Delhi court grants novel injunction against Xiaomi

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Delhi court grants novel injunction against Xiaomi

Delhi High Court has granted the country’s first anti-anti-suit injunction in favour of US technology giant InterDigital and against Chinese multinational Xiaomi.

The court on 3 May directed Xiaomi to indemnify InterDigital against any penalty imposed by the Wuhan Immediate People’s Court, where the Chinese phone maker sued InterDigital over a licensing fee dispute.

InterDigital had sued Xiaomi in Delhi High Court, in July 2020, for infringement of its 3G and 4G standard essential patents (SEPs). Later, the Wuhan court fined the American company RMB1 million (US$155,000) per day in response to an ASI application filed by Xiaomi, in August 2020, over the proceedings in India.

Through this judgment, Delhi High Court has confirmed its 9 October 2020 order, by which it had granted an ad-interim injunction against Xiaomi, directing it to not pursue or enforce the injunction it had secured from the Wuhan court.

The high court granted the anti-anti-suit injunction on the grounds that InterDigital had no prior knowledge that an anti-suit injunction application had been filed in the Wuhan court until the order was published, so it had no occasion to take pre-emptive remedies against the order of the Wuhan Court.

InterDigital was only served with notice of the fact that a complaint had been filed in Wuhan, which sought establishment of fair, reasonable, and non-discriminatory (FRAND) royalty rates for the entire global SEP portfolio of InterDigital.

The high court held that a suit seeking injunction against infringement of Indian patents can only be tried before competent courts in India.

The court noted that Xiaomi chose to remain silent, and did not inform them or InterDigital that it had filed an anti-suit injunction against the Indian proceedings. Xiaomi was present before the Indian court on six occasions.

“India has acted like a ‘FRANDLY’ neighbour to China by neutralising the penalty order of the Wuhan court through its indemnity order and maintaining its sovereignty by continuing arguments on the injunction,” said Pravin Anand, managing partner of Anand and Anand, which represented InterDigital.

In addition to Anand, the firm’s team on the matter comprised partner Vaishali Mittal, managing associate Siddhant Chamola, and senior associate Pallavi Bhatnagar, as well as senior advocate Gourab Banerji, who argued the matter before the court.

“Besides formulating some rule of thumb principles, the court has addressed the limited application that the principle of comity of courts will have,” Mittal, told India Business Law Journal. “[This is] especially when the impugned order itself was oppressive, and did not respect the jurisdiction of an Indian court to hear matters covered under Indian law. The court upheld the principle that comity is a two-way street.”