IPCom, a non-manufacturing entity that bought some patents from Robert Bosch prevailed in a patent infringement action in November 2010 against the mighty Nokia in respect of Nokia's UMTS handsets. IPCom asked for an injunction to restrain Nokia from further infringement. Nokia counterclaimed that they were entitled to a licence under the Fair, Reasonable and Non-Discriminatory (FRAND) obligations of the European Telecommunications Standards Industry (ETSI) IPR Policy because the infringement arose out of the essential nature of the invention to that standard and because they had previously taken a licence from Bosch who were members of ETSI (and therefore subject to the IPR Policy) when the UMTS standard was established.
The Patent Court was asked to consider whether to grant the injunction. The answer (in July 2011) was "not yet". Of interest are the criteria for granting an injunction.
The criteria to be considered were set out Navitaire Corp. v. EasyJet Airline Co. in 2006.
An injunction to restrain an infringer from continuing to infringe is an equitable remedy at the discretion of the Court. Precedent is not binding on the Court when it exercises its discretion, but precedent guides the Court in how to exercise it.
In the absence of equitable defences (laches, acquiescence or estoppel), a successful claimant is prima facie entitled to an injunction and will generally be granted an injunction where there is a threat of repeated infringement and the grant of an injunction is not oppressive, i.e. grossly disproportionate, where "grossly" makes clear that the enquiry is not merely a balance of convenience.
A 100-year old "working rule" that has "stood the test of time" calls for the judge to consider:
1. if the injury to the plaintiff's legal right is small and
2. is one which is capable of being estimated in money and
3. is one that can adequately be compensated by a small money payment and
4. the case is one in which it would be oppressive to the defendant to grant an injunction.
If all four criteria are met, damages may be awarded instead of an injunction. For example, an order to pull down a building may cause a defendant a loss out of all proportion to that which would be suffered by a plaintiff if it were refused. The court does not wish to deliver a defendant "bound hand and foot" to be subjected to any extortionate demands a plaintiff may make. On the other hand, the court does not want to become a tribunal for legalizing wrongful acts. It does not wish to allow a wrong to continue simply because the wrongdoer is able and willing to pay (for example for a licence).
Nokia must first be permitted to plead its case as to why it believes it has a licence. If it does not, and merely believes it is entitled to a prospective licence, then the above principles can be considered as to whether Nokia should be subject to an injunction.
As in the German Supreme Court "Orange Book" case (See Autumn 2009 Patent issues), the Court appears to want to see an actual licence rather than a mere obligation to grant a licence before waiving the patentee's prima facie right to an injunction.
Might an injunction amount to delivering Nokia "bound hand and foot"? Not necessarily. The patent in question relates to how a mobile station accesses a random access channel. It is purportedly dictated by the UMTS standard, but that is not to say that Nokia cannot sell UMTS phones that operate within the standard while not implementing this feature in the specific way claimed. It could yet turn out to be a hollow victory for IPCom.
Context of Nokia v. IPCom
IPCom did not prevail against Nokia at the first attempt. These proceedings were part of a larger battle between the parties initially started in Germany. Part of Nokia's response to the German action was to commence revocation actions in the UK against some 15 IPCom patents. On 18 January 2010, the Court held two of the patents to be invalid. But for invalidity, they would have found to have been infringed. IPCom were refused permission to amend the patents to make them valid. IPCom appealed against that refusal, and the Court of Appeal stood by the Court's exercise of discretion, saying:
The trend in Europe is making parties put up their cases in time for them to be dealt with fairly at a pre-arranged hearing without adjournment. The message is: "put up in time, or shut up". That can only be good for European industry.
But IPCom had an ace up their sleeve. They had a divisional application granted on 17 March 2010 with stronger claims. Of course Nokia have filed opposition (along with DeTeMobil, Ericsson and HTC, with Vodafone joining by way of intervention).
Lord Justice Jacob sympathised with counsel for Nokia who said:
We have to lop the [heads] of the Hydra one at a time or sometimes two at a time. That is what happens when you are facing somebody with a large patent portfolio. What we object to is every [head] re-growing after we lop it off.