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Tuesday, 1 March 2011

LG obtains border seizure against Sony PS3

As the Guardian reports, Korean consumer electronic giant LG has obtained a preliminary injunction from the district court of the Hague, barring import of Sony's PS3 game console into the European Union "for at least ten days" (this seems to indicate an ex parte injunction, but the news article is sketchy). Since Sony is importing upwards of 100,000 consoles per week (according to the Guardian), the economic impact of this order is significant. Sony says its stock held in Europe will last for three weeks.


LG based its claim on patents (allegedly) covering the Blu-ray playback facility of the PS3, but the news article does not give any further details.

As the Spiegel notes, the case may well settle, because in December 2010, Sony filed a patent infringement complaint with the US International Trade Commission against LG, claiming that LG infringed on several Sony patents on mobile phone technology, asking to bar import into the US of LG mobile phones (source). LG already countersued Sony before the International Trade Commission, requesting an import ban of "high margin televisions and game consoles" - presumably containing Blu-ray players and therefore most probably based on the US patents corresponding to the patents the Dutch decision was based on.

Looks like the Hague district court is a lot faster than the International Trade Commission - and given what's at stake for both parties (should a court finally decide that the customs seizure was unjustified, LG is liable for damages), this decision certainly puts new urgency into settlement talks.

EDIT at Tue, 9.30 pm CET: as an anonymous commenter notes, the Guardian story makes little sense. The Guardian story is best explained - and this is really just educated speculation - like this (see my comment below):

LG applied for EU wide customs measure under Council Regulation (EC) No 1383/2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights ("CR (EC) No 1383/2003").

The Guardian states that "Rotterdam and Schiphol are the main import points for PS3s for both the UK and continental Europe".

So Dutch customs seized a shipment of PS3s. LG then initiated proceedings against Sony within the 10 day delay set forth in art. 13(1) CR (EC) No 1383/2003. While the proceedings continue, the customs measure remains in place. That would explain the slightly weird statement that the PS3s "have to be confiscated as they are imported into the UK and the rest of Europe for at least 10 days". That is true, but not as a consequence of the Dutch court's decision (there probably is none yet), but rather the EU border measures.

To permanently seize the goods, LG needs to show that they infringe a patent valid in the Netherlands, see art. 2(1)(c)(i) CR (EC) No 1383/2003.

If shipments arrive thru a UK port, then indeed infringement of a UK patent needs to be shown.

6 comments:

Anonymous said...

Question: how can a court in the Hague ban imports into the EU on the basis of a patent claim? I can see how in practice they might ban imports into the EU that go via Dutch ports, but can they really order customs officials at Dover to seize goods? The patent rights they are arguing over are Dutch, and exist independently of any rights in the UK even if they are granted through the same system

Anonymous said...

So far, every single news source is citing the Guardian. And looking at the online Dutch judicial decision database at rechtspraak.nl, I haven't been able to find anything whatsoever about this. Knowing how fraught the subject of European cross-border injunctions is, in particular with respect to patents, I'd like to know more. Does anybody have a little more information? If it was the 1st of April, rather than March, I'd already have dismissed the Grauniad's report...

Mark Schweizer said...

what I suspect happened, and this is just speculation based on the Guardian article, is that LG applied for EU wide customs measure under Council Regulation (EC) No 1383/2003.
The Guardian states that "Rotterdam and Schiphol are the main import points for PS3s for both the UK and continental Europe".
So I assume Dutch customs seized a shipment of PS3s. LG then initiated proceedings against Sony within the 10 day delay set forth in art. 13(1) CR (EC) No 1383/2003. While the proceedings continue, the customs measure remains in place. That would explain the slightly weird statement that the PS3s "have to be confiscated as they are imported into the UK and the rest of Europe for at least 10 days". That is true, but not as a consequence of the Dutch court's decision (there probably is none yet), but rather the EU border measures.
To permanently seize the goods, LG needs to show that they infringe a patent valid in the Netherlands, see art. 2(1)(c)(i) CR (EC) No 1383/2003.
If shipments arrive thru a UK port, then indeed infringement of a UK patent needs to be shown.

Anonymous said...

The Guardian story is a complete trainwreck of clueless reporting. Take this sentence:

The Japanese company has the right to appeal to the European patents office.

What? The EPO will be surprised to learn that it now has jurisdiction on infringement proceedings, never mind border measures...

What's really depressing is that the Grauniad's hopeless report has just been quoted verbatim (sometimes without attribution) by news media all across Europe, even in the Netherlands! What happened with the old journalistic requirement of getting at least two concording independent sources? It appears that ex-Dr. zu Guttenberg may still have a brilliant career in the media...

Anonymous said...

Also, in the case of Dutch media, an obvious giveaway that they've just lifted their reports from the Grauniad's rather than, say, walking over to The Hague's district court and asking somebody, is that they repeatedly use the word "patent", instead of the correct Dutch word "octrooi", as any Dutch person familiar with IP law would have done.

Anonymous said...

The Metro was even more confused. It said that Sony could appeal to the EPO!!!! http://www.metro.co.uk/tech/856856-ps3-imports-banned-in-patent-row

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