Interdigital Technology Corporation v.
Xiaomi Corporation: Can a Foreign Court Injunct a Party from Pursuing its Cause before Indian Courts?
The Delhi High Court, in its recent ruling has ruled India’s first case on anti-enforcement order for an anti-injunction order passed by a foreign court.
Xiomi Corporation (“Xiomi”) had filed a suit for Standard Essential Patents (“SEPs”) global rate-setting before the Wuhan Court in June 2020. Interdigital Technology Corporation filed an infringement suit in July 2020 before the Hon’ble High Court of Delhi alleging that Xiaomi Corporation used the technology of their SEPs without due authorisation. They also claimed that they grant licenses at rates which are fair, reasonable and non-discriminatory (“FRAND”). The case filed in India is inextricably linked with China (which was instituted prior to the Delhi High Court Injunction Suit) where the defendants filed a SEP Royalty Rate Setting Suit before the Wuhan Court.
The Hon’ble High Court of Delhi issued Summons on 4th August 2020, and on the very same day, the defendants filed an anti-suit injunction application before the Wuhan Court for a restraint from prosecuting the suit before Delhi High court. As per order dated 23rd September 2020, the Wuhan Court issued directions directing withdrawal of any application for any temporary or permanent injunction in China or elsewhere. An interim application was therefore filed by Interdigital for injunction on enforcement of the order.
Before explaining the issues, the court categorised the different kinds of injunction suits in foreign claims, to clarify which category the captioned suit fell under. Injunction suits may be of three types:-
- Anti-suit injunctions, where the order deals with injunction from proceeding with the main suit pending before a foreign court;
- Anti-anti-suit injunctions (more correctly, anti-anti-suit injunction-injunctions), which are ordered for injuncting the anti-suit injunction application filed by a party before a foreign court, for injuncting a local proceedings;
- Anti-enforcement injunctions, which injuncts a party from enforcing against another, an order passed by a foreign court, from being enforced against them. These may be further of two kinds, an order passed in a main suit, or, in an anti-injunction suit.
There were two important issues, as discussed hereinbelow:-
- Whether the Wuhan Court was justified in passing the anti-suit injunction vide 23rd September 2020?
- Whether the Delhi High Court could injunct Xiomi from enforcing this order against Interdigital?
The court, after analysing several Indian and international judgment of similar kind on anti-injunction suits and anti-enforcement suits traced a common thread amongst them all, with respect to anti-enforcement injunctions for anti-injunction orders. Primarily, the court observed that the principles related to anti-injunction suit may also be applicable to anti-enforcement suits. These principles elucidated that:-
- An anti-suit injunction by a foreign court restraining a court in another sovereign nation must be passed with utmost caution and in rare cases, since it interferes with the working of a sovereign forum.i
- Anti-suit injunctions may be passed by a court having “sufficient interest” or “natural forum” in the case which forms the subject matter of the injunctions.ii
- A definitive test as to where an order of injunction may be granted is the possibility of gross injustice to a party, if such injunction is denied.iii Gross injustice may include the fact that such an order may be vexatious or oppressive to a party’s rights.
- The ambit of “oppression” will constitute the “interference” of a party’s right to pursue their legal remedy in any other competent jurisdiction to adjudicate upon the rights of such party. This is specifically considered oppressive, if that alternate competent jurisdiction was the only jurisdiction before which the party could claim relief.iv
- Especially in case of infringement suits, the court observed that, “the right to seek legal redressal, against infringement, was a fundamental right.”v A patent holder has the right to choose which SEPs he would be willing to enforce against a party. In case an order takes away this “fundamental right” of a party, it would be considered oppressive in nature, ex facie.vi
- The court further, commenting on the Principle of Comity, observed that, the principle doesn’t come to play if the proceedings/order against which the injunction was sought, was oppressive in nature. The principle is further subject to other factors such as where “foreign law or foreign proceedings or order was not offensive to domestic public policy or customary international law. Comity in any event is a two- way street.”vii
- Anti-execution injunctions may not be considered exceptional to anti-suit injunctions, to the extent that, “even if grounds for grant of injunction were made out, the court would hesitate.”
- The court also enlisted a few instances where anti-enforcement orders may be passed. These may include situations where, the judgement for injunction was obtained without the knowledge of the party being injuncted, such that they could not have prepared for any pre-emptive measures, or, the injunction order was obtained fraudulently, or, where the party seeking anti-enforcement order was made
aware of proceedings against them, only after they were made available of the copy of the order against which they seek such injunction.
Based on these principles, the Court arrived at the conclusion that the Wuhan Court had overstepped its jurisdiction by restraining Interdigital from filing a suit in any court outside China as well. The Court held that “…It is totally impermissible for a court in one sovereign jurisdiction to injunct the party before it from pursuing its cause against infringement of its intellectual property before another sovereign jurisdiction…” Further, the Delhi High Court dismissed Xiomi’s contention that both the suits pertained to the same issues and therefore the captioned suit must be dismissed. The Delhi High Court noted that the proceedings were substantially on different points of law and therefore, Interdigital could not be restricted from exercising its right to file for infringement of their SEPs in India.
The Wuhan court had also ordered Interdigital to pay a fine of RMB 1 Million yuan per day in the event of violation of the order. In furtherance of this, the Delhi High Court ordered Xiomi to deposit the same amount with the Delhi High Court, if the Wuhan Court directed for such payment, within a week from passing of that order, to protect Interdigital’s rights.
Aarna Law Comments-
This order has several nuances. While it is understandable that the Wuhan Courts were concerned about the process involved in arriving at the Licensing Fee. However, there are several issues related to the jurisdictions of China and India, comity of courts and the very principle of sovereignty. This is a significant judgment since the position of law has been clarified- that a foreign court cannot injunct a party from pursuing its cause before Indian courts when Indian jurisdiction is the only forum competent to adjudicate the case. Essentially, when a matter especially a suit seeking injunctive reliefs can be adjudicated only in India, that Indian Courts cannot be restrained from adjudicating the matter in light of the established principles of law, especially the principle of comity.
i Devi Resources Limited v. Ambo Exports Limited [2019 SCC OnLine Cal 7774]
ii SAS Institute Inc. v. World Programming Ltd. [(2020) EWCA Civ 599]
iii IPCom GmbH & Co KG v. Lenovo Technology (United Kingdom) Ltd. [(2019) EWHC 3030 (Pat)], Lenovo (US) v. IPCom GmbH & Co KG [RG 19/21426 – No Portalis 35L7-V-B7D-CBAZK], Huawei Technologies Co. Ltd. v. Conversant Wireless Technologies S.A.R.L [(2019) EWCA Civ. 38].
iv Lenovo (US) v. IPCom GmbH & Co KG [RG 19/21426 – No Portalis 35L7-V-B7D-CBAZK], Huawei Technologies Co. Ltd. v. Conversant Wireless Technologies S.A.R.L [(2019) EWCA Civ. 38].
v Lenovo (US) v. IPCom GmbH & Co KG [RG 19/21426 – No Portalis 35L7-V-B7D-CBAZK].
vi Satya v. Teja Singh, (1975) 1 SCC 120.
vii Ecobank Transnational Inc v. Tanoh [(2016) 1 WLR 2231], SAS Institute Inc. v. World Programming Ltd. [(2020) EWCA Civ 599]