On 24 October 2024, the Federal Circuit issued a precedential decision in Telefonaktiebolaget LM Ericsson v. Lenovo (U.S.), Inc.1 concluding that the threshold “dispositive” requirement of the foreign-antisuit-injunction framework can be met if a foreign antisuit injunction would resolve a foreign injunction, even if it would not resolve the entire foreign proceeding. The Federal Circuit also clarified that whether a party satisfies the good-faith-negotiating obligation of a fair, reasonable, and non-discriminatory (FRAND) commitment is dispositive of the party’s ability to pursue foreign injunctions.
The parties to the case are both European Telecommunications Standards Institute (ETSI) members and have made a FRAND commitment through their membership. The parties were negotiating a global cross-license for certain standard essential patents (SEPs). When the parties could not reach an agreement, several lawsuits were filed, including a lawsuit filed by Ericsson in the U.S. alleging that the defendant infringed its U.S. 5G SEPs and breached its FRAND obligation by failing to negotiate in good faith. Defendant counterclaimed with allegations mirroring Ericsson’s. Ericsson also filed lawsuits in Colombia and Brazil alleging that the defendant infringed its Colombian and Brazilian 5G SEPs, seeking, and securing, a preliminary injunction in each country prohibiting infringement of the SEPs.
After the foreign injunctions were entered, the defendant moved for an antisuit injunction in the United States to prevent Ericsson from enforcing the foreign injunctions it obtained in Colombia and Brazil. The district court denied the defendant’s motion concluding that the domestic lawsuit was not dispositive of the foreign action.
The analysis of foreign-antisuit-injunction requests, as set forth in Microsoft Corp. v. Motorola, Inc.,2 includes the threshold requirement that “the parties and issues must be the same in both the domestic and foreign suits, and the domestic suit must be dispositive of the foreign action to be enjoined.”3 The district court reasoned that to be dispositive, the domestic suit must necessarily result in a global cross-license between the parties.4 The defendant appealed the denial of its motion for an antisuit injunction.
The Federal Circuit vacated the district court’s application of the “dispositive” requirement reasoning that the district court’s interpretation of the requirement was based on a misunderstanding of Microsoft. Specifically, the Federal Circuit concluded that “the ‘dispositive’ requirement can be met even though a foreign antisuit injunction would resolve only a foreign injunction (and not the entire foreign proceeding).”5 The Court’s key inquiry was whether Ericsson’s FRAND commitment precluded it from seeking SEP-based injunctive relief without first negotiating in good faith. The Court concluded that a party subject to an ETSI FRAND obligation must, at a minimum, negotiate in good faith before pursuing injunctive relief so as not to render the FRAND commitment meaningless.6 Because Ericsson’s compliance (or lack thereof) with its obligation is dispositive of its ability to pursue and enforce foreign injunctions against the defendant, the Federal Circuit vacated the denial of the defendant’s motion for an antisuit injunction and remanded.
The Federal Circuit’s decision is notable as it clarifies that the “dispositive” requirement of the foreign-antisuit-injunction framework requires a party to have engaged in the minimum standard of conduct imposed by its FRAND commitments, including for foreign negotiations.
Footnotes
1 Telefonaktiebolaget LM Ericsson v. Lenovo (U.S.), Inc., No. 24-1515, 2024 WL 4558664 (Fed. Cir. Oct. 24, 2024).
2 Microsoft Corp. v. Motorola, Inc., 696 F.3d 872 (9th Cir. 2012)
3 Id. at 882 (quoting E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984 (9th Cir. 2006)).
4 Telefonaktiebolaget LM Ericsson v. Lenovo (U.S.), Inc., No. 5:23-cv-569, 2024 WL 645319, at *8 (E.D.N.C. Feb. 14, 2024).
5 Telefonaktiebolaget, 2024 WL 4558664, at *8.
6 Id. at *9.
