23 June 2021
In a first, the Delhi High Court (“DHC”) on 03 May 2021 granted an anti-enforcement injunction in a suit filed by Interdigital Technology Corporation (“Interdigital”) against Xiaomi Corporation (“Xiaomi”). The DHC was dealing with a suit instituted by Interdigital seeking injunction against Xiaomi for alleged infringement of patents of Interdigital. The facts leading up to the DHC order are as follows:
(i) 09 June 2020: Xiaomi filed suit before the Wuhan court to determine the global royalty rate based on which they could obtain licence from Interdigital;
(ii) 29 July 2020: Interdigital filed a suit before the DHC seeking injunction, alleging infringement of certain patents by Xiaomi, held and registered in the name of Interdigital;
(iii) 04 August 2020: Xiaomi filed anti-suit injunction for a restraint against Interdigital from prosecuting its suit before the DHC; and
(iv) 23 September 2020: Wuhan court granted injunction directing Interdigital to withdraw its application seeking injunction before the DHC.
Pursuant to the Wuhan court’s directions, Interdigital filed an application before the DHC seeking injunction against Xiaomi from enforcing Wuhan court’s directions and subsequently the DHC passed the anti-enforcement injunction order.
While granting injunction against enforcement (“Anti-Enforcement Injunction”) of the Wuhan court’s directions, the following principles / factors were considered (in addition to the Troika test) –
a) Doctrine of Comity
The doctrine of comity is the principle in accordance with which the courts of one state or jurisdiction give effect to the laws and judicial decisions of another, not as a matter of obligation, but out of deference and respect. The doctrine of comity requires a court to abstain from passing an order which would conflict with another order passed by a competent court of law (Supreme Court in India Household and Healthcare Ltd. v. LG Household and Healthcare Ltd).
However, the DHC took exception to the principle of comity in this case. It noted that comity is a two-way street and subject to the foreign order not being offensive to domestic public policy or customary international law. The DHC noted that if such order is oppressive and without due justification, then comity is of relatively little importance.
b) Tests for Anti-Enforcement Injunction
The DHC noted that one of the tests for granting anti-suit injunctions is to determine if the foreign proceedings are ‘vexatious or oppressive’. Drawing a line between an anti-suit injunction (wherein the proceedings are pending) as against an Anti-Enforcement injunction (wherein no proceedings are pending), the DHC noted the absence of an Indian precedent for Anti-Enforcement Injunction. The DHC differed from the view taken from a few foreign precedents wherein a greater degree of caution was called for while dealing with Anti-Enforcement Injunction. The DHC observed that in anti-suit injunctions, the extent of interference with foreign proceedings is greater as compared to Anti-Enforcement Injunctions. This is because in an anti-suit injunction, a running proceeding is sought to be halted in its tracks, whereas, in an Anti-Enforcement Injunction, there is no pending proceeding.
c) General Principles from foreign jurisprudence
Although, the DHC observed the lack of an authoritative delineation in India, it agreed with the general principles relating to anti-suit and Anti-Enforcement Injunctions emerging from foreign jurisprudence. It considered the following guiding factors:
§ Interference with the functioning of a sovereign forum
§ Sufficient interest in the proceeding against which injunction is sought
§ Possibility of injustice and preserving the subject matter
§ Interference to pursue legal remedies
§ Protection of jurisdiction of the court
§ Comity of courts
The DHC also provided certain instances where an Anti-Enforcement Injunction would be justified. It provided that a situation where injunction was sought secretly or if such order were obtained fraudulently or where the applicant seeking Anti-Enforcement Injunction has no knowledge of injunction order until served on her, would be situations justifying an Anti-Enforcement Injunction.
d) Grounds of Wuhan Court’s directions
The DHC noted that where order passed by the court of one sovereign country, without due justification, entrenches on the lawful invocation of remedies, the latter sovereign country is duty bound to protect such incursion. The Wuhan court considered factors such as behaviour of Interdigital, impact on the development of the licensing negotiation between parties and impact the operations of Interdigital and their affiliated companies while issuing directions. The DHC opined that the factors considered by Wuhan court are not recognised as factors for grant of Anti-Suit Injunction in any jurisdiction. Further, it also noted that Interdigital’s failure to appear before the Wuhan court was due to Interdigital being made aware of the Wuhan proceedings only during its pendency. And therefore, their failure to appear cannot be relevant for granting anti-suit injunction. On the remaining grounds such as Xiaomi being registered in China and possibility of conflicting orders, the DHC noted that cause of action before the DHC was infringement of patents. Whereas the issue of infringement was not going to be addressed by the Wuhan court, while adjudicating Xiaomi’s complaint. Therefore, the scale and sweep of enquiry in the Wuhan complaint is decidedly different from that of the DHC. It also inter-alia held that mere overlap of issues cannot be sufficient to grant anti-suit injunction.
Our thoughts
This order of the DHC sets a precedent and way forward especially with the detailed approach taken to reason the order while distinguishing the directions issued by the Wuhan court. This also seems to be in line with the Anti-Enforcement Injunctions being granted by the European countries in patent litigations. In our view, two factors, apart from the facts and circumstances of the case, that outweighed the others were (a) subject matter being patent infringement where it was the right of the patent holder to choose the patents which it desired to enforce; and (b) that the injunction was against the only court which has the jurisdiction to entertain it.
For further information, please contact:
Souvik Ganguly, Partner, Acuity Law
al@acuitylaw.co.in
