In a major decision involving standard-essential patents (SEPs) and international licensing disputes, the Federal Circuit vacated a district court’s denial of an antisuit injunction requested by Lenovo against Ericsson. The case revolves around fair, reasonable, and non-discriminatory (FRAND) licensing commitments, the enforcement of foreign patent injunctions, and how U.S. courts handle international patent disputes.

Background: The SEP Dispute Between Ericsson and Lenovo

Ericsson and Lenovo both own patents essential to the 5G wireless communication standard, known as SEPs (Standard-Essential Patents). As members of the European Telecommunications Standards Institute (ETSI), both companies have agreed to license their SEPs under FRAND terms, meaning they must negotiate in good faith and offer fair, reasonable, and non-discriminatory licenses.

When negotiations for a global cross-license between Ericsson and Lenovo failed, both parties initiated legal action:

• Ericsson sued Lenovo in the U.S., claiming Lenovo was infringing its U.S. 5G SEPs and had breached its FRAND commitment by refusing to negotiate in good faith.
• Lenovo sued Ericsson in the U.K., asking the British court to determine a fair global licensing rate.
• Ericsson sought and obtained patent injunctions in Colombia and Brazil, preventing Lenovo from selling products that allegedly infringed Ericsson’s SEPs in those countries.

In response, Lenovo asked a U.S. court to issue an antisuit injunction, which would block Ericsson from enforcing its foreign patent injunctions. The district court denied Lenovo’s request, and Lenovo appealed to the Federal Circuit.

Key Patent Law Issues Addressed by the Federal Circuit

1. Can a U.S. Court Stop a Foreign Patent Injunction?

Lenovo argued that Ericsson’s FRAND commitment prevented it from seeking SEP-based injunctions in Colombia and Brazil until it had negotiated in good faith. Since the U.S. case was already addressing whether Ericsson complied with its FRAND obligations, Lenovo claimed a U.S. court ruling would resolve the international dispute—meaning an antisuit injunction was justified.

The Federal Circuit agreed that the district court applied the wrong legal standard in denying Lenovo’s request. It emphasized that a key question was whether the U.S. case would determine if Ericsson’s foreign injunctions were improper under the FRAND framework.

2. What Does “Dispositive” Mean in Antisuit Injunction Cases?

For a U.S. court to issue an antisuit injunction, it must find that the domestic case will resolve (or be “dispositive of”) the foreign dispute. The district court held that Lenovo had to prove the U.S. case would definitely result in a global license agreement. The Federal Circuit disagreed, stating that the key issue was whether the U.S. case would determine whether Ericsson could seek foreign patent injunctions—not whether a final license deal would be reached.

3. SEP Holders and Injunctions: When Are They Allowed?

A major issue in SEP litigation is when, if ever, an SEP holder can seek an injunction. Lenovo argued that a company making a FRAND commitment should only be allowed to seek an injunction after proving it negotiated in good faith. The Federal Circuit agreed that injunctions should not be allowed unless the SEP holder first fulfills its FRAND obligations.

This aligns with previous cases, such as Microsoft v. Motorola, where a court stopped an SEP holder from enforcing a German injunction until a U.S. court determined whether it had negotiated a FRAND license properly.

4. The Role of International Comity

The decision also addressed whether blocking a foreign injunction would interfere with the authority of courts in Colombia and Brazil. The Federal Circuit emphasized that enforcing contractual FRAND obligations was different from interfering with foreign patent laws. Since Ericsson agreed to global FRAND commitments, a U.S. court could enforce those commitments without overstepping its bounds.

Outcome and What Comes Next

The Federal Circuit vacated the district court’s denial of Lenovo’s request for an antisuit injunction and sent the case back for further proceedings. However, this does not mean the antisuit injunction will automatically be granted—rather, the district court must now apply the correct legal framework.

Why This Case Matters

This ruling clarifies that:

• SEP holders like Ericsson must honor their FRAND commitments before seeking injunctions.
• A U.S. case addressing FRAND compliance can justify blocking foreign patent injunctions.
• Lenovo v. Ericsson reinforces the Microsoft v. Motorola precedent, affirming that SEPs come with licensing obligations that affect enforcement rights worldwide.

For companies involved in wireless technology and SEP licensing, this decision is a major development in balancing patent enforcement rights with global licensing obligations. It signals that courts will hold SEP holders accountable for their commitments, limiting their ability to use foreign injunctions as leverage in licensing negotiations.

Post by Charles Gideon Korrell