The US Court of Appeals for the Federal Circuit vacated a district court’s decision to deny an antisuit injunction prohibiting a patent owner from enforcing injunctions that it obtained in Columbia and Brazil on standard essential patents (SEPs). Telefonaktiebolaget LM Ericsson, et al. v. Lenovo (United States), Inc., Case No. 24-1515 (Fed. Cir. Oct. 24, 2024) (Prost, Lourie, Reyna, JJ.)

Lenovo and Ericsson entered into negotiations to cross-license their SEPs to each other. SEPs are patents declared essential to complying with a technical standard. Because SEPs by definition must be practiced to comply with a given standard, SEP holders wield significant power over standard implementers during licensing negotiations. Standard setting organizations therefore typically have an intellectual property policy under which SEP holders agree to license their SEPs on fair, reasonable, and nondiscriminatory (FRAND) terms. Here, the parties agreed that the FRAND commitment was a contract, governed by French law, that each party could enforce against the other, and that the FRAND commitment included an obligation to negotiate in good faith over licenses to SEPs.

After the parties were unsuccessful in reaching agreement, Ericsson sued Lenovo in US district court alleging that Lenovo infringed four of Ericsson’s US SEPs related to the 5G wireless communication standard. Ericsson also alleged that Lenovo breached its FRAND commitment by failing to negotiate in good faith and asked the district court to determine a FRAND rate for a global cross-license between the parties. Lenovo counterclaimed, alleging that Ericsson infringed four of Lenovo’s 5G US SEPs and asking for a similar outcome. Lenovo also asked the district court to enter an antisuit injunction prohibiting Ericsson from enforcing the preliminary injunctions Ericsson obtained in Colombia and Brazil that prohibited Lenovo from infringing Ericsson’s Columbian and Brazilian 5G SEPs. The district court denied Lenovo’s motion, following the antisuit injunction framework in the Ninth Circuit’s 2012 decision in Microsoft v. Motorola. The district court concluded that the instant suit was not dispositive of the foreign action, which was a threshold requirement to enter such an injunction. Lenovo appealed.

The Federal Circuit disagreed with the district court’s determination, finding that a party with a FRAND commitment must negotiate in good faith over a license to its SEPs before it pursues injunctive relief based on those SEPs. Interpreting the “dispositive” requirement, the Court concluded that the “requirement can be met even though a foreign antisuit injunction would resolve only a foreign injunction (and not the entire foreign proceeding), and even though the relevant resolution depends on the potential that one party’s view of the facts or law prevails in the domestic suit.” Here, the Court found that the requirement was met because the “FRAND commitment precludes Ericsson from pursuing SEP-based injunctive relief unless it has first complied with the commitment’s obligation to negotiate in good faith over a license to those SEPs.” If the district court were to determine that Ericsson had not complied with that obligation, that determination would dictate the impropriety of Ericsson pursuing SEP-based injunctive relief. Accordingly, the Federal Circuit vacated the district court’s decision and remanded so the district court could make that determination.