IP infringements, trade fairs and the implications for businesses
Mobile World Congress: the scene of patent infringement battles
14 December 2018
Barcelona' s Commercial Court's refusal to grant an injunction aimed at preventing the exhibition of more than thirty electronic devices at the Mobile World Congress in February 2016 may have implications for other companies who fear their rights may be infringed at trade fairs.
What is the case about?
Sisvel International, S.A. sought to prevent Archos, S.A from exhibiting a series of allegedly patent-infringing electronic devices at the Mobile World Congress held in Barcelona. Sisvel is the owner of two patents essential for the implementation of GPRS and UMTS telecommunication standards. Archos, meanwhile started selling electronic devices implementing those standards in 2013 and, ever since the two companies have been unsuccessfully trying to negotiate the terms of a FRAND (Fair, Reasonable, and Non-Discriminatory) licence.
On 11 February 2016, Sisvel sent a letter to Archos unilaterally terminating the negotiations. On 19 February 2016 three days before the exhibition was due to open its doors Sisvel filed an application seeking, among other measures, a Court order preventing Archos from exhibiting, offering, promoting and advertising more than thirty electronic devices implementing the GPRS and UMTS standards. Sisvel applied for this ex parte (meaning that Archos should not be heard first ).
The court refused and said that Sisvel could and should have knocked on its door earlier so as to allow the defendant to be heard first - Archos had, after all, been marketing its devices for three years. Moreover, the Court found that, Sisvel being the holder of two standard essential patents, it could only resort to the Courts in order to obtain a compensation for unpaid FRAND royalties, and this relief could hardly be guaranteed by a preliminary injunction preventing Archos from promoting its devices during the MWC. The Court hinted that, bearing in mind the aggressiveness of the requested order it could not be ruled out that Sisvel could be misusing this procedural mechanism as a way to exert pressure on Archos in the context of the FRAND licence negotiations.
What are the implications?
- Situations where IP rights could be infringed during trade fairs are very common. Preliminary injunctions aimed at preventing infringement of IP rights are typically available in Spain.
- Unlike in other jurisdictions, in Spain the general rule dictates that defendants must be heard before the Court orders a preliminary injunction.
- Ideally, a preliminary injunction should be applied for well ahead of the opening of the trade fair, so as to allow the holding of an oral hearing before the Court makes a decision.
- Applications ex parte brought unnecessarily late may end up being rejected immediately.
- Spanish Courts will hardly ever order preliminary injunctions aimed at altering an IP right infringement situation consented to by the applicant over a lengthy period
- Prospects of success of an application for a preliminary injunction based on an essential standard patent are rather limited in Spain.
For a more detailed examination of this development and other recent IP stories please see the Clifford Chance's Global Intellectual Property Newsletter. This is our quarterly publication which provides an overview of the most recent IP developments in major jurisdictions around the world.