19-07-24 Nokia Opposition To Continental Antisuit Motion
19-07-24 Nokia Opposition To Continental Antisuit Motion
1 Teresa T. Bonder (SBN 321558) Mark A. McCarty (pro hac vice granted)
ALSTON & BIRD LLP Matthew D. Richardson (pro hac vice granted)
2 560 Mission Street, Suite 2100 John D. Haynes (pro hac vice granted)
San Francisco, CA 94105 Andrew Tuck (pro hac vice granted)
3 Telephone: (415) 243-1000 Cassandra Kerkhoff Johnson (SBN 300064)
Facsimile: (415) 243-1001 ALSTON & BIRD LLP
4 [email protected] 1201 W. Peachtree St.
Atlanta, GA 30309
5 Ryan W. Koppelman (SBN 290704) Telephone: (404) 881-7000
ALSTON & BIRD LLP Facsimile: (404) 881-7777
6 1950 University Avenue, 5th Floor [email protected]
East Palo Alto, CA 94303 [email protected]
7 Telephone: (650) 838-2000 [email protected]
Facsimile: (650) 838-2001 [email protected]
8 [email protected] [email protected]
25 Defendants.
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2 CONTENTS
3 I. INTRODUCTION .....................................................................................................................1
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II. FACTUAL BACKGROUND ....................................................................................................3
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A. Patent License Agreement Negotiations. .......................................................................4
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B. The German Actions. .....................................................................................................5
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C. The German Court Issues an Injunction Ordering Continental US to Withdraw
8 the Instant Motion. .........................................................................................................6
9 III. LEGAL STANDARDS .............................................................................................................8
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IV. ARGUMENT & ANALYSIS ....................................................................................................9
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A. Continental US Fails to Satisfy any of the Anti-Suit Injunction Requirements. ...........9
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1. The Parties and Issues Are Not the Same, either Factually or
13 Functionally. ......................................................................................................9
19 C. This Court Does Not Have Jurisdiction over the Nokia Defendants. ..........................22
20 D. Venue and Jurisdiction Are Improper Over the Optis Entities. ...................................23
21 E. Defendant Avanci’s Individual Opposition to Continental US’s Motion....................24
22 V. CONCLUSION ........................................................................................................................25
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TABLE OF AUTHORITIES
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Page(s)
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3 Cases
16 Daimler AG v. Bauman,
571 U.S. 117 (2014) .......................................................................................................................23
17
E. & J. Gallo Winery v. Andina Licores S.A.,
18 446 F.3d 984 (9th Cir. 2012) ................................................................................................. passim
19
FTC v. Qualcomm Inc.
20 No. 17-cv-00200-LHK, 2017 U.S. Dist. LEXIS 98632 (N.D. Cal. June 26, 2017) ........................4
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8 Statutes
9 15 U.S.C. § 6a ......................................................................................................................................17
10 15 U.S.C. § 22 ................................................................................................................................23, 24
11 Other Authorities
12 Fed. R. Civ. P. 65 .................................................................................................................................21
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1 I. INTRODUCTION
2 In its Motion, Plaintiff Continental Automotive Systems, Inc. (“Continental US”) asks this
3 Court to take extraordinary, broad, and unprecedented action: (1) enjoin 10 first-filed German patent
4 infringement actions (the “German Actions”) brought by two Finnish patent owners (Nokia
5 Technologies Oy and Nokia Solutions and Networks Oy)—not against plaintiff Continental US—but
6 against the German automobile manufacturer Daimler AG (“Daimler”), months before Continental
7 US filed this case; and (2) enjoin all Defendants1 from filing any patent infringement actions anywhere
8 against Continental US or its customers. Such an injunction would be unprecedented in the Ninth
9 Circuit. Continental US does not cite, nor is Nokia2 aware of, a single case in which a federal court in
10 this Circuit has enjoined a foreign, first-filed action from proceeding in a situation such as this.3
11 Moreover, as demonstrated below, Continental US’s request for this unprecedented relief is based on
12 two crucial but false premises: (1) the German Actions would somehow effectively result in an
13 injunction against Continental US; and (2) the German courts would somehow ignore FRAND
14 altogether and issue an injunction that would force Daimler to take a license on non-FRAND terms
15 (which would then somehow be passed down to Continental US). Neither is true.
16 Continental US’s Motion seeks to belatedly inject third-party Continental US and this Court
17 into a three-year old licensing dispute entirely between European parties with no meaningful
18 connection to the U.S. Nokia is one of the leading contributors to the cellular standards, having
6 infringement actions in German courts (Munich, Mannheim, and Dusseldorf—the “German Actions”)
7 against Daimler in March 2019. The German courts have jurisdiction over these infringement claims,
8 and the cases are proceeding towards merits determinations. Under German and EU law, the German
9 courts will consider the defenses raised and whether the European Nokia Plaintiffs have complied with
10 their obligations imposed by the European Court of Justice in Huawei Technologies Co. Ltd v ZTE
11 Corp. (Case C-170/13) in deciding any appropriate remedies, including whether or not to grant an
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15 . Thus, Continental US’s dire claims that a German injunction will force Daimler to accept
16 non-FRAND license terms, and that Continental US will somehow have to accept those terms, is
17 simply untrue.
18 In addition, the party seeking the extraordinary remedy of an anti-suit injunction here is not a
19 party to the first-filed German Actions, either actually or functionally. The first-filed German Actions
20 are patent infringement actions pending between entirely European entities with no U.S. parties or
21 connections. As Continental US notes in its Motion, under German procedural law, Daimler can send
22 Third-Party Notifications to suppliers it believes owe Daimler indemnification in the German Actions.
23 Suppliers receiving such notices can then intervene in the German Actions, but they do not become
24 parties to the German Actions. But Continental US never received a Third-Party Notification from
25 Daimler, and it never sought to intervene in the German Actions. Three separate European subsidiaries
26 of the German conglomerate Continental AG did receive Third-Party Notifications, and two have
27 intervened but, tellingly, none of those European entities have joined this action. Thus, Continental
28 US’s claims that it will “effectively” be enjoined in the German Actions likewise rings hollow.
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1 Granting such a request would be unsupported by controlling Ninth Circuit precedent—in fact,
2 it turns such jurisprudence on its head. Under Ninth Circuit precedent, federal courts have the power
3 to issue injunctions under appropriate circumstances to enjoin a party in a first-filed action from
4 proceeding with a second-filed suit if doing so is necessary to preserve the first-filed court’s
5 jurisdiction, or in the limited circumstances of enjoining a party from proceeding with a first-filed suit
6 where there is a controlling forum selection or arbitration clause. But here, Continental US seeks to
7 accomplish the exact opposite— it seeks to use a later-filed case filed by a non-party to the foreign
8 proceedings to effectively strip the foreign court of its jurisdiction for no reason other than it is (or its
9 foreign-affiliated entities are) displeased with how the foreign cases are proceeding. Granting such
10 relief would run afoul of important comity concerns and signal to foreign courts that U.S. courts are
11 willing to trample over their sovereignty in first-filed cases over which they have jurisdiction. This
12 final point is particularly relevant in this case given the fact that Continental US has been enjoined by
13 a German court from pursuing this Motion. On July 12, 2019, a German court issued an injunction
14 directing Continental US to withdraw this Motion and cease any further attempt at halting the German
15 Actions. It did so after concluding that Continental US’s Motion jeopardized the proper course of
16 justice in Germany. Continental US has been properly served with this injunction, yet it has simply
17 ignored it. And although Continental US is free to challenge that injunction in the German Court, it
18 has refused to do so. Granting this Motion in this context would not be consistent with comity, it
20 Finally, Continental US also seeks an extremely broad injunction preventing the future filing
21 of any patent infringement actions by any Defendants in this case against Continental US or any of its
22 customers anywhere in the world. Granting this requested relief in the form of an anti-suit injunction
23 would, again, be unprecedented. In fact, the request is not a request for an anti-suit injunction at all,
24 since it does not seek to enjoin extant proceedings, but instead is a request for a preliminary injunction
25 where all the traditional factors for a preliminary injunction would have to be met. Continental US
26 has not even attempted to satisfy those requirements, and thus this request too must be rejected.
1 approximately $140 billion in research and development on mobile communications over the past two
2 decades. Nokia has also played a prominent role in developing technologies used in the 2G, 3G, and
3 4G standards that facilitate the interoperability of those wireless communication technologies and
4 increase end-to-end performance. As a result of Nokia’s investment and contribution, Nokia holds
5 numerous patents that it has disclosed as potentially essential to the 2G, 3G, and 4G cellular
6 telecommunications standards.
7 A. Patent License Agreement Negotiations.
9 Germany. (Declaration of Lasse Holopainen (“Holopainen Decl.”) ¶ 2). Nokia Tech is a Finnish
10 company. In early 2016, Nokia Tech contacted Daimler to notify it that Daimler’s products were
11 practicing at least one communication standard for which Nokia holds relevant patents. (Id.). Nokia
12 Tech invited Daimler to engage in discussions regarding licensing Nokia’s patents. (Id.). On
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15 (Id. ¶ 3).
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21 (Id. ¶ 3).
22 On October 24, 2017, Nokia Tech received a letter from Dr. Roman Bonn and Dr. Jurgen
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1 Continental AG. (Id. ¶ 4). In their letter, Dr. Bonn and Dr. Richter stated that “Daimler AG has
2 prompted us to contact Nokia regarding the question of a license for telematics modules, which we
5 (Id. ¶ 15).
6 (Id. ¶ 16).
8 As a result
9 ,
10 the European Nokia Plaintiffs filed the German Actions against Daimler on March 20, 2019 in Munich,
12 3).
13 On May 17, 2019, and again on June 17, 2019, Daimler filed Third-Party Notifications with
14 the German courts notifying three European companies—Continental Automotive GmbH, Conti
15 Temic microelectronic GmbH, and Continental Automotive Hungary Kft.—that components supplied
16 by them could be implicated by the European Nokia Plaintiffs’ patent infringement actions. (Id. ¶ 5).
17 Under German law, a defendant like Daimler may file Third-Party Notices when it believes it may
18 have an indemnification claim against a third party. (Id. ¶ 6). On May 31, 2019, two Continental
21 Significantly, Daimler did not serve a Third-Party Notification on Continental US, the Plaintiff
22 here. This evidences Daimler’s belief that it is not being supplied by Continental US. (Schumacher
23 Decl. ¶ 8; McGuire Decl. ¶ 41). This is further reinforced by the fact that Continental US has not
24 sought to voluntarily intervene in the German Actions. (Schumacher Decl. ¶ 8). One of the German
25 courts has already made an initial determination of infringement by Daimler of a Nokia SEP. (Id. ¶
26 9). Under German law, the next step will be to hold a merits hearing in that case. (Id. ¶ 10). If
27 infringement is confirmed, the court will conduct the inquiry specified in the case of Huawei
28 Technologies Co. Ltd v ZTE Corp. (Case C-170/13). Under German and EU law, the German courts
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1 will consider the defenses raised and whether Nokia Tech has complied with its obligations imposed
2 by the European Court of Justice in Huawei Technologies Co. Ltd v ZTE Corp. (Case C-170/13) in
3 deciding whether or not to grant an injunction applicable to Daimler’s sale of infringing products.
6 (Holopainen Decl. ¶ 3). Continental US filed the Complaint in this action on May 10, 2019
7 – nearly two months after the European Nokia Plaintiffs’ patent infringement actions were filed in the
8 German courts, having never intervened, or been invited to intervene, in the German Actions.
11 On July 9, 2019, the European Nokia Plaintiffs filed an application for an injunction
12 with the Regional Court of Munich I (the “Munich Court”). (Schumacher Decl. ¶ 12). In their
13 application, the European Nokia Plaintiffs sought an injunction that would direct Continental US to
14 withdraw this Motion seeking to stop the German Actions. (Id.). The European Nokia Plaintiffs’
15 application expressly asked the Munich Court not to take any steps that would impact the jurisdiction
16 of this Court to adjudicate Plaintiff’s substantive claims:
17
Furthermore, the present motion is not intended to deny the Respondents’ access to the US
18 courts altogether. For the present motion is not directed against the US main proceedings
filed of 10 May 2019 (Exhibit AR 7), but solely against the supplementary motion for
19 issuance of an anti-suit injunction. . . The defensive measure requested here is therefore only
aimed at preserving the status quo and a considerably smaller curtailment of the legal
20 position of the Respondents.
21 Dkt. 95-1, Ex. A at 39. Under German procedural rules, courts routinely issue injunctions ex parte.
22 (McGuire Decl. ¶ 47). Once the enjoined party is served with the injunction, it goes into effect, and
23 the enjoined party is permitted to object and argue against the injunction’s continued effect. (Id. ¶ 48).
24 Following an oral hearing, the court will issue a judgment which is subject to an appeal to the
25 appropriate Higher Regional Court. (Id.).
26 On July 11, 2019, the Munich Court issued an injunction ordering Continental US (1) “to
27 refrain from applying for an anti-suit injunction, which is intended directly or indirectly to prohibit
28 [the European Nokia Plaintiffs] to pursue one or more of [the German Actions];” (2) “to withdraw the
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2 incoming file no. 32, before the United States District Court—Northern District of California
3 immediately upon service of the injunction order;” and (3) “the prohibition of [Continental US’s]
4 further pursuing the anti-suit injunction proceedings, other than for the purpose of withdrawing the
5 motion.” (Schumacher Decl. ¶ 13). The injunction does not prevent Continental US from proceeding
6 with its substantive claims in this case. (Id.). Continental US has the right to contest the merits of this
8 The European Nokia Plaintiffs’ German counsel immediately began service on Continental US
9 through The Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or
10 Commercial Matters (the “Hague Service Convention”).5 (Id. ¶ 16). English and German copies of
11 all the relevant documents were provided to the designated Central Authority for US service of process
12 under the Hague Service Convention, and the European Nokia Plaintiffs’ German counsel received
13 back an attestation from the contracting agent for the United States Department of Justice’s Office of
14 International Judicial Assistance that formal service under Article 5(1)(a) was properly performed on
15 Continental US. (Id. ¶ 18, Ex. A). Accordingly, as of July 17, 2019 at 2:25 pm, the Munich Court’s
16 injunction went into effect. (Id.). Counsel for Nokia informed counsel for Continental US of the
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In its July 19, 2019 letter to this Court, counsel for Continental US alleged that Nokia’s
19 obtaining of an injunction ex parte was somehow a deprivation of due process, and that Nokia’s
20 request for an extension of time to respond to this Motion was done under false pretenses. See Dkt.
95-1. Neither assertion is accurate, but both speak volumes. First, as discussed above, ex parte
21 injunctions are routine under German law. Once Continental US received notice of the injunction, it
has been free to appear in the issuing court and contest the injunction. Despite its due process
22 complaints, Continental US has yet to appear in the Munich Court to challenge the allegedly improper
injunction. Continental US’s inaction is telling. Second, Nokia’s request for an extension of time to
23 respond to the instant Motion arose out of the situation Continental US created. As Nokia’s request
24 for extension made clear, Nokia sought the extension in part because (1) Continental US had served
an incomplete Motion on Nokia that had portions of the brief redacted, and it refused to provide Nokia
25 with a complete copy; and (2) Nokia and Continental US had recently agreed to a deadline of August
2, 2019 for Nokia to file responsive briefs, including jurisdictional briefing. Nokia simply sought an
26 extension of briefing on this Motion to align with its deadline for responsive pleadings and
jurisdictional defense. By filing this Motion shortly after stipulating to the August 2 responsive
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pleading deadline, Continental US effectively sought to undo the stipulation and require Nokia to
28 respond to substantive issues on a far more accelerated timetable.
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1 Continental US’s response was not to withdraw the current Anti-Suit Injunction Motion or challenge
2 it in the Munich Court, but to raise unspecified objections to service. These meritless arguments will
3 ultimately be resolved by the Munich Court and it is now a question of when, not if, Continental US
6 A federal court “with jurisdiction over the parties has the power to enjoin them from
7 proceeding with an action in the courts of a foreign country.” Microsoft Corp. v. Motorola, Inc., 696
8 F.3d 872, 881-82 (9th Cir. 2012); E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984, 989 (9th
9 Cir. 2012) (emphasis added). The Court’s power to enjoin parties from proceeding with foreign
10 litigation must be used “sparingly.” Seattle Totems Hockey Club, Inc. v. Nat’l Hockey League, 652
11 F.2d 852, 855 (9th Cir. 1981). Injunctive relief is “an extraordinary remedy that may only be awarded
12 upon a clear showing that the plaintiff is entitled to such relief.” Glob. Commodities Trading Grp.,
13 Inc. v. Beneficio De Arroz Choloma, S.A., No. 2:16-CV-01045-TLN-CKD, 2016 U.S. Dist. LEXIS
14 98989, at *4 (E.D. Cal. July 28, 2016) (quoting Winter v. NRDC, Inc., 555 U.S. 7, 22, 129 S. Ct. 365,
16 In the Ninth Circuit, the movant must satisfy a three-part test for such extraordinary power to
17 be exercised. Microsoft, 696 F.3d at 882. The threshold inquiry is: (1) whether the “parties and the
18 issues are the same in both the domestic and foreign actions;” and (2) whether “the first action is
19 dispositive of the action to be enjoined.” Id. (quoting Gallo, 446 F.3d at 991). If that test is met, the
20 court must then determine whether “one of the so-called ‘Unterweser factors’ applies.” Microsoft,
21 696 F.3d at 881. These factors are whether the foreign litigation would “(1) frustrate a policy of the
22 forum issuing the injunction; (2) be vexatious or oppressive; (3) threaten the issuing court’s in rem or
23 quasi in rem jurisdiction; or (4) where the proceedings prejudice other equitable considerations.”
24 Gallo, 446 F.3d at 991 (adopting in the Ninth Circuit the test from In re Unterweser Reederei, Gmbh,
26 Finally, where the threshold test is met and one of the Unterweser factors are present, the Court
27 must consider whether the injunction’s “impact on comity is tolerable.” Microsoft, 696 F.3d at 881;
28 Gallo, 446 F.3d at 991. This inquiry incorporates principles of the first-to-file rule. See id. at 879, 86
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1 (noting that “the timing of the filing of the German Action” “several months into the … domestic
2 litigation” was central to the required analysis). Courts have recognized that “principles of
3 international comity and reciprocity require a delicate touch.” Microsoft, 696 F.3d at 880-81, 887.
4 Thus, a foreign anti-suit injunction should issue only when: (1) the United States has “a strong interest
5 in adjudicating the claims;” (2) the claims unquestionably belong in the domestic forum, not the
6 foreign forum—such as when “the [foreign] action was filed after the U.S. action;” and (3) the
7 injunction is “no broader than necessary to avoid the harm on which the injunction is predicated.” Id.
10 1. The Parties and Issues Are Not the Same, either Factually or Functionally.
11 The first requirement for an anti-suit injunction is that the parties and the issues are the same,
12 such that “the domestic action is capable of disposing of all the issues in the foreign action.” Applied
13 Med. Distrib. Corp. v. Surgical Co. BV, 587 F.3d 909, 915 (9th Cir. 2009). In its Motion, Continental
14 US has not demonstrated (and cannot demonstrate) that the parties are the same, much less that the
15 issues are the same such that the U.S. action will dispose of the German Actions.
17 Continental US argues that the parties in the German Actions are “either the same as those in
18 this lawsuit, or are functionally the same.” Mot. at 16. This assertion lacks merit. First, there can be
19 no doubt that the parties are not “the same.” Continental US is neither a plaintiff nor a defendant in
20 the German Actions that it seeks to enjoin. The only defendant in the German Actions is Daimler.
21 (Schumacher Decl. ¶¶ 2, 3). Moreover, except for certain of the Nokia Defendants, none of the
22 Defendants in this case are parties in the German Actions that Continental US seeks to enjoin.
23 Second, the parties are not “functionally the same.” Mot. at 15-16. Continental US considers
24 the parties to be “functionally the same” because it contends that it is the “real party in interest.” Id.
25 Continental US claims that “on May 17, 2019, Daimler served Continental and its relevant subsidiaries
26 with a formal Third Party Notice of Dispute.” Mot. at 12. Continental US further alleges that
27 “Continental formally intervened in the above-stated German Action pursuant to the Third Party
28 Notice Received from Daimler.” Id. As a result, Continental US claims that it “may” have to
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1 indemnify Daimler. See id. at 12 (“Continental may be liable for the damages Nokia seeks to obtain
3 These assertions are incorrect. Daimler has not issued any Third-Party Notice to the plaintiff
4 seeking this injunction—Continental US. Instead, Daimler issued Third-Party Notices to three
5 different Continental entities that are not parties to this case: Continental Automotive GmbH, Conti
6 Temic microelectronic GmbH, and Continental Automotive Hungary Kft. and none of those entities
7 chose to join this case. (Schumacher Decl. ¶ 5). Daimler also issued Third-Party Notices to other
8 entities that are unaffiliated with these three Continental entities or Continental US. (Id.). By failing
9 to provide Continental US with a Third-Party Notice, Daimler has indicated that it is not being supplied
10 by Continental US. (Id. ¶ 8). Indeed, despite repeatedly asserting that Continental US was served
11 with a Third-Party Notice in its Motion, Continental US admitted for the first time in its letter of July
12 19, 2019 that the products at issue in the German Actions are not its products at all, but “products
13 sourced from Continental’s affiliates”—none of which are parties to this action. Dkt. 95-1 at p.1
14 (emphasis added).
16 the existence of an indemnification request from Daimler. Contrary to Continental US’s misleading
17 statements that “Continental received an indemnification request from Daimler regarding the license
19
20 This further shows that Continental US has no interest in the German Actions,
22 party in interest.”6
23 Continental US cannot blur the distinction between members of the Continental family by
24 arguing that it has an interest in the German Actions because another member of the Continental
25 corporate family is involved. It is axiomatic that corporations are distinct legal entities from one
26 another absent application of the alter ego doctrine. Laird v. Capital Cities/Abc, 68 Cal. App. 4th 727,
27 6
Nor can Continental US argue that there is no functional difference between Continental US
28 and Continental Automotive GmbH unless it is willing to take the position that it is merely the alter
ego of the German corporation, which is not present here.
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1 737 (1998). Indeed, Continental US itself has taken this same position in prior cases. (See Richardson
2 Decl., Ex. B.) (“Even though GTI has named [Continental Automotive Systems, Inc.] as the defendant,
3 GTI served the registered agent of a different company—Continental Automotive Systems US, Inc.
4 (“CAS USI”)—with the complaint. These two companies are not one and the same . . . It is a bedrock
5 principal of law that corporations are distinct legal entities, not to be treated interchangeably absent
7 Furthermore, even the claim that Continental US may have to indemnify Daimler is insufficient
8 to establish that the parties are functionally the “same.” Parties are not considered the “same” for
9 purposes of an anti-suit injunction simply because they have a business relationship with one another.
10 For example, in Ronlake v. US-Reports, Inc., No. CV F 11-2009 LJO MJS, 2012 U.S. Dist. LEXIS
11 138700 (E.D. Cal. Sep. 25, 2012), the court considered whether entities in a business relationship with
12 one another were the “same” parties for purposes issuing an anti-suit injunction. It found they were
13 not because “[t]he Ninth Circuit in Gallo referred to the ‘same’ parties, not parties in privity or subject
14 to a contractual or principal-agent relationship.” Id. at *13. The Ronlake court found dispositive the
15 fact that the parties in question were “entirely separate entities, with different ownership, different
16 management, different members, different bank accounts, different insurance, different operating
17 agreements, and different tax returns.” Id. at *12-13. The same is certainly true here: Daimler is a
18 German OEM and Continental US is an automotive parts supplier. The fact that Continental US
19 purports to do business with Daimler does not render them the same company—far from it. By
20 Continental US’s reasoning, each and every one of the various TCU suppliers to Daimler (or perhaps
21 component suppliers to those TCUs) would be the “same” as Daimler itself by virtue of the potential
23 Continental US next argues it should be considered the real party in interest under the
24 “customer suit exception,” a mechanism by which a “supplier has standing to commence a [US]
25 declaratory judgment action if (a) the supplier is obligated to indemnify its customers from
26 infringement liability, or (b) there is a controversy between the patentee and the supplier as to the
27 supplier’s liability for induced or contributory infringement based on the alleged acts of direct
28 infringement by its customers.” Arris Grp., Inc. v. British Telecomms. PLC, 639 F.3d 1368, 1375
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1 (Fed. Cir. 2011). The “customer suit exception” typically arises when related US patent infringement
2 actions are pending in different US courts, the first brought by a US patent owner against the
3 manufacturer’s customer, and the second filed as a US declaratory relief action by the manufacturer
4 against the US patent owner. Am. Acad. of Sci. v. Novell, Inc., No. C-91-4300 EFL, 1992 U.S. Dist.
5 LEXIS 20145, at *4 (N.D. Cal. July 8, 2012). When the manufacturer seeks to stay the first-
6 filed suit pending the outcome of the second-filed declaratory relief action, “it draws primarily on the
7 doctrine of the customer suit exception in order to avoid the general rule that the first-filed suit should
10 the “customer suit exception” doctrine because it believes that Continental US, as an alleged supplier,
11 has a greater interest in defending against charges of patent infringement than the customer (Daimler).
12 See Mot. at 16. But Continental US has failed to cite to any case in which a U.S. court has applied the
13 customer suit exception in the anti-suit injunction context. In addition, Continental US ignores the
14 fact that courts refuse to apply the customer suit exception “where a patentee has a separate interest in
15 litigating against the customer [such that] the real party in interest rationale for giving priority to the
16 manufacturer’s lawsuit is inapplicable.’” Novell, 1992 U.S. Dist. LEXIS 20145, at *7. Here, the
17 European Nokia Plaintiffs have an interest in litigating directly against Daimler, and not Continental
18 US, because Continental US has not shown that it supplies any TCUs to Daimler, let alone that it is
19 the only supplier for Daimler. Indeed, there are other TCU suppliers to Daimler that have intervened
20 in the German Actions. (Schumacher Decl. ¶ 11). Consequently, the rationale of the “customer suit
22 And third, the single defendant—Daimler—named in the German Actions is not a party to this
23 lawsuit. Since there are other suppliers of Daimler in the German Actions that have intervened, the
24 resolution of the Continental US action would have no impact on the European Nokia Plaintiffs’ right
25 to continue its case against Daimler. Accordingly, there can be no doubt that the parties to the German
26 Actions and the domestic action are not actually or “functionally” the same.
1 Continental US also needs to show that the German Actions and this lawsuit cover the same
2 issues, such that this case will dispose of the German Actions. See Microsoft Corp. v. Motorola, Inc.,
3 696 F.3d 872, 882-83 (9th Cir. 2012); Applied Med. Distribution Corp. v. Surgical Co. BV, 587 F.3d
4 909, 915 (9th Cir. 2009) (“[W]hether the issues are the same and the first action dispositive of the
6 First, a ruling on Continental US’s claim for breach of the FRAND contract and antitrust
7 violations would be immaterial to the German Actions because Daimler has taken the position that
8 Continental US does not supply it with TCUs. The German courts would still need to determine if
9 Daimler’s products infringe the European Nokia Plaintiffs’ patents, and whether there was compliance
10 with FRAND obligations under the framework set out under Huawei Technologies Co. Ltd v ZTE
11 Corp. (Case C-170/13). Additionally, the German Actions against Daimler also involve other TCU
12 suppliers to Daimler, and the German courts would need to determine Daimler’s liability for
14 Second, the two suits cover different issues. The German Actions relate to ten European
15 Patents and Daimler’s infringement of those patents as interpreted under German law. (Schumacher
16 Decl. ¶ 3). Under German and EU law, the German courts will consider the defenses raised and
17 whether the European Nokia Plaintiffs have complied with the obligations imposed by the European
21 In contrast, Continental US here asserts that Nokia and other Defendants have somehow
22 violated both the Sherman Act, the California UCL, and their FRAND commitments by not offering
24 US—and that the license rates offered by the Defendants to Continental US were somehow too high.
25 Importantly, Continental US does not allege that any of the Defendants are prohibited from licensing
26 an OEM like Daimler or that the only party in the value chain that is entitled to a license is the mid-
27 level US subsidiary TCU supplier (Continental US) to the exclusion of all others. Quite to the
28 contrary, despite claiming that a plethora of companies up and down the automotive value chain are
13
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1 theoretically entitled to FRAND licenses, Continental US alleges that it would be entirely appropriate
2 for an SEP owner to grant a FRAND license to an entity like Continental US higher up the value chain
3 above NAD suppliers or baseband chipset suppliers. Thus, Continental US’s claims in this case that
4 it is one of many entities entitled to a FRAND license would not be dispositive of the licensing dispute
5 between Nokia and Daimler especially where Continental US is apparently not a sufficient supplier to
6 Daimler in Germany to even warrant a Third-Party Notification or intervention in the German Actions.
7 Continental US cites the district court ruling in TCL v. Ericsson for the proposition that this
8 Court should resolve the claims here first and enjoin the German Actions, claiming “the [TCL] court
9 granted an anti-suit injunction to prevent Ericsson from pursuing foreign patent claims on individual
10 SEPs that were the subject of the court’s global FRAND determination[.]” Mot. at 18. But Continental
11 US conveniently ignores a few important and differentiating facts in the TCL action, including that the
12 same parties were involved in both the domestic and foreign actions and that those parties agreed that
13 “the FRAND litigation w[ould] be dispositive of the Foreign Actions,” and the TCL court relied on
14 that agreement, holding that “a bilateral preliminary anti-suit injunction [wa]s warranted based on the
15 parties’ mutual agreement.” TCL Commun. Tech. Holdings v. Telefonaktienbolaget LM Ericsson, No.
16 8:14-cv-00341-JVS-AN, 2015 U.S. Dist. LEXIS 191512, at *19 (C.D. Cal. June 29, 2015). Here, the
17 US action will not be dispositive of the German Actions, and Nokia does not agree that an anti-suit
18 injunction is warranted.
19 Continental US also cites to Huawei v. Samsung for this same point but again ignores important
20 facts in that case – for example, the SEP owner, Huawei, filed an action in California in which it
21 alleged a breach of FRAND claim and asked the Court to establish the terms of a global FRAND
22 license between Huawei and Samsung. Huawei Tech. Co. Ltd. v. Samsung Electronics Co., Ltd., 2018
23 WL 1784065 at *2-3 (N.D. Cal. April 13, 2018). Huawei also filed patent infringement actions against
24 Samsung in China asserting SEPs and pursued injunctions. Id. The Huawei court found that an anti-
25 suit injunction was warranted when the same parties were involved in both the domestic and foreign
26 actions, and because Huawei itself had invoked a U.S. court’s jurisdiction to assert a breach claim and
27 to put in place a global license between the parties, and Samsung had enjoined the issues through its
28 asserted counterclaims.
14
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1 This case is neither TCL nor Huawei. When the parties are not the same, and the domestic
2 action will not dispose of the claims arising under the laws that would be applied by the foreign court,
3 enjoining a party from pursuing the foreign action would deprive that party of its rights under the
4 foreign laws. Zynga, Inc. v. Vostu USA, Inc., 816 F. Supp. 2d 824, 830 (N.D. Cal. 2011). That is
5 exactly what would happen if this Court were to enjoin the European Nokia Plaintiffs from pursuing
8 Continental US has also failed to establish that any of the Unterweser factors apply. These
9 factors include whether the foreign litigation “would (1) frustrate a policy of the forum issuing the
10 injunction; (2) be vexatious or oppressive; (3) threaten the issuing court’s in rem or quasi in rem
11 jurisdiction; or (4) where the proceedings prejudice other equitable considerations.” Microsoft, 696
12 F.3d at 882 (quoting Gallo, 446 F.3d at 990). Continental US argues three of these factors are met
13 because the German Actions frustrate important U.S. policies; are vexatious and oppressive; and
14 present a risk of inconsistent judgments. In reality, the European Nokia Plaintiffs’ first-filed German
17 Continental US argues that the German Actions frustrate US policy because they purportedly
19 Continental US argues that the European Nokia Plaintiffs could somehow evade FRAND obligations
20 by filing and pursuing infringement actions against Daimler in Germany. But, as noted above, quite
21 the opposite is true. In the German Actions, the European Nokia Plaintiffs will have to demonstrate
22 compliance with their FRAND obligations under the Huawei v. ZTE framework before ever obtaining
23 any remedies against Daimler. (McGuire Decl. ¶¶ 13-27 and Executive Summary ¶ 1). One need only
24 review the European Nokia Plaintiffs’ complaints in the German Actions and Daimler’s asserted
25 defenses, both of which address the requirements of Huawei v. ZTE. Thus, the European Nokia
26 Plaintiffs have evaded nothing with the German Actions; the FRAND obligations will be front and
27 center.
28 Continental US seeks to avoid this obvious point by trying to manufacture a conflict between
15
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1 European law and U.S. law on the availability of injunctions for SEPs claiming that U.S. law is
2 somehow more restrictive than European law.7 But the Federal Circuit has taken the position that
3 injunctions are a permissible remedy against a party that infringes an SEP and refuses to accept a
4 FRAND license, and has held that it would be error to apply “a per se rule that injunctions are
5 unavailable for SEPs.” See Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1331 (Fed. Cir. 2014),
6 overruled on other grounds, Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015). As
7 the Federal Circuit reasoned in Apple, “an injunction may be justified where an infringer unilaterally
8 refuses a FRAND royalty or unreasonably delays negotiations to the same effect.” Id. at 1332.
9 European law is consistent with this approach. The European Court of Justice in Huawei v.
10 ZTE held that injunctions for SEPs may be permitted in certain circumstances. (See McGuire Decl.,
11 Ex. A). Under Huawei, an injunction is appropriate if the alleged infringer does not diligently accept
12 the SEP holder’s FRAND offer or make a counter-offer on FRAND terms. (Id. ¶¶ 17-18). The
13 German courts overseeing the German Actions are bound by Huawei and will issue any injunctions
14 only if the Huawei criteria are satisfied. Thus both U.S. law and European law are in agreement that
15 injunctions on SEPs may be warranted in circumstances involving an unwilling licensee. (Id. ¶¶ 17,
16 23 n.38). Continental US simply assumes for purposes of its Motion that Daimler must be a willing
17 licensee, but it is important to note that Continental US only filed its Motion seeking an anti-suit
18 injunction following an early hearing in one of the German Actions where the German court expressed
19 its preliminary view that Daimler appeared to be acting like an unwilling licensee. (Schumacher Decl.
20 ¶ 9).
21 7
Continental US cites a number of prior statements and pleadings by certain Nokia entities
22 dating back to 2006 discussing injunctions on SEPs. Many of those statements were made at a time
before the law (both in the US and internationally) had more fully developed regarding the
23 circumstances under which a patent owner may obtain an injunction on an SEP. Many have proved
to be consistent with the law as it later developed through various courts, including in the ECJ
24 decision in Huawei v. ZTE. One exception is the prior litigation with Qualcomm in Delaware
Chancery Court. In that action, the Nokia parties contended at that time that Qualcomm was not
25 entitled to injunctions on SEP's where the FRAND commitments were made to ETSI under French
law, predicated on a French contract law theory that a FRAND commitment created an extant license
26 to the patent owner's SEPs. That theory, however, was never accepted by the court in the Qualcomm
Delaware Chancery Court litigation, and has been rejected by other courts since that time. See, e.g.,
27 Apple Inc. v. Samsung Elecs. Co., Ltd., No. 11-cv-01846, 2012 WL 1672493, at *13-15 (N.D. Cal.
May 14, 2012) (finding Apple's argument that it had an existing license under French law to
28 declared-essential patents “implausible”).
16
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Case 5:19-cv-02520-LHK Document 102 Filed 07/24/19 Page 22 of 32
1 Continental US’s argument that the German Actions violate U.S. law or policy because the
2 European Nokia Plaintiffs are using the German Actions to pressure Daimler to accept non-FRAND
3 terms likewise does not hold water in light of Huawei v. ZTE. There is no real risk that Daimler would
4 have to accept a license on terms that are not found to be acceptable in accordance with the framework
5 and analysis set forth in the controlling ECJ decision in Huawei v. ZTE. (McGuire Decl. Executive
6 Summary ¶ 1).
7 Continental US’s final claim is that in the German Actions, the European Nokia Plaintiffs are
8 somehow seeking to avoid purported requirements under US antitrust law related to component
9 licensing. As an initial matter, Continental US’s arguments that its US antitrust law claims apply to
10 the German Actions make little sense given the fact that Continental US is not involved in the German
11 Actions, nor can U.S. antitrust law be applied extraterritorially in any event. 15 U.S.C. § 6a. But
12 moreover, asking this Court to enjoin the German Actions to prevent the European Nokia Plaintiffs
13 from purportedly “evading” competition law issues related to component licensing makes even less
14 sense when, by Continental US’s own admissions, its European affiliates chose to place the exact same
15 issues under EU competition law before the EU Commission in a complaint filed four months before
19 bears the burden of showing that the Actions are “without reasonable or probable cause or excuse;
20 harassing; [or] annoying.” Microsoft, 696 F.3d at 886. Continental US argues that the European Nokia
21 Plaintiffs are improperly seeking injunctive relief in the German Actions to pressure Daimler to enter
23 Once again, Continental US ignores the timing and circumstances of the German Actions. Two
24 Finnish Nokia entities filed the German Actions months before this case was even initiated. They
25 filed those German Actions against a German auto manufacturer in a jurisdiction where the European
26 Nokia Plaintiffs will have to demonstrate compliance with the Huawei v. ZTE framework before a
27 German court issues any remedies against Daimler. The European Nokia Plaintiffs’ claims in the
28 German Actions, according to Third-Party Notifications sent by Daimler itself, involve products
17
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Case 5:19-cv-02520-LHK Document 102 Filed 07/24/19 Page 23 of 32
1 supplied by companies other than Continental US. As a result, Continental US’s reliance on the
2 Microsoft decision is unavailing. In Microsoft, the Ninth Circuit held that Motorola’s conduct in
3 initiating the German injunctive relief action was vexatious because it was filed six months after
4 Microsoft filed its domestic action, and one of the issues to be litigated in Motorola’s German action
5 was already being litigated in the U.S. action. Microsoft, 696 F.3d at 886. Motorola and Microsoft
6 agreed that the parties were identical in the U.S. and German actions. Id. at 883. On those facts, the
7 Ninth Circuit concluded that there was no abuse of discretion when the district court found the timing
8 and location of the foreign action “raise[d] concerns of forum shopping and duplicative and vexatious
9 litigation.”8 Id. As noted above, if any party can be said to be engaging in forum shopping and
13 But Continental US provides no real description of the actual risk. As an initial matter, the courts in
14 the German Actions will be assessing patent infringement issues under German law not present in this
15 case. If the German courts find infringement, they will then turn to the appropriate remedies to be
16 imposed on Daimler and, as noted above, will apply the Huawei v. ZTE framework. In a case where
17 Continental US is not a party and not a supplier to Daimler, and where the issue to be determined
18 involves compliance with Huawei v. ZTE, Continental US’s unspecified claims about the risk of
19 inconsistent judgments ring hollow. Accordingly, Continental US has not shown that any of the
20 Unterweser factors apply here, and Continental US’s Motion should be denied.
22 The Court should also deny Continental US’s request for an anti-suit injunction because the
23 requested injunction would have an intolerable impact on comity. “Comity is ‘the recognition which
24 one nation allows within its territory to the legislative, executive or judicial acts of another nation,
25 having due regard both to international duty and convenience, and to the rights of its own citizens, or
26 of other persons who are under the protection of its laws.’” Gallo, 446 F.3d at 994. “The doctrine has
27 8
Continental US’s request is likewise overbroad because it relies on Motorola v. Microsoft in support
28 of the injunction, yet it seeks relief broader than what was granted in Microsoft v. Motorola because
it seeks to enjoin the entire proceeding.
18
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Case 5:19-cv-02520-LHK Document 102 Filed 07/24/19 Page 24 of 32
1 never been well-defined,” but comity “is clearly concerned with maintaining amicable working
2 relationships between nations, a ‘shorthand for good neighbourliness, common courtesy and mutual
3 respect between those who labour in adjoining judicial vineyards.’” JP Morgan Chase Bank v. Altos
4 Hornos de Mexico, S.A. de C. V., 412 F.3d 418, 423 (2d Cir. 2005); Mujica v. AirScan Inc., 771 F.3d
5 580, 598 (9th Cir. 2014). In applying comity, courts consider multiple factors in determining whether
6 the injunction’s impact on comity is tolerable, including whether the matter is a private dispute or if it
7 implicates public international law or government litigants; the order of the domestic and foreign
8 lawsuits; and the scope of the anti-suit injunction. See Microsoft Corp. v. Motorola, Inc., 696 F.3d
9 872, 887 (9th Cir. 2012).
10 Here, enjoining the European Nokia Plaintiffs from pursuing the German Actions would offend
11 comity for a number of reasons. First, courts give significant deference to the fact that the foreign
12 action was first-filed in finding that an injunction would raise comity concerns. See Microsoft, 696
13 F.3d at 887; cf. Gallo, 446 F.3d at 994 (only when the parties have agreed to an arbitration or venue
14 provision which the foreign action violates that the first-filed foreign not given deference).9 Second,
15 as fully discussed above, the German Actions do not involve any U.S. parties or implicate any U.S.
16 law. In the German Actions, European Nokia Plaintiffs seek damages and an injunction based on
17 Daimler’s import and sales of infringing vehicles in Germany. All of the allegedly infringing activity
18 occurred in Germany, and the German court will only apply German patent law and European
20 Continental US ignores these arguments and mistakenly relies on Microsoft and Gallo for the
21 proposition that the requested injunction would have a tolerable impact on comity because this dispute
22 is a private contractual dispute between the parties that it has named. Mot. at 24-25. Continental US’s
23 argument places too much emphasis on these cases because those courts’ decisions to issue the anti-
24
9
25 The fact that the German Actions were filed first also alleviates any concerns that they were
filed in an attempt to evade the authority of this Court. Cf. Quaak v. Klynveld Peat Marwick Goerdeler
26 Bedrijfsrevisoren Gallo, 361 F.3d 11, 15 (2d Cir. 2004) (use of a second-filed court to enjoin plaintiffs
from proceeding with their first-filed U.S. suit was “a blatant attempt to evade the rightful authority
27
of the forum court,” heightening the need to enjoin the foreign action). If anything, it is Continental
28 US that is trying to evade the authority of the German court to decide the infringement action.
19
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Case 5:19-cv-02520-LHK Document 102 Filed 07/24/19 Page 25 of 32
1 suit injunctions rested heavily on other considerations absent from this action. In Gallo, the parties
2 had a forum selection clause that did not contemplate litigating in Ecuador, where the foreign action
3 was filed, so the filing of the foreign action was undeniably improper. See Gallo, 446 F.3d at 993. In
4 Microsoft, the parties agreed that the actions involved the same parties. The parties also agreed that
5 Motorola owed direct contractual obligations to Microsoft, and that those claims could resolve the
6 German patent claims in the foreign suit. Microsoft, 696 F.3d at 883. The domestic action also
7 involved only U.S. parties, and was first-filed. Id. at 888. None of those facts are present here. Here,
8 the foreign action was filed first, the parties involved in the actions are not related, and the German
9 Actions involve entirely foreign parties. See supra at Section IV.A.1. Finally, at the time that
10 Microsoft was decided, the German courts had stated in the patent litigation that a RAND commitment
11 was not enforceable by Microsoft because German law did not recognize third party contract
12 rights. Microsoft, 696 F.3d at 879. The Ninth Circuit also relied on a decision in Apple v. Microsoft
13 as establishing that, under U.S. law, injunctions on SEPs may be prohibited altogether, so the Ninth
14 Circuit was concerned that the German court may issue an injunction that would be impermissible
15 under U.S. law. See id. at 877. Since Microsoft, U.S. courts have said injunctions are not categorically
16 barred by a FRAND commitment. See, e.g., Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1331 (Fed.
17 Cir. 2014). And German courts have a very rigorous system for making sure FRAND has been
18 complied with before issuing injunctions. (See McGuire Decl. ¶¶ 13-27). Given this landscape, there
19 is no reason for this Court to share the Ninth Circuit’s concern in Microsoft about letting the German
20 Actions proceed.
21 Moreover, the impact on comity would be calamitous given the fact that a German court has
22 sought to protect its jurisdiction by enjoining Continental US from even pursuing this Motion. This
23 is not a situation in which a foreign court has been silent with respect to its interests. The Munich
24 Court issued the injunction because it concluded that Continental US’s Motion was sufficiently
25 injurious to its jurisdiction as to jeopardize the proper course of justice. There is no rational or
26 plausible argument that entry of an anti-suit injunction in the face of such a preceding injunction would
Defendants Named in this Lawsuit Who Are Not Involved in the German Actions
1 and Significantly Exceeds the Scope of a Permissible Anti-Suit Injunction.
2 Although styled as a request for an anti-suit injunction, Continental US is, in effect, asking for
3 two injunctions. The first—an anti-suit injunction over the European Nokia Plaintiffs’ German
4 Actions—should not issue for all the reasons detailed above. But Continental US goes further and
5 also seeks an order prospectively “prohibiting Defendants from filing, or acting in concert with anyone
6 else to file, any action against Continental or any of its customers (or subsidiaries or affiliates) alleging
7 infringement of their global 2G, 3G and 4G SEPs during the pendency of the FRAND proceedings in
8 this court.” Mot. at 25. This even broader requested injunction goes well beyond the scope of any
9 legitimate foreign anti-suit injunction, which (when granted under appropriate circumstances) should
10 be narrowly tailored in scope and may only enjoin the parties “from proceeding with an action in the
11 courts of a foreign country.” Gallo, 446 F.3d at 989 (quoting Seattle Totems Hockey Club, Inc. v.
12 Nat’l Hockey, 652 F.2d 852, 855 (9th Cir. 1981). Indeed, this second, even broader, request is not a
13 request for an anti-suit injunction at all, but is instead a request for a preliminary injunction under Fed.
14 R. Civ. P. 65. And Continental US has not even alleged, must less demonstrated, that it has met any
15 of the required elements to obtain a preliminary injunction in this case. See Sierra Forest Legacy v.
16 Rey, 577 F.3d 1015, 1021 (9th Cir. 2009).10
17 Such an injunction cannot be issued because it is completely untethered to remedying any harm
18 that Continental US has suffered or is likely to suffer. See Price v. City of Stockton, 390 F.3d 1105,
19 1117 (9th Cir. 2004) (“[A]n injunction must be narrowly tailored…to remedy only the specific harms
20 shown by the plaintiffs, rather than ‘to enjoin all possible breaches of the law.’”) (citing Zepeda v.
21 INS, 753 F.2d 719, 727 (9th Cir. 1983)). As just one example, the relief Continental US seeks would
22 enjoin Nokia or any other Defendant from filing infringement actions against customers of Continental
23 US even if those customers infringed their SEPs other than through products not supplied by
24 10
Continental US has made no attempt to satisfy the test for injunctive relief set forth in Winter v.
25 Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). The law in the Ninth Circuit does not clearly
relieve Continental US of satisfying those factors in order to obtain injunctive
26 relief. See InterDigital Tech. Corp. v. Pegatron Corp., No. 15-CV-02584-LHK, 2015 U.S. Dist.
LEXIS 85116, at *27-28 (N.D. Cal. June 29, 2015) (“The law in the Ninth Circuit is unclear whether
27 a movant seeking an anti-suit injunction must only establish the presence of the three anti-suit
injunction factors addressed above, or whether the movant must also establish the remaining
28 traditional factors for a preliminary injunction.”).
21
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Case 5:19-cv-02520-LHK Document 102 Filed 07/24/19 Page 27 of 32
1 Continental US and regardless of the remedies sought. Continental US can scarcely claim a potential
2 indemnification claim under such circumstances. Indeed, given the extreme overbreadth of the
3 injunction, and Continental US’s failure to show that any preliminary injunction factors have been
6 4110498, at *9 (N.D. Cal. Aug. 29, 2018), this Court denied Apple’s request “to enjoin Qualcomm
7 from enforcing any exclusion or cease-and-desist order that the ITC may issue.” The Court agreed
8 with Qualcomm that Apple “lack[ed] Article III standing to pursue their requested preliminary
9 injunction at this time.” Id. at *10. Specifically, Apple’s “purported harm depends upon a number of
10 contingencies.” Id. at *11. The Court should reach the same conclusion here, because the purported
11 harm presumes that all Defendants would file actions against Continental US’s customers, Continental
12 US or its affiliates; that Continental US’s customers would seek indemnification from Continental US;
13 that Continental US would intervene in their customer’s suit (which it obviously hasn’t thus far in the
14 Daimler case); and that it would end up indemnifying its customers. This is simply too speculative
15 especially when Defendants never threatened to sue any Continental entity or its customers.11
16 C. This Court Does Not Have Jurisdiction over the Nokia Defendants.
17 That Ninth Circuit has recognized that “[a] federal district court with jurisdiction over the
18 parties has the power to enjoin them from proceeding with an action in the courts of a foreign country,
19 although the power should be used sparingly.” Gallo, 446 F.3d at 989 (emphasis added). In this case,
20 an anti-suit injunction is improper for additional reasons, namely, because the Nokia Defendants are
21 not subject to personal jurisdiction in this Court. Nokia will file a motion for lack of personal
22 jurisdiction pursuant to Rule 12(b)(2) and to dismiss the antitrust claims under Rule 12(b)(6) in
23 August. As will be fully described in those motions, the Nokia Defendants are not subject to personal
24
11
25 In addition, were this Court to conclude that the German Actions and this action involve
substantially the same parties and issues (which Nokia disputes), the Court should stay this action,
26 rather than enjoin the European Nokia Plaintiffs from pursuing the German Actions. It is well-
established that District Courts have plenary authority to manage their dockets, which includes the
27
power to stay cases pending separate proceedings. Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d
28 857, 863-64 (9th Cir. 1979).
22
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Case 5:19-cv-02520-LHK Document 102 Filed 07/24/19 Page 28 of 32
1 jurisdiction because they have no case-related contact with this district; the antitrust claims cannot
2 supply “national contacts” jurisdiction because they are due to be dismissed; and the foreign Nokia
3 Defendants do not even have national contacts related to the case sufficient to exercise jurisdiction.
4 First, the Nokia Defendants are not subject to this Court’s general jurisdiction because none of
5 the Nokia Defendants has a principal place of business or place of incorporation within California, nor
6 are any “exceptional circumstances” present in this case. See Daimler AG v. Bauman, 571 U.S. 117,
7 137 (2014). In the absence of general jurisdiction, this Court must then have specific jurisdiction over
8 each of the Nokia Defendants. Typically, to comport with due process, a federal court must find
9 minimum contacts that are both within the forum and related to the case to exercise personal
10 jurisdiction over a person or entity that resides outside the district. See Mavrix Photo, Inc. v. Brand
11 Techs., Inc., 647 F.3d 1218, 1227-28 (9th Cir. 2011). Because the Clayton Act provides for
12 international service in antitrust cases, courts have held that personal jurisdiction comports with due
13 process when a person or entity has sufficient “national contacts” with the United States as a
14 whole. See 15 U.S.C. § 22; see also Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174,
15 1180 (9th Cir. 2004).12 In addition, when exercising “national contacts” jurisdiction over an antitrust
16 claim, a court can exercise “pendent personal jurisdiction” over any claim “that arises out of a common
17 nucleus of operative facts with a claim in the same suit over which the court does have personal
18 jurisdiction.” Id. However, because Continental US’s antitrust claims are due to be dismissed, there
19 will not be personal jurisdiction based on “national contacts” under the Clayton Act, and thus there
22 As to the non-Sherman Act claims, neither venue nor personal jurisdiction is proper in this
23
12
24 While it appears there is a circuit split as to whether the venue provision of the Clayton Act
limits application of the nationwide service of process statute (see Mgmt. Insights Inc. v. CIC Enters.,
25 Inc., 194 F. Supp. 2d 520, at 530-31 (N.D. Tex. 2001)), to the extent that the Ninth Circuit has not
resolved this issue in Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir.
26 2004) or Go-Video, Inc. v. Akai Elec. Co., 885 F.2d 1406, 1409 (9th Cir. 1989), this Court should find
that venue is not proper in this Court under the Clayton Act and thus there is no personal jurisdiction
27 by virtue of “national contacts.”
13
28 And as set forth in Holopainen and Schmidt Declarations, none of the Nokia Defendants have
sufficient minimum contacts related to this case to be subject to personal jurisdiction in this Court.
23
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1 district over the Optis Entities. (See Declaration of Raymond J. Warren, ¶¶ 9-19). As to the Sherman
2 Act claims, “[t]hough personal jurisdiction is appropriate everywhere under [15 U.S.C. § 22], venue
3 is proper only in the district(s) the corporation inhabits, is found, or transacts business.” KM Enters.,
4 Inc. v. Glob. Traffic Techs., Inc., 725 F.3d 718, 725 (7th Cir. 2013). Venue is improper as to the
5 Sherman Act claims because of the lack of connections between this district and the Optis Entities.
6 (See Warren Declaration, ¶¶ 9-19). Separately, there is no case or controversy as to the claims
7 presented against the Optis Entities because there has never been a refusal to license nor a threat of
8 suit. Id., ¶¶ 4-8. The Optis Entities will move to dismiss the complaint at the deadline for their answer.
9 E. Defendant Avanci’s Individual Opposition to Continental US’s Motion.
10 Avanci, LLC (“Avanci”) joins this Opposition,14 rather than filing a separate opposition, in
11 compliance with the Court’s Order that all Defendants present their oppositions to Continental US’s
12 anti-suit Motion in a single, consolidated opposition. See Dkt. 76 at 2. However, Avanci is differently
13 situated from the other defendants because the other defendants are alleged to be the owners of patents
14 at issue in this litigation, but, as the Complaint acknowledges, Avanci itself is not a patent owner. See,
15 e.g., Compl. ¶ 4 (“Avanci purportedly does not own any patents directly, but rather acts on behalf of
16 Defendant Licensors and other owners of SEPs (collectively ‘Avanci Members’) as their licensing
17 agent for the alleged SEPs”). Simply put, it would be impossible for Avanci to file any infringement
18 action against Continental US or anyone else because it does not own any patents. For this reason,
19 Continental US cannot meet the standard for any injunction against Avanci because there is nothing
20 to enjoin, and the Motion should be denied as against Avanci even if the Court were to grant the
21 Motion against the Nokia Defendants and the other defendants. Because Avanci is differently situated
22 from the other defendants, Avanci only joins the arguments set forth above in Section IV.B.15 As the
23 Motion makes clear, the relief Continental US seeks is predominantly against the Nokia Defendants
24 14
Defendant Avanci Platform International Limited (“APIL”) is an Irish entity that will be filing
25 a Rule 12 motion to present its defense of lack of personal jurisdiction due to its lack of minimum
contacts with the United States. Without waiver of any of its defenses, included its defense of personal
26 jurisdiction, APIL states that its position is that it would be inappropriate for an in personam injunction
such as an anti-suit injunction to be issued against APIL until the personal jurisdiction issue has been
27 resolved.
15
Avanci does not oppose the arguments presented by the other defendants in other sections of
28 this brief.
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OPPOSITION TO PLAINTIFF’S MOTION FOR ANTI-SUIT INJUNCTION
Case No. 19-cv-2520-LHK
Case 5:19-cv-02520-LHK Document 102 Filed 07/24/19 Page 30 of 32
1 with respect to the German Actions. It is undisputed, however, that Avanci is not a party to the German
2 Actions, and the relief Continental US seeks with respect to the German Actions is directed solely at
3 the Nokia Defendants. Mot. at 4; see also Dkt. 32-1 (proposed order). Accordingly, under no
4 circumstance could the Court grant any injunction with respect to the German Actions against Avanci.
5 Moreover, as fully set forth above, Continental US has not even articulated—let alone met its
6 evidentiary burden to satisfy—the correct legal standard for the injunction that it seeks against Avanci.
7 Application of the Gallo standard is improper given the absence of cases to be enjoined in which
8 Avanci is a party, and Continental US has not attempted to meet its burden to come forward with
9 evidence to meet the four elements of the traditional test for a preliminary injunction against patent
10 infringement litigation by Avanci and the other defendants, as explained above in Section IV.B. Nor
11 could it with respect to Avanci in particular, because Avanci is not a patent owner, and therefore
12 Avanci could not bring an infringement action against Continental US—meaning that Continental US
13 could not satisfy any of the elements of the preliminary injunction analysis as to Avanci, let alone
15 See, e.g., Int’l Medcom, Inc. v. S.E. Int’l, Inc., No. 15-cv-3839-HSG, 2015 WL 7753267, at *5 (N.D.
16 Cal. Dec. 2, 2015) (denying preliminary injunction where motion not supported by “a non-speculative
17 threat of irreparable injury supported by evidence (as opposed to conclusions)”) (citing Am. Passage
18 Media Corp. v. Cass Comm’cns, Inc., 750 F.2d 1470, 1473 (9th Cir. 1985)).
19 V. CONCLUSION
19
1
Ian L. Papendick (SBN 275648)
2 [email protected]
Jeanifer E. Parsigian (SBN 289001)
3 [email protected]
4 WINSTON & STRAWN LLP
101 California Street
5 San Francisco, CA 94111
Telephone: (415) 591-1000
6
Facsimile: (415) 591-1400
7
Counsel for Defendants
8 AVANCI, LLC AND
9 AVANCI PLATFORM INTERNATIONAL LIMITED
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OPPOSITION TO PLAINTIFF’S MOTION FOR ANTI-SUIT INJUNCTION
Case No. 19-cv-2520-LHK