30.07.2020

Germany’s first “anti-anti-suit injunction”

Background

By judgment of 2 October 2019 (file no. 21 O 9333/19), the Regional Court of Munich I issued the first so-called anti-anti-suit injunction in Germany, which has now been confirmed by the Higher Regional Court and has found a corresponding echo in other countries in mainland Europe. But what is an anti-anti-suit injunction and when can it be applied for?

Put briefly, an anti-anti-suit injunction is a court order that has to be obtained in proceedings for preliminary relief and, as the name indicates, is directed against an anti-suit injunction. An anti-suit injunction, in turn, is an injunction (anti-suit order) known in Anglo-Saxon legal systems which prohibits a party – usually the claimant/plaintiff – under penalty from filing, or continuing, a further suit in another country. Such anti-suit injunctions are impermissible in the European judicial area. By contrast, they are customary in the USA – especially when it comes to preventing “forum shopping” by the opposing party or to thwarting unwanted parallel proceedings.

Thwarting unwanted parallel proceedings has also been the intention of Continental AG, wo applied for an anti-suit injunction against Nokia in the USA in order to prevent Nokia from continuing its patent infringement proceedings before German courts. The Regional Court of Munich I considered this to constitute a violation of Nokia’s rights and unhesitatingly issued an anti-anti-suit injunction, i.e. an order to cease and desist from applying for the anti-suit injunction in the USA; this anti-anti-suit injunction was confirmed by the Higher Regional Court of Munich by judgment of 12 December 2019 (file no. 6 U 5042/19).

Facts

The parties involved in the underlying lawsuit were Nokia, Continental and the parent company of Continental, Daimler, who were in dispute about the use of a patent. Nokia is in possession of a technical car connectivity solution which Daimler installs in its vehicles via so-called telematics control units. Daimler purchases the telematics control units from other providers – for example, Continental. The parties are, inter alia, in disagreement about who is the appropriate licensee of Nokia – Daimler itself or the other providers and, hence, also Continental?

Against this background, Nokia initiated ten patent infringement proceedings against Daimler before the Regional Courts of Dusseldorf, Mannheim, and Munich I on 21 March 2019; Daimler gave Continental third-party notice in these proceedings. In the process, Continental obtained an anti-suit injunction against Nokia from the US District Court for the Northern District of California with a view to halting the current patent infringement proceedings until the US courts have finally decided who is the patent licensee. In response to this, Nokia filed its application for an anti-anti-suit injunction against the anti-suit injunction with the Regional Court of Munich I.The Regional Court of Munich sustained this application, whereupon Continental withdrew its anti-suit injunction.

Impermissibility of anti-suit injunctions in Germany and Europe

Anti-suit injunctions do not violate international law, as one might think at first glance. This is because they are not issued against the other country whose jurisdiction is intended to be excluded, but against the other party to the dispute. Their primary purpose is to prevent abuse of the right to file suits abroad, and to put a stop to so-called forum shopping.

Despite the above, German procedural law does not grant a judge any powers comparable to an anti-suit injunction that would allow it to deprive a party of its right to file a suit with a foreign court. One of the reasons is that such an instrument could also be used to prevent proceedings before foreign courts that are actually competent, thus jeopardising the right to effective legal protection. Another reason is that anti-suit injunctions are compatible neither with the principle of mutual trust that applies within the system of Regulation (EU) No. 1215/2012 nor with the statutory provisions regarding jurisdiction, according to which all courts in the European Union are deemed to have the same expertise. In the above-mentioned judgment of the Regional Court of Munich I, the latter further stated that otherwise proper court proceedings in accordance with the rule of law would be jeopardised, “as such proceedings are only guaranteed if the parties can, without restriction, file the applications that are necessitated by the course of the proceedings”. According to the Regional Court of Munich I, if an anti-suit injunction could prevent the continuation of patent infringement proceedings, this would additionally violate the appropriation inherent to the patent as a property-type right pursuant to Sections 9 et seq., 139 et seq. German Patent Act (PatG).

Permissibility of anti-anti-suit injunctions in Germany

The anti-anti-suit injunction, on the other hand, is also permissible in Germany and has now been officially recognised in case law. The Higher Regional Court of Munich has held that even though the applicant does not have a claim for defence against the anti-suit injunction under procedural law, such a claim may exist under substantive law, arising from tort.

Just like the Regional Court had done before it, the Higher Regional Court considered the application for an anti-suit injunction in the USA to be an impending encroachment upon an absolute right of the patent owner, namely upon the patent owner’s property-type rights to the patents dealt with in the proceedings. The Higher Regional Court therefore agreed with the Regional Court that Continental as infringer had an obligation to cease and desist under Sections 1004 in conjunction with 823(1) German Civil Code (BGB) on the grounds that the encroachment was unlawful, as was shown by a comprehensive balancing of interests between the constitutionally guaranteed property-type right to the patents and the general freedom of action under Article 2(1) German Basic Law (GG). The Higher Regional Court held that the property-type right of Nokia outweighed Continental’s interest in filing an application for an anti-suit injunction, which was permissible under US law, and expressly stated that it considered the impact of the US anti-suit injunction on the legal position of Nokia to be more drastic than the impact of the German anti-anti-suit injunction on the legal position of Continental.

In this respect, the anti-anti-suit injunction is not a special, new procedural instrument but a regular injunction in the area of preliminary relief that can be obtained if a claim for injunctive relief exists. Such a claim for injunctive relief may exist if an anti-suit injunction in another country is used to unlawfully prevent the permissible enforcement of substantive legal positions in Germany.

Trend in other countries

A trend regarding the permissibility of so-called anti-anti-suit injunctions can be observed not only in Germany but also in France and in England: on 8 November 2019, both the Tribunal de Grande Instance de Paris and the High Court of Justice in London issued anti-anti-suit injunctions, thus following the example set by the Regional Court of Munich I. Both decisions were based on proceedings between Lenovo and IPCom concerning the 100a patent of IPCom, which is about how a handset connects to a network while prioritising emergency calls. The anti-anti-suit injunctions issued by the two courts denied Lenovo the right to proceed against IPCom by means of an anti-suit injunction, which had once again been applied for with the US District Court for the Northern District of California, USA.

Conclusion

An application for an anti-anti-suit injunction can especially be an option upon infringement, or a threat of infringement, of absolute rights – certainly not only in respect of patent rights, as has been the case in the above examples – if the opposing party applies for an anti-suit injunction in another country with a view to preventing further proceedings before competent German domestic courts. The applicant for an anti-anti-suit injunction does not have to wait until the anti-suit injunction has been issued before it can proceed against such injunction. Instead, once the application for an anti-suit injunction has been filed, there is a risk of first infringement based on which an anti-anti-suit injunction can be applied for with the German courts as a counter-measure. As for the scope of the anti-anti-suit injunction, it is noticeable that the Higher Regional Court of Munich believed that efforts had been combined within the group of companies and, therefore, considered not only Continental but also the German parent company Daimler to be a proper defendant. This means that an anti-anti-suit injunction can be applied for not only against the applicant for the anti-suit injunction but, as a precaution, also against other group companies.

Author
Dr Stephan Bausch, D.U.

Dr Stephan Bausch, D.U.
Partner
Cologne
stephan.bausch@luther-lawfirm.com
+49 221 9937 25782

Katharina Klenk-Wernitzki, Dipl. Reg.-Wiss

Katharina Klenk-Wernitzki, Dipl. Reg.-Wiss
Senior Associate
Cologne
katharina.klenk@luther-lawfirm.com
+49 221 9937 25741