Continental v Nokia, Higher Regional Court (Oberlandesgericht) of Munich

12 December 2019 - Case No. 6 U 5042/19

http://caselaw.4ipcouncil.com/german-court-decisions/olg-munich-higher-district-court/continental-v-nokia

A. Facts

Nokia holds a number of patents declared essential to the practice of 3G and 4G wireless telecommuni- cations standards (Standard Essential Patents, or SEPs). Daimler is one of the world’s largest motor car manufacturers. Continental, a worldwide group of companies with headquarters in Germany, is a supplier of Daimler.

In March 2019, Nokia filed ten patent infringement actions against Daimler before the District Courts of Munich, Duesseldorf and Mannheim in Germany based on several of its German SEPs (German infringement proceedings). Following third-party notices issued by Daimler, two companies of the Continental group joined the German infringement proceedings as interveners (the German subsidiary Continental Automotive GmbH and the Hungarian subsidiary Continental Automotive Hungary Kft.).

On 10 May 2019, a further subsidiary of the Continental group based in the United States, Continental Automotive Systems Inc. (Continental US), brought an action against Nokia and others before the US District Court for the Northern District of California (US Court), accusing Nokia of antitrust violations.

On 12 June 2019, Continental US also filed a motion for an anti-suit injunction, asking the US Court to enjoin Nokia from prosecuting the German infringement proceedings (US motion for anti-suit injunction). The US Court gave Nokia the possibility to respond to the motion for an anti-suit injunction within a deadline expiring on 24 July 2019.

On 9 July 2019, Nokia filed a motion for a preliminary injunction before the District Court of Munich (District Court). Nokia requested the District Court to order Continental US to withdraw the US motion for an anti-suit injunction and to refrain from applying for an anti-suit injunction or similar measures in the future. In addition, Nokia requested an order against the German parent company of the Continental group (Continental Germany), enjoining -among other things- the latter to ensure that Continental US will withdraw the US motion for anti-suit injunction.

On 11 July 2019, the District Court granted Nokia’s request for a preliminary injunction against Continental US [1] .

On 30 July 2019, the District Court issued also an injunction against Continental Germany, ordering the latter to make sure that its affiliate will withdraw the US motion for anti-suit injunction [2] . Continental Germany appealed this decision.

On 3 September 2019, Continental US withdrew the US motion for anti-suit injunction. On 8 October 2019, however, Continental US filed a motion for a Temporary Restraining Order (TRO) against Nokia before the US Court, asking the court to enjoin Nokia from asserting its patents in Germany against companies of the Continental group and their clients. This motion was rejected.

With the present judgment dated 12 December 2019 [3] (cited by https://www.gesetze-bayern.de/Content/Document/Y-300-Z-BECKRS-B-2019-N- 33196?hl=true&AspxAutoDetectCookieSupport=1)., the Higher District Court of Munich (Appeal Court), dismissed the appeal of Continental Germany and confirmed the injunction granted by the District Court on 30 July 2019.

B. Court’s reasoning

The Appeal Court found that Nokia was entitled to an injunction against Continental Germany, in order to prevent a direct unlawful threat to its property rights.

Under German law, an anti-suit injunction or a TRO granted by the US Court would unlawfully infringe Nokia’s property rights: Nokia would be deprived of its right to enforce the exclusivity arising from its patents against Daimler in the pending German infringement proceedings [4] .

The threat to Nokia’s property right emerging from such measures is still urgent, although Continental US had withdrawn the US motion for anti-suit injunction in the meantime. In the Appeal Court’s eyes, the new motion for a TRO filed by Continental US against Nokia indicated that the former had not abandoned the respective strategy yet [5] .

The fact that Continental US – and not Continental Germany – had initiated both motions, did not exclude an injunction against the latter [6] . The Appeal Court confirmed the District Court’s view that Continental Germany was to be considered as ‘co-perpetrator’ of the motions filed by its affiliate in the US, since it had not provided any evidence to counter Nokia’s pleadings suggesting that Continental US acted with the knowledge/consent of its German parent company [7] .

Furthermore, the Appeal Court made clear that the ‘anti-anti-suit injunction’ granted by the District Court in first instance was legally admissible [8] . Continental Germany had, basically, argued that the District Court’s injunction should not have been granted in Germany, since it had the same effect as the US anti- suit injunction, namely depriving Continental US from asserting its rights in court proceedings in the US.

Insofar, the Appeal Court disagreed with the District Court, which had ruled that a German anti-anti-suit injunction was admissible, because it concerned only an auxiliary motion filed by Continental US (motion for an anti-suit injunction) and, thus, had no effect on the main proceedings initiated against Nokia in the US [9] . The Appeal Court held that, as a rule, it is not justified to prevent a party from pursuing even auxiliary motions by court order [10] .

The Appeal Court took, however, the view that the German anti-anti-suit injunction was admissible, since it was -as Nokia had argued- the ‘only effective means of defence’ against an US anti-suit injunction [11] . Moreover, in the present case, it was justified to allow Nokia’s interest to defend itself against an unlawful legal measure to prevail over the interest of Continental US to preserve its freedom to act [12] .

Furthermore, the fact that Nokia was, in principle, in the position to participate in the US proceedings for an anti-suit injunction did not speak against granting an anti-anti-suit injunction to Nokia in Germany. Reason for that was, according to the Appeal Court, that the implications of an anti-suit injunction on Nokia’s right to proceed with the German infringement proceedings would not have been a factor considered by the US Court, when deciding on the motion for an anti-suit injunction filed by Continental US [13] . Nokia, would, therefore, not be able to sufficiently defend its rights in the proceedings before the US Court.

Equally irrelevant for the present case was the fact that the US anti-suit injunction would most likely not be enforceable in Germany [13] . The Appeal Court pointed out that the penalties which Nokia would be required to pay in the US in case of non-compliance with an anti-suit injunction would, in fact, force Nokia to stop asserting its patents in the German infringement proceedings [14] .

In addition, the Appeal Court found that the ‘anti-anti-suit injunction’ granted by the District Court in Germany did not violate international law, since it did not have any direct impact on the jurisdiction of the US courts and, accordingly, did not question US sovereignty [15] .

Finally, the Appeal Court highlighted that the decision of the District Court did neither violate European law. European law was not even applicable here, since the case involved the infringement of German patent rights by a domestic entity [16] .

• [1] Nokia v Continental, District Court of Munich, Order dated 11 July 2019, Case-No. 21 O 3999/19.
• [2] Nokia v Continental, District Court of Munich, Order dated 30 July 2019, Case-No. 21 O 9512/19.
• [3] Nokia v Continental, Higher District Court of Munich, decision dated 12 December 2019, Case-No. 6 U 5042/19
• [4] Ibid, para. 55.
• [5] Ibid, para. 56.
• [6] Ibid, paras. 76 et seqq.
• [7] Ibid, paras. 81 et seqq.
• [8] Ibid, paras. 58 et seqq.
• [9] Ibid, paras. 59 et seqq.
• [10]  Ibid, paras. 59 et seqq.
• [11] Ibid, paras. 69 and 72.
• [12] Ibid, para. 69.
• [13]  Ibid, para. 70.
• [14] Ibid, para. 71.
• [15] Ibid, para. 73.
• [16] Ibid, para. 74.