Background

The dispute between HTC and Apple relates to patents underlying their smart phones.  These international organisations both have litigation experience in many jurisdictions around the world, and no doubt choose their jurisdictions for patent disputes with care.  It is therefore informative that Apple choose Germany to launch the present suit.  A jurisdiction with bifurcated proceedings trying infringement in different courts to validity and at different speeds, thereby typically favouring patent holders.

It was in July 2011 that Apple commenced infringement proceedings against HTC in two courts in Germany: The Regional Court in Mannheim (for the patent referred to as ’859) and in the Regional Court in Munich (for patents referred to as ’022 and ’868).  Also in July through into  August, HTC commenced proceedings in England for the revocation for the UK equivalent of these three patents.  Then in mid-September Apple responded to the English claims with infringement proceedings against HTC in the relating not only to the three patents already in suit but also under a patent referred to as ’948.

HTC almost immediately sought expedition of the validity and infringement actions in England.  As part of its submission HTC sought to have the trial of ’859 be expedited so as to come on to trial in January 2012 (before the sister action in Germany) and that the proceedings involving ’022, ’868 and ’948 be expedited to the first convenient date on or between March 26th 2012 until April 30th 2012 (again before the sister German actions).

In regard to the Munich proceedings, HTC applied to expedite the sister actions on the basis that a decision of the English Court would be of assistance in the proceedings in the German Court, and in the absence of any serious opposition by Apple, Arnold J. was prepared to make the order sought by HTC.  Regarding the Mannheim action, HTC’s submitted that due to the bifurcated system in Germany, if it lost the proceedings in the Mannheim Court (which, although the timetable had not been set yet, could take place as early as January/February 2012 with a judgment four to six weeks later), then an injunction may be granted against it restraining infringement of the ’859 patent before the validity of that patent has been tested by the Federal Patent Court in late 2012/early 2013.  Accordingly, there could be a significant period of time during which HTC would be restrained from its business, event though the patent in question might later be found invalid, and this would be most harmful to them.  More so than in relation to the Munich actions, Apple strenuously resisted this expedition application on the ground that the desire to obtain a judgment of a English Court for use in proceedings in the Mannheim Court was simply not a legitimate reason for expedition.

On reviewing the relevant authorities, Arnold J. stated that the English Courts had accepted that a factor which may be relied upon by a party applying for expedition is that the finding of an English court in relation to the validity of the European patent (GB), the German counterpart of which is being litigated in infringement proceedings in Germany, will be of assistance to that party with regard to the question of whether there should be a stay of those proceedings.  It was not a factor which had been treated in any of the cases as being a particularly strong or important factor.  Though in this case it provided ‘some further support’ to the request for expedition, it did not on its own persuade Arnold. J. that expedition to ensure a decision before the case in Mannheim in relation to the ’859 case was required.  However, Arnold J. went on helpfully to set down three other factors of importance that could be of relevance to future litigants:  First, the timetable in the Mannheim proceedings had not been set yet.  Therefore the Mannheim Court once aware of the trial in England set for late March 2012/April 2012, may adjust its timetable to enable it to take the English Court’s judgment.  Second, as to HTC’s submission that no amount of financial security by Apple would be sufficient to remedy the irreparable harm to HTC should an injunction be granted by the Mannheim Court but later discharged, Arnold J. consdiered that this was a matter which could be put before the Mannheim Court when determining whether it should either stay the proceedings as a whole or at least delay its decision as to whether to grant an injunction.  Third, it seemed undesirable for an action involving one Apple patent to be litigated separately from an action involving three other Apple patents when the allegedly infringing phones are certainly similar and where the arguments on each sides will also be similar.  Therefore, Arnold J.’s final determination was expedition of the English proceedings relating to ’859, though not to the extent which it originally sought.

Conclusion

Smart phones and the patents that under pin them exist in rapidly evolving markets, the difference of months can therefore prove vital to business trying to get their products embedded in the purchasing habits of the target audience. This decision shows the flexibility of the English courts and the useful opportunities to international litigants in having forum choice in Europe.  Indeed if competition is good for innovation there can be no better example than this case, and from it will evolve more helpful procedure and time tables to meet market demands that a system without competition would likely not create.  This development is of great value to all engaged in rapidly developing markets, and anyone for whom choice of forum in Europe is an issue.  Here is the perfect example of how intelligent litigants will look to the procedures of Europe to drive forward innovation in our disputes processes.