Ninth Circuit Affirms Preliminary Injunction Preventing Motorola From Enforcing German Injunction | Practical Law

Ninth Circuit Affirms Preliminary Injunction Preventing Motorola From Enforcing German Injunction | Practical Law

In Microsoft Corp. v. Motorola, Inc., the US Court of Appeals for the Ninth Circuit affirmed the district court's grant of a preliminary injunction preventing Motorola from enforcing a patent-related injunction it obtained against Microsoft in a German court.

Ninth Circuit Affirms Preliminary Injunction Preventing Motorola From Enforcing German Injunction

by PLC Intellectual Property & Technology
Published on 02 Oct 2012 • USA (National/Federal)
In Microsoft Corp. v. Motorola, Inc., the US Court of Appeals for the Ninth Circuit affirmed the district court's grant of a preliminary injunction preventing Motorola from enforcing a patent-related injunction it obtained against Microsoft in a German court.

Key Litigated Issue

The key litigated issue was whether the US District Court for the Western District of Washington erred in granting a foreign anti-suit injunction that prevents Motorola from enforcing a patent-related injunction it obtained in a German court.

Background

Microsoft and Motorola are involved in ongoing contract and patent litigation concerning standard-essential patents covering certain wireless and video coding technologies. Microsoft sued Motorola in November 2010 in the US District Court for the Western District of Washington alleging breach of contract for failing to license certain of these patents.
In response to Microsoft's suit, Motorola filed a patent infringement suit against Microsoft in Germany in July 2011 under some of Motorola's standard-essential patents to exclude certain Microsoft products from the German market.
While the parties were waiting for the German court's decision, on April 12, 2012, the district court granted Microsoft's motion for a temporary restraining order to enjoin Motorola from enforcing any German injunctive relief it may obtain. The district court granted Microsoft's motion because:
  • The parties and issues are the same in the US and German actions.
  • Motorola's actions raise forum shopping concerns and frustrated the district court's ability to adjudicate the issues before it.
  • The injunction's impact on comity was tolerable.
On May 2, 2012, the Mannheim Regional Court in Germany issued its ruling that:
  • Microsoft did not have a license to use Motorola's patents.
  • Motorola did not have a commitment with the International Telecommunications Union concerning Motorola's patents that Microsoft could enforce.
  • Microsoft infringed Motorola's asserted patents.
The Mannheim Regional Court enjoined Microsoft from marketing or importing certain of its products in Germany. This injunction required Motorola to post a security bond. Under German law, Microsoft then had the option to either:
  • File a motion with the German appellate court to stay the injunction.
  • Make an unconditional offer to enter into a license with Motorola.
On May 14, 2012, the district court converted the TRO to a preliminary injunction, which Motorola appealed.

Outcome

On September 28, 2012, the US Court of Appeals for the Ninth Circuit issued a decision affirming the district court's grant of the injunction.
The Ninth Circuit assessed the propriety of the district court's foreign anti-suit injunction using the three-part inquiry established by E. & J. Gallo Winery v. Andina Licores S.A. and Applied Medical Distribution Corp. v. Surgical Co., requiring a determination of whether:
  • The parties and the issues are the same in both the domestic and foreign actions and whether the first action is dispositive of the action to be enjoined.
  • A foreign litigation would:
    • frustrate a policy of the forum that would be issuing the injunction;
    • be vexatious or oppressive;
    • threaten the issuing court's in rem or quasi in rem jurisdiction; or
    • prejudice other equitable considerations.
  • The injunction's impact on comity is tolerable.
The Ninth Circuit noted that:
  • The parties are the same in both the US and German actions and the district court did not abuse its discretion in determining that Microsoft's contract-based claims would, if decided in Microsoft's favor, determine the propriety of Motorola's enforcement of the German injunctive relief.
  • The district court made findings sufficient to establish that the German litigation is "vexatious or oppressive" and "prejudices equitable considerations" by compromising the district court's ability to adjudicate the issues before it free of external pressure on Microsoft to enter into an unfavorable settlement before the litigation is complete.
  • The injunction's impact on comity was tolerable because:
    • the dispute concerns a private contractual matter; and
    • the injunction extends no broader than necessary since it only temporarily bars Motorola from posting the bond required to enforce the German injunction.

Court Documents