IPCom v Lenovo, Court of Paris

20 January 2020 - Case No. RG 19/60318

http://caselaw.4ipcouncil.com/french-court-decisions/court-paris/ipcom-v-lenovo-court-paris

A. Facts

In 2014, Lenovo acquired Motorola [1] . Both companies have a French subsidiary [2] .

Digital River Ireland Limited sells Lenovo products on Lenovo’s French website [3] . Modelabs Mobile S.A. (Modelabs) imports Motorola devices in France alongside Lenovo [2] .

IPCom GmbH & Co. KG (IPCom) acquired over 160 patent families from Robert Bosch in 2017 [1] . IPCom’s Patents cover the 2G, 3G and 4G wireless telecommunications standards [2] . One of the acquired patents is EP 1 841 268 B1 (EP 268) [2] , which is essential to the 3G standard [4] . EP 268 expires on 15 February 2020 [5] . IPCom made a FRAND commitment for its essential patents towards ETSI [6] .

In 2018, IPCom contacted Lenovo for a licence under its patents, including EP 268 [4] . There were some discussions between the parties [2] . On 1st March 2019 [2] , IPCom renewed its offer to license Lenovo and requested Lenovo to respond to this offer by 15 March 2019 [3] .

Absent a reply from Lenovo by this date, IPCom stated that it would initiate proceedings against Lenovo for patent infringement [2] .

On 14 March 2019, US subsidiaries of Lenovo and Motorola filed a claim against IPCom before the District Court for the Northern District of California (US District Court) in the US [2] . The requested the US District Court to set the terms for a worldwide FRAND licence for IPCom’s portfolio [2] .

On 4 July 2019, IPCom filed a complaint against the UK subsidiaries of Lenovo and Motorola before the High Court for England and Wales for patent infringement of the UK counterpart of EP 268 [7] .

On 18 September 2019, Lenovo’s and Motorola’s US subsidiaries filed a motion for an anti-suit injunction with the US District Court to prevent IPCom from continuing the infringement proceedings initiated in the UK as well as from filing any further infringement actions in any foreign jurisdiction, as long as there was no final decision on the US complaint [3] .

On 8 November 2019, the Court of Paris required Lenovo and Motorola to withdraw their anti-suit request with respect to EP 268 by 14 November 2019 the latest [7] . The anti-anti-suit injunction granted by the Court of Paris also applied to any subsequent request to the same end that would be introduced by Motorola and Lenovo. Lenovo and Motorola’s US counterparts partially withdrew the motion for an anti-suit injunction brought before the US District Court [2] .

On 14 November 2019, IPCom filed infringement proceedings against Lenovo and Motorola before the Court of Paris [8] . Before that, on 30 October 2019, IPCom had also sought temporary measures until the patent expiration day, i.e. a preliminary injunction, as well as an order for the recall of all 3G products and the confiscation and sequestration of 3G compliant products [9] .

With the present judgment, the Court rejected IPCom’s request for a preliminary injunction, holding that it was not proportionate and that it could provide an unjustified advantage to IPCom that could lead the company to negotiate licensing terms and conditions that would not be FRAND [10] .

B. Court’s reasoning

With respect to the request for a preliminary injunction, the Court applied Article L615-3 of the French Intellectual Property Code. This provision allows courts to order urgent measures to prevent an irreparable damage to be caused to the right-holder [11] . For this, it is required that patent infringement is likely and the damages potentially suffered cannot be compensated by monetary payments [12] .

The Court also took recourse to the EU Directive 2004/48, which provides that preliminary measures should be proportionate considering the specificity of a dispute on a case by case basis [13] .

The Court concluded that there was no irreparable harm to IPCom that could not be compensated by damages, if a preliminary injunction would be denied. [14] IPCom had claimed that the absence of an injunction would put existing licensees at a disadvantage and that a request for interim measures could not be considered as abusive, given the fact that the absence of a preliminary injunction would reduce the value of its patent portfolio [15] . The Court was not convinced that this would be the case. Moreover, the Court placed weight on the fact that IPCom did not practise the patents itself and, therefore, did not face a risk to lose market shares by competing products infringing IPCom’s rights [16] .

On the other hand, the Court found that an injunction, even of a temporary nature (until the patent expiration date, i.e. 15 February 2020), affecting almost all Lenovo and Motorola products, would heavily impact these companies. In addition, such an abrupt withdrawal of most of the products from the market would harm the reputation of the defendants and impair the distribution operations of Digital River [16] .

Lenovo and Motorola had argued that IPCom’s request was disproportionate [4] . They highlighted that the injunction request applied to most of their cellphones and tablets, what would lead to a serious financial harm [2] . In their view, IPCom’s behaviour was not FRAND, because IPCom did not wait for the end of the negotiations between the parties on the first offer to submit a second offer that was not negotiable [2] . And IPCom filed infringement procedures in the UK and France, instead of negotiating a FRAND license under the US proceedings [2] . Apart from that, Lenovo and Motorola claimed that the patent was not essential to a mandatory, but only to an optional portion of the standard [2] . They also added that the patent was close to expiration and IPCom did not exploit the patent itself [2] . Therefore, there was no harm that could not be compensated by financial damages [2] .

The injunction would impact Lenovo and Motorola market share, including on the new 5G market, and affect their reputation towards main telecom operators [6] .

C. Other issues

Translation of documents

Modelabs argued that IPCom had breached a French law dated 1539Ordonnance de Villers-Cotterêts by providing documents that were in their majority drafted in English instead of French. This behaviour violated Modelabs’ right to an equitable process [18] . The Court pointed out that, since Modelabs imports and commercialises electronic products in France, it had to understand English [2] . Additionally, IPCom had provided documents in French [2] . Therefore, the Court found that Modelabs’ right to an equitable process was not violated [2] .

Patent ownership / Transfer of patents

The defendants challenged IPCom’s ownership of the patent in suit [19] . They claimed that the patent had not been assigned to IPCom. Would the assignment from Robert Bosch to IPCom, nonetheless, have taken place, there had been a second assignment, since IPCom had merged with another company and as a result of the merger, a new company was created, IPCom GmbH & Co [2] .

The Court highlighted that neither Robert Bosch nor the inventors had made any claim under the patent [20] . Additionally, IPCom published the assignment and justified the transfer [21] . The merger came with a transfer of all IPCom assets to IPCom GmbH & Co [20] . The merger and the change of name were notified to the French Patent Office on 13 September 2019 and was published before the notification of the writ of summons to the defendants [4] .

• [1] Court of Paris, judgement dated 20 January 2020, page 2.
• [2] Ibidem
• [3] Court of Paris, judgement dated 20 January 2020, page 3.
• [4] Court of Paris, judgement dated 20 January 2020, page 13.
• [5] Court of Paris, judgement dated 20 January 2020, page 8.
• [6] Court of Paris, judgement dated 20 January 2020, page 14.
• [7] Court of Paris, judgement dated 20 January 2020, page 4.
• [8] Court of Paris, judgement dated 20 January 2020, page 5.
• [9] Court of Paris, judgement dated 20 January 2020, pages 4-7.
• [10] Court of Paris, judgement dated 20 January 2020, page 17.
• [11] Court of Paris, judgement dated 20 January 2020, pages 10- 11.
• [12] Court of Paris, judgement dated 20 January 2020, page 10.
• [13] Court of Paris, judgement dated 20 January 2020, pages 11, 14-16.
• [14] Court of Paris, judgement dated 20 January 2020, page17.
• [15] Court of Paris, judgement dated 20 January 2020, page 15.
• [16] Court of Paris, judgement dated 20 January 2020, page 16.
• [17] Ordonnance de Villers-Cotterêts
• [18] Court of Paris, judgement dated 20 January 2020, page 9.
• [19] Court of Paris, judgement dated 20 January 2020, page 11.
• [20] Court of Paris, judgement dated 20 January 2020, page 12.
• [21] Court of Paris, judgement dated 20 January 2020, page 12-13.