the overlap,
if any, was only partial and incidental. It was pointed out that
the scope of FRAND inquiry by this Court in IA 6440/2020, or
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even in the main suit, was fundamentally different from the
scope of FRAND inquiry which would be carried out by the
Wuhan Court while examining the complaint filed by the
defendants. This Court would be concerned with the FRAND
rate of royalty for grant of licence by the plaintiffs to the
defendants for the right to exploit the suit patents as, in the
alternative, such exploitation would tantamount to infringement,
vulnerable to injunction at law. Per corollary, the very issue of
fixation of FRAND rate would arise only if the defendants
desired to continue exploiting the plaintiffs' suit patents by
obtaining a licence from the plaintiffs. As such, it was
submitted that no serious consequence would result even if the
appropriate FRAND rates for grant of licence by the plaintiffs
to the defendants in respect of the suit patents, were decided by
this Court.
(viii) The plaintiff was not seeking any interference with the
prosecution, by the defendants, of their complaint before the
Wuhan Court. However, the plaintiffs were entitled to seek
restoration of the status quo ante before the filing, by the
defendants, of their anti-suit injunction application in Wuhan.
Reliance was placed, in this context, on the judgement of the
Regional Court of Munich in Nokia Technologies Oy v.
Continental Automotive Systems Inc.14, and the judgment of
14
In Docket No. 21 O 9333/19
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the Court of First instance, Paris, in IPCom GmBH & Co KG v.
Lenovo (United States) Inc.15
(ix) The fact that the defendants had filed their complaint
before the Wuhan Court before the filing of the present suit by
the plaintiff before this Court was irrelevant, in view of the
difference in the scope of the two proceedings.
(x) The impugned order had been obtained by subterfuge and
concealment, and the defendants had also resorted to
suppression of material facts from this Court. The plaintiffs
were never communicated the fact either of filing of the anti-
suit injunction application by the defendants in the Wuhan
Court, or of the passing of the order dated 23rd September 2020,
and came to know of the said proceeding, and of the said order,
only when the order was annexed by the defendants with their
reply to IA 6440/2020, filed by the plaintiffs. The defendants
had conspicuously concealed, from this Court, the fact of
pendency of the complaint at Wuhan and of the anti-suit
injunction preferred by the defendants therein. No notice, of the
filing of the anti-suit injunction application, was ever served on
the plaintiffs, before the order dated 23rd September, 2020,
came to be passed by the Wuhan Court. The order was,
therefore, effectively passed ex parte.
15
Order dt 8th November,, 2019 of the Tribunal de Grande Instance de Paris
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(xi) Apart from the above submissions, which were intended
to support prayers (i) and (iii) in this application, Mr. Banerjee
also seriously pressed prayer (iv), which sought imposition of
costs, on the defendants, equivalent to the costs/penalty payable
by the plaintiffs in accordance with the order dated 23rd
September, 2020, of the Wuhan Court. Emphasis was laid, for
this purpose, on the defendants' own submission that they were
powerless to restrain the Wuhan Court from enforcing the
direction for payment of fine, as contained in the order dated
23rd September, 2020, as the anti-suit injunction application
stood disposed of. Once the Wuhan Court had issued directions
to the plaintiffs, and had made the directions liable to
compliance on payment of fine, the defendants sought to submit
that the decision on whether to secure enforcement of its order,
or not, by recovery of the said costs from the plaintiffs, vested
with the Wuhan Court, and that the defendants had no part to
play in this regard. Mr Banerjee submitted that, in that view of
the matter, given the fact that the order dated 23rd September,
2020, of the Wuhan Court, had come to be passed owing to
sharp practices adopted by the defendants, the plaintiffs were
required to be indemnified by the defendants, in the event of the
plaintiff being mulcted with fine as envisaged by the order
dated 23rd September, 2020. As such, it was submitted that,
while the plaintiffs were not insisting on the defendants
depositing the said costs upfront, a direction was required to be
issued to the defendants to deposit the said costs in this court, to
the extent they were enforced against the plaintiffs by the
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Wuhan Court, by way of execution of the order dated 23rd
September, 2020.
13. Responding to the aforesaid submissions of Mr. Gourab
Banerji, Mr. Neeraj Kishan Kaul, learned Senior Counsel appearing
for the defendants, contended thus:
(i) The order, dated 23rd September, 2020, of the Wuhan
Court, did not extinguish the plaintiffs' right either to prosecute
its suit for infringement of its Indian patent, or even its
application for interlocutory injunction preferred therein. It
merely delayed the recovery, by the plaintiffs, of the royalty
claimed by it in IA 6440/2020.
(ii) The proceedings before this Court in the present suit, and
in IA 6440/2020, not only overlap with, but are identical to,
those pending before the Wuhan Court. The claims of the
parties before the two fora, as well as reliefs prayed therein,
were identical. The considerations of FRAND rate
determination, in the two proceedings, were overlapping. The
present proceedings before this court were, therefore, bound to
interfere with the proceedings in the complaint before the
Wuhan Court. In fact, the plaintiffs were exhorting this Court to
proceed on a "direct collision path" with the Wuhan Court.
FRAND rate determination was an integral part for
consideration of the prayer for grant of injunction, in the case of
alleged SEP infringement. In this context, Mr. Kaul
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expostulated, at great length, on the various indicia and
incidents of SEP infringement proceedings. He pointed out that,
before deciding an application for grant of interlocutory
injunction against SEP infringement, the Court was required to
satisfy itself that the asserted patents were valid, essential and
infringed, and that, though the plaintiffs had complied with their
FRAND obligations, the defendants were unwilling to take a
license from the plaintiffs even at the FRAND rate determined
by the Court. As such, he submits, determination of the FRAND
rate at which the license, for exploitation of their SEPs, was to
be granted by the plaintiffs, was a necessary precursor to any
finding of infringement by the defendants, which would follow
only if the defendants were unwilling to take a licence from the
plaintiffs at the FRAND rate so determined by the Court. As
such, he submits, the plaintiffs were misleading the court in
contending that their claim before the Court was only for
injuncting infringement of the suit patents. Mr. Kaul submits
that FRAND rate determination was integral to the
consideration of the prayer for interlocutory injunction made by
the plaintiffs in IA 6440/2020. As such, the issue before this
Court, and the Wuhan Court, he submits, were not only
overlapping, but were substantially identical.
(iii) If the two Courts were to be permitted to adjudicate their
proceedings simultaneously, Mr Kaul submits that there was a
possibility of two global FRAND rates being fixed which would
result in chaos and would give rise to various vexed issues. In
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such circumstances, he submits that there were authorities to the
effect that, in order to avoid an unseemly race to have the
FRAND rate fixed, one of the proceedings was to be kept in
abeyance. He also emphasised the principle that the requirement
of a FRAND undertaking was in the nature of a contractual
derogation of the right of the patent holder to obtain an
injunction. The plaintiff, submits Mr. Kaul, was effectively
asking the Court to proceed on a premise that any foreign
judgement would be per se void if it decided inter se rights,
which incidentally affected some rights arising out of Indian
law. Given the extent of overlap between the proceedings in IA
6440/2020 and the complaint before the Wuhan Court, Mr Kaul
submits that the injunctive order of the Wuhan Court was
entirely justified.
(iv) Mr. Kaul further submitted that that anti-enforcement
injunction/anti-anti-suit injunctions were extremely rare specie
of judicial interdiction, which were not easily to be passed by
courts. He submits that, as there was no dispute regarding the
competence of the Wuhan Court to pass the impugned order,
this Court ought not to interfere therewith, as any such
interference would be destructive of the principle of comity of
courts.
(v) Apropos the penalty for ₹ 1 crore per day, imposed by the
order dated 23rd September, 2020, of the Wuhan Court, Mr.
Kaul, submits that the said order had been passed only towards
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enforcement of the directions issued by the Wuhan Court and
could not, therefore, be treated as vexatious or oppressive in any
manner. He submits that the plaintiffs could not seek to contend
that the order of anti-suit injunction passed by the Wuhan Court
was vexatious and oppressive merely because of the
consequences which would ensue, were the order to be violated
by the plaintiffs. In this context, Mr. Kaul exhorts the Court not
to interfere with the manner in which a foreign Court ensured
compliance with its order, which was essentially a matter within
the competence and jurisdiction of the foreign court.
(vi) Apropos the submission of the plaintiffs that the
impugned order had been passed behind its back, and without
due notice to it, Mr. Kaul submits that the plaintiffs had been
duly issued notice of the complaint, by the Wuhan Court, but
has deliberately chosen to remain absent. He submits that, in
fact, the plaintiffs were guilty of suppression, as they never
informed this Court of the pendency of the said complaint
despite being fully aware thereof.
(vii) As such, submits Mr Kaul, no case for grant of
injunction, as sought in this application, exists.
D. Judgements cited by learned Counsel
14. Admittedly, many of the issues which arise in the present case
are res integra, at least insofar as the development of the law in this
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country is concerned. Extensive reliance has been placed, by learned
Senior Counsel on both sides, on decisions rendered in foreign
jurisdictions. These must, in the very nature of things, guide
appreciation of the issues involved in the present case; accordingly, I
am of the opinion that, at the outset, it would be appropriate to
examine what has been held in these decisions. Before proceeding to
foreign judgements, however, it would be appropriate, at the first
instance, to study the decisions of the Supreme Court, this Court and
the High Court of Calcutta, on which learned Counsel placed reliance.
Admittedly, the Supreme Court has pronounced, on the aspect of anti-
suit injunctions, restraining parties from proceeding with litigations in
foreign jurisdictions, primarily in three decisions, viz. O.N.G.C. v.
Western Co. of North America16, Modi Entertainment Network10 and
Dinesh Singh Thakur11.
O.N.G.C. v. Western Co. of North America16
15. In this case, the High Court first granted an anti-suit injunction
and, thereafter, vacated the injunction, against which ONGC
approached the Supreme Court.
16. The merits of the dispute between ONGC and the respondent
Western Co. of North America ("Western", hereinafter) are not of
particular relevance. Suffice it to state that the contract, between
ONGC and Western provided for arbitration, to be governed by the
16
(1987) 1 SCC 496
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Indian Arbitration Act, 1940 ("the 1940 Act"). Disputes arose
between ONGC and Western, which were referred to arbitration by an
Arbitral Tribunal consisting of two members and an umpire. The two
members could not arrive at a consensus, resulting in the umpire
passing an award, dated 22nd November, 1985 and a supplementary
award dated 28th November, 1985.
17. Western lodged a complaint in the US District Court, for
confirming these two awards of the Umpire, and for a judgement
against ONGC, for the amount awarded with interest and costs.
ONGC, for its part, instituted a petition under Section 30 and 33 of the
1940 Act before the High Court, for setting aside the award rendered
by the Umpire. Interim directions, restraining Western from
proceeding further with the action instituted in the US Court, were
also sought. The learned Single Judge of the High Court first granted
interim anti-suit injunction, as sought by ONGC and, thereafter,
vacated the order, resulting in ONGC approaching the Supreme Court.
18. The Supreme Court held that sufficient grounds, for restraining
Western from prosecuting its proceedings in the US Courts existed, in
paras 13 to 15 of the report, which read thus:
"13. The submission is that while the validity of the award
is required to be tested in the context of the Indian law if
Western Company is permitted to pursue the matter in the
American Court, the matter would be decided under a law
other than the Indian law, by the American Court.
Admittedly, Western Company has prayed for confirmation
of the award. The American Court may still proceed to
confirm the award. And in doing so the American Court
would take into account the American law and not the Indian
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law or the Indian Arbitration Act of 1940. And the American
Court would be doing so at the behest and at the instance of
Western Company which has in terms agreed that the
arbitration proceedings will be governed by the Indian
Arbitration Act of 1940. Not only the matter will be decided
by a court other than the court agreed upon between the
parties but it will be decided by a court under a law other
than the law agreed upon. Should or should not such an
unaesthetic (sic) situation be foreclosed?
14. The last submission is also quite impressive. If
Western Company is right in the posture assumed by it in this
Court at the time of the hearing that the American Court has
no jurisdiction to confirm the award in view of the New York
Convention is correct, the resultant position would be this:
The award rendered by the Umpire, the validity of which is
not tested either by an American Court or an Indian Court
will have been enforced by an American Court. It will be an
extremely uphill task to persuade the court to hold that a
foreign award can be enforced on the mere making of it
without it being open to challenge in either the country of its
origin or the country where it was sought to be enforced. And
that its validity may perhaps be tested for academic purposes
in the country of origin after the award is enforced and for
seeking restitution later on if possible and if there are assets
which can be proceeded against in the country where the
award has been enforced. It is essential to emphasise at this
juncture and in this context that under the Indian law, an
arbitral award is unenforceable until it is made a rule of the
court and a judgment and consequential decree are passed in
terms of the award. Till an award is transformed into a
judgment and decree under Section 17 of the Arbitration Act,
it is altogether lifeless from the point of view of its
enforceability. Life is infused into the award in the sense of its
becoming enforceable only after it is made a rule of the court
upon the judgment and decree in terms of the award being
passed. The American Court would have therefore enforced
an award which is a lifeless award in the country of its origin,
and under the law of the country of its origin which law
governs the award by choice and consent.
15. We are of the opinion that the appellant ONGC,
should not be obliged to face such a situation as would arise
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in the light of the aforesaid discussion in the facts and
circumstances of the present case. To drive the appellant in a
tight corner and oblige it to be placed in such an inextricable
situation as would arise if Western Company is permitted to
go ahead with the proceedings in the American Court would
be oppressive to ONGC. It would be neither just nor fair on
the part of the Indian Court to deny relief to ONGC when it is
likely to be placed in such an awkward situation if the relief is
refused. It would be difficult to conceive of a more
appropriate case for granting such relief."
(Italics and underscoring supplied)
19. This is an important decision as it identifies one situation in
which allowing the proceedings in the foreign court to continue would
be "oppressive". The Supreme Court found the continuation of the
proceedings initiated by Western in the US Court to be oppressive as,
despite the award forming subject matter of the dispute being required
to be made rule of court by the court in India under the 1940 Act, if
Western were to be allowed to continue prosecuting the proceedings
initiated by it in the US Court, ONGC would be driven to a "tight
corner" once the award was enforced by the US Court, which would,
consequently, be oppressive in nature. The two considerations which,
to the mind of the Supreme Court, justified grant of anti-suit
injunction, qua the proceedings in the US Court were, therefore, (i) the
Indian Court being the proper court, for seeking enforcement of, or for
challenging, the award and (ii) the difficulties which ONGC would
face if the US Court were, without jurisdiction, to proceed to enforce
the award.
Modi Entertainment Network v. W.S.G. Cricket Pte Ltd10
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20. The dispute, in this case, emanated out of an announcement, by
the International Cricket Council (ICC), for organising a cricket
tournament in Kenya, for which W.S.G. Cricket Pte Ltd ("WSG",
hereinafter) was granted exclusive license to grant commercial rights.
Exclusive license was, thus, granted, by WSG, to the second appellant
before the Supreme Court (whose identity is not forthcoming from the
judgement) on 21st September, 2000. Said second appellant assigned
its rights to the first appellant, Modi Entertainment Network ("Modi",
hereinafter). Modi was required, under the agreement, to pay a
minimum guaranteed amount of US $ 35 lakhs.
21. Cross suits resulted. On 9th May, 2001, Modi sued WSG in the
High Court of Bombay, claiming damages for loss of advertising
revenue due to illegal threats by WSG. On 22nd November, 2001,
WSG sued Modi before the Queen's Bench Division of the High
Court in England ("the English Court", hereinafter), praying for a
decree against Modi, for payment of the minimum guaranteed amount
under the agreement. Modi entered appearance before the English
Court on 9th January, 2002 and, on 15th January, 2002, applied to the
Bombay High Court for an anti-suit injunction against WSG,
restraining it from proceeding with the action in the English Court,
pleading that the proceedings before the English Court were vexatious
and oppressive.
22. The application was allowed by a learned Single Judge of the
High Court of Bombay, who granted ad interim anti-suit injunction as
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sought. The Division Bench set aside the order of the learned Single
Judge. Modi appealed to the Supreme Court.
23. The Supreme Court, at the outset, observed, in para 10 of the
report, thus:
"The courts in India like the courts in England are courts of
both law and equity. The principles governing grant of
injunction -- an equitable relief -- by a court will also
govern grant of anti-suit injunction which is but a species of
injunction. When a court restrains a party to a suit/proceeding
before it from instituting or prosecuting a case in another
court including a foreign court, it is called anti-suit injunction.
It is a common ground that the courts in India have power to
issue anti-suit injunction to a party over whom it has personal
jurisdiction, in an appropriate case. This is because courts of
equity exercise jurisdiction in personam. However, having
regard to the rule of comity, this power will be exercised
sparingly because such an injunction though directed against
a person, in effect causes interference in the exercise of
jurisdiction by another court."
(Emphasis supplied)
24. The Supreme Court went on, thereafter, to refer, inter alia, to
the judgements of the House of Lords in Carron Iron Co. v.
Maclaren17, Castanho v. Brown & Root (U.K.) Ltd18, Airbus
Industrie GE v. Patel19 and Spiliada Maritime Corpn v. Cansulex
Ltd20, the Privy Council in SNI Aerospatiale v. Lee Kui Jak21 and its
own earlier decision in O.N.G.C.16, to lay down the following
principles (in para 24 of the report):
17
(1855) 5 HLC 416
18
(1981) 1 All ER 143 (HL)
19
(1998) 2 All ER 257 (HL)
20
(1986) 3 All ER 843 (HL)
21
(1987) 3 All ER 510 (PC)
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"(1) In exercising discretion to grant an anti-suit injunction
the court must be satisfied of the following aspects:
(a) the defendant, against whom injunction is
sought, is amenable to the personal jurisdiction of the
court;
(b) if the injunction is declined, the ends of justice
will be defeated and injustice will be perpetuated; and
(c) the principle of comity - respect for the court in
which the commencement or continuance of
action/proceeding is sought to be restrained - must be
borne in mind.
(2) In a case where more forums than one are available,
the court in exercise of its discretion to grant anti-suit
injunction will examine as to which is the appropriate forum
(forum conveniens) having regard to the convenience of the
parties and may grant anti-suit injunction in regard to
proceedings which are oppressive or vexatious or in a forum
non-conveniens.
(3) Where jurisdiction of a court is invoked on the basis of
jurisdiction clause in a contract, the recitals therein in regard
to exclusive or non-exclusive jurisdiction of the court of
choice of the parties are not determinative but are relevant
factors and when a question arises as to the nature of
jurisdiction agreed to between the parties the court has to
decide the same on a true interpretation of the contract on the
facts and in the circumstances of each case.
(4) A court of natural jurisdiction will not normally grant
anti-suit injunction against a defendant before it where parties
have agreed to submit to the exclusive jurisdiction of a court
including a foreign court, a forum of their choice in regard to
the commencement or continuance of proceedings in the
court of choice, save in an exceptional case for good and
sufficient reasons, with a view to prevent injustice in
circumstances such as which permit a contracting party to be
relieved of the burden of the contract; or since the date of the
contract the circumstances or subsequent events have made it
impossible for the party seeking injunction to prosecute the
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case in the court of choice because the essence of the
jurisdiction of the court does not exist or because of a vis
major or force majeure and the like.
(5) Where parties have agreed, under a non-exclusive
jurisdiction clause, to approach a neutral foreign forum and
be governed by the law applicable to it for the resolution of
their disputes arising under the contract, ordinarily no anti-
suit injunction will be granted in regard to proceedings in
such a forum conveniens and favoured forum as it shall be
presumed that the parties have thought over their convenience
and all other relevant factors before submitting to the non-
exclusive jurisdiction of the court of their choice which
cannot be treated just as an alternative forum.
(6) A party to the contract containing jurisdiction clause
cannot normally be prevented from approaching the court of
choice of the parties as it would amount to aiding breach of
the contract; yet when one of the parties to the jurisdiction
clause approaches the court of choice in which exclusive or
non-exclusive jurisdiction is created, the proceedings in that
court cannot per se be treated as vexatious or oppressive nor
can the court be said to be forum non-conveniens.
(7) The burden of establishing that the forum of choice is
a forum non-conveniens or the proceedings therein are
oppressive or vexatious would be on the party so contending
to aver and prove the same."
25. Ultimately, in the case before it, the Supreme Court dismissed
the appeal of Modi, relying on the jurisdiction clause (albeit non-
exclusive) contained in the agreement between Modi and WSG,
conferring jurisdiction on English courts to adjudicate on disputes.
That aspect is not of particular relevance to the present case, as there
is no agreement between the plaintiffs and the defendants, on the basis
of which the issue of jurisdiction can be determined.
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Dinesh Singh Thakur v. Sonal Thakur11
26. This case involved a matrimonial dispute. The appellant before
the Supreme Court was the husband, and the respondent, the wife.
Consequent to marital relations souring, the husband filed a petition
for divorce, against the wife, before the Family Court, Gurugram.
Subsequently, the wife filed a petition for divorce, against the
husband, before the Florida District Court. The husband, thereupon,
filed a second suit before the Gurugram Court, seeking an anti-suit
injunction, restraining the wife from prosecuting her divorce petition
before the Florida Court. Ex parte ad interim injunction, in the said
terms, was initially granted by the learned District Judge, Gurugram
who, subsequently, vacated the injunction. The challenge, to the said
vacation order, by the husband, was dismissed by the High Court,
resulting in the husband approaching the Supreme Court. The
Supreme Court, therefore, delineated the only issue arising before it
for consideration as whether the husband was entitled to a decree of
anti-suit injunction against his wife.
27. The Supreme Court held, in paras 12 and 13 of the report, that
the principles governing grant of anti-suit injunction were the same as
those which apply to grant of injunction per se, but that anti-suit
injunctions were not to be readily granted, as they interfered with the
exercise of jurisdiction by a foreign court. In the facts before it, the
Supreme Court held that there was no material, on the basis of which
it could be concluded that continuation of the proceedings in the
Florida Court would result in grave injustice to either of the parties.
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In this context, the fact that the husband was residing in Florida was
also taken into account. Equally, it was held, declining injunction, as
sought by the husband, would not result in defeating the ends of
justice or perpetuating injustice. In the circumstances, the prayer for
anti-suit injunction, of the husband against the wife, was declined.
Devi Resources Ltd v. Ambo Exports Ltd12
28. This decision dealt essentially with an anti-arbitration, rather
than an anti-suit injunction, and involved facts which are vitally
different from those in the present case. Mr Banerjee, however, relies
on the following passages from the judgement, and it is difficult to
characterize the reliance as misplaced:
"55. Just as the legal trinity of justice, equity and good
conscience casts a duty on a court to see that a party before it
is not unfairly prejudiced, the principles of comity, the
respect for the sovereignty of a friendly nation and the need
for self-restraint should guide a court to issue an injunction
of such nature only in the most extreme and gross situations
and not for the mere asking. A court must be alive to the fact
that even an injunction in personam in such a situation
interferes with the functioning of a sovereign or a private
forum which may not be subject to the writ of that court. At
the same time, despite placing such an onerous burden on a
court assessing the propriety of such an injunction, the
authority of such a court, unless it is of very limited
jurisdiction, cannot be doubted, particularly if it is a High
Court in this country exercising its original civil jurisdiction.
That is not to suggest that a Civil Judge (Junior Division)
may lack the authority, it is only that such an injunction may
rarely be sought at that level.
56. The very purpose of law is to right a perceived wrong.
In course of a court righting such wrong, at times, something
more than adjudicating the immediate lis is also called for. It
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would be futile for a court to proceed steadfastly towards a
decree in a civil suit if, in the mean time, the subject-matter of
the decree is wasted or destroyed. In doing justice in
accordance with law, the court will also try and preserve the
subject-matter of the lis so that the beneficiary of the final
verdict can enjoy the fruits thereof. It is the general authority
of a sovereign forum as a court - as opposed to a private
forum or a forum of limited jurisdiction as a tribunal - that it
enjoys certain powers which are incidental to the court's
obligation to do justice. Such power inheres in a court by
virtue of the court being the face of the sovereign while
dispensing justice. Thus, despite no law providing for an anti-
suit or an anti-arbitration injunction, the general equitable
jurisdiction of granting an injunction encompasses the
authority to grant an anti-suit or anti-arbitration injunction
or even an anti-anti-suit injunction. But such an injunction is
issued only in the most extreme of cases where the refusal of
the injunction may result in palpable and gross injustice in
the meanest sense."
(Italics and underscoring supplied)
Satya v. Teja Singh7
29. The dispute, in this case, was also between a husband (the
respondent before the Supreme Court) and his wife (the appellant
before the Supreme Court). The husband, who had left for USA for
higher studies in 1959, obtained a decree of divorce, against his wife,
from a court in Nevada in December 1964. A month later, in January
1965, the wife filed an application under Section 488 of the Code of
Criminal Procedure, 1973, against her husband, for maintenance. The
husband contended that, as the marriage stood dissolved by the
divorce decree passed by the Nevada Court in December 1964, before
the institution, by his wife, of the application for maintenance, no such
application would lie. The learned Magistrate held that she was not
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bound by the divorce decree, and granted maintenance to the wife.
This decision was confirmed by the learned Additional Sessions
Judge. The High Court, however, reversed the decision, holding that,
as the husband was domiciled in Nevada, the divorce decree passed by
the Nevada Court was within jurisdiction. In this backdrop, the
Supreme Court, which was approached by the wife in further appeal,
held that the principal issue arising for consideration was the
recognition to be granted to the divorce decree of the Nevada Court.
The lis forming subject matter of controversy before the Supreme
Court was, therefore, essentially different from that before this Court.
30. The Supreme Court made, however, certain pertinent
observations, which are relevant to the case at hand. Adverting, first,
to the concept of conflict of laws, in private international law, the
Supreme Court held that it was "a truism to say that whether it is a
problem of municipal law or of conflict of laws, every case which
comes before any "must be decided in accordance with law". Even if,
in a given case containing a foreign element, the law of a foreign
country was required to be applied in a given situation, for deciding
the case, such recognition, to the law of the foreign country was
accorded, not as an act of courtesy, but on considerations of justice.
The Supreme Court held that "it (was) implicit in that process, that the
foreign law must not offend against our public policy". On the aspect
of comity, the Supreme Court entered (in para 17 of the report), the
following critical observations:
"The phrase "comity of nations" which owes its origin to the
theory of a Dutch Jurist, John Voet, has, however, been
widely criticised as "grating to the ear, when it proceeds from
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a court of justice" [De Nova, (1964) 8 American Journal of
Legal History, pp. 136, 144 citing the early American author,
Livermore]. Comity, as said by Livermore is a matter for
Sovereigns, not for Judges required to decide a case
according to the rights of parties."
In para 18 of the report, the Supreme Court went on to observe that
"no country is bound by comity to give effect in its courts to depose
laws of another country which are repugnant to its own laws and
public policy". This principle, which essentially applies to the
application of laws of one country, to persons situated in another
would, in my opinion, apply equally to the recognition required to be
accorded to the order or decree passed by a foreign court, vis-à-vis
considerations of public policy.
Enercon (India) Ltd v Enercon GmBH22
31. The issue in controversy in this case was completely alien to the
controversy before this Court in the present instance. The Supreme
Court was concerned, in this case, with the fixing of the locus of the
"seat" of arbitration between the parties, as courts having jurisdiction
over the seat of arbitration would, proprio vigore, also have
jurisdiction to oversee the arbitral proceedings.
32. The defendants, however, relying on certain observations made
by the Supreme Court, in paras 127 to 129 of the report, dealing with
the undesirability of having the same subject matter being decided by
two courts of concurrent jurisdiction. In the case before the Supreme
22
(2014) 5 SCC 1
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Court, the English High Court, having initially granted an anti-suit
injunction, injuncting the continuance of the proceedings in India,
much later vacated the injunction. I do not deem it necessary to
examine, in detail, the passages from this decision, on which the
defendants' place reliance, for the simple reason that, in the present
case, the cause canvassed by the plaintiff before this Court is
fundamentally different from the cause canvassed by the defendants
before Wuhan Court. The applicability of the decision in Enercon22
might have warranted consideration, were this Court and the Wuhan
Court, concerned with the same lis. This Court is, however, concerned
with the aspect of infringement, by the defendants, of the plaintiffs
Indian patents, whereas the Wuhan Court is not concerned with the
aspect of infringement at all. On the aspect of infringement, therefore,
there is no question of any possibility of conflicting decisions between
this Court and the Wuhan Court. The reliance, by the defendants, on
the judgement in Enercon22 has, therefore, to be characterised as
misplaced.
Foreign judgements, relied upon by the parties
IPCom v Lenovo Technology (UK)1
33. IPCom sought, in this case moved before the UK High Court,
injunction against continuance, by Lenovo, of anti-suit injunction
proceedings initiated by Lenovo against IPCom in the California
District Court. To that extent, the issue before the High Court in this
case was similar to that before me, the only difference being that
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injunction in respect of the anti-suit injunction proceedings pending
before the foreign court was in that case, sought while the anti-suit
injunction application was pending, whereas, in the present case, the
anti-suit injunction application has proceeded to judgement, and
injunction, against enforcement thereof, is sought.
34. IPCom was the proprietor of EP 268, a European Patent, which
was an SEP. IPCom alleged infringement, of said European Patent,
by certain Lenovo companies based in the UK ("the UK Companies",
in short). IPCom offered to license the use of its patent to Lenovo on
terms which, according to it, were FRAND, but Lenovo was,
according to IPCom, "holding out", meaning that it was merely
protracting the exercise, without either accepting or rejecting the offer
categorically. In March 2019, IPCom made a final offer, indicating
that, if the offer was not accepted by Lenovo by 15th March, 2019,
IPCom would seek injunction. A day earlier, i.e. on 14th March, 2019,
the US Companies of the Lenovo group filed proceedings, before the
California District Court, against IPCom, seeking fixation of a global
FRAND rate for IPCom's patent portfolio. IPCom filed its
infringement proceedings, in the Patent Court in the UK on 2nd July,
2019. On 18th September, 2019, Lenovo filed an application, in the
US proceedings, seeking an anti-suit injunction, restraining IPCom
from proceeding to prosecute its infringement proceedings anywhere
outside the US, which included the UK Patents Court. IPCom
retaliated, by moving an application before the UK Patents Court on
25th October, 2019, seeking a prohibition against Lenovo from
prosecuting "any application before any court which seeks directly or
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indirectly to prevent (the High Court) from making directions for the
conduct of these proceedings, or any order in relation to the UK
claim", or prevent IPCom from pursuing the UK claim to trial.
35. The High Court held, at the outset, that its jurisdiction, to grant
an anti-anti-suit injunction, was not disputed, and that the principles of
law, governing grant of anti-anti-suit injunctions were broadly the
same as those which apply to grant of an anti-suit injunction. The
Court, thereafter, went on to dilate on the principles for grant of anti-
suit injunction, and also observed that "the less that an anti-anti-suit
injunction granted in England would interfere with the foreign
proceedings to which it (was) directed, the more likely it (was) that
the court (would) exercise its discretion to grant such an injunction".
The following observations, in paras 45 and 46 of the decision of the
High Court, are of seminal importance in the present case, as they
underscore the difference in the proceedings before the High Court
and the California District Court, to dispel the notion that grant of
anti-anti-suit injunction, in the form of proceedings would impede or
inhibit the latter:
"45. In resolving this matter, I think it is important to keep
in mind the relief that IPCom is seeking. Often an anti-suit
injunction (or an anti-anti-suit injunction) would affect the
entirety of the proceedings brought or contemplated in
another jurisdiction. In the present instance that would not be
the case if I were to make the order sought.
46. The substantive action before the US Court has been
brought by US Companies and it concerns only the settlement
of a global FRAND license and 2 US patents. It does not
directly concern the issues in the present action, namely the
infringement and validity of the UK designation of EP `268."
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(Emphasis supplied)
36. Equally seminal is para 48 of the decision, which emphasises
the position that the relief sought in the High Court - for injunction
against infringement of EP `268 - could not be sought before any
other forum, and certainly not before the California District Court:
"The application before me is directed at the substantive
question of which Court should [determine] the issues of
infringement and validity of EP 268. The first matter I must
consider is whether England is clearly the more appropriate
forum in which to decide those issues. Very clearly, it is. The
grant of patent is an act which can be performed only by a
state. Therefore the validity of a patent is an issue reserved
for the course of the granting state, at least in Europe... It
would surprise me to learn that the rules of jurisdiction
applicable in the US court would allow that court to decide
whether EP 268 is validly registered in the UK."
(Emphasis supplied)
37. Paras 50 and 51 went on to elucidate why, in the opinion of the
UK Patents Court, allowing the anti-suit injunction application,
preferred before the California District Court, to continue to be
prosecuted by Lenovo, would be oppressive and vexatious to IPCom
in the UK, thus:
"51. The only realistic means a patentee of the standard
essential patent has to move things forward is to bring an
action for infringement. That is what IPCom has done in this
Court in relation to EP 268. If the present action were to be
brought to a halt, that means of bringing pressure would
vanish altogether. Other potential advantages to IPCom of
this action, referred to by Mr. Vanhegan, would also fall
away.
52. I take the view that it would be vexatious and
oppressive to IPCom if it were deprived entirely of its right to
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litigate infringement and validity of EP `268 and thereby be
deprived of those advantages."
(Emphasis supplied)
38. The judgement concludes by observing that the fact of prior
institution of the California proceedings was immaterial, and that
grant of anti-anti-suit injunction, as sought, would not interfere with
the principal of comity, as "it would in no way interfere with the bulk
of the issues before the US Court".
Lenovo (United States) v. IPCom2
39. This was a decision of the Court of Appeal in Paris ("the Paris
Court", in short), again emanating from the anti-suit injunction
application filed by Lenovo before the California District Court supra.
The relief granted by the Paris Court to IPCom was more drastic than
that granted by the UK High Court. Observing that "IPCom was
likely to see itself prohibited by the Californian judge, with regard to
the faculty offered by its law, to initiate and/or to pursue any action
for patent infringement against the companies of Lenovo group and/or
their customers to protect the French part of the EP `268 patent, that it
owns and particularly before the French courts", the Paris Court of
Appeal characterised "such an impediment (as) a manifestly unlawful
disturbance as long as it infringes the right for the holder of an
industrial patent to access the only judge competent to rule on the
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infringement of its title", disregarding all statutory provisions,
entitling the patent holder to so agitate.23
40. Lenovo sought to contend, before the Paris Court of Appeal -
as have the defendants sought to contend before me - that the anti-suit
injunction, as sought by Lenovo from the California District Court
was only temporary, for the duration of the proceedings before the
Californian Court. This contention was summarily dismissed, by the
Paris Court of Appeal, thus:
"58. If the Lenovo companies maintained that this
prohibiting measure is only temporary and only lasts for the
time of the proceedings before the American judge, such a
stay, having regard to the duration thereof which might take
several years, but also of its uncertain outcome, compared to
the limited duration of protection granted to the owner of a
patent, which in this case expired on February 15, 2020,
amounts to a concrete deprivation of the right for its holder
to avail and protect his industrial property title before its
expiration, knowing that it is not disputed that the Californian
judge is not seized and could not in any event rule on such an
action for infringement which is of the exclusive jurisdiction
of the Paris Court of First Instance."
23
As cited by the Paris Court of Appeal,
(i) Article L. 611-1 of the Intellectual Property Code according to which "any invention may
be the subject of an industrial property title issued by the Director of the National Institute of
industrial property which confers on its owner or his successors in title and exclusive right of
exploitation",
(ii) Article L. 615-1 of the Intellectual Property Code which provided that "any infringement
of the rights of the owner of the patent, as defined in Articles L. 613-3 to L. 613-6 constitutes an
infringement",
(iii) Article 1 of Protocol 1 of the European Convention on Human Rights, according to which
"every natural or legal person is entitled to the peaceful enjoyment of his possessions" and not to be
deprived thereof "except in the public interest and subject to the conditions provided for by law and
by the general principles of international law",
(iv) Article 17 of the Charter of Fundamental Rights of the European Union which expressly
included intellectual property in this protection and
(v) Articles 6 § 1 and 13 of the European Convention on Human Rights, which provided to
"everyone" "the right... To have their case heard fairly, publicly and within a reasonable time by an
independent and impartial tribunal, and to the right to an effective remedy before a national
authority".
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59. Thus, the only appropriate way to put an end to the
manifestly unlawful disturbance was indeed to order the
Lenovo companies to withdraw under penalty the "anti-suit"
motion filed before the Californian judge, being moreover
observed that it in no way prejudices the continuation of the
lawsuit initiated by the Lenovo companies before the
Californian court, the subject of which is distinct since it does
not relate to the infringement of the patented dispute and that
the outcome of the infringement action in France is not
without interest for the Californian judge, supposing that he
recognises himself finally competent to rule on the
responsibility of IPCom and the fixing of a FRAND license."
41. The Paris Court of Appeal went on, after observing that the
application, of Lenovo, before the California District Court, for anti-
suit injunction "characterises the manifestly unlawful disturbance... in
view of the disturbance it generates by infringing a fundamental
right", to direct Lenovo "to withdraw under penalty" the anti-suit
injunction application.
SAS Institute Inc6
42. The facts, in this case, were somewhat involved, but it is
necessary to refer to them. SAS, based in North Carolina, developed
the software known as the SAS System. This software enabled users
to write and run applications in a language known as the SAS
Language. World Programming Ltd (WPL) created a product known
as the World Programming System (WPS). The WPS emulated the
SAS System as closely as possible, so that programs, of the customers
of WPS, could be executed, when run on WPS, as on the SAS System.
For this purpose WPL took a license of the SAS Learning Edition
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from SAS. The terms of the license prohibited the use of the software
to produce a competing product. Violating this, WPL sought to
replicate the functionality of the SAS System in its own WPS
Software.
43. SAS sued WPL in England, alleging copyright infringement and
breach of contract. The claims were rejected by a single Judge, on the
ground that the terms of the license granted by SAS to WPL, for the
SAS Learning Edition were null and void. SAS's appeal, against this
decision, was also dismissed. These proceedings have been referred
to, in the judgement of the Court of Appeal, as "the English
proceedings".
44. SAS also sued WPL, alleging, inter alia, copyright infringement
and breach of contract, in a North Carolina court. The North Carolina
court allowed SAS's claim of breach of contract, but dismissed its
claim of copyright infringement. An additional claim, by SAS against
WPL, on the ground of fraud in failing to abide by the license terms
despite representation to the contrary, was also allowed. Successive
appeals, preferred by WPL, were dismissed by the first appellate court
and, thereafter, by the Supreme Court. SAS moved the English court,
for enforcement of the judgement of the North Carolina court, to the
extent of damages granted on the ground of fraud and under the North
Carolina Unfair and Deceptive Trade Practices Act (UDTPA), to the
tune of US $ 26 million. The claim for enforcement was dismissed by
a learned Judge on 13th December, 2018, on various grounds.
Permission to appeal, thereagainst, was also declined. SAS, therefore,
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became disentitled to recognition or enforcement of the North
Carolina judgement in the English court.
45. SAS, thereafter, filed a Writ of Execution against WPL, for
enforcement of the North Carolina judgement in the Central District of
California. Californian law provided for enforcement by orders for
assignment and turnover. Assignment implied requiring the
judgement debtor to assign, to the decree holder, specified assets, and
turnover orders directed the judgement debtor to transfer, to the
levying officer, who was a United States Marshal, specified assets.
The first application of SAS, for execution, was directed only at
receivables from WPL customers in the US. However, in the
pleadings, SAS indicated that it was reserving its rights to amend the
assignment order, once SAS obtained information regarding WPL
sales outside the US of which, too, submitted SAS, the California
Court could order assignment. WPL moved an anti-suit injunction
application before the English court, for restraining SAS from seeking
assignment orders regarding customers and receivables of WPL in
England. The anti-suit injunction application was dismissed on the
ground that no order, containing any such direction, had been passed
by any court in the US.
46. Yet another application for assignment was filed by SAS before
the California court on 18th June, 2018. The California court indicated
its intention to pass an Assignment Order and a Turnover Order, as
sought by SAS. The Assignment Order was to require WPL to assign,
to SAS, all rights to payment due or to become due from companies
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identified on SAS's Customer List, the satisfaction of the judgement
passed by the North Carolina Court for a total of US $ 79,129,905.00,
and the Turnover Order was to require WPL to transfer, to the US
Marshal, all receivables arising from business conducted between
WPL and its customers. It was an admitted position that there was a
substantial risk that the California Court would pass these orders.
47. WPL applied, in the English Court, for an interim anti-suit
injunction. On 21st December, 2018, a learned Judge of the English
Court (Knowles, J.) granted injunction as sought, prohibiting SAS
from taking steps to seek either of the aforesaid proposed orders or
any similar relief from any court in the US, and, additionally,
prohibiting SAS from taking any step before any US court to restrain
the anti-suit injunction application filed by WPL in the English Court.
48. In March 2019, the North Carolina court passed an order in
favour of SAS, preventing WPL from licensing WPS to new
customers in the US, till the judgement for US $ 79 million was
satisfied. An appeal, preferred thereagainst, by WPL, was dismissed
by the Court of Appeal. Critical comments were entered, in the said
decision, on the English Court undermining the finality of the
judgement of the California court.
49. By order dated 27th September, 2019, another learned Judge of
the English Court (Cockerill, J.) refused to continue the interim anti-
suit injunction granted by Knowles, J. on 21st December, 2018. WPL
appealed, against the said decision, to the Court of Appeal.
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50. The Court of Appeal noted, at the outset, that the Assignment
and Turnover Orders, if made by the California Court, would require
WPL to assign, to SAS, debts due from customers situated in UK and
that the Turnover Order, if made, would require WPL to transfer, to
the US Marshal, debts due from banks situated in the jurisdiction of
the English Court. Conversely, however, it was also noted that the
interim anti-suit injunction granted by Knowles, J. resulted in
preventing SAS from seeking assignment of debts due from US
customers, situated in the US, from the California Court. The Court of
Appeal noted, relying on the judgement of the House of Lords in
Societe Eram Shipping Co. Ltd v. Cie Internationale de
Navigation24, that it was not open to a court in one sovereign state to,
for the purposes of execution of its judgement, proceed against assets
situated within the jurisdiction of another sovereign state or compel
the parties before it to do acts against such assets. The following
exhortation, in more empirical terms, is to be found in para 71 of the
judgement:
"It is important also that these principles are recognised
internationally. Lord Hoffman referred to a "general
principle of international law that one sovereign state should
not trespass on the authority of another." Lord Millett
described the exercise of an exorbitant enforcement
jurisdiction as contrary to generally accepted norms of
international law".
(Emphasis supplied)
Having said that, it must be noted that the Court of Appeal was
returning these observations in the context of Mareva injunctions,
24
(2004) 1 AC 260 (HL)
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against assets situated within the territory of another sovereign state.
No such specific situation obtains in the case before me.
51. While it was necessary to provide the aforesaid factual
backdrop, in order to appreciate the ultimate decision of the Court of
Appeal, what is of particular significance is the view of the Court on
the aspect of anti-enforcement injunctions, as this Court is also, in the
present case, seized with one such situation. Paras 92 and 93 of the
judgement of the Court of Appeal observed thus:
"92. Before I do so, I need to refer to the cases dealing with
anti-enforcement injunctions. These are cases where the
foreign proceedings have proceeded as far as judgement and
the unsuccessful defendant seeks an injunction from the
English court to restrain the successful claimant from
enforcing the judgement. Ms Carss-Frisk submitted that such
injunctions may only be granted in exceptional cases,
supporting the judges approach that, in general, it would be
necessary for an applicant to show conduct akin to fraud or, at
any rate, of similar gravity. Mr Raphael acknowledged that
such injunctions would be rare, but submitted that
exceptionality was not a distinct jurisdictional requirement.
93. In my judgement there is no distinct jurisdictional
requirement that an anti-enforcement injunctions will only be
granted in an exceptional case. Such injunctions will only
rarely be granted, but that is because it is only in a rare case
that the conditions for the grant of an anti-suit injunction will
be met and not because there is an additional requirement of
exceptionality. That accords, in my judgement, with the
approach of Lawrence Collins LJ in Masri v. Consolidated
Contractors International (UK) Ltd (No. 3) [2008] EWCA
Civ 625, [2009] QB 503 at [94], where he commented that
such injunctions would only be granted in rare cases, or in
exceptional circumstances, but did not identify this as a
distinct jurisdictional requirement. In any event,
exceptionality would be a vague and somewhat elastic
criterion and (if it matters) it is hard to see why this case,
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with its complex procedural history, should not be regarded
as exceptional."
(Emphasis supplied)
Thus did the Court of Appeal demystify the concept of an anti-
enforcement injunctions and the theory that such an injunction
followed only in "exceptional" cases. I find myself entirely in
agreement with the observation that "exceptionality would be a vague
and somewhat elastic criterion". Categorising the instance as, in
which a particular jurisdiction is to be exercised as "exceptional" or
"rare", without - as is most often the case - spelling out or delineating
the "exceptional" or "rare" circumstances, in my opinion, introduces
uncertainty in the law, and leaves the room open for arbitrary exercise
of discretion. There are, of course, circumstances which justify such
categorisation; awarding of the death sentence being, in the Indian
legal system, being the instance which comes most readily to mind.
Conferment of judicial discretion is, at times, both inevitable and
necessary; these times, however, in my view, must be select and far
between.
52. Having thus impliedly disapproved the principle that anti-
enforcement injunctions could be granted only in "exceptional" cases,
the Court of Appeal went on to reproduce the following passages,
from Ecobank Transnational Inc v. Tanoh25, which are significant,
given the controversy before me:
"118. In short, the cases in which the English courts have
granted anti-enforcement injunctions are few and far between.
Of the two examples to which we were referred, one was
25
(2016) 1 WLR 2231
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based on the fraud of the respondent and the other involved
an attempt to execute the judgement when, after it had been
obtained, the respondent had promised not to do so. Knowles
J suggested another circumstance where an injunction might
be granted, namely where the judgement was obtained too
quickly or to secretly to enable an anti-suit injunction to be
obtained, a circumstance far removed from this case. No
example has been cited to us of a case where an anti-
enforcement injunction has been granted simply on the basis
that the proceedings sought to be restrained were commenced
in breach of an exclusive jurisdiction or arbitration clause.
119. This dearth of examples is not surprising. If, as has
been heretofore been thought to be the case, an applicant for
anti-suit relief needs to have acted promptly, an applicant
who does not apply for an injunction until after judgement is
given in the foreign proceedings is not likely to succeed. But
he may succeed if, for instance, the respondent has acted
fraudulently, or if he could not have sought relief before the
judgement was given either because the relevant agreement
was reached post judgement or because he had no means of
knowing that the judgement was being sought until it was
served on him. That is not this case."
(Emphasis supplied)
53. The Court of Appeal went on to make certain telling
observations on the concept of comity, which remains a tantalisingly
elusive concept, especially in the context of anti-suit injunctions.
Many and varied have been the shades of judicial opinion, on the
comity concept, and paras 100 to 112 of the judgement in SAS
Institute6 provide a valuable addition thereto. The relevant portions
thereof merit reproduction, thus:
"100. Comity is undoubtedly an important consideration in
this case ...
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101. ... To grant an injunction which will interfere, even
indirectly, with the process of a foreign court is therefore a
strong step for which a clear justification must be required.
*****
103. When an anti-suit injunction is sought on grounds
which do not involve the breach of contract, comity, telling
against interference with the process of a foreign court, will
always require careful consideration. The mere fact that
things are done differently elsewhere does not begin to justify
an injunction. It is evident in the present case that the anti-
suit injunction granted by Robin Knowles J is viewed by the
United States courts as an unwelcome interference with the
process. That is inevitably a cause for concern and regret.
However, as Toulson LJ's summary explains, comity will be
of less weight by the order made or proposed to be made by
the foreign court involves a breach of customary
international law.
*****
108. Third, comity requires that in order for an anti-suit
injunction to be granted, the English court must have a
"sufficient interest" in the matter in question. As Lord Goff
explained in Airbus26 at 138 G-H:
"As a general rule, before an anti-suit injunction can
properly be granted by English court to restrain a
person from pursuing proceedings in a foreign
jurisdiction in cases of the kind under consideration in
the present case, comity requires that the English
forum should have a sufficient interest in, or
connection with, the matter in question to justify the
indirect interference with the foreign court which an
anti-suit injunction entails."
109. Often that sufficient interest will exist by reason of the
fact that the English court is the natural forum for
determination of the parties dispute. But as Lord Goff was
careful to emphasise at 140 B-D, this is only a general rule,
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which must not be interpreted too rigidly. In a case where the
injunction is sought in order to protect the jurisdiction of the
process of the English courts, the existence of a sufficient
interest will generally be self-evident. Indeed, the need to
protect the jurisdiction of the court has been described as "the
golden thread". In Masri (No. 3)27 at [86] Lawrence Collins
LJ said this:
"In Bank of Tokyo Ltd v. Karoon (Note) (1987) TC
45, 58, Robert Goff LJ referred to Judge Wilkey's
statement in Laker Airways Ltd v. Sabena Belgian
World Airlines (1984) 731 F 2d 909, 926-927 that
anti-suit injunctions were most often necessary (a) to
protect the jurisdiction of the adjoining court, or (b) to
prevent the litigant's evasion of the important public
policies of the forum, and concluded (1987) AC 45, 60:
'without attempting to cut down the breadth of
the jurisdiction, the golden thread running
through the rare cases where an injunction has
been granted appears to have been the
protection of the jurisdiction; and injunction
has been granted where it was considered
necessary and proper for the protection of the
exercise of the jurisdiction of the English
court.'"
111. Fourth, however, comity is a two-way street, requiring
mutual respect between courts in different states. This need
for mutual respect means that comity requires recognition of
the territorial limits of each court's enforcement jurisdiction,
in accordance with generally accepted principles of
customary international law , which I have already described.
Lord Bingham explained this in Societe Eram26 at [26]:
"If (contrary to my opinion) the English court had
jurisdiction to make an order in a case such as the
present, the objections to its exercising a discretion to
do so would be very strong on grounds of principle,
comity and convenience: it is ... inconsistent with the
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comity owed to the Hong Kong court to purport to
interfere with assets subject to its local jurisdiction..."
112. Just as it is inconsistent with comity for the English
court to purport to interfere with assets subject to the local
jurisdiction of another court, so it is inconsistent with comity
for another court to purport to interfere with assets situated
here which are subject to the jurisdiction of the English
court."
(Emphasis supplied)
54. The Court of Appeal went on, thereafter, to apply the
principles, enunciated by it, to the facts. At the outset, the Court of
Appeal held that there was no justification for grant of any anti-suit
injunction, preventing SAS from enforcing the judgement of the North
Carolina court against the assets of WPL situated in the US. On the
issue of grant of anti-suit injunction, in respect of any order or
prospective order relating to assets of WPL situated in the UK, i.e.
debts from UK customers, paras 124 and 125 of the judgement of the
Court of Appeal are of considerable significance:
"124. Debts due from United Kingdom customers are
situated in this jurisdiction. Accordingly, as I have explained,
for SAS to seek an order for the assignment of such debts in
circumstances where the North Carolina judgement will not
be recognised or enforced in this jurisdiction would be
exorbitant interference with the jurisdiction of the English
court, in the light of the internationally recognised principles
for the territorial allocation of enforcement jurisdiction
which I have described. For that reason such an order could
also be characterised as vexatious. If necessary, therefore, I
would conclude that the criteria for an anti-suit injunction to
restrain SAS from seeking such an order are satisfied. Such
an injunction would be necessary to protect the territorial
enforcement jurisdiction of the English court.
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125. It would remain to consider whether such an injunction
should be refused as a matter of discretion, having regard to
issues of comity, delay and submission. Of these, comity
would present the most serious obstacle but, for the reasons I
have explained, would not in my judgement prevent the grant
of injunction. It is notable that SAS has not so far sought, and
the United States courts have not indicated that they would be
prepared to grant, an Assignment Order extending to debts
due from WPL customers in the United Kingdom. It may be
that this forbearance involves some recognition of the
exorbitant effect of such an order and the proper role of the
English court in relation to such debts. Whether or not that is
so, such an order would be exorbitant in the sense that I have
described, which means that relatively little, if any, weight
should be given to comity as a factor telling against the grant
of an injunction. While it would be a matter of regret to grant
an injunction which would risk causing offence to a United
States court, it would in my judgement be our duty to do so."
55. In conclusion, the Court of Appeal injuncted SAS from seeking
an Assignment Order, or a Turnover Order, relating to debts, or funds
held in banks, in the UK.
Conversant v. Huawei3, Huawei v. Conversant4 and Unwired Planet
International5
56. These were successive appeals, with Conversant v. Huawei3
being decided by the UK Patents Court, Huawei v. Conversant4 being
decided by the Court of Appeal and Unwired Planet International5
by the UK Supreme Court. On the aspect of forum conveniens,
however, all three decisions were ad idem.
57. Conversant Wireless Licensing SARL ("Conversant", in short)
commenced proceedings against Huawei and ZTE in England in July
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2017, seeking a declaration that the global license at which it was
offering its SEPs to Huawei and ZTE was on FRAND terms and, in
the alternative, seeking determination of FRAND terms.
Additionally, injunctions, against UK patents of Conversant being
exploited by Huawei and ZTE, pending determination of FRAND
terms, were also sought. Huawei and ZTE challenged the jurisdiction
of the English courts to determine these issues raising, inter alia, the
ground of forum non conveniens. Henry Carr J. rejected the
jurisdiction challenge raised by Huawei and ZTE. The following
paras, from the opinion of Carr J, are relevant:
"65. In my judgment, the characterisation of these claims as
foreign portfolio infringement claims, or worldwide royalty
claims, is inaccurate. They are claims for infringement of
four United Kingdom patents, and the English court is clearly
the appropriate forum in which these cases should be tried....
66. The fact that these are claims for infringement of UK
patents is a matter of substance, not form. Of course, the
object of the proceedings is to obtain the relief sought in the
claim form, in these cases either a global FRAND license or a
FRAND injunction, but this does not differentiate these
proceedings from other cases before the English court; the
reliefs sought is generally the object of the proceedings.
*****
68. I agree with Birss J that there is no such thing as a
portfolio right. That mischaracterises the claim, as it is not
the cause of action suit upon. These claims are concerned
with infringement of UK patents, and the relief that should be
granted if infringement is established. If one or more of the
four patents in suit is held to be valid and infringed, then the
Court will consider what relief should be granted.
Conversant says that it is willing to grant a license on
FRAND terms and (subject to some equivocation) the
Defendants say that they are willing to take a license on
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FRAND terms. There is a dispute between the parties as to
whether a global license would be FRAND.
69. ...Whether such relief should be granted in the present
case will be a matter for the FRAND trial, if liability is
established. If these claims were stayed on the basis of forum
non conveniens, then the consequence would be that the
English court could not decide upon infringement of UK
patents, and could not decide what relief it would be
appropriate to grant where such patents are infringed. That,
in my judgment, would not be in the interests of all the parties
and the ends of justice."
(Emphasis supplied)
58. The Court of Appeal, in the appeal against this decision,
observed thus, towards the commencement of its discussion:
"97. It is clear that one may get different answers to the
forum conveniens questions depending on the level of
generality at which one characterises the dispute. It is
possible to define the dispute both in a way which is too
specific and in a way which is too general. Thus, to define a
dispute in a way which focuses on the relief which would be
granted in the English court was to define it too specifically.
On the other hand, to define the dispute in so general a way
that the claimant is left to pursue a claim based on a different
property right and different underlying facts in the foreign
forum is, in my judgment, likely to define it too broadly."
59. Regarding the nature of the lis, it was, thereafter, observed as
under [in para 98(v)]:
"Where a SEP owner brings proceedings for infringement
against an implementer in one jurisdiction in respect of the
SEPs which it owns there and makes good its case, two
outcomes might follow. First, if the evidence establishes that
a willing licensor and a willing licensee in the position of the
parties would agree a FRAND license in respect of that
jurisdiction but the SEP owner refuses to offer it such a
license no injunction should be granted. If on the other hand,
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the implementer refuses to enter into the FRAND license for
that jurisdiction that the SEP owner can properly seek an
injunction to restrain further infringement there. Secondly,
however, if the evidence establishes that a willing licensor
and a willing licensee in the position of the parties would
agree a global FRAND license, that such a license would
conform to industry practice and that it would not be
discriminatory but the SEP owner refuses to grant such a
license to the implementer then once again it should be
denied an injunction. If on the other hand, the implementer
were to refuse to enter into such a license then the SEP owner
should be entitled to an injunction in that jurisdiction to
restrain infringement of the particular SEPs in issue in those
proceedings."
60. Thereafter, expressing its agreement with the view of Carr J.,
the Court of Appeal went on to hold thus:
"104. If one characterises the case in the way in which the
judge characterised it, with which I agree, then it seems to me
that the forum conveniens question answers itself. The fact
that the dispute concerns UK patents is a matter of substance
and not a form. Resolution of the dispute will involve
determining infringement, essentiality and validity of UK
patents. A UK forum is clearly the most appropriate forum,
indeed the only possible forum, for this dispute to be tried.
The further evidence of Chinese law, if admitted, could not
influence this outcome. Even taken at its highest it does not
suggest that the Chinese court could inquire into the validity
of UK patents.
*****
110. The fallback positions advanced by the appellants are
not, to my mind, properly applications of the forum non
conveniens principal at all. As the analysis in Unwired CA28
shows, consideration of the offers made by the parties against
the FRAND criterion is an embedded part of the
determination of whether Conversant is entitled to relief for
infringement of their UK SEPs. Whether one views
Unwired Planet International Ltd v. Huawei Technologies Co Ltd, (2018) EWCA Civ 2344
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consideration of these offers as a precondition for liability or
relief, or part of the defence which the appellants will offer to
the claim, it is not a claim which is capable of being treated
separately for forum conveniens purposes."
(Italics and underscoring supplied)
61. The matter travelled up to the UK Supreme Court. For the
purposes of the present dispute, paras 95 and 96 of the opinion of the
Supreme Court alone merit reproduction, thus:
"95. The question how the dispute should be defined has
been the main bone of contention between the parties, both in
this court and in the courts below. Is it, as the appellants say,
in substance a dispute about the terms of a global FRAND
license, or is it, as the respondent maintains, both in form and
in substance about the vindication of the rights inherent in
English patents, and therefore about their validity and
infringement, with FRAND issues arising only as an aspect of
the alleged contractual defence? Thus far the respondent has
had the better of that argument, both before the judge and the
Court of Appeal. At the heart of the analysis which has thus
far prevailed is the recognition that the owner of a portfolio of
patents granted by different countries is in principle entitled
to decide which patents (and therefore in which country or
countries) to seek to enforce, and cannot be compelled to
enforce patents in the portfolio granted by other countries
merely because a common FRAND defence to the
enforcement of any of them raises issues which might more
conveniently be determined in another jurisdiction than that
which exclusively regulated the enforcement of the chosen
patents.
96. Were it necessary to choose between the rival
characterisations of the substance of the dispute, we would
have agreed with the choice made by the courts below. But
we think, like the judge, that there is a compelling reason why
the appellants must fail on this issue which would apply even
if the appellants' characterisation had been correct, so that the
dispute was in substance about the terms of a global FRAND
license. A challenge to jurisdiction on forum conveniens
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grounds requires the challenger to identify some other forum
which does have jurisdiction to determine the dispute. Even
in a case where permission is required to serve out of the
jurisdiction, so that the burden then shifts to the claimant to
show that England is the more appropriate forum, that still
requires there to be another candidate with the requisite
jurisdiction. In the present case, China is the only candidate
which the appellants have put forward."
(Emphasis supplied)
62. Thus, in these paras, the UK Supreme Court emphasized two
important principles, viz. that
(i) the holder of the SEPs was entitled to sue for
infringement of the SEPs in the country where the SEPs were
granted, even if fixation of a global FRAND rate was one of the
issues which would arise for consideration in that case, and that
exercise could more conveniently be undertaken by the court in
another country, as the dispute raised by the SEP holder was
essentially of infringement of the patents, and not fixation of
the terms of a global FRAND license, and
(ii) a challenge to jurisdiction on the ground of forum
conveniens could succeed only if the challenger were to cite
another forum which would be more convenient for the lis to be
adjudicated.
Ecobank Transnational Inc25
63. Mr. Kaul referred me to various paras of the decision of the UK
Court of Appeal in Ecobank Transnational Inc25. I do not deem it
necessary to refer to the said paras in detail, primarily because they
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essentially emphasize the exceptional nature of anti-enforcement
injunctions, regarding which Mr. Banerjee, too, does not seriously
join issue - though, he would submit, anti-enforcement jurisdiction is
not as exceptional as Mr. Kaul would seek to make it out to be. It is
not necessary to refer in detail to these paras, because, after entering
the aforesaid cautionary note, the Court of Appeal returned the
findings reproduced in para 118 (supra), in which they set out the
circumstances in which anti-enforcement injunction could be granted,
and on which Mr. Banerjee places reliance.
Sun Travels & Tours Pvt Ltd v. Hilton International Manage
(Maldives) Pvt Ltd29
64. This was a decision of the Singapore Court of Appeal. Mr.
Kaul places reliance thereon, and has invited my attention to paras 3,
37, 43(b) and (c), 50, 58, 59, 62, 65, 66, 68, 69, 89, 90, 97, 98, 99,
101, 105, 107, 108, 110 and 114 of the judgment.
65. A dispute, between Sun Travels & Tours Pvt. Ltd. ("Sun", in
short) and Hilton International Manage (Maldives) Pvt. Ltd.
("Hilton", in short), was referred to arbitration, resulting in two
awards, both in favour of Hilton. Hilton sought to enforce the awards
in the Maldives. Sun sued Hilton, in the Maldives Court, re-agitating
issues already decided in the arbitral proceedings. The Maldivian
court passed the judgment in favour of Sun, whereunder substantial
damages were awarded to Sun, totally contrary to the awards
(2019) SGCA 10
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consequent on the arbitral proceedings. Hilton's application for
enforcement of the awards was rejected by the Maldivian court, in
view of the aforesaid judgment, passed by it in favour of Sun. Hilton,
thereupon, applied, to the Singapore High Court, for an anti-suit
injunction against Sun. While holding that the proceedings had
travelled beyond the stage in which an anti-suit injunction could be
granted, the High Court, nevertheless, granted an anti-enforcement
injunction against Sun, preventing it from relying on the Maldivian
judgment. Sun appealed to the Singapore Court of Appeal, resulting in
the judgment under discussion.
66. Para 37 of the judgment of the Court of Appeal sets out the
prayers contained in the anti-suit injunction application preferred by
Hilton. Para 43 enumerates the reasons for the judgment of the High
Court. Paras 58 to 63 set out the submissions of learned Counsel for
the parties. Interestingly, para 58 reveals that Hilton had actually
participated in the Maldivian proceedings, which proceeded to the
judgment of which Hilton now sought injunction from the Singapore
High Court. Paras 64 to 68 set out the grounds on which anti-suit
injunction could be granted. Inasmuch as the Supreme Court of India,
as well as various High Courts, have elucidated the law, as applicable
in this country with respect to anti-suit injunctions, with sufficient
clarity, it is hardly necessary to refer to the principles contained in
these paras. Suffice it to state that a reading of paras 64 to 68 reveals
that there is no real difference in the law relating to grant of anti-suit
injunctions as it is applied in Singapore, vis-à-vis the law as it applies
in India. Para 69 cautioned that, even though anti-suit injunctions are
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operate in personam, they nevertheless indirectly interfere with
foreign proceedings, which was inconsistent with normal relations
between friendly sovereign states. For this reason, anti-suit
injunctions, it was advised, were to be granted with caution. Again,
on this principle, there can be no two views.
67. Paras 89 and 90 recognised the difference between anti-
enforcement injunctions and anti-suit injunctions, and opined that the
degree of caution, while considering a prayer for anti-enforcement
injunction, was required to be greater than when considering a prayer
for anti-suit injunction, "because of the way they interfere with
foreign proceedings". Paras 97 and 98 referred to the principles in
Ecobank Transnational Inc25. Thereafter, the Court of Appeal noted
thus:
"Notably, because an anti-enforcement injunction proscribes
the enforcement of foreign judgment on pain of contempt
proceedings in the jurisdiction where the injunction is
granted, granting an anti-enforcement injunction is
comparable to nullifying the foreign judgment or stripping the
judgment of any legal effect when only the foreign court can
set aside or vary its own judgments."
(Emphasis in original)
68. Para 101 noted the circumstances, enumerated in Ecobank
Transnational Inc25, in which anti-enforcement injunction could be
granted. Para 105 considered the circumstances of fraud and lack of
knowledge of the foreign proceedings until the delivery of the foreign
court judgment, but did not dilate thereon. Para 108 considered the
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impact of delay on a prayer for anti-suit or anti-enforcement
injunction, and para 110 proceeded to observe thus:
"In our judgment, this explains why a case where the
applicant had no means of knowing that the judgment was
being sought until it was delivered constitutes an exceptional
situation where an anti-enforcement injunction may
nevertheless be granted. Without knowledge, they can be no
dilatoriness that would make the applicant's conduct in
equitable or unconscionable."
Finally, para 114 of the judgment sets out the following three
principles, on the aspect of grant of anti-suit and anti-enforcement
injunctions:
"(a) First, we stress again the importance of comity, and
that comity considerations may potentially apply even in
cases where anti-suit relief is sought for a breach of the
arbitration or exclusive jurisdiction clause, particularly where
there has been delay in seeking relief.
(b) Where there has been extensive delay, the foreign
court would have expended vast amounts of judicial time and
costs, and respect for the operations of foreign legal systems
entails caution in exercising the jurisdiction to enjoin a party
from relying on the foreign court's decision.
(c) This consideration is amplified when an anti-
enforcement injunction is sought after issuance of a court
judgment and such injunctions should generally be refused;
not least for want of sufficient promptitude. Further, two
additional considerations come into the picture: first, such an
injunction would preclude other foreign courts from
considering whether the judgment in question should be
recognised and enforced; and secondly, it would be an
indirect interference with the execution of the judgment in the
jurisdiction where the judgment was given and where the
judgment can be expected to be obeyed.
(d) There is, therefore, an additional requirement to show
that there are exceptional circumstances that warrant the
exercise of the court's jurisdiction. Such recognised
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exceptions include cases of fraud and cases where the
applicant had no knowledge that the judgment was being
sought until after the judgment was rendered. In respect of
these exceptions, the equities of the case lie in favour of
granting the anti-enforcement injunction."
(Italics and underscoring supplied)
Microsoft Corp. v Motorola Inc.30
69. Mr. Kaul places considerable reliance on this decision, of the
United States Court of Appeals.
70. In October 2010, Motorola sent letters to Microsoft, offering to
license, inter alia, various SEPs, of which Motorola claimed
ownership, and which were essential to the H. 264 standard. This list
included, apart from US patents, patents granted or filed in other
jurisdictions including Australia, Canada, China, France, Germany
and Great Britain. German patents EP 667 and EP 384, US patents
US 374, US 375 and US 376 were included therein. Microsoft
responded by filing a breach of contract suit against Motorola in the
Washington District Court on 9th November, 2010, alleging that
royalty terms proposed by Motorola in its offer were unreasonable and
in breach of its FRAND obligations, of which Microsoft was a
beneficiary. Motorola filed a suit, against Microsoft, on the very next
day, i.e. 10th November, 2010, before the Wisconsin District Court,
alleging infringement of its patents US 374, US 375 and US 376. The
696 F. 3d. 872 (9th cir. 2012)- judgment dt 28th September, 2012, by the US Court of Appeals, 9th
Circuit
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Wisconsin District Court transferred the patent case to the
Washington District Court, which consolidated the cases.
71. Several months later, Motorola sued Microsoft in the
Mannheim Regional Court, Germany ("the German court"), alleging
infringement of the EP 667 and EP 384 patents. Microsoft moved the
Washington District Court for an anti-suit - rather, an anti-
enforcement - injunction, restraining Motorola from enforcing any
injunctive relief it might obtain from the German court. This was
granted by the Washington District Court vide order dated 12th April,
2012, subject to Microsoft furnishing a security bond for US $ 100
million as collateral. Less than a month thereafter, by order dated 2nd
May, 2012, the German Court held that (i) Microsoft did not have any
license to use the patents of Motorola, (ii) Motorola's FRAND
commitment to the ITU did not create any contract enforceable by
Microsoft, as Microsoft was a third party to the contract and (iii)
Microsoft had infringed the EP 667 and EP 384 patents of Motorola.
Consequently, Microsoft was injuncted from offering, marketing,
using or importing any computer software involving use of the EP 667
and EP 384 patents of Motorola.
72. On 14th May, 2012, the Washington District Court granted an
anti-enforcement injunction, barring Motorola from enforcing any
injunctive relief granted by the German court, with respect to the
European patents in issue in the said proceedings, reasoning that (i)
the anti-suit injunction proceeding brought before the Washington
District Court by Microsoft would be dispositive of the German
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infringement action filed by Motorola, (ii) there was a possibility of
inconsistent judgments and (iii) though Motorola's commitments to
the ITU involved approximately 100 patents held by it, the German
proceedings were initiated by Motorola only in respect of two of the
said patents, seeking injunctive relief in respect of the said two patents
before the Washington District Court could adjudicate on the
propriety of injunctive relief in the FRAND context, i.e. the precise
issue brought before the German court by Motorola, which raised
concerns of forum shopping and vexatious litigation. Note was also
taken of the fact that Microsoft and Motorola were both US
corporations and that the facts took place within the jurisdiction of the
US Court.
73. Motorola appealed. Given the extent of reliance placed by Mr.
Kaul on the decision of the Court of Appeal, it is necessary to
understand how, and why, the Court of Appeal decided as it did.
74. The Court of Appeal examined the issue from the perspective
of the criteria laid down in its own earlier decision in E & J Gallo
Winery v. Andina Licores S.A.31 ["Gallo", hereafter], which were,
firstly, "whether or not the parties and the issues are the same in both
the domestic and foreign actions, and whether or not the first action is
dispositive of the action to be enjoined"; secondly, "whether at least
one of the Unterweser factors applied" and, thirdly, "whether the
injunction's impact on comity is tolerable". The Unterweser factors,
in turn, were a disjunctive list of considerations which could justify a
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foreign anti-suit injunction, first articulated in In re Unterweser
Reederei GMBH32, which were regarded, by the Court of Appeal in
Seattle Totems33 as instructive. These factors were whether the
foreign litigation would (i) frustrate a policy of the forum issuing the
injunction, (ii) be vexatious or oppressive, (iii) threaten the issuing
court's in rem or quasi in rem jurisdiction or (iv) prejudice other
equitable considerations. Applying these criteria, the Court of Appeal
upheld the decision of the Washington District Court, observing thus:
(i) Microsoft's claim before the Washington District Court
including its claim that the FRAND commitment of Motorola
precluded grant of injunctive relief would, if decided in favour
of Microsoft, determine the propriety of enforcement, by
Motorola, of the injunctive relief obtained in Germany.
(ii) The District Court had found at least two Unterweser
factors to apply, as (a) the German proceedings were vexatious
or oppressive and (b) the German proceedings prejudiced
equitable considerations. Neither of these findings could be
regarded as erroneous, meriting interference. Motorola's
contention that the very grant of injunction, by the German
court, indicated that the German proceedings could not be
regarded as vexatious, was rejected, observing that "litigation
may have some merit and still be vexatious, which is defined as
"without reasonable or probable cause or excuse; harassing;
446 F. 3d. 984, 989 (9th Cir. 2006)
428 F. 2d. 888, 896 (5th Cir. 1970)
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annoying"34. Even while the Washington District Court
proceedings were underway, relating to the entire portfolio of
patents of Motorola, Motorola initiated separate proceedings in
Germany for enforcement of two of the said patents. This was
regarded, by the District Court, as a procedural manoeuvre
designed to harass Microsoft with the threat of injunction and to
interfere with the District Court's ability to decide the issues
properly brought before it. The Court of Appeal, interestingly,
observed that as "although the District Court's interpretation of
Motorola's litigation decisions may not be the only possible
interpretation, it is not "illogical, implausible, or without
support from inferences that may be drawn from the facts in the
record", and, therefore, it could not be held "that the District
Court abused its discretion at this stage of the Gallo31 analysis".
It may be relevant to note that the Court of Appeal did not
proceed to examine the correctness of the finding, of the
District Court, regarding satisfaction of the second Unterweser
factor, of the German litigation prejudicing equitable
considerations.
(iii) The impact of the grant of anti-suit injunction on comity
was tolerable.
75. Significantly, a specific contention was urged by Motorola,
before the Court of Appeal, that the grant of anti-suit injunction by the
652 F. 2d. 855
Black's Law Dictionary (9th edition)
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District Court disabled Motorola from enforcing its German patents
before the only forum competent to rule in that regard. This argument
was rejected by the Court of Appeal, in the following terms:
"Motorola further alleges that the anti-suit injunction must be
overturned because it has disabled Motorola from enforcing
its German patents in the only forum in which they can be
enforced. This argument exaggerates the scope of the
injunction, which leaves Motorola free to continue litigating
its German patent claims against Microsoft as to damages or
other non-injunctive remedies to which it may be entitled.
Indeed, depending on the outcome of the District Court
litigation, Motorola may well ultimately be able to enforce
the German injunction too."
For reasons which I would elucidate hereinafter, I am unable to
subscribe to the reasoning contained in the afore-extracted passage
from the decision of the Court of Appeal.
E. Analysis
Categories of injunctions qua foreign proceedings and the law in that
regard
76. Injunctions, of legal proceedings in foreign climes, may,
plainly, take one of the three forms. There are anti-suit injunctions, in
which the Court injuncts the party from proceeding with the main suit,
pending before the foreign Court; "anti-anti-suit injunctions" [which,
frankly, should more correctly be called "anti-anti-suit injunction-
injunctions"], where the Court injuncts the party from proceeding with
the anti-suit injunction application filed before the foreign Court to
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injunct the "local" proceedings, and "anti-enforcement injunctions",
where the Court injuncts one of the parties before it from enforcing,
against the other, a decree or order passed by a foreign Court.
77. Anti-enforcement injunctions would also fall within two
categories; the first, where the order, the enforcement of which is
sought to be injuncted, is an order in the main suit/complaint/other
proceeding in the foreign Court and, the second, where injunction is
sought of an anti-suit injunction order passed by the foreign Court.
78. Plainly, the present case falls within this last, select, category.
79. There is, to my knowledge, no precedent, in this country,
dealing with this category of cases. Of the judgments cited before me
by learned Counsel for the parties, the only judgments which deal
with "anti-enforcement injunctions", where the applicant seeks
injunction of enforcement, against it, of a foreign order, are SAS
Institute, Ecobank Transnational Inc25, Sun Travels & Tours29 and
Microsoft Corp.30
80. Referring to "anti-enforcement injunctions" as "anti-anti-suit
injunctions" would, in my view, be a misnomer. It would not be
correct to equate a prayer for injuncting the opposite party from
continuing to prosecute a proceeding pending in a foreign Court, with
a prayer for injuncting execution of an order passed by the foreign
Court. It would be completely unrealistic for a Court not to recognise
the distinction between these two categories of cases. Even on the
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aspect of immediacy and urgency, there is a fundamental qualitative
distinction between them. This is obvious, and I need hardly dilate on
the topic. In plainspeak, there is really no comparison between a
prayer for restraining further prosecution of proceedings pending in a
foreign Court, with a prayer for restraining execution, against the
Indian litigant, of an order passed by a foreign Court.
81. Execution - as is apparent even from this case - presents a real,
live and imminent danger. As the discussion heretofore reveals, the
pre-eminent test, in the matter of grant of anti-suit injunctions, is
whether the foreign proceedings are "vexatious or oppressive". The
extent to which the "vexatious or oppressive" test may apply, in the
case of an anti-enforcement injunction, in my view, may itself be a
somewhat vexed issue. No proceeding is pending before the foreign
Court, once the matter reaches the anti-execution injunction stage. In
the present case, for example, the Wuhan Court has disposed of the
anti-suit injunction application of the defendants. No question,
therefore, remains, of injuncting the defendants from further
prosecuting the said application. The issue is whether the defendant
should be permitted to enforce, against the plaintiffs, the order passed
by the Wuhan Court on the said anti-suit injunction application.
82. The tests which would govern consideration of an application
for anti-execution injunction, as compared to anti-suit injunction, do
not, so far as I am aware, find any authoritative delineation, at least in
any decision of any Indian court. Learned Senior Counsel for the
parties before me, too, with all their vast knowledge and experience of
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this branch of the law, have not been able to cite any such authority.
The issue appears, therefore, to be in a sense res integra.
83. Having said that, the tests for grant of anti-suit injunction are
not entirely irrelevant, where anti-enforcement injunction is sought,
for the simple reason that the enforcement is itself an order passed in
the suit - or, as in the present case, in the anti-suit injunction
application filed before the Wuhan Court. Except that, in the present
case, the proceeding, of execution of the order passed in which stay is
being sought, is not the original complaint filed by the defendants
before the Wuhan Court, but the anti-suit injunction application filed
in the said complaint. In view thereof, in my opinion, the present
application of the plaintiffs has to be examined on two touchstones (or
"issues"), viz.
(i) whether the plaintiffs are entitled to seek a restraint
against execution or enforcement, by the defendants, of the
order dated 23rd September, 2020, passed by the Wuhan Court,
and
(ii) whether a case for injuncting the defendants from
prosecuting the anti-suit injunction application, filed by them
before the Wuhan Court, in which the order dated 23rd
September, 2020 came to be passed, could be said to have
existed, had the plaintiffs approached this Court when the
application was still pending.
Issue (ii) retains relevance, even though the anti-suit injunction
application filed by the defendants before the Wuhan Court stands
disposed of, for the simple reason that, owing to the filing and
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dependency of the anti-suit injunction application having never been
disclosed to the plaintiffs by the defendants, despite ample
opportunities in that regard having existed, the plaintiffs were denied
an opportunity to seek any restraint against the defendants proceeding
with the application, or even from contesting the application in
Wuhan. This has resulted in the order dated 23rd September, 2020,
being passed by the Wuhan Court. The defendants have, therefore,
resorted to unfair practice in securing the order dated 23rd September,
2020 behind the back of the plaintiffs (as would be elucidated in
greater detail hereinafter), and it would be contrary to the most basic
norms of natural justice and fair play to allow the plaintiffs to be
prejudiced for that reason. I am, therefore, convinced that the scope
of examination, in the present case, has also to extend to assessing
whether a case for grant of "anti-anti-suit injunction injunction",
restraining the defendants from prosecuting the anti-suit injunction
application filed by them before the Wuhan Court, could be said to
have existed, had the plaintiffs approached this court for such relief at
that stage. To that extent, therefore, the principles governing grant of
anti-suit injunction, as enunciated by this Court, are also to be borne
in mind, while considering the present application of the plaintiffs.
84. On whether anti-enforcement injunctions constitute an even
more exceptional sub-classification, vis-à-vis anti-suit injunctions of
proceedings in a foreign jurisdiction, there is a division of opinion.
The Singapore Court of Appeal, in Sun Travels & Tours29 advocates
a "greater degree of caution" while dealing with a prayer for anti-
enforcement injunction, as compared to a prayer for anti-suit
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injunction. The reason adduced for this additional cautionary note in
the judgment is, however, "the way in which" anti-enforcement
injunctions "interfere with foreign proceedings". To my mind, the
extent of interference with foreign proceedings is greater, in the case
of anti-suit injunctions, as compared to anti-enforcement injunctions
as, in the former case, a running proceeding is sought to be halted in
its tracks, whereas, in the latter, the court, having rendered the
judgment of which enforcement is being sought to be injuncted, is
already functus officio, till such time as it is moved for enforcement or
execution of its order. The court does not, therefore, retain any lien
(ordinarily) over the case, and the proceedings, in which the order has
been passed, have already come to a close. I cannot, therefore,
subscribe to the view, expressed by the Singapore Court of Appeal,
that a greater degree of circumspection is required when dealing with
a prayer for anti-enforcement injunction, as compared to a prayer for
anti-suit injunction. As already noted earlier in this judgment, the UK
Court of Appeal, in SAS Institute6 did not subscribe to the view that
anti-enforcement injunctions were to be granted only in exceptional
cases. In my considered opinion, the entire discussion of whether the
case before the court is, or is not, "exceptional" may have had
significance at some prior point of time but has, by now, become
somewhat disingenuous, not to say anachronistic. Plainly said, at the
end of the day, the interests of justice must prevail. If rendering of
justice, in a given case, requires an anti-enforcement injunction to be
issued, the Court should not hold back its hands, on some perceived
notion of lack of "exceptionality" in the case. This would result in
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perpetuation of injustice. Justice, it is well settled, is the highest to
which the law can attain.
85. The three principal decisions of the Supreme Court, on the
aspect of anti-suit injunctions, are O.N.G.C.16, Modi Entertainment
Network10 and Dinesh Singh Thakur11.
86. These decisions have already been examined earlier in this
judgment. O.N.G.C.16 provides a textbook example of when
continuation of the proceedings in the foreign Court, or any order or
decree resulting therein, could be treated as "oppressive" to the Indian
anti-suit injunction applicant. That case revolved around two arbitral
awards, rendered under the Arbitration Act, 1940 ("the 1940 Act").
Under the 1940 Act, an arbitral award was not enforceable unless and
until it was made the rule of court, under Section 17 thereof, but was
amenable to challenge under Section 30 and 33. ONGC challenged
the awards before the High Court, under the said provisions. In the
meanwhile, the respondent Western Company of North America,
which was the beneficiary of the awards, approached the American
Courts, for confirmation thereof, even while accepting that the 1940
Act applied. The Supreme Court held that, as the American Court was
bound to decide the application of the respondent Western Company
in the light of American law which, even as per Western Company,
did not apply as it accepted the applicability of the 1940 Act, allowing
the proceedings in the American Court to continue and, possibly,
result in an order which would be de hors the 1940 Act, would be
oppressive to ONGC, which would, thereby, be "driven to a tight
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corner" and "place in an inextricable situation". Another situation, in
which continuation of the proceedings in the foreign Court were held
to be "oppressive" was where the Indian litigant was required to
defend the same cause of action, in the Indian court as well as the
foreign Court.35 Modi Entertainment Network10 emphasized, in the
first instance, the fact that an anti-suit injunction was but another
specie of injunction which would, therefore, be governed by the
general principles applicable to grant of injunctions (which principle
was reiterated in Dinesh Singh Thakur11). Injunctions, it was pointed
out, were, by nature, equitable relief. Though, in para-24 of the
report, the Supreme Court enumerated, in seven distinct points,
principles governing grant of anti-suit injunction, most of those
principles apply to cases where the relationship between the parties
was contractual in nature, and the contract contained, or did not
contain, an exclusive jurisdiction clause. The principles that one may
take home, for the purposes of the present dispute, from Modi
Entertainment Network10, are that anti-suit injunctions are ordinarily
to be granted where the foreign proceedings are "oppressive or
vexatious", or where declining injunction would result in defeating the
ends of justice and perpetuating injustice.
87. An important decision on anti-suit injunctions, specifically in
the context of patent infringement, was rendered by a Division Bench
of this Court in Magotteaux Industries Pvt Ltd v. AIA Engineering
Ltd36. This decision, too noted the fact that where the nature of the
Ref. Essel Sports Pvt Ltd v B.C.C.I., 2011 (178) DLT 465 (DB), which also held that, ultimately, the law
that would apply would be the law enunciated in Modi Entertainment Network10.
2008 (155) DLT 73 (DB)
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litigation was patent infringement, the principles in Modi
Entertainment Network10, relating to contractual disputes and the
existence of exclusive jurisdiction clauses therein. The suit filed in
this Court, and the complaint filed in the US Court, in Magotteaux
Industries36, were both actions against infringement of patents, the
Indian action being directed against alleged infringement of Indian
patents and the US action being directed against alleged infringement
of US patents. This Court held, in paras 57 and 58 of the report, that
the courses of action propelling the Indian and the US litigation were
different, thus:
"57. It appears that the causes of action in both the matters
are different and occur on different dates which becomes
relevant for the consideration of the grant of anti suit
injunction. In Suit No. 189/06 there was no specific averment
that the respondent has appointed two companies in USA and
Italy to deal with the product i.e. composite wear components
in question. It was also not alleged by either of the parties that
the respondent has actually been exporting the product in
question under the infringement of Patent of appellant No. 2
granted in India nor there is any averment by the Appellants
or respondent that the respondent is exporting composite wear
components from India, and/or two companies appointed by
the respondent has imported the goods from U.S.A.
58. It also appears from the record that M/s. Vega
Industries Inc. Ltd. Tennessee, USA and M/s. F.A.R.
Fonderie Acciaierie Roiale SPA who are respondents No. 2
and 3 in the complaint under Section 337 of the US Trade
Tariff Act of 1930 are not the parties in Suit No. 189/06. The
allegation against the respondent and above said two
companies made by the Appellants No. 2 and 3 in the
Complaint is that the respondent and its two companies
manufactured or have manufactured on their behalf and have
imported their goods and/or sold composite wear components
Grinding tables for US in vertical roller Mill grinders
imported into or sold in US amounts to infringement of re-
issuance of Patent No. 39998E. It is also a matter of fact that
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the re-issuance of Patent granted in favour of Appellant No. 2
in U.S.A. is subsequent to the suit by the appellants No. 1 and
2 in this court for infringement of patent in India. In view of
the above, the proceedings, which are pending in USA are
based upon separate cause of action which has occurred on
the separate date and it relates to the patent rights granted in
foreign nation."
What is, however, of possibly greater significance, in the light of the
present controversy, are the observations, in the passages that follow
in Magotteaux Industries36, regarding patent rights being territorial in
nature, granted by the sovereign State. Following thereupon, in para
67 of the report, this Court concludes thus:
"Not only two causes appear to be different and ground of
inconvenience to the respondent does not appear to be
correct, it is also noticeable that since the patent law is
territorial in nature, therefore, the infringement caused in
different countries where the patents are registered and
monopoly rights are granted, will lead to a separate cause of
action and the mere fact that the appellants has brought one
suit of civil nature before this Court for the violation of the
patent rights in India will not lead to the conclusion that a
party is debarred from filing any action restraining the
misuse of the patent/monopoly rights, which are granted in
the jurisdiction of some other court."
(Emphasis supplied)
88. Useful markers, to guide the Court seized with the issue of
grant, or not grant, of an anti-suit injunction or an anti-enforcement
injunction, are also to be found in other Indian decisions, as well as
overseas decisions, on which learned Senior Counsel have relied.
Though, no doubt, Indian Courts, including the Supreme Court, have
pronounced on the circumstances in which anti-suit injunctions may
be granted, sufficient room for play in the joints still remains, in view
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of the use of the words "oppressive", "vexatious" and "interests of
justice". No well delineated boundaries, within which the existence,
or non-existence, of these parameters, could be gleaned, are to be
found in any judicial authority. Indeed, the moment the ends of justice
are predominant, there can never be any hard or fast rule, or guidelines
cast in iron. I find myself, however, in agreement with the following
general principles relating to anti-suit and anti-enforcement
injunctions, emerging from "foreign" jurisprudence, to which my
attention has been invited during the course of arguments:
(i) An anti-suit injunction should be granted only in rare
cases, and not for the mere asking. The Court should be
mindful of the fact that even an injunction in personam
interferes with the functioning of a sovereign forum, not subject
to the writ of the court granting the injunction.37
(ii) An anti-suit injunction could only be granted by a Court
possessing "sufficient interest" in the lis forming subject matter
of the proceedings which it intends to injunct. In other words,
qua the said lis, the Court was required to be the natural
forum.38
(iii) The possibility of palpable and gross injustice, were
injunction not to be granted, remains a definitive test.39 In
doing justice in accordance with law, the Court will try and
Ref. Devi Resources12
Ref. SAS Institute6
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preserve the subject matter of the lis so that the beneficiary of
the final verdict can enjoy the fruits thereof.39
(iv) Interference with the right to pursue one's legal remedies,
before the forum which was competent to adjudicate thereon,
amounts to "oppression", especially where there is no other
forum which the litigant could approach.39
(v) In patent infringement matters, it was the right of the
patent holder to choose the patents which it desired to enforce.40
The only practical relief available to an SEP holder was by way
of anti-infringement action.41 The right to seek legal redressal,
against infringement, was a fundamental right.42 A proceeding,
or an order, which resulted in divesting the patent holder of the
authority to exercise this fundamental right, was ex facie
oppressive in nature.45 Protection of the jurisdiction of the Court
is also a guiding factor.46
(vi) Comity, as a concept, was grating to the ear, when it
proceeded from a court of justice.43 Where the proceeding or
order, of which injunction was sought, was oppressive to the
applicant seeking injunction, comity was of relatively little
importance, as a factor telling against grant of such injunction.
Even if grant of injunction, in such circumstances, was likely to
Ref. IPCom v. Lenovo1, Lenovo (US) v IPCom2, Huawei v. Conversant4
Ref. Unwired Planet5
Ref. IPCom v. Lenovo1
Ref. Lenovo (US) v IPCom2
Ref. Satya7
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offend the foreign Court, that consideration could not operate as
a factor inhibiting against such grant.44 Considerations of
comity were, moreover, subject to the condition that the foreign
law, or the foreign proceeding or order was not offensive to
domestic public policy45 or customary international law.46
Comity, in any event, was a two-way street.46
(vii) There was no reason to treat anti-execution injunction
applications as "exceptional", to the extent that, even if grounds
for grant of injunction were made out, the Court would
hesitate.46
(viii) Some instances in which anti-enforcement injunction is
would be justified are
(a) where the judgment, of the execution of which
injunction was sought, was obtained too quickly or too
secretly to enable the applicant (seeking injunction) to
take pre-emptive remedial measures, including by way of
applying for anti-suit injunction while the proceeding was
pending,
(b) where the order, of the execution of which
injunction was sought, was obtained fraudulently,
(c) where the applicant seeking anti-enforcement
injunction had no means of knowing of the passing of the
judgment or order against, until it was served on him.45
Ref. SAS Institute6
Ref. Ecobank25, SAS Institute6
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Sun Travels & Tours29, on which Mr. Kaul relied, in fact, even
while opining that anti-enforcement injunctions could be
granted only in exceptional cases, recognised these three
circumstances as justifying grant of anti-enforcement injunction
as, in these circumstances, "the equities of the case (lay) in
favour of grant of anti-enforcement injunction."
89. The entire controversy in the present case may be divided into
two aspects; firstly, whether the Wuhan Court was justified in
granting anti-suit injunction, vide its order dated 23rd September,
2020, and, secondly, whether this Court would be justified in
injuncting the respondent from enforcing that order against the
plaintiffs. The issue of the relief to which the plaintiff, if at all, would
be entitled, would, of course, follow thereafter.
Justification of the Wuhan anti-suit injunction order
90. I am acutely conscious of the fact that I am not sitting in appeal
over the order, dated 23rd September, 2020, of the Wuhan Court.
Nonetheless, one of the factors which has to be borne in mind by this
Court, in deciding whether to restrain the defendants from enforcing,
against the plaintiffs, the order of the Wuhan Court, is unquestionably
the justifiability of such order. If the order is justified, and passed on
considerations which are, on their face, legitimate, this Court would
be acting in gross excess of its jurisdiction in restraining enforcement
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of the order, merely on the ground that such enforcement might
prejudice one of the parties before it. I am entirely in agreement with
the proposition that a Court, of one sovereign country, should
ordinarily be loath to injunct enforcement of an order passed by a
Court in another sovereign country; indeed, empirically stated, no
such jurisdiction exists at all. Where, however, the order passed by
the Court of one sovereign country, without due justification,
entrenches on the lawful invocation of remedies known to law, by a
litigant in another sovereign country, the Court in the latter sovereign
country is duty bound to protect such incursion on its jurisdiction, and
on the fundamental right of its citizen to seek legal redress. No
consideration of comity can militate against grant of relief in such a
case.
Grounds on which the Wuhan Court granted anti-suit injunction
91. The considerations which weighed with the Wuhan Court, as
they emerge from the order dated 23rd September, 2020, are the
following:
(i) As licensing negotiations between the plaintiff and the
defendants were at the deadlock, the defendants requested the
Wuhan Court to "make a judicial decision in accordance with
the FRAND rules" to facilitate negotiation and solve the dispute
between the plaintiff and the defendants regarding the royalty
rates of the SEPs involved. This was "in line with the original
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intention of the FRAND licensing rules and (conformed) to the
FRAND principle" and was, therefore, justified.
(ii) As the defendants were registered in China, their main
research and development, production and sales base were in
China, one of the affiliated defendants was located in Wuhan
and the place of implementation of the plaintiff's SEPs by the
defendants was in Wuhan, the Wuhan Court was possessed of
jurisdiction to deal with the matter. All parties were, therefore,
required to cooperate with the Wuhan Court.
(iii) However, the acts of the plaintiff indicated disrespect to
the procedure of the Wuhan Court and their intent to interfere
with the said proceedings.
(iv) The behaviour of the plaintiffs had caused great damage
to the overseas market of the defendants and their affiliates.
(v) Despite having been forwarded copies of the complaint
filed by the defendants in the Wuhan Court, evidence materials,
court summons and other procedural documents, by email, on
11th August, 2020 and the 2nd September, 2020, the plaintiffs
refused to respond or reply thereto.
(vi) Instead of respecting and coordinating with the Wuhan
Court to proceed with the litigation procedures, the plaintiffs
started emergency initiation of injunction procedures before this
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Court to exclude the jurisdiction of the Wuhan Court and
counteract the proceedings before it, thereby deliberately
interfering with the said proceedings.
(vii) The present proceedings pending before this Court
"might result in an adjudication conflict with the adjudication
of" the Wuhan complaint.
(viii) This, in turn, would "impact the conclusion of a SEP
license agreement between the plaintiff and the defendants and
lead to difficulties of enforcing the effective adjudication of the
case" before the Wuhan Court.
(ix) The present proceedings before this Court would
"necessarily impact on the operation" of the defendants and
their affiliated companies in the Indian market, resulting "in a
great harm to the interests" of the defendants, which was
irreparable.
(x) If the Wuhan Court were not to stop the present
proceedings in time, there was a possibility that they would
"imperil the positive development of the licensing negotiation
between the parties", which would further harm the interests of
defendants.
(xi) The plaintiffs were Non-Performing Entities (NPEs),
which did not produce or manufacture SEP related products,
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and were merely seeking prior profits by FRAND licensing
negotiation and litigations.
(xii) Grant of anti-suit injunction by the Wuhan Court would
not result in any substantive harm to the SEPs held or managed
by the plaintiffs "except the delay for the (plaintiffs') relief
after the breakdown of the licensing negotiation between the
parties", and would not affect public interest.
Justification for the Wuhan Court order
92. Of the above observations and findings of the Wuhan Court (for
ease of convenience I would refer to them as "findings"), findings (i)
and (ii) were observations on the justifiability of the complaint filed
by the defendants before the Wuhan Court, and of the jurisdiction of
the Wuhan Court to deal with the matter. Neither of these findings, in
my view, call for any observation by this Court. They deal with the
sustainability, and the maintainability, of the complaint before the
Wuhan Court, and had to be met, by the plaintiffs, before the Wuhan
Court and adjudicated by that Court. They are of no relevance insofar
as the issue of anti-suit injunction or anti-enforcement injunction, is
concerned. It is also true that every party is expected to cooperate
with proceedings pending before any judicial forum. Findings (iv),
(viii), (ix), (x) and (xi) are, with respect, not considerations relevant
for grant of anti-suit injunction, either according to the anti-suit
injunction law as it exists in this country, or, for that matter, the anti-
suit injunction law as it exists in any other jurisdiction. Mr. Kaul has
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not been able to refer to any decision which would justify the grant of
anti-suit injunction, as granted by the Wuhan Court, on the ground
that (i) the plaintiff's behaviour had caused great damage to the
overseas market of the defendants, or that (ii) the present proceedings
would impact conclusion of an SEP license agreement between the
plaintiffs and the defendants, or that (iii) they would impact the
operation of the defendants and their affiliated companies in the
Indian market, resulting in harm to the interests of the defendants,
irreparable or otherwise, or that (iv) they would imperil the positive
development of the licensing negotiation between the parties, thereby
harming the defendant's interests, or that (v) the plaintiffs are,
allegedly, NPEs (which finding Mr. Banerjee emphatically refutes), or
that (vi) the plaintiffs were seeking prior profits by FRAND licensing
negotiation and litigations. While reiterating that I am not sitting in
appeal over the findings or observations of the Wuhan Court, I merely
seek to observe that these factors are not recognised as factors for
grant of anti-suit injunction, in any jurisdiction of which I am aware,
or any legal authority to which the defendants have drawn my
attention. Nor, for that matter, does the order of the Wuhan Court
refer to any such decision or authority.
93. The surviving considerations, in the order of the Wuhan Court,
are (i) that the acts of the plaintiffs indicated disrespect to the
procedure of the Wuhan Court, and an intention to interfere with the
said proceedings, (ii) that the plaintiffs, despite being put on notice,
had not responded, or caused appearance before the Wuhan Court,
(iii) instead, the plaintiffs were seeking, by initiating the present
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proceedings before this Court, to exclude the jurisdiction of the
Wuhan Court and deliberately interfere with the Wuhan proceedings,
(iv) there was a possibility of an adjudication conflict, were both
proceedings to be allowed to continue side by side and (v) grant of
anti-suit injunction would not prejudice the plaintiffs in the present
proceedings, except to the extent of delay in obtaining relief.
94. Re. plaintiffs' failing to appear in the Wuhan Court despite
notice having been issued
94.1 As would become clear from the discussion hereinafter, the
plaintiffs were never issued notice of the anti-suit injunction
application, before it came to be decided against them. At worst, it
could be said that the plaintiffs were issued notice of the complaint
filed by the defendants before the Wuhan Court, though, even on this,
the plantiffs join issue. Even assuming, arguendo, that the plaintiffs,
without due justification, defaulted in responding to the notice issued
to them, by the Wuhan Court, on the complaint of the defendants,
could that constitute a justifiable basis for the Wuhan Court
proceeding to finally decide the anti-suit injunction application
without notice to the plaintiffs? No decision, permitting this, has been
brought to my notice.
94.2 In so far as the anti-suit injunction proceedings were concerned,
the plaintiffs were, plainly, not served with due notice by the Wuhan
Court. We are not concerned with the issue of notice having been
served, on the plaintiffs, in the Wuhan complaint, as the plaintiffs do
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not seek to injunct the proceedings in the said complaint. The alleged
lack of response, by the plaintiffs, to the notice issued in the said
complaint, the justification thereof, and the consequences of such
alleged failure to respond, if any, are matters relevant to the complaint
and the proceedings in the complaint, and not to the anti-suit
injunction application filed by the defendants in the said complaint
before the Wuhan Court.
94.3 Notice, in the main proceedings, quite obviously, does not
amount to notice in every application filed therein. Nor can a litigant,
who is not clairvoyant by nature, be expected to have knowledge of
every application filed in the main proceeding, merely because he has
been put on notice in that main proceeding. The order of the Wuhan
Court does not record any notice having been issued to, or served on,
the plaintiffs, of the anti-suit injunction application filed by the
defendants in those proceedings. Though notice is stated to have been
issued, twice, to the plaintiffs, first on 11th August, 2020 and,
thereafter, on 2nd September, 2020, these are, expressly, "of the
complaint, evidence materials, procedural documents and court
summons". Even qua these proceedings/documents, the order goes on
to record thus:
"The complaint, evidence, procedural materials, court
summons of the present case is still in the serving process
and the Respondents have not signed for the Proof of Service
or reply to this Court yet. This Court issued the antisuit
injunction ruling directly, in a sense of behavior preservation.
However, this ruling will not prevent the Respondents from
exercising remedy of procedural rights i.e. submitting the
evidence or expressing its opinions through reconsideration
procedures."
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(Emphasis supplied)
Even as regards the main complaint and the documents filed by the
defendants, in that regard, the Wuhan Court records, candidly, that
service of the complainant and the documents were still in process,
but that it was nevertheless proceeding to issue the anti-suit injunction
"directly", "in a sense of behavior preservation". Whether the Wuhan
Court was justified in doing so, or not, is not for me to comment on,
in the present proceedings. Suffice it to state that, in the
circumstances, the contention that the order of the Wuhan Court was
passed after due notice to the plaintiffs is obviously unacceptable.
The record reveals, rather, that it was only during the pendency of
these proceedings in this Court that the plaintiffs were ever made
aware of the fact that the defendants had filed an anti-suit injunction
application in the Wuhan Court.
94.4 Viewed thus, the failure, of the plaintiffs, to enter appearance
consequent to notice being issued by the Wuhan Court in the
complaint filed by the defendants, i.e. consideration (ii) in para-74
(supra), cannot be treated as relevant for the purposes of granting anti-
suit injunction, restraining the plaintiffs from prosecuting the present
proceedings.
95. The remaining considerations which prompted the Wuhan Court
to pass the order dated 23rd September, 2020 require, in order for their
proper appreciation, a juxtaposed view of the case of the plaintiffs in
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the present suit, vis-à-vis the case of the defendants in the complaint
before the Wuhan Court.
The present plaint
96. Para 15 of the plaint acknowledges the commitment of the
plaintiff, to the ETSI, to grant licences, of its SEPs, to implementers of
ETSI wireless communications standards on FRAND terms and
conditions. The cause of action, for filing the plaint, is manifested in
para 26, which avers that "all products of the defendants, which
implement those aspects of the 3G and 4G standards to which the
plaintiff's patents are essential" infringe the plaintiff's sole and
exclusive rights over the said patent. Thereafter, the plaint
enumerates, by way of example, specified handsets of the REDMI
NOTE 8, REDMI K20 PRO, Mi A3, REDMI NOTE 7 PRO and
REDMI NOTE 8 PRO handsets of the defendants as specifically
infringing the plaintiffs' SEPs, as is apparent from the advertisements
relating to the said handsets and descriptions of the specifications
thereof, which implement the standards to which the plaintiff's SEPs
are essential. "This fact alone", alleges the plaint, "qualifies as proof
of infringement by the defendants", who "have made use of
technology which is specifically covered by the plaintiffs' claims in
the suit patents". Use of technology covered under claims which are
essential to a particular standard, asserts the plaint, requires the entity
using the technology to secure a license from the owner of the patents,
which the defendants have been unwilling to do, on FRAND terms
and conditions. This, asserts the plaint, entitles the plaintiffs to an
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injunction. Thereafter, paras 30 to 43 of the plaint explains the
standards, and paras 45 to 74 explain how the IN '910, IN '912, IN
'719, IN '036 and IN '182 suit patents are essential to the said
standards. Paras 79 to 84 set out the details of the infringement
analysis and testing conducted by the plaintiffs, and para 85 asserts
that "in keeping with the very definition of essentiality, once the suit
patents have been shown to be essential to certain specific standards, it
would be impossible on technical grounds for the defendants' devices
to comply with the said standards without infringing the suit patents".
Paras 86 to 91 explain the plaintiffs FRAND commitment and paras
92 to 94 explain the defendants' obligation to obtain licenses from the
plaintiffs on FRAND terms, if they seek to continue to utilize the
technology to which the plaintiff's SEPs are essential. Paras 95 to 115
seek to demonstrate how the defendants have been unwilling to take
licenses from the plaintiffs on FRAND terms, despite the plaintiffs
having a successful SEP licensing program, the details of which the
plaintiffs purport to set out in paras 116 to 121. Paras 122 and 123
justify the plaintiff's claim for damages against the defendants. Paras
124 to 133 are formal paras dealing with limitation, cause of action,
jurisdiction, valuation and the like.
The defendants' Wuhan complaint
97. The prayer clause, in the Wuhan complaint of the defendants,
requested the Wuhan Court "to determine the global royalty rates or
the range for the licensing of all standard essential patents ("SEPs")
and patent applications in (the plaintiffs) 3G, 4G patent portfolios that
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(the plaintiffs) hold or have the right to license in accordance with
FRAND principal". The complaint asserts that the 3G and 4G patent
portfolios managed by the plaintiffs contained a large number of
wireless communication patents, covering all declared SEP families
held and granted to be licensed by the plaintiffs. The complaint
thereafter refers to a Confidentiality Agreement executed between the
plaintiffs and the defendants in December 2016, for a potential patent
cooperation project, whereafter it is asserted that substantive licensing
negotiations, for the patents held and managed by the plaintiffs,
commenced. Details of the negotiations follow, resulting in the
defendants alleging that "the royalty rates for the relevant wireless
communication SEPs offered by InterDigital (were) obviously too
high, which violate(d) FRAND licensing obligations". Exception has
also been taken, into the complaint, to the refusal, by the plaintiffs, to
disclose the basis on which they had worked out the royalty rates. The
relevant paras from the complaint, with which, in fact, the complaint
concludes, and which constitute the basis of the cause of action set out
therein, read thus:
"The royalty rates for the relevant wireless communication
SEPs offered by InterDigital are obviously too high, which
violate FRAND licensing obligations. Moreover, in the
licensing negotiations, InterDigital refused to compromise,
and consistently insisted on royalty rates that violate FRAND
terms.
First, InterDigital has not disclosed the royalty rates it
referred to when calculating the royalty rates offered to
Xiaomi. Although Xiaomi had asked for the calculation
methods and relevant referred comparable agreements for
several times, InterDigital refused to provide any explanation
on the ground of the confidentiality clauses in other licensing
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agreements. Thus, the royalty rates directly provided in its
offer cannot be deemed as a reasonable and sufficient basis.
Second, the rates offered by InterDigital to Xiaomi are much
higher than the rates offered by other SEP licensors. Xiaomi
has always respected the intellectual property rights of others
and is willing to enter into licensing agreements with SEP
licensors on FRAND terms. Up to now, Xiaomi has entered
into licensing agreements with several SEP licensors in the
industry. Compared with those of the licensors, InterDigital
has offered royalty rates that are much higher and are
inconsistent with the quality and quantity of its SEPs.
Third, the royalty rates offered by InterDigital are
disproportionate to the relevant proportion of the SEPs held
and granted to be licensed by InterDigital compared to all
other SEPs covering relevant standards, which would lead to
an excessively high cumulative royalty rate. If its royalty
rates were applied, manufacturers of mobile terminals, such
as Xiaomi, would bear an unfair and unreasonable burden."
Sustainability of the surviving grounds for grant of anti-suit
injunction, in the order of the Wuhan Court
98. Holistically viewed, I do not think that the Wuhan Court was
justified either in holding that the plaintiffs had sought to interfere
with the complaint filed by the defendants in the Wuhan Court, by
filing the present suit, or that they intended to exclude the jurisdiction
of the Wuhan Court thereby. The cause of action in the present
proceedings, initiated by the plaintiffs before this Court, is the
perceived infringement, by the defendants, of six select and specific
Indian patents. Much of the recital, in the plaint, is towards
establishing that the utilisation of 3G and 4G technology, by the
defendants, in fact requires use of the SEPs held by the plaintiff, in
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order to subscribe to the standards set by Standard Setting
Organisations. The defendants would have several defenses open to
them, to contest the suit. It is open to the defendants, for instance, to
contend that the suit patents are not, in fact, essential to the standards
and are not, therefore, SEPs at all, as also that the defendants are not
unauthorizedly using, or infringing, the suit patents. It is only if the
plaintiff's patents are found to be SEPs, which would require the
plaintiffs to demonstrate that, in order to utilize the 3G and 4G
technologies in accordance with the standards set by the SSOs, the
plaintiff's patents are "essential", that they can be regarded as SEPs at
all. Once they are regarded as SEPs, the next issue for consideration
would be whether the defendants are, in their handsets, utilising the
plaintiff's patented technology, as would require the defendants to
obtain a license from the plaintiffs. It is only if this question is also
answered in the affirmative that the issue of the appropriate royalty
rates, at which the plaintiffs would be obligated to license the SEPs, to
remain in conformity with their FRAND obligations, would come up
for consideration. There is substance in the contention of Mr.
Banerjee, therefore, that the issue of FRAND royalty rates arises, in
the present case, only as a part of the entire gamut of the controversy
before this Court.
99. It is obvious, at a bare glance, that the issue of infringement, by
the defendants, of the suit patents or, for that matter, of any of the
patents of the plaintiffs, is not going to be addressed by the Wuhan
Court, while adjudicating the defendants' complaint; or, at any rate,
that the defendants have not called upon the Wuhan Court to address
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that issue, directly or indirectly. It is also significant that the present
suit concerns itself only with six of the plaintiffs' patents, granted in
India, whereas the Wuhan complaint is apropos the entire portfolio of
all SEPs held by the plaintiffs. The scale and sweep of enquiry in the
Wuhan complaint is also, therefore, decidedly different from that in
which this Court has been called upon to engage itself, in the present
proceedings. In this context, there is also, prima facie, substance in
the contention of Mr. Banerjee that, unlike the Wuhan proceedings,
the present suit does not concern itself with fixation of any global
FRAND rate for the entire portfolio of the plaintiffs SEPs. This Court
is required to address itself to the aspect of infringement of the
specified patents forming subject matter of these proceedings, and, if
necessary, determination of the FRAND royalty rate at which, if
licenses taken by the defendants, infringement is obviated. As such,
the nature of the enquiry which would be required to be conducted by
this Court, in the matter of fixation of a FRAND royalty rate, would
also be with respect to the infringement of the specified suit patents in
this case. Unlike the Wuhan proceedings, this Court, at least
foreseeably, is not required to enter into fixation of a global FRAND
rate covering the entire portfolio of the plaintiff's SEPs.
100. Perceived infringement of Indian patents can, indisputably, be
challenged only in India, patent rights being territorial in nature and
patents themselves being granted only by the concerned sovereign
state. There is, therefore, no question of the plaintiffs having been
able to seek injunction, against infringement of the suit patents in
issue in the present case, before any forum outside India. The Wuhan
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Court has, while observing that the plaintiffs were seeking, by
initiating the present proceedings before this Court, to exclude the
jurisdiction of the Wuhan Court can interfere with the Wuhan
proceedings, completely overlooked this fact. There can be no
question of exclusion of the jurisdiction of the Wuhan Court by the
plaintiffs, in the present proceedings, for the simple reason that the
Wuhan Court has no jurisdiction to adjudicate on the present suit or
decide the issue in controversy raised therein, i.e. infringement, by the
defendants, of the Indian suit patents of the plaintiffs. With greatest
respect to the Wuhan Court, therefore, it appears, to me, that the order
dated 23rd September, 2020, falls into error in opining that the
plaintiffs had, by initiating the present proceedings before this Court,
sought to exclude the jurisdiction of the Wuhan Court. Rather, the
Wuhan Court has, by its order, sought to exclude the jurisdiction of
this Court to adjudicate on the lis brought before it by the plaintiff
which this Court, and no other, is empowered to adjudicate, as is
explained in a little greater detail hereinafter.
101. Nor is there any possibility of interference, by the plaintiffs in
the present proceedings, or by the present proceedings themselves,
with the proceedings pending before the Wuhan Court in connection
with the complaint filed by the defendants before it (in which respect
the observations and findings in IPCom v Lenovo1 (supra) apply,
mutatis mutandis, to the present case. I agree with Mr. Banerjee in his
contention that the degree of overlap - and, for that matter, the nature
of overlap - between the present proceedings and the Wuhan
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proceedings is not such as would justify the present proceedings being
brought to a halt, pending disposal of the Wuhan proceedings.
102. Mere overlap of issues is not regarded, either by the law in this
country or in any other jurisdiction, as sufficient to grant anti-suit
injunction. It is only where the overlap results in the foreign
proceedings being rendered "oppressive or vexatious" that anti-suit
injunction may be justified. If one were to examine the present case
on this anvil, the position that emerges is that, while the Wuhan Court
may not have been justified in granting anti-suit injunction, this Court
would certainly be justified in injuncting the defendants from
enforcing, against the plaintiffs, the order dated 23rd September, 2020
of the Wuhan Court. I am not convinced with the submission of Mr.
Kaul that, merely because determination of a FRAND compliant
royalty rate may be an issue which arises for consideration in the
proceedings before this Court, and also before the Wuhan Court, the
present proceedings could be regarded as oppressive or vexatious qua
the Wuhan proceedings, as would justify the Wuhan Court injuncting
the plaintiffs from prosecuting these proceedings. On the other hand,
the order, dated 23rd September, 2020 of the Wuhan Court expressly
prohibits exercise, by the plaintiffs, of their right to seek legal
redressal, in accordance with the laws of this country, against
perceived infringement of the suit patents.
103. Another concern, voiced by the Wuhan Court in the order dated
23rd September, 2020, as justifying grant of anti-suit injunction
against the plaintiffs, is the possibility of conflicting orders being
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passed. While so observing, the Wuhan Court has, with greatest
respect, failed to take into account the fact that the relief sought by the
plaintiffs before this Court does not form any part of the subject
matter of the proceedings before the Wuhan Court. At best, it may be
said that, if the defendants acknowledge that the plaintiff's patents are
SEPs and that, in the absence of any license from the plaintiffs
authorizing them to utilize the said patents, they would be in
infringement thereof, this Court may have to examine the issue of
fixation of a FRAND compliant royalty rate. It is only at that stage,
and in those circumstances, that any kind of overlap, between the
present proceedings and the proceedings pending before the Wuhan
Court, could be said to arise. That overlap, if and when it may arise
cannot, in my view, constitute a legitimate basis for the Wuhan Court
restraining the plaintiffs from prosecuting their application for
injunction against infringement of the suit patents, either at the
interlocutory or at the final stage. It need hardly be stated that every
overlap of issues cannot justify an anti-suit injunction.
104. I also have my reservations regarding whether the mere
possibility of conflicting orders being passed could be a ground for a
Court, in one sovereign country, to injunct proceedings before the
Court in another, over which it has no dominion at all. I have not
come across any decision which justifies this. To my mind, a step so
extreme as an anti-suit injunction cannot be justified on a mere
apprehension of the possibility of conflicting orders, were proceedings
in both jurisdictions to be allowed to proceed. Assuming, for the sake
of argument, that one of the Courts were to arrive at a decision prior
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in point of time to the other, it would always be open to the latter
Court to follow, or distinguish, the decision of the former, or take a
different view. The defendants do not seek to contend that the order
of this Court would bind the Wuhan Court, or vice versa. It would,
therefore, be too simplistic to treat the mere apprehension of a
possibility of two views, on one issue, resulting, as justifying a Court
in one sovereign jurisdiction injuncting, in its tracks, proceedings in
another. In the present case, however, as the issues before this Court
and before the Wuhan Court, despite some degree of overlap, are
fundamentally distinct, and the proceedings before this Court could
not have been preferred before any other jurisdiction, least of all
Wuhan, the "conflicting orders" conundrum may not assume much
significance.
105. Jurisdiction to adjudicate on the dispute in the present suit vests
only in this Court
105.1 Section 104 of the Patents Act46 specifically prohibits the
institution of any suit, for infringement of a patent, in any court
inferior to a District Court having jurisdiction to try the suit. Section
20 of the CPC47 requires the suit to be instituted in a Court, within the
104. Jurisdiction
No suit for declaration under section 105 or for any relief under section 106 or for infringement of a patent
shall be instituted in any court inferior to a District Court having jurisdiction to try to suit:
Provided that where our counter-claim for revocation of the patent is made by the defendant, the
suit, along with the counter-claim shall be transferred to the High Court for decision."
20. Other suit is to be instituted where defendants reside or cause of action arises. - Subject to the
limitations aforesaid, every suits shall be instituted in a Court within the local limits of those jurisdiction -
(a) the defendant, or each of the defendants where there are more than one, at the time of the
commencement of the suit, actually involuntarily resides, or carries on business, or personally
works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of
the suit, actually involuntarily resides, or carries on business, or personally works again, provided
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local limits of whose jurisdiction the defendants reside or carry on
business, or where the cause of action arises, wholly or in part.
Indeed, it is not disputed, even by the defendants, that the present suit,
seeking injunction against infringement of the plaintiff's Indian suit
patents IN 910, IN 912, IN 719, IN 036 and IN 182, could not have
been maintained before any court outside India. Nor do the
defendants dispute the territorial jurisdiction of this Court, to
adjudicate and decide the present suit.
105.2 Clearly, therefore, the order, dated 23rd September, 2020, of the
Wuhan Court, injuncts the plaintiff from prosecuting its suit and
application for injunction, against infringement of the suit patents,
which are amenable only to the jurisdiction of this Court. In other
words, what has happened in the present case is that a foreign court
has restrained the plaintiff from prosecuting a proceeding which is
maintainable before this Court, and could not be maintained before
any other Court.
106. The Wuhan Court does not have the jurisdiction to grant the
relief sought by the plaintiff in IA 6440/2020. The result of allowing
the anti-suit injunction order passed by the Wuhan Court to be
enforced by the defendants against the plaintiff would be that the
plaintiff is completely prohibited - till the Wuhan Court lifts or
vacates the anti-suit injunction - from prosecuting its claim for
injunction against infringement, by the defendants, of the suit patent,
that in such case either the leave of the Code is given, or the defendants who do not reside, or carry
on business, or personally works again, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises."
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as this claim can be prosecuted only before this Court, and before no
other court, least of all before the Wuhan Court. It is not, therefore, a
situation in which the claim of the plaintiff could equally be
prosecuted before the Wuhan Court. The Wuhan Court, which does
not possess the jurisdiction to decide the issue of infringement of the
plaintiff patent has, by the order dated 23rd September, 2020,
interdicted the plaintiff from prosecuting the said claim before the
only Court which has the jurisdiction to entertain it. The proceedings
arising out of the anti-suit injunction application filed by the
defendants before the Wuhan Court were, in that regard, prima facie
oppressive in nature, as they were intended to altogether prevent the
plaintiff from prosecuting its prayer for anti-suit injunction of the suit
patent. Equally, therefore, the order, dated 23rd September, 2020, of
the Wuhan Court, allowing the prayer of the defendants in the said
anti-suit injunction application, but also, prima facie, be oppressive to
the plaintiff even on this sole ground.
107. It is obviously disingenuous, on the part of the defendants, to
contend that the order of the Wuhan Court merely suspends, and does
not altogether foreclose, the plaintiffs from pursuing the present claim
for injunction against the defendants. There being no other forum
before which the plaintiffs could agitate their claim against
infringement, it is totally unthinkable that a forum which has no
jurisdiction in that regard could injunct the plaintiffs from agitating
the issue before the only forum which has. Such injunction cannot be
allowed to continue even for a single day. That apart, it is common
knowledge - which is why I characterize the contention as
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disingenuous - that, in intellectual property infringement claims, what
matters is injunction of the exploitation of the infringing patent, or
trade mark, or copyright. What is intended to be prevented, therefore,
is assault on the intellectual property integrity of the holder of the
intellectual property. The defendants have not chosen to undertake
not to use the technology, involving the allegedly infringed suit
patents, during the pendency of the Wuhan proceedings. What the
defendants suggest is, therefore, that the plaintiffs should sit back and
helplessly watch continued infringement of their suit patents by the
defendants (as the plaintiffs would allege) without being able to lift a
finger to prevent it, even while legal remedies, for redressal, continue
to remain available in this country under the Patents Act. This would,
clearly, render the Patents Act, and the statutory guarantees available
thereunder, both otiose and impotent. Damages are but poor solace,
once the damage itself is done.
108. For this reason, the submission of Mr. Kaul that, in order to
avoid an "unseemly race" to obtain a decree, the prayer for anti-
enforcement injunction of the plaintiff sought to be rejected, fails to
impress. The question of an "unseemly race" would arise where the
nature of the reliefs sought by the plaintiffs in the defendants is
similar. It is not so in the present case. The plaintiffs seek injunction
against infringement of their suit patents, whereas the defendants seek
fixation of a global FRAND rate, for the entire portfolio of the
plaintiffs' patents. The plaintiffs and the defendants are not,
therefore, racing towards the same goal.
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109. Before concluding the discussion, it is necessary to deal with
the Microsoft30 decision, on which Mr Kaul placed considerable
emphasis. As already noted in para 75 supra, a specific contention,
advanced before the Court of Appeal, that grant of anti-suit injunction
would disable Motorola from enforcing its German patents before the
only court competent to adjudicate thereon, was rejected. The Court
of Appeal felt that this submission, of Motorola, "exaggerated" the
scope of the injunction, as Motorola could continue, despite the anti-
suit injunction, to continue agitating for damages or other non-
injuncting remedies. With respect, this finding, in my view, is
completely unacceptable, and I am constrained, therefore, to express
my inability to concur therewith. It completely undermines, in my
opinion, the very sanctity of intellectual property rights, by treating
damages, or "other non-injunctive reliefs" as sufficient succour, for
the plaintiff seeking relief against infringement of its patents. At least
in the regime of the Patents Act in this country, such a position is
totally unacceptable. The right to seek remedy against infringement
of patents, validly held by the plaintiff, is a pre-eminent right, with the
right to claim damages being residuary in nature, and not vice versa. I
express my respectful disagreement, further, with the observation, of
the Court of Appeal, that the argument of Motorola "exaggerated" the
scope of the injunction sought by it. Rather, in my considered view,
the observations of the Court of Appeal undermine the scope of the
injunction sought by Motorola. The orders in the IPCom-Lenovo
orders, rather, in my view, postulate the correct legal position, which
is that a sovereign court in one jurisdiction cannot injunct proceedings
in a sovereign court in another jurisdiction, especially in the realm of
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infringement of intellectual property rights, which are maintainable
only before such latter court, and none other. Any such injunction
would amount to an assault on the rights of the litigant before the
latter court and, in the absence of cogent and convincing material to
indicate that the continuation of the proceedings before the latter
Court would be oppressive or vexatious to the proceedings pending
before the former, would be totally unjustified in law. Injunction
against enforcement thereof would, therefore, in my view be
eminently justified.
My concluding view
110. In my view, therefore, it is totally impermissible for a Court in
one sovereign jurisdiction to injunct the party before it from pursuing
its cause against infringement of its intellectual property before
another sovereign jurisdiction, where such latter jurisdiction is the
only forum competent to adjudicate the claim of infringement, save
and except where continuation of the infringement proceedings are
vexatious or oppressive to the proceedings pending before the former,
injuncting, court. The mere fact that one or other aspect of the
controversy may overlap cannot be a ground to grant such injunction.
Nor can the consideration of the two courts arriving at differing
decisions on that part of the issue which may overlap be regarded as
sufficient to grant such injunction, which would result in denying the
plaintiff seeking injunction against infringement the right to agitate
such claim before the only forum competent to adjudicate thereon.
Such injunction would be ex facie destructive of the principle of
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comity of courts. It cannot be tolerated even for a day. A clear case
for injuncting enforcement, against the plaintiff, before the court
before whom the action for infringement is brought, of such a diktat
is, therefore, made out. Grant of anti-enforcement injunction is,
therefore, imperative in such a case.
111. The right of the citizen, in this country, to legal redressal to
ventilate his legitimate rights, is hallowed, sacred, and fundamental.
It is a sanctified and preambular constitutional goal, and derives
sustenance from the most sublime of our fundamental rights,
including those consecrated by Articles 14 and 21. It is an inviolable
and inalienable facet of access to justice.48 It triumphantly carries
forward the torch lit, over two centuries ago, by Chief Justice
Marshall in Marbury v. Madison49 which hailed the right to obtain
civil redress as "the very essence of civil liberty". What the order of
the Wuhan Court does, unfortunately, is to deny, to the plaintiffs, the
right to even flavour this essence, without due justification.
112. Specifically in the Indian context, our Constitution guarantees
"justice, social economic and political" to every citizen. This
guarantee cannot be sacrificed at the altar of comity.
Concealment, lack of fairness and transparency by the defendants
before this Court
113. One more aspect remains, regretfully, to be addressed.
Refer Anita Kushwaha v. Pushp Sudan, (2016) 8 SCC 509
5 US (1 Cranch) 137 (1803)
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114. Despite the emphatic assertions to the contrary by Mr. Kaul, I
am constrained to observe that the defendants have, in these
proceedings, been less than fair, not only to the plaintiffs, but also to
this Court. Even in the proceedings before this Court, no copy, of the
anti-suit injunction application, filed by them before the Wuhan
Court, was ever furnished by the defendants to the plaintiffs - or,
indeed, even to this Court. Most disturbingly, even in the reply dated
25th August, 2020, filed by the defendants in response to IA
6440/2020, while reference is to be found to the complaint filed
before the Wuhan Court, there is conspicuous absence of any
reference to the anti-suit injunction application filed in the said
proceedings. After the anti-suit injunction application was filed, the
present proceedings were listed before this Court on as many as six
occasions, before passing of the ad interim order, in the present
application, on 9th October, 2020, but the respondents never disclosed
the fact of filing of the anti-suit injunction application. A transparent
intent, to keep the plaintiffs, as well as this Court, in the dark,
regarding the filing of the anti-suit injunction application, and the
passing of the order, thereon, it is apparent. In my view, such an
attitude, in a commercial litigation such as the present - or, for that
matter, in any proceeding in a court - is completely intolerable. It
amounts to fraud on the Court as well as material concealment from
the plaintiffs. Even on this sole ground, I am convinced that the
defendants deserve to be injuncted from enforcing, against the
plaintiffs, the order dated 23rd September, 2020, of the Wuhan Court,
passed in such circumstances.
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115. The inaction, on the part of the plaintiffs, in responding to the
summons issued by the Wuhan Court in the complaint of the
defendants, cannot wish away this default. Even as on date, the
plaintiffs are not opposing the continuation of the proceedings in the
Wuhan complaint. It is completely unfair, therefore, on the part of the
defendants, to seek to capitalize on that default, in an attempt to
justify the passing of the anti-suit injunction, by the Wuhan Court,
without the plaintiffs even been made aware of the pendency, or even
the filing, of the anti-suit injunction application.
Re. Prayer (iv)
116. Prayer (iv), which Mr. Banerjee pressed, seeks imposition of
costs, on the defendants, equivalent at least to the "fine" with which
the order, dated 23rd September, 2020, of the Wuhan Court, mulcts the
plaintiffs, in the event they continue to prosecute their application for
injunction before this Court. The prayer has merit. One of the
defences taken by the defendants is that they are powerless to prevent
any order, by the Wuhan Court, requiring the plaintiffs to pay the said
fine, for disobeying the anti-suit injunction granted by the Wuhan
Court and continuing to prosecute their application for interim
injunction before this Court. Once it has been found that enforcement
of the anti-suit injunction order of the Wuhan Court, by the defendant
against the plaintiffs, deserves to be injuncted, it follows merely as a
sequitur that the plaintiffs cannot be fastened with the "fine" imposed
by said order of the Wuhan Court. Mr. Kaul submits that this Court
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should not interfere with the manner in which the Wuhan Court, being
a court in another sovereign jurisdiction, seeks to enforce its orders. I
agree. It is, quite obviously, not permissible for this Court to restrain
the Wuhan Court from passing any order. The defendants, however,
contend that the Wuhan Court order is self enforcing its character, in
that it becomes enforceable, with respect to the fine which the
plaintiffs would have to pay there under, without any intervention by
the defendants. Equally, submit the defendants, they cannot restrain
such enforcement, should the Wuhan Court seek to do so. The fine,
which would have to be so paid, according to the defendants, would
augment the treasury, not of the defendants, but of the Wuhan Court.
The defendants claiming helplessness in this regard, the only manner
in which succour can be granted to the plaintiffs, as regards the said
fine, is by directing the defendants to, in the event of the Wuhan Court
directing payment of the fine by the plaintiffs, indemnify the plaintiffs
by directing deposit, by the defendants, of the amount so directed by
the Wuhan Court with this Court, so that the plaintiffs could withdraw
the amount and stand recompensed. This follows as a natural
corollary to the restraint, of the execution of the Wuhan Court order
against the plaintiffs, on plain principles of restitution.
117. Additionally, the direction for such indemnity, by the
defendants in favour of the plaintiffs, would also be justified in view
of the fact that the defendants have resorted to unfair practice in
securing the order from the Wuhan Court, keeping the plaintiffs, as
well as this Court, in the dark, throughout. The financial implications
of this direction are, no doubt, prohibitive but, if the Wuhan Court,
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towards enforcement of its anti-suit injunction order, directs payment
of the fine, the brunt has to be borne either by the plaintiff or the
defendants. Given the findings heretofore, it would be the defendants
who have to suffer.
The troika considerations
118. Applying the troika test of prima facie case, balance of
convenience and irreparable loss, therefore, grant of anti-enforcement
injunction, as sought by the plaintiffs, would be eminently justified.
The plaintiff has a clear prima facie case against enforcement of the
order by the defendants, in view of the findings heretofore. If the
order were to be permitted to be enforced, irreparable loss is bound to
occur to the plaintiffs, as the plaintiffs would be unable to prosecute
the only remedy available to them against the (perceived)
infringement of their suit patents, and would also stand exposed to the
fine imposed by the Wuhan Court for pursuing their legitimate legal
remedies in this country. As the plaintiffs are not seeking any
restraint against the defendants continuing to prosecute their
complaint before the Wuhan Court, whereas the order of the Wuhan
Court brings the present proceedings to a grinding halt, without due
justification, the balance of convenience would also be in favour of
grant of anti-enforcement injunction as sought.
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F. Conclusion
119. In view of the above discussion, this application is allowed in
the following terms and to the following extent:
(i) The ad interim injunction granted by this Court on 9th
October, 2020 is made absolute, pending disposal of CS
(COMM) 295/2020. The defendant shall remain restrained,
during the pendency of the present suit, from enforcing, against
the plaintiffs, the order dated 23rd September, 2020, passed by
the Wuhan Court.
(ii) In the event of any orders been passed by the Wuhan
Court, or any other measures being taken, against the plaintiffs,
towards deposit of the fine of RMB 1 million per day, as
directed by the order dated 23rd September, 2020 of the Wuhan
Court, the defendants shall, within one week of passing of the
said order (which period may be reduced or extended at that
stage, if necessary), secure such amount of fine, imposed on the
plaintiffs, by depositing, with the Registrar General of this
Court, an equivalent amount, by way of crossed cheque/demand
draft, and the plaintiff shall be entitled, on such deposit, to
withdraw the said amount, or have been transferred to the
account of the plaintiffs.
(iii) As the plaintiffs have not pressed the prayer, in this
application, for a direction to the defendants to withdraw the
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complaint filed by them before the Wuhan Court, no orders are
being passed on the said prayer which is, accordingly, disposed
of.
C. HARI SHANKAR, J.
MAY 3, 2021
dsn/ss/rbararia
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