In one of 2022’s most significant IP developments, Ericsson and Apple agreed on 9 December to settle their global 5G-era cross-licensing dispute. While it is well-known that the deal came amid a flurry of activity in the US and German prongs of the spat, it has not been widely reported in English-language media that the deal came hot on the heels of a landmark Brazilian ruling in Ericsson’s favour.
The 6 December decision was the first SEP case (and the first 5G dispute) to be considered by Brazil’s Superior Court of Justice, the country’s highest court with jurisdiction over IP law disputes. Affirming the right of SEP owners to an immediate preliminary injunction, the judgment reinforces Brazil’s growing attractiveness as a venue for global FRAND litigation. It may also have pushed the companies’ settlement over the line.
The Ericsson and Apple patent war was waged across a slew of jurisdictions from October 2021 onwards. After the two were unable to reach agreement about an appropriate licensing rate for the Swedish company’s 5G-era portfolio, Ericsson launched legal actions against Apple in US federal district court and the US International Trade Commission. It filed further suits in Germany, the UK, the Netherlands, Brazil and Colombia. Apple’s response included lawsuits in Germany and the US, as well as dozens of patent validity challenges at the USPTO Patent Trial and Appeal Board.
The settlement of this multi-faceted dispute came against the background of several developments and pending developments in these cases. The first meaningful decision was handed down by Colombia’s Juzgado 043 Civil del Circuito de Bogotá in July last year. The court banned Apple from importing and selling 5G iPhones and iPads in the country, having found that the products infringed an Ericsson 5G SEP. It also issued an anti-anti-suit injunction against Apple, forbidding to seek an anti-suit injunction elsewhere in the world.
Another important development came at the end of November. The Mannheim Regional Court rejected Apple’s claim that Ericsson’s cellular base stations infringe one of its implementation patents.
When the parties’ deal was announced in December, an Eastern District of Texas FRAND and breach-of-contract trial was underway, an ITC hearing had recently been held and a Regional Court of Munich FRAND trial was imminent. These are thought to have played a significant role in creating the pressures that produced the settlement.
The Brazilian Superior Court of Justice decision, largely unreported outside the country until now, may have played an equally important part, however. Just three days before the settlement, the court reinstated a preliminary injunction against Apple that had originally been imposed by the Rio de Janeiro State Court. The Superior Court of Justice ordered the Silicon Valley giant to stop selling 5G cellular devices in Brazil or commit immediately to pay Ericsson $3 per device. Given Brazil’s status as the sixth largest smartphone market in the world, this decision will have given Ericsson significant additional leverage in the days leading up to the licensing agreement.
Of broader interest to the patent profession, the Superior Court of Justice found that SEP owners are not excluded from the right to obtain a preliminary injunction against a patent infringer, that any use of patented technology without payment constitutes unjust enrichment and that damages awarded at the end of a lawsuit are inadequate to protect a patentee’s rights.
This confirms a growing appreciation of Brazil’s importance as an SEP enforcement venue. Not only has Brazilian litigation featured in the Ericsson-Apple dispute, but it has been utilised recently by Nokia in its spat with Lenovo, by Vringo against ZTE, DivX against Samsung and TCL.
“Between 2012 and 2019, there were only six lawsuits ever filed concerning the infringement of SEPs in the country,” says Licks Attorneys’ Carlos Aboim, who represented Ericsson against Apple. “With courts from the largest Latin American economy granting, upholding and enforcing injunctions that are crucial for SEP owners to fend off unwilling licensees, the numbers increased rapidly, with eight SEP infringement lawsuits being filed over the past two years. Recent cases such as Ericsson v Apple and Philips v TCL clearly show that filing in Brazil is the gold standard for SEP enforcement.”
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