Cross-Border IP Enforcement

ITC Section 337 investigations are one of the most powerful IP enforcement tools available to US patent holders — particularly effective against foreign manufacturers who make infringing products abroad and sell them in the US: THE ITC AND SECTION 337: the US International Trade Commission (ITC) is an independent federal agency that can issue exclusion orders barring importation of products that infringe US intellectual property rights; the ITC's jurisdiction is over IMPORTS — it can only stop infringing products from entering the US; the ITC cannot award monetary damages (unlike district court); HOW SECTION 337 WORKS: COMPLAINANT FILES COMPLAINT: patent owner (or trade secret; trademark; copyright owner) files a complaint alleging that imported products (or articles made with an imported process) infringe valid US IP rights; COMPLAINT REQUIREMENTS: ITC requires showing of: (1) valid US patent (or other IP right); (2) importation into the US of the accused products; (3) domestic industry — the complainant must have a domestic industry in the US relating to the articles protected by the patent (either manufacturing or significant investment in engineering/R&D; licensing; or technical services); DOMESTIC INDUSTRY REQUIREMENT: critical and unique to ITC; patent holders without US manufacturing must often rely on 'economic domestic industry' (licensing program; R&D investment in the US relating to the patent); INVESTIGATION PROCEDURE: ITC institutes investigation within 30 days; Administrative Law Judge (ALJ) presides; fact-intensive discovery; depositions; trial before ALJ: typically 12-18 months from complaint to initial determination; ITC COMMISSION reviews and issues final determination; REMEDIES: LIMITED EXCLUSION ORDER (LEO): excludes specific respondent's products; GENERAL EXCLUSION ORDER (GEO): excludes all imports of the infringing product (regardless of source); much harder to get (requires widespread infringement; impracticality of naming all infringers); CEASE AND DESIST ORDER: prevents domestic respondents from selling infringing inventory already in the US; PRESIDENTIAL REVIEW: every ITC final determination is subject to 60-day Presidential review; very rarely overturned; COMPETITIVE ADVANTAGE vs. DISTRICT COURT: ITC timeline (12-18 months) faster than district court (3-5 years to trial); ITC proceedings during pendency = import ban threat creates settlement leverage; ITC allows discovery from foreign companies not subject to US court jurisdiction (via in rem proceedings or willing foreign respondents); DOWNSIDES: no monetary damages; must have domestic industry; can be expensive ($5-20M+ in complex cases); FRAND commitments may bar exclusion orders for SEP assertions.

Germany is the preferred jurisdiction for patent enforcement in Europe because of its extremely fast injunction procedures, plaintiff-friendly courts, and significant commercial stakes as Europe's largest economy: WHY GERMANY IS THE DOMINANT EU PATENT FORUM: SPEED: German district courts (Landgericht) are among the fastest patent courts in the world; from filing to first-instance trial verdict: 12-18 months in Munich; 18-24 months in Mannheim; 18-24 months in Düsseldorf; PRELIMINARY INJUNCTIONS: available in Germany if the patent holder can show: high probability of infringement; irreparable harm (commercial relationship is often sufficient); urgency (cannot be aware of infringement for too long before filing); available WITHOUT full trial in some cases; BIFURCATED SYSTEM: infringement is litigated in the district courts (LG Munich; LG Mannheim; LG Düsseldorf; LG Hamburg); validity is litigated separately in the Federal Patent Court (Bundespatentgericht); result: an infringement injunction can be (and often is) issued before the validity challenge is resolved; this creates significant risk for the defendant — enjoined from selling while validity is still being determined; FRAND AND SEP IN GERMANY: Germany historically granted injunctions for SEP holders even when FRAND licensing was ongoing; EU CJEU Huawei v. ZTE (2015) created a 5-step process that SEP holders must follow before obtaining injunction; Sisvel v. Haier (Germany): FRAND injunctions still available if implementer is 'unwilling licensee'; HIGH-VALUE CASES: LG Munich (Munich Court): Apple vs. Qualcomm (EU); Nokia vs. OPPO (2021-2022 leading to OPPO exit from Germany); Ericsson vs. Apple (2024); LG Düsseldorf: Samsung vs. Huawei; InterDigital vs. Xiaomi; LG Mannheim: historically patent-holder friendly; GERMAN COURTS POST-UPC: Germany is a Participating Member State in the UPC (Unified Patent Court); most Germany-focused patent strategies now must consider whether to use UPC or German national courts; both options available (opt-out unitary patents = national court; UPC-covered EP patents = UPC default unless opted out); ENFORCEMENT PROCEDURE: file infringement action (Verletzungsklage) in competent LG; plaintiff files for injunction; defendant responds; oral hearing; first-instance judgment; appeal to Court of Appeal (Oberlandesgericht); final appeal to Federal Court of Justice (Bundesgerichtshof) on pure law questions.

The Unified Patent Court (UPC) launched in June 2023 and represents the most significant change to European patent enforcement in decades — creating a single forum to obtain pan-European injunctions and invalidate European patents across all participating states: WHAT THE UPC IS: a new European court with jurisdiction over European Patents (EPs) and the new Unitary Patent; the UPC can issue: injunctions covering ALL 17+ Participating Member States simultaneously with one action; declarations of non-infringement across all participating states; declaration of invalidity (revocation) of European patents (in participating states); CURRENT PARTICIPATING MEMBER STATES (as of 2024): Germany; France; Italy; Netherlands; Belgium; Luxembourg; Austria; Sweden; Finland; Denmark; Portugal; Malta; Estonia; Lithuania; Latvia; Bulgaria; Slovenia; Romania; (notable non-participants: UK left with Brexit; Spain; Poland chose not to join yet); HOW UPC AND EXISTING EUROPEAN PATENTS INTERACT: all existing European Patent (EP) bundles granted before UPC start = automatically UPC jurisdiction in participating states; OPT-OUT: patent holders with existing EP bundles had a 7-year transitional period to OPT OUT of UPC jurisdiction; opt-out = patent remains under national courts only; important decision: opted-out patent cannot be the subject of a UPC central revocation action; UNITARY PATENT: a new form of patent; single filing covering all 17+ participating UPC states; one renewal fee; one enforcement action covers all participating states; must designate at the time of European Patent grant (within one month of publication of grant decision); STRATEGIC CONSIDERATIONS: UPC BENEFITS FOR PATENT OWNERS: single action = pan-European injunction (vs. filing separately in Germany; France; Italy; etc. = very expensive); faster (UPC aims for 12-18 month timeline to judgment); powerful revocation action defense: but also means patent can be centrally revoked across all participating states with one action; OPT-OUT BENEFITS: avoids central revocation exposure; appropriate for patents that are strong and patent holder wants to avoid pan-European invalidity risk; SELECT DIVISION STRATEGY: Local Division (where defendant is or acts): Germany (LD Munich; LD Mannheim; LD Hamburg; LD Düsseldorf); Paris; Milan; Nordic division; Central Division (for actions without local component): London seat for chemistry/pharma; Munich seat for mechanical engineering; Paris seat for others; choice of division affects speed; judges; and litigation culture; EARLY UPC CASES: first substantive UPC preliminary injunction decisions in 2023-2024; courts generally moving faster than predicted.

Chinese patent enforcement has undergone dramatic transformation since 2014-2018 — from a historically weak system widely ignored by foreign IP holders to a sophisticated enforcement environment where Chinese courts are issuing multi-hundred-million-dollar damages awards and global anti-suit injunctions: THE TRANSFORMATION OF CHINESE IP COURTS: IP COURT ESTABLISHMENT: Beijing IP Court established December 2014; Shanghai IP Court 2014; Guangzhou IP Court 2014; Supreme People's Court IP Division established 2019; Shenzhen IP court 2019; KEY IMPROVEMENTS: specialized IP judges (trained in both law and technology); faster proceedings (6-12 months to first instance vs. 2-3 years previously); significantly higher damages awards; PUNITIVE DAMAGES (2019 Patent Law Amendment): up to 5x compensatory damages for willful infringement; willfulness standard: defendant knew or should have known; evidence preservation orders (easier access to defendant financial records for damages); FAMOUS LARGE AWARDS: Huawei v. Conversant (Shenzhen 2020: Conversant won $585M — China's largest patent damages at the time; reversed in part on appeal); Honeywell v. Hangzhou H3C (hundreds of millions RMB); ongoing increases in award sizes; FOREIGN COMPANIES WINNING IN CHINESE COURTS: contrary to earlier perception, foreign patent holders do win in Chinese courts; statistical study shows foreign vs. domestic patent holder win rates approximately comparable in higher courts; Chinese courts less hospitable to NPE-like assertions; operating company vs. operating company enforcement generally works; ANTI-SUIT INJUNCTIONS (ASIs): Chinese courts began issuing ASIs in 2020-2021; an ASI prevents a party from pursuing litigation in a foreign court; Huawei v. Conversant: Shenzhen court issued ASI against Conversant's UK proceedings; implications: patent holder must consider Chinese courts may block foreign enforcement; defendant in US/German litigation may seek Chinese ASI to stop foreign proceedings; creates race to which jurisdiction's courts act first; CHINESE PATENT STRATEGY FOR FOREIGN COMPANIES: FILE IN CHINA EARLY: Chinese first-to-file system means early filing essential; prosecute actively in CNIPA (State Intellectual Property Office); include manufacturing-related claims (Chinese courts are comfortable with process patents); ENFORCE IN CHINA WHEN: Chinese-based infringer; Chinese market is primary market for infringing goods; Chinese manufacturing of infringing products; high damages potential; DEFEND IN CHINA WHEN: seek ASI if foreign plaintiff files abroad; challenge at CNIPA Patent Reexamination Board (PRB); INVALIDITY IN CHINA: CNIPA Patent Reexamination and Invalidation Division; administrative process; can be appealed to Beijing IP Court; patent is valid until finally invalidated; different from US (where invalidity is a defense in same proceeding).