Patents - Koninklijke Philips N.V. v Xiaomi Inc
| Author Basher Eyre# Lixnxw CC BY-SA 2.0 |
Patents Court (Mr Justice Mellor) Koninklijke Philips N.V. v Xiaomi Inc and others [2021] EWHC 1124 (Pat) (26 April 2021)
On 21 Oct 2020 Koninklijke Philips N.V issued patent infringement proceedings against Xiaomi Inc and its subsidiaries in the UK, Cayman Islands and Hong Kong. Phillips claimed that the patents that the Xiaomi companies are alleged to have infringed are essential to a standard for the operation of 3G and 4G mobile phone networks for which it has undertaken to grant licences. Phillips sought a declaration that the terms upon which it grants licences are FRAND, that is to say fair, reasonable and non-discriminatory
As all the defendants except the second are outside the jurisdiction, Phillips needed the court's permission to serve them. It applied to Mr Justice Mann on 26 Oct 2020 who granted such leave to Phillips as well as other relief. The second defendant, Xiaomi Technology (United Kingdom) Ltd., issued an application under CPR 11.1 (b) for a declaration that the court should not exercise any jurisdiction which it may have. Alternatively, it sought a stay under CPR 11.6 (d), CPR 3.1(2)(f) and/or the inherent jurisdiction of the court. Phillips requested further information on the basis of Xiaomi Technology (United Kingdom) Ltd.'s application. As it was not happy with that company's response, Phillips sought an order to strike out its application.
Phillips's application together with a further application by the Chinese, Hong Kong and Cayman Island companies came on before Mrs Justice Bacon on 8 Feb 2021. The parties agreed to a consent order whereby challenges to the jurisdiction by both the UK and overseas Xiaomi companies would be heard on 24 and 25 May 2021. The order also provided for those overseas companies to accept service at the offices of their English solicitors and excused all the defendants including the second from serving a defence until after the May hearing.
CPR 11.9 provides:
"If a defendant makes an application under this rule, he must file and serve his written evidence in support with the application notice, but he need not before the hearing of the application file –
(a) in a Part 7 claim, a defence; or
(b) in a Part 8 claim, any other written evidence."
There is, however, no equivalent provision where jurisdiction is challenged under some other rule such as CPR 3.1 (2) (f). As it became clear from the defendants' evidence and party to party correspondence that the second defendant would rely on CPR 3.1 (2) (f) and not on CPR Part 11, Phillips contended that that defendant should serve its defence forthwith. On 15 April the second defendant applied for an order that it need not deliver a defence until after the May hearing. Philips responded on 20 April with an application for an unless order.
Both of those applications came on before Mr Justice Mellor on 26 April 2021 who described them as "an unfortunate piece of satellite litigation pending a two-day jurisdiction application which is due to be heard on 24th-25th May."
Mr Justice Mellor weighed the parties' contentions at para [22] of his judgment:
"With the protection of CPR 11 (9) removed, Philips say that Xiaomi UK is months out of time for service of its defence and, since it has had months to prepare, its defence should be served in short order and under an unless order. However, it would be entirely understandable that any preparatory work towards the drafting of a defence by Xiaomi UK would have either ceased or at least put on the back burner following the Bacon Order. Furthermore, some time has passed since the Bacon order was made on February 8th, leaving much less time for Xiaomi UK to prepare and file a 'full' defence. So it seems to me that all that has changed since the Bacon Order was made is that Philips have extracted an explicit concession from Xiaomi UK that it does not have a CPR Part 11 jurisdiction challenge in circumstances where that was already apparent to Philips. That does not seem to me to justify Philips' change of stance, from being content not to receive any defence until after the May hearing to an insistence on a defence being served in short order under an unless sanction."
He decided in favour of Xiaomi:
"Therefore, in the unusual circumstances of this case, I have reached the conclusion that the agreement that the defendants need not file a defence for the May hearing, even though the basis for the Xiaomi UK agreement has now gone, in other words, CPR rule 11 (9) no longer applies, I still think that the parties should abide by that agreement. I am not suggesting that I am turning my back on the construction of the recital in the Bacon order that I mentioned earlier; I am saying that in the circumstances of this particular case, I think the right solution is that Xiaomi UK does not need to file a defence before the May hearing."
He, therefore, dismissed the claimant's application for an "unless" order and allowed the second defendant's for an extension of time.
Anyone wishing to discuss this note or any aspect of patent litigation is welcome to call me on 020 7404 5252 during normal office hours or message me through my contact form.
Comments