UK Court of Appeal puts dampener on start of Panasonic’s major SEP battle at UPC

Panasonic’s battle with Xiaomi and Oppo over global SEP licence agreements is increasingly starting to resemble a courtroom thriller, with the story coming to a dramatic head in October.

Since August 2023, Panasonic has filed eight national and twelve UPC lawsuits against its competitors Oppo and Xiaomi. All patents-in-dispute are relevant for the WCDMA and LTE standards.

The first hearing of a UPC local division in the SEP case begins today in Mannheim. For three days, the panel headed by Peter Tochtermann will hear whether Xiaomi and Oppo have infringed Panasonic’s SEP EP 2 568 724. EP 724 protects a radio communication device and method. The FRAND defences of both Chinese implementers are also on the agenda (case ID for Xiaomi: ACT_545615/2023 UPC_CFI_219/2023; case ID for Oppo: ACT_545551/2023 UPC_CFI_210/2023).

Acts one, two and three

The Mannheim hearing is the prelude to a very busy few weeks in which the case is likely to dominate headlines. In addition to the UPC, several courts in Germany and the UK are dealing with lawsuits filed by Panasonic.

The next round will play out at Munich Regional Court, which has scheduled a hearing in the case against Xiaomi for 11 October. Then, on 18 October the parties will meet again at Mannheim Regional Court. The latter had originally scheduled two hearings in the case against Xiaomi for September, but suspended these pending the outcome of the revocation action at the Federal Patent Court.

At the end of June, Munich Regional Court was the first to hear the proceedings against Oppo. The court handed down its ruling in Panasonic’s favour two weeks ago.

As befits a suspenseful thriller, the dispute between Panasonic and its adversaries Xiaomi and Oppo features two main conflicts. Firstly, all three companies have so far put up a fierce and merciless fight. Secondly, the positions taken by the various courts are becoming increasingly difficult to reconcile.

As always in major mobile communications cases, the matter of what is the right FRAND rate is at the heart of the dispute.

Willingness to determine FRAND

The UK High Court has already expressed its willingness to set a FRAND rate. Panasonic and Xiaomi had previously agreed to accept a global FRAND rate set by the court.

In late July, UK High Court judge Richard Meade wrote a letter in which he promised a FRAND ruling by the end of this year.

Some trial observers interpreted this letter as a request to the UPC and national German courts that they refrain from a decision until the UK court has ruled. However, the Munich Regional Court did not wait and observers are now eagerly watching the UPC trial in Mannheim.

An interesting aspect of this hearing will be whether and how the UPC deals with the FRAND amount. In contrast to Xiaomi, Oppo focused entirely on the technical trials in the UK and did not commit to accepting a FRAND rate from the court.

Instead, Oppo has filed a counterclaim for FRAND determination with the UPC. As yet, it is unclear whether the Mannheim local division will accept and comment on this matter.

Clear signal from UK

The FRAND question has been given new impetus since last week, as the UK Court Of Appeal obliged Panasonic to accept an interim licence until the UK High Court has determined the FRAND rate (case ID: CA-2024-001709). Xiaomi had initially applied to the UK High Court for the interim licence, but the court rejected the application in its July ruling.

Xiaomi has now had this ruling overturned on appeal. The three Court of Appeal judges, Stephen Phillips, Andrew Mylon and presiding judge Richard Arnold agreed in their ruling that “Panasonic is in breach of its obligation of good faith under clause 6.1 of the ETSI IPR Policy by pursuing claims for injunctions in foreign courts despite having invoked the jurisdiction of the English courts to determine FRAND terms for a global licence and despite both parties having undertaken to enter into a licence on the terms determined by the Patents Court to be FRAND”.

However, only judges Arnold and Mylon are of the opinion that “a willing licensor in the position of Panasonic would enter into an interim licence with Xiaomi” and that “making the declarations sought by Xiaomi would serve a useful purpose”.

Judge Phillips, on the other hand, was not convinced by the interim licence and would have preferred an anti-suit injunction. Panasonic can now ask the Court of Appeal for permission to appeal to the Supreme Court. The company and its lawyers have not yet commented on this. However, this is highly likely in view of the severity of the dispute.

Bristows partners Sophie Lawrance and Richard Pinckney are representing Panasonic in the UK proceedings. Barristers Andrew Scott from Blackstone Chamber as well as 8 New Square’s Isabel Jamal led the proceedings before the Court of Appeal. Their counterparts for Xiaomi were Daniel Alexander from 8 New Square and Ligia Osepciu from Monckton Chambers. Xiaomi is also relying on a Kirkland & Ellis team led by Nicola Dagg, Jin Ooi and Steven Baldwin. Pinsent Masons partner James Marshall represented Oppo in the UK.

Two days for FRAND

Now it is the Mannheim local division’s turn. The four-member panel is highly experienced in mobile communications and SEP lawsuits. Presiding judge Peter Tochtermann has already heard numerous national SEP proceedings. He is also the judge rapporteur.

Dirk Böttcher and Edger Brinkman also have SEP experience. The latter is presiding judge of the local division The Hague and a member of the judges’ panel in all six Panasonic lawsuits in Mannheim.

Technically qualified judge Klaus Loibner is examiner at the Austrian Patent Office and specialises in physics.

Today, the four judges will first hear the technical part of the two lawsuits against Xiaomi and Oppo concerning EP 724.

On 8 October, the FRAND trial in the lawsuit against Oppo will take place. On 9 October, the court will then hear the FRAND trial in the lawsuit against Xiaomi.

Showdown

There is no shortage of protagonists in this case. Panasonic is relying on a team from the Düsseldorf patent litigation boutique Kather Augenstein for the entire series of proceedings. Christopher Weber has the lead in the technical trial. Thilo Schmelcher, former Ericsson in-house patent attorney and now partner at RCD Patent, is asstisting in the technical aspects. Lawyer Christof Augenstein is leading the FRAND trial.

Partner Sören Dahm and associates Benedikt Walesch, Sophie Prudent, Robert Knaps, and Marco Berlage complete the Kather Augenstein team. Panasonic’s chief IP counsel Andrew Yen is also present in the courtroom.

Vossius and Brinkhof for Oppo

In the Mannheim lawsuits Oppo is relying on a combination of lawyers from the two partner firms Brinkhof from Amsterdam and Vossius & Partner from Munich. In most UPC proceedings these operate as Vossius & Brinkhof UPC Litigators.

Today, Vossius lawyers Andreas Kramer and Hannes Obex are running the technical trial alongside Brinkhof lawyers Mark van Gardingen, Rien Broekstra, and Maarten Groeneveld. Vossius patent attorneys Thomas Schwarze and Ingo Lummer will handle the technical aspects.

On 8 October the Oppo team will consist only of lawyers of Daan de Lange and Boukje van der Maazen (both Brinkhof) and Andreas Kramer, Hannes Obex.

Freshfields for Xiaomi

Previously Freshfields Bruckhaus Deringer, the law firm representing Xiaomi now operates only as Freshfields. This is the first time the outfit has represented at the UPC.

Partner Frank-Erich Hufnagel and Wolrad Prinz zu Waldeck lead the team, which also consists of lawyers Fabian Schubach, Eva Acker, Carlotta Mannes, and Caroline Horstmann. Patent attorneys Gunnar Baumgärtel, Christoph Schroeder, and Sandro Staroske from Maikowski & Ninnemann are also part of the team.

Lawyers from Clifford Chance and Hogan Lovells will likely observe the hearing in Mannheim. The latter is representing Xiaomi in parallel lawsuits filed by Panasonic at the local division Munich. Clifford Chance represents Oppo in three lawsuits alongside Berlin-based patent attorneys from Maikowski & Ninnemann.

If the four Mannheim judges stick to the UPC’s schedule, they will hand down their judgment in the week 18 to 22 November, well ahead of the FRAND ruling by UK High Court judge Richard Meade.

Read an overview of all of Panasonic’s lawsuits here.

Images of judges: ©UPC and ©Munich International Patent Law Conference