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Our last argued case this morning is Telephone Arctic Bullaget Erickson and Emerson Erickson versus Lenovo et al.

[00:00:16] Speaker 00:
2024, 1515.

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Mr. O'Quinn.

[00:00:34] Speaker 03:
Thank you, Judge Larian.

[00:00:35] Speaker 03:
May it please the court, John O'Quinn on behalf of Lenovo.

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The district court denied Lenovo's request for a temporary anti-suit injunction to protect it from enforcement of ex parte or expedited foreign injunctions sought by Erickson in the midst of this contractual franned licensing dispute.

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The district court did so entirely based on its threshold determination that the contractual dispute would not be dispositive of the foreign injunction requests.

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The district court erred as a matter of law at that initial step for three reasons.

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First, it misunderstood the threshold legal requirement, which merely requires that the domestic action be, quote, capable of disposing, end quote, of the issue in the foreign action, much like a dispositive motion under Rule 12b6 or for summary judgment is capable of deciding a case.

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Second, the district court failed to

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The district court failed to recognize that the breach claim before it, that is, whether or not Erickson's offer is consistent with its contractual obligation

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to make offers and negotiate.

[00:01:38] Speaker 01:
Let's go back, just make sure I heard you correctly.

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Did you say capable of disposing or deciding?

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Capable of disposing.

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That's what dispositive means.

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Just like a 12b6 motion, if decided in favor of the movement, is dispositive of the case.

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If it's decided against the movement, it doesn't resolve the case.

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It's capable of disposing of it.

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That's exactly right, Judge.

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I thought you said deciding.

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Right, no, no, capable of disposing of.

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And that is consistent with, that language comes directly from Microsoft versus Motorola, it comes from the Ninth Circuit's decision in applied medical, and it's consistent.

[00:02:13] Speaker 01:
Would you tell us how the court erred in your view with its characterization of disposing?

[00:02:22] Speaker 03:
Sure.

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So Judge Raina, the district court aired in two ways.

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One, it thought that the only way that it would make a decision that would be capable of disposing of or that would dispose of, and I think that's part of it, is that it thought that it had to either way dispose of the case as opposed to if it decided it in favor of Lenovo, but that it would only dispose of it if it resulted in the determination of an actual rate.

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And first of all, the breach claim itself, that is the breach of the obligation to make an offer in good faith, to negotiate in good faith, is itself a precondition to be able to seek injunctive relief if they are in breach.

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Well, can I ask you, are you relying on both?

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I mean, your argument is that squarely the issue is before the district court that the adjudication of that issue will be dispositive, right?

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Yes.

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And I just want some clarity.

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Is Erickson's complaint that puts the issue squarely before the district court your counterclaim or both?

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Both.

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With respect to the issue of whether or not they are in breach and the dispositiveness of that, whether or not they have complied with making an offer in good faith is something they put before the district court.

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We put it before in our counterclaims.

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Now, I also think that the district court was also wrong in thinking that there would not actually be a rate determined in this case.

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And I think it was wrong for two reasons.

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That's your alternative.

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You have an alternative argument, right?

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That's right.

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Either one of these would be dispositive of the permissibility of seeking injunctions.

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But how would the second one work?

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The second one would require a remand, then, for the district court to reevaluate the evidence in light of your counterclaims and stuff, the alternative holding that his dispositive

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was right but he just failed to review the facts and the evidence appropriately.

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I don't think that's quite right Judge Prost in the sense that if you agree that the contract claims before him

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whether in the form of our counterclaims or in the form of their own claims, mean that a rate will be determined, the determination of a rate would be dispositive.

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Now, they argue on appeal that that's all that we argued would be dispositive, but we argued both, that the determination of a rate would be dispositive of the propriety of injunctive relief and the fact that we assert that they are in breach of their obligation to negotiate in good faith, to make a good faith author.

[00:04:44] Speaker 04:
Let's go back to your first line, which is not the alternative argument.

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What's your best support?

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for the notion that Erickson can't seek an injunctive relief unless and until it's complied with its friend.

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Sure, I think that the best support for that is several cases.

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I think that is certainly consistent with the Ninth Circuit's decision in Microsoft versus Motorola, where the court observed that the whole dispute was over the propriety of injunctive relief, where there was a similar fran obligation.

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The exact same fran obligation was at issue in Judge Oreck's decision in the Huawei case, where the court said, quote, the availability of injunctive relief

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for each party's SEPs, standard essential patents, depends on the breach of contract claims," end quote.

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That's page eight of Judge Oreck's opinion in the Huawei case.

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And I'd also point this court to the Supreme Court of the United Kingdom's opinion in Unwired Planet.

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This discussed both in our opening and in our reply brief.

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There, that court, applying French law, interpreted the Etsy obligation itself.

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And it determined at paragraph 72 of its decision, quote, the operation of the Etsy regime requires the SEP owner to offer a FRAN license and the implementer to decline it as preconditions, as preconditions of the grant of an injunction.

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And it makes a similar point at paragraph 14 of its decision where it says the SEP owner's undertaking, quote, which the implementer can enforce to grant a license on FRAN terms is a contractual

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derogation from a SEPA owner's right under the general law to obtain an injunction to prevent infringement of its patent."

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End quote.

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This is for another point of clarification.

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Has Lenore received an offer on a rate?

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So there was an offer that was made.

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That is the offer of either their rack rate or of the, I think it was 1% or up to $4 a unit.

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And we don't believe that it was a franned offer, and we don't believe that that is the franned rate.

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And in fact, frankly, the HTC case from the Fifth Circuit that they

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rely on heavily but mistakenly supports the notion that it wasn't a fran rate, at least as to us, because we are similarly situated to Apple, to Samsung, to Huawei, the parties that the HTC of court observe got much better rates than those.

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We think it's a discriminatory rate.

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But we don't think that the offer itself complied with their obligation to make an offer

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in the first instance, and that alone, a determination on that in our favor, that alone would be dispositive, and that alone is a reason that the district court... Well, but do you concede that if the district court finds that Erickson has not reached its friend negotiating obligations, then there's no impediment to it seeking foreign injunctions?

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So Judge Gross, I think that's necessary but not sufficient.

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The other piece of the puzzle would be that there would need to be a determination that was also put in play by their contractual action that we, meaning Lenovo, are an unwilling licensee.

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In other words, every court that has looked at the Etsy obligation, whether it was the United Kingdom in the Unwired Planet case,

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If you look at the courts in Europe that are cited in the law review article at appendix 3094 to 3098, every single one of them look for two things before an injunction can issue in the context of this Etsy commitment.

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One is that they've made a FRAND compliant offer.

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And two is that the implementer or the defendant, and that would be us, is not negotiating in good faith.

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But I thought you seemed quick to say that if Erickson did breach its negotiating obligations, then it can't seek foreign injunctions.

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So deciding that Erickson didn't breach its negotiating applications, doesn't that mean that Erickson can seek foreign injunctions?

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How else could it be dispositive?

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I mean, that's your dispositive argument.

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Well, just to be clear, it's enough that if you agree with us that it would be dispositive.

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It doesn't, it's not, in other words, for example, if you look at the way that Microsoft versus Motorola described

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the dispositiveness inquiry of page 885 of that opinion, it said, quote, Microsoft's contract-based claims would, if decided in favor of Microsoft, determine the propriety of enforcement by Motorola of the injunctive relief obtained in Germany.

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And my modest position is that if you agree with us that they are in breach, that is dispositive of their injunctive claim.

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Now, the mirror image of that is not quite correct in the sense that

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In addition to showing that they are not in breach, they would need to demonstrate that we are an unwilling licensee as a precondition.

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Now that is in the district court case, and so that is an issue that could be decided by the district court.

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If the district court decided both of those issues, then yes.

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If they decided both of those issues adversely to us, then yes, they would be able to seek conjunctive relief under the defense agreement.

[00:09:49] Speaker 01:
How is Erickson in breach?

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Is it because they're not HC compliant?

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That's right, Judge Raina.

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Our position is that the offer that they have made us is not is not consistent with their friend obligation and that their conduct, you know, the offer that they made was on October 11th of last year.

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At the same time that they filed not only the action in district court, but they also filed the action in the ITC seeking an exclusion order.

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And so that that is further example of how that they are.

[00:10:22] Speaker 01:
So you're not arguing then that this is not a friend rate rather than your argument, if I understand correctly, this is not a friend offer.

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Our argument is both Judge Rana.

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We are arguing it is not a franned offer and that if the district court agrees with us, that is dispositive of their request for injunctive relief.

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We are also arguing it is not a franned rate.

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It is our position that they ultimately would be obligated to enter into a franned rate.

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That would also be dispositive.

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These two issues are issues that would be decided by the district court.

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Those are issues that we believe should be decided by the district court in the context of the litigation.

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The question of whether or not that they have made a frant offer is one that they have clearly teed up.

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That is, whether their offer is consistent with their obligation.

[00:11:10] Speaker 01:
If we went to break in and remat, exactly what point would that be on the failure to adequately apply the first test of the injunction criteria?

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That's right, Judge Raina.

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I mean, this court can vacate and remand.

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You can do so solely on the grounds that the district court misunderstood in the way that it approached what it constitutes being dispositive.

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But that would require that we inform the court as to the proper definition of the parameters of dispositive.

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Of dispositiveness.

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And I think that this court's decision in this court's prior decision in the Santa Fe Aventis case is on point on this as well.

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The court there said the, quote, functional inquiry, and that's what we're talking about.

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It's a functional inquiry that requires the district court can determine whether the issues are the same in the sense that the issues, quote, can be resolved in the U.S.

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action.

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Not must, but not will, but can.

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And they clearly can be resolved here.

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Now, as we've argued in our brief, and I realize I'm well into my rebuttal time, but I'm happy to take questions on

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this as well.

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In addition to vacating on the grounds that the district court erred at the threshold inquiry, given the exigent circumstances of these existing foreign injunctions, the fact that the issues are fully briefed on appeal, and is that other circuits have observed that the ultimate decision whether to grant an anti-suit injunction largely turns on legal principles as much as anything.

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This court can and should order entry of the requested injunction on remand.

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indicated there's a sense of urgency here, a compelling urgency here.

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Was this case expedited in any way?

[00:12:49] Speaker 03:
It was.

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It was.

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We filed a motion to expedite this appeal.

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Ironically, it was opposed.

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This was after they had obtained injunctions in Brazil and in Colombia.

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that are aimed at very large markets and are aimed at harming us.

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Meanwhile, they have no irreparable harm of their own.

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So this case was expedited.

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We did ask for it to be expedited and placed on the calendar.

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And I would respectfully submit that all of the issues in this case have been anticipated by the Ninth Circuit in its reasoning in the Microsoft versus Motorola case.

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It rejects the very arguments that Ericsson is now making.

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and I would ask that this court do likewise.

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I'm happy to answer any additional questions.

[00:13:33] Speaker 00:
We will save you a rebuttal time, Mr. O'Quinn.

[00:13:36] Speaker 03:
Thank you, Judge Lori.

[00:13:37] Speaker 03:
Mr. Lamkin.

[00:13:44] Speaker 02:
Thank you.

[00:13:44] Speaker 02:
May it please the court?

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The almost invariable rule is that parallel proceedings before different sovereigns proceed in parallel without interference one against the other, except in the most extreme cases.

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And the district court here was well within its discretion in not contributing that rule through an anti-suit injunction.

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It would have rendered unenforceable in Brazil a Brazilian decree enforcing Brazilian patents for sales to customers in Brazil.

[00:14:11] Speaker 02:
Well, let me just ask you.

[00:14:12] Speaker 04:
Go ahead.

[00:14:13] Speaker 04:
Do you agree that your Etsy commitment requires you as a potential licensor of SCPs to negotiate in good faith with potential licensees?

[00:14:22] Speaker 02:
Yes, the Etsy commitment does require that.

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But I think the issue here is the district court found that the threshold issue, as the district court found, is whether or not the North Carolina case would be dispositive.

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And it found that Lenovo's own position prevented it from being dispositive.

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Because Lenovo took the position that if our offer is found franned,

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If our offer is friend-friend, it reserves the right to continue infringing.

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It reserves the right not to take the license.

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It reserves the right to continue exactly as before.

[00:14:49] Speaker 01:
You're out in the marketplace.

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I can see how there's arguments that an offer is not a friend offer or it's not made at a friend rate.

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I mean, that's not surprising.

[00:15:01] Speaker 02:
I'm sorry, it's not surprising that they're arguing that our argument is that it's not frank?

[00:15:05] Speaker 02:
Yes, I mean these arguments occur all the time.

[00:15:07] Speaker 01:
Who decides that?

[00:15:09] Speaker 01:
In order to move something like this along, if that issue has to be decided, whether there's been a friend offer or a friend rate, then who guides that

[00:15:20] Speaker 02:
Each of the courts, each court before whom that issue is raised is able to write it, to decide it.

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So there's nothing that says that a North Carolina court is better positioned to decide whether something violated the French law Etsy contract than a Brazilian court and provides relief from Brazil.

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than a Brazilian court that would apply the same.

[00:15:39] Speaker 04:
We're not saying we're not talking about deciding this case.

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We're deciding about solely the issue of seeking an injunction.

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And that's a bit different.

[00:15:48] Speaker 02:
Well, actually, it's quite when you comes to Brazil, it comes to civil law countries.

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The primary relief is injunctive relief.

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And what the court is being asked to do, the district court was being asked to do here, was to render that relief unenforceable, to tell the parties, you know this court decree is here, but you cannot enforce it.

[00:16:05] Speaker 02:
That is a grave intrusion on the Brazilian proceedings by saying, yeah, court, yeah, it should be agreed.

[00:16:09] Speaker 01:
That's how those courts operate.

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Pardon?

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That's how those courts operate.

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They're injunction oriented.

[00:16:15] Speaker 01:
Exactly why it's such a great- It's called a juicio de amparo.

[00:16:18] Speaker 01:
Pardon?

[00:16:19] Speaker 01:
A juicio de amparo.

[00:16:20] Speaker 02:
A juicio de amparo, but that is how they operate, and it's not inconsistent with the Etsy obligation for a Brazilian court to follow its own rules.

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And there's simply nothing... Really, the whole point of FRAN, these FRAN commitments, is it required some effort.

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from the patent holder to license before it seeks to enforce its SAP court.

[00:16:38] Speaker 02:
I think that's right.

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And the question then is, does the US court shove the Brazilian court out of the way and say, I will decide this?

[00:16:44] Speaker 04:
Well, what else do these grand commitments impose on you?

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Anything?

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Is there anything left?

[00:16:48] Speaker 02:
No.

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Certainly, these commitments exist.

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But it's not proper to issue an anti-suit injunction to intrude on a foreign proceeding on the chance that there may be a breach.

[00:16:59] Speaker 02:
That just goes too far.

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Is any court held that way?

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Imagine the circumstances.

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What if, at the end of four years of litigation, the district court or the jury finds here that our offer was frammed?

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What do we say to the Brazilian court?

[00:17:13] Speaker 02:
Oops, we're sorry.

[00:17:14] Speaker 02:
Go ahead and enforce your decree now.

[00:17:16] Speaker 02:
We're sorry we interrupted it and rendered it unenforceable for four years.

[00:17:19] Speaker 02:
That isn't the standard.

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That gives too little, too little weight to the international ramifications of enjoining enforcement of a foreign decree.

[00:17:27] Speaker 02:
Instead, what you need to have, and I'm going to pause here and say something about waiver.

[00:17:31] Speaker 02:
But what you need to have is a decision that's necessarily dispositive of the foreign case, that if we lose or we win, it's dispositive.

[00:17:40] Speaker 02:
And waiver, there's nothing in the opening brief that's said, I'm sorry.

[00:17:44] Speaker 01:
Do the foreign cases have an underlying case of infringement?

[00:17:47] Speaker 02:
Yes, that's exactly why.

[00:17:49] Speaker 02:
There's an infringement.

[00:17:50] Speaker 01:
Your argument is that dispositive

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means that all of those cases, including the underlying infringement matters, have to be resolved by the injunction.

[00:18:07] Speaker 02:
I think the answer is not necessarily what the injunction would do.

[00:18:13] Speaker 02:
It's will the US proceeding be dispositive of the foreign cases.

[00:18:18] Speaker 02:
But it's not even dispositive of the right to injunctive relief in Brazil.

[00:18:23] Speaker 02:
First, because if we win,

[00:18:26] Speaker 02:
If we win, then it's not dispositive.

[00:18:28] Speaker 01:
Does the action here have to be dispositive of all the foreign proceedings?

[00:18:34] Speaker 01:
The ones in Columbia?

[00:18:36] Speaker 02:
Yeah, I think in order to get an anti-suit relief against a Colombian action, you would have to be dispositive of that action.

[00:18:42] Speaker 01:
What's the authority on that?

[00:18:44] Speaker 02:
So I think the district court cited on Appendix 15, the 11th Circuit's decision in Cannon v. Lantek,

[00:18:50] Speaker 02:
And it's explained, and Cannon versus Lantek is important, because that court explained that in view of the comedy and international conflict's concerns, it would read dispositive to mean what it says, which means ending the dispute, ending the issue between the parties.

[00:19:08] Speaker 02:
And that's what the discourse followed here.

[00:19:11] Speaker 02:
And the opening brief filed by Lenovo never once says district court applied the wrong legal standard.

[00:19:18] Speaker 02:
That simply doesn't come up.

[00:19:20] Speaker 02:
The issue is as waived as waived could be.

[00:19:23] Speaker 02:
But the right answer is, if you're going to enjoin a foreign court decree, you have to be awfully certain that the US decision is going to decide that issue as a threshold matter.

[00:19:34] Speaker 02:
There's lots of other common issues you have to get to the end, which is why you would have to remand, even if you disagree.

[00:19:39] Speaker 02:
But you have to be awfully certain it will necessarily resolve the issue.

[00:19:42] Speaker 02:
That was the standard the district court applied, necessarily dispositive.

[00:19:46] Speaker 02:
And no objection to the open grief to that.

[00:19:48] Speaker 02:
And the reason for that is, if you imagine, look, if we win, what happens?

[00:19:53] Speaker 02:
We tell the Brazilians, OK, never mind for four years.

[00:19:55] Speaker 02:
We're sorry we interfered with your decree.

[00:19:57] Speaker 02:
Let's go forward.

[00:19:59] Speaker 02:
In addition, I think it's absolutely critical that the reason why, the reason why the decree is not, excuse me, the US issue is not entirely dispositive is because Lenovo's holding out.

[00:20:10] Speaker 02:
Lenovo says, hey, we won't follow you, if Eric says, we won't accept it.

[00:20:16] Speaker 01:
Would you agree with me that Lenovo is seeking an anti-suit injunction to enjoin Erickson from seeking or enforcing foreign injunctions?

[00:20:27] Speaker 02:
That's exactly what they're seeking, yes.

[00:20:29] Speaker 01:
So then if you agree with that, then would you also agree that what the injunction is focused at in this instance is the conduct of the parties?

[00:20:41] Speaker 01:
That's true.

[00:20:43] Speaker 01:
So could not, given your presence in the United States and membership in the standard setting organizations, then if you received an injunction from the US District Court, that would have stopped you.

[00:21:02] Speaker 01:
Why would that not dispose of the issue of the case?

[00:21:11] Speaker 02:
Okay, I think that the question isn't whether the anti-suit injunction will dispose of the foreign suit.

[00:21:16] Speaker 02:
The question is, as a threshold, before issuing an anti-suit injunction,

[00:21:20] Speaker 02:
The court has to know that the issues between the two cases are the same.

[00:21:24] Speaker 02:
And they are the same if the US decision, when it ultimately is decided, is dispositive of the foreign action.

[00:21:30] Speaker 02:
And I think the court decided that the parties weren't the same, at least.

[00:21:33] Speaker 02:
The parties were the same, but the court decided that the issues were not functionally the same because the US decision would not necessarily dispose of the foreign suit.

[00:21:43] Speaker 02:
And it wouldn't dispose of the foreign suit because of what Lenovo said.

[00:21:46] Speaker 02:
What Lenovo said was, if Ericsson's offer is franned,

[00:21:49] Speaker 02:
Even if it's, and we asked for an adjudication, is this offer franned?

[00:21:53] Speaker 02:
Not, is it consistent with the obligation to offer a negotiation between states?

[00:21:56] Speaker 02:
But is it franned six times, or three times on page 16, the district court says that.

[00:22:01] Speaker 02:
If it's franned, then we get to proceed in Brazil.

[00:22:04] Speaker 02:
Well, why would a district court, on the chance that it's not permissible to go in Brazil, enjoin proceedings in Brazil?

[00:22:11] Speaker 02:
Why would they enjoin the injunction in Brazil?

[00:22:13] Speaker 02:
In ordinary injunctive cases,

[00:22:15] Speaker 02:
In ordinary injunctive cases, you have to show probability of success.

[00:22:18] Speaker 02:
I'm likely to succeed and therefore I should enjoy in this proceedings.

[00:22:22] Speaker 02:
Because of the enormous comedy effects, the grave impact on international relations, there's a higher standard when it comes to anti-suit injunctions.

[00:22:31] Speaker 02:
And that higher standard has to be necessarily dispositive.

[00:22:34] Speaker 02:
It has to be absolutely forecloses the result one way or the other, regardless of who wins.

[00:22:40] Speaker 02:
And it really goes too far for a US court to say, you know what, Brazilian court, you heard arguments that the offer wasn't franned and that you shouldn't have joined, and you reject them.

[00:22:48] Speaker 02:
But we, the US court, are now going to go have a trial.

[00:22:51] Speaker 02:
And if the trial goes one way, we're going to keep an injunction against you.

[00:22:55] Speaker 02:
And if the trial goes the other way, after four years, we're going to vacate our injunction and please go ahead.

[00:22:59] Speaker 02:
That's not consistent with international comedy, and that's why there's a very high threshold.

[00:23:03] Speaker 04:
Is it your view that the Brazil and Columbia courts actually considered and adjudicated the issue of whether you must comply with brand obligations?

[00:23:11] Speaker 02:
Yes, the argument, at least in Brazil where they appeared and made their arguments, the argument was set up time and time again that we had breached our obligation and therefore there should not be an injunction.

[00:23:24] Speaker 02:
And the Brazilian court simply either disagreed that there was proof that we had a breach or disagreed that under the circumstance of the case that would preclude us from getting an injunction.

[00:23:34] Speaker 02:
I think that's another key point.

[00:23:35] Speaker 04:
But the merits of all of this is still before them.

[00:23:38] Speaker 02:
Yeah, there is an appeal still pending before the Brazilian Court of Appeals.

[00:23:42] Speaker 02:
On the injunction.

[00:23:43] Speaker 04:
But the merits of the case have not been adjudicated, right?

[00:23:47] Speaker 02:
Well, yes.

[00:23:48] Speaker 02:
Only the preliminary injunction has been.

[00:23:49] Speaker 02:
That's correct.

[00:23:50] Speaker 02:
It's just like it occurs in the United States.

[00:23:54] Speaker 02:
But the key point is that the US court doesn't sit as a super adjudicator, a super court of appeals, staying the Brazilian injunction while it decides whether there's a breach.

[00:24:04] Speaker 02:
The Brazilian court is just as capable of deciding it.

[00:24:07] Speaker 02:
And that's just simply the way it works.

[00:24:09] Speaker 02:
Parallel proceedings go in parallel.

[00:24:12] Speaker 02:
And if there's going to be an injunction that prohibits enforcement of a Brazilian decree.

[00:24:16] Speaker 01:
When you say parallel proceedings, it's the US District Court on one rail.

[00:24:21] Speaker 01:
What's on the other one?

[00:24:23] Speaker 02:
So the US District Court where we filed suit, there's proceedings in the UK where Lenovo filed suit, and there's proceedings in Brazil and Colombia where we filed suit.

[00:24:32] Speaker 02:
And that's simply a reflection of that ordinary rule that if you want to enforce a Brazilian patent, the only place you can enforce it in Brazil.

[00:24:39] Speaker 02:
And I keep pointing back to this point, but I think it's absolutely critical.

[00:24:43] Speaker 02:
The party that prevented the US case from being dispositive is Lenovo.

[00:24:47] Speaker 02:
And they prevented it by saying, if it comes out a particular way, if Ericsson wins and it offers a educated friend, we reserve the right not to accept that offer.

[00:24:56] Speaker 02:
We may continue to infringe.

[00:24:57] Speaker 02:
We may continue to hold out.

[00:24:59] Speaker 02:
And we're looking at 15 years of holdout here.

[00:25:01] Speaker 02:
We may continue to hold out, at which point nothing has been resolved.

[00:25:04] Speaker 02:
And that means that we would put Brazilian decrees on hold for five years.

[00:25:09] Speaker 02:
That doesn't make for nothing.

[00:25:11] Speaker 02:
That doesn't make sense.

[00:25:12] Speaker 02:
In ordinary injunctions, we have a standard of, well, you need to show a probability of success.

[00:25:17] Speaker 02:
You don't get that unless you're likely to succeed.

[00:25:20] Speaker 02:
For anti-suit injunctions, it's more exacting because of the international comedy requirements.

[00:25:25] Speaker 02:
And for them, the standard is, it's necessarily dispositive.

[00:25:29] Speaker 02:
The standard from Canon versus Land Tech, the standard that District Court applied below, and the standard that was never challenged in their opening brief.

[00:25:38] Speaker 02:
Likewise, it's not even necessarily dispositive if the district court were to find a breach.

[00:25:44] Speaker 02:
And that's because of this.

[00:25:45] Speaker 02:
There's nothing in the Etsy contract that says, if you breach your friend obligation, you can't get injunctive relief no matter what, period.

[00:25:52] Speaker 02:
That's the end of the day.

[00:25:53] Speaker 02:
You are disabled.

[00:25:54] Speaker 02:
You just can't find anything in the Etsy contract that says that.

[00:25:58] Speaker 02:
A Brazilian court would be well within its rights to say, you know what, given the primacy of inject injunctive relief under our system and given the intense holdout behavior we have seen from a Lenovo.

[00:26:10] Speaker 02:
We're looking at 15 years of holdout here.

[00:26:12] Speaker 02:
two years trying to unsuccessfully negotiate an NDA.

[00:26:15] Speaker 02:
We even got to the point where we said, just sign the same one we had in 2010.

[00:26:18] Speaker 02:
And they said, no.

[00:26:20] Speaker 02:
Look at that intense holdout period.

[00:26:22] Speaker 02:
We think injunctive relief is justified even though there is a breach of friend.

[00:26:27] Speaker 02:
And there's just simply nothing in Etsy that precludes that.

[00:26:29] Speaker 02:
And so the notion that this is necessarily dispositive fails at both ends.

[00:26:34] Speaker 02:
It fails at the front end.

[00:26:35] Speaker 02:
because Lenovo has made the determination that it won't accept our frand rate, or at least reserves the right not to accept it, even if it's educated in frand.

[00:26:43] Speaker 02:
Well, how can they insist on an injunctive release against the foreign leaf when they won't fully accept the results of the U.S.

[00:26:50] Speaker 02:
proceeding?

[00:26:51] Speaker 02:
Likewise, on the Brazilian side of things, how can it be that it's necessarily dispositive that the Brazilian court has authority to say, look, we give injunctive relief, that's the norm, and given the intense pulled-out behavior, yes, maybe there's a technical breach here, but we would like to give an injunction by then.

[00:27:07] Speaker 02:
At the threshold, they simply fail to show that it's necessarily dispositive, which is the standard the district court used, and properly, because of the enormous consequences of erroneously enjoining

[00:27:17] Speaker 02:
a foreign decree for four years, and then saying at the end of four years, oops, you're right, Erickson won.

[00:27:21] Speaker 02:
We're sorry.

[00:27:22] Speaker 02:
We shouldn't have enjoined your decree.

[00:27:24] Speaker 02:
If I could turn just very briefly, in the minutes waiting to Microsoft, which I think is, or actually perhaps talk about for a moment.

[00:27:32] Speaker 02:
Council mentioned the unwired planet decision saying these cited in the opening brief.

[00:27:35] Speaker 02:
But unwired planet wasn't cited for the notion that a breach of friend automatically disables you from getting an injunctive relief.

[00:27:41] Speaker 02:
It's cited just for the notion that courts can do rate settings.

[00:27:44] Speaker 02:
And I think the key here is that,

[00:27:46] Speaker 02:
There can be no rate setting if we didn't breach FRAND.

[00:27:50] Speaker 02:
If we were consistent with FRAND, there is no remedy of a rate setting because a rate setting is simply a remedy.

[00:27:56] Speaker 02:
No wrong, no remedy.

[00:27:58] Speaker 02:
US courts don't just set rates because somebody asked them to.

[00:28:01] Speaker 02:
If we breach FRAND, only then would there be a remedy.

[00:28:03] Speaker 02:
So the entire position here, the entire effort to get this overturned is on the possibility, unproved,

[00:28:10] Speaker 02:
never prove the district court that somehow we managed to breach friend.

[00:28:14] Speaker 02:
An issue they could just as easily raise in the Brazilian court.

[00:28:17] Speaker 02:
If I can have just 30 seconds on Microsoft, it looks like all I got.

[00:28:20] Speaker 02:
I think Microsoft is completely different in three respects, even apart from the fact that it's not binding on the Fourth Circuit, the district court here, or this court.

[00:28:29] Speaker 02:
First, Microsoft upheld discretion to issue anti-suit relief.

[00:28:33] Speaker 02:
It didn't say it would be an abuse of discretion to deny it on those facts.

[00:28:36] Speaker 02:
much less the different facts here, where Lenovo itself is holding out and saying, gee, even if it's friend, we won't do it.

[00:28:43] Speaker 02:
And second, Microsoft rested on the notion that it's long been overruled by this court, which is,

[00:28:49] Speaker 02:
The idea that the Frand obligation itself precludes injunctive relief, Microsoft has to reconfigure, excuse me, Lenovo has to reconfigure Microsoft to say, well, it's not just, we're not saying it's impermissible per se, but if we prove a breach, then it's impermissible.

[00:29:04] Speaker 02:
But without proving that breach, it's improper to interfere with the forehand proceedings.

[00:29:09] Speaker 02:
Thank you, gentlemen.

[00:29:10] Speaker 02:
I see 30 seconds over.

[00:29:11] Speaker 02:
If the court has no further questions, we ask that the judgment be affirmed.

[00:29:13] Speaker 00:
Thank you, counsel.

[00:29:15] Speaker 00:
Mr. O'Quinn has some rebuttal time.

[00:29:19] Speaker 00:
Essentially two minutes.

[00:29:21] Speaker 04:
And I have a question I want you including your answer in.

[00:29:25] Speaker 04:
Yes, go ahead.

[00:29:26] Speaker 04:
Is it easy to dispute whether Brazil or Columbia courts actually considered and adjudicated the issue?

[00:29:32] Speaker 04:
But suppose they didn't.

[00:29:33] Speaker 04:
If that's so, then why should the district court be able to decide that issue differently and impose its views on those foreign tribunals?

[00:29:41] Speaker 04:
And if you can address the canon case that Mr.

[00:29:44] Speaker 04:
Blanken also raised.

[00:29:45] Speaker 03:
Sure, Judge, so a couple of points.

[00:29:47] Speaker 03:
So with respect to Brazil, I'd point you to Appendix 2422.

[00:29:51] Speaker 03:
It's the three-page opinion in which they granted the preliminary injunction six days after it was sought.

[00:29:58] Speaker 03:
There's no analysis of the... Well, let's assume they had been, hypothetically.

[00:30:02] Speaker 03:
Yeah, I think... Does it matter?

[00:30:04] Speaker 03:
I think it would not matter to the threshold issue of whether of dispositiveness.

[00:30:09] Speaker 03:
It might matter to a weighing of comedy issues at that point.

[00:30:13] Speaker 03:
Now, that's counterfactual.

[00:30:14] Speaker 03:
It doesn't exist here.

[00:30:16] Speaker 03:
And I think that's also the difference between this and the Cannon case that he talked about.

[00:30:19] Speaker 03:
And here, the district court stumbled out of the gate with respect to the threshold inquiry.

[00:30:25] Speaker 03:
But in all events, certainly the Brazilian court didn't decide this on the merits.

[00:30:32] Speaker 03:
All it decided was whether or not, as a matter of domestic law, it was going to grant the injunction.

[00:30:37] Speaker 03:
And the fact that there was an asserted Franta obligation wasn't sufficient for it to not to, at least in the three-page order that we have, which is a different question than the question that's before the district court, which is, in the words of Microsoft versus Motorola, is, quote, the contractual umbrella

[00:30:54] Speaker 03:
over the patent claims, and that controls here, and it dictates that this action is dispositive.

[00:31:01] Speaker 03:
That was the reasoning in Microsoft at page 883, and it did not apply a per se prohibition, because if the contractual umbrella doesn't matter, then the Fram obligation is meaningless, which of course has very significant public policy issues here in the United States and around the world.

[00:31:19] Speaker 03:
And to be clear,

[00:31:20] Speaker 03:
To say, well, the Brazilian courts can do what they can do ignores the fact that they freely encumbered their patents with this contractual umbrella.

[00:31:29] Speaker 03:
It also ignores that they freely came to the United States courts first with the contractual dispute.

[00:31:35] Speaker 03:
And that contractual dispute, because it can and will be dispositive.

[00:31:41] Speaker 03:
And they are reading more into the dispositive inquiry by saying it has to necessarily be dispositive.

[00:31:47] Speaker 03:
That is inconsistent with the passages that I recited earlier from Microsoft versus Motorola and other cases.

[00:31:55] Speaker 03:
And the last point that I'll make, Judge Laurie, unless the panel has other questions, is we see at the podium here today, there's a conflating between the so-called Frandoffer

[00:32:04] Speaker 03:
and a fran rate.

[00:32:06] Speaker 03:
They ultimately have an obligation to do both.

[00:32:09] Speaker 03:
That is, they have an obligation to make an offer in good faith and negotiate in good faith, and they have an obligation to enter into an actual fran rate with the counterparty, and they have done neither.

[00:32:21] Speaker 03:
In cases recognized, there is a distinction between referring to

[00:32:25] Speaker 03:
an offer and whether or not an offer complies with the duty to negotiate in good faith versus actually determining the rate.

[00:32:32] Speaker 03:
And cases also recognize, like Judge Robart in Microsoft and Judge Andrews in the interdigital versus ZTE case, that you typically have to determine the rate in order to decide whether somebody has negotiated in good faith.

[00:32:44] Speaker 03:
I appreciate the court's indulgence.

[00:32:46] Speaker 00:
Thank you, counsel.

[00:32:47] Speaker 00:
To both counsel, the case is admitted.

[00:32:49] Speaker 00:
Thank you, Judge Lora.