[Guest Post] Sisvel v. Sun Cupid: a Dutch SEP injunction absent any counterclaim

What is the minimum relief a SEP owner
could be entitled to in the Netherlands?

From the Netherlands comes news of a decision of the Court of the Hague where last month it granted an injunction in a SEP infringement case where the defendants did not submit a defence or counterclaim.  The decision is informative in arguably showing the minimum remedy the Dutch court might order in a SEP case with limited evidence and no defence or counterclaim.  Marie Barani (UCL and 4iP Council) provides a summary of the decision:

"On 2 March 2020, the Court of the Hague granted an injunction to Sisvel for infringement of EP 2 139 272 - Method and system for attaching a mobile equipment to a wireless communication network - against Sun Cupid Technology (HK) Limited and other companies of the same group. The Court also requested that the defendants to notify resellers, recall and destroy infringing products, display infringement notifications on websites and in Dutch newspapers and provide Sisvel with a list of the infringing models, prices and resellers.

This decision is unusual because it seems that none of the companies of Sun Cupid group presented any defense. More details below.

Background

Sisvel administers a licensing program for standard essential patents.  As part of its LTE/LTE-A Patent Pool, Sisvel licences patents that have been declared essential to the 4G/LTE 3GPP standard.  One of these patents is EP 2 139 272, a patent originally owned by Nokia, that was declared essential to the 4G/LTE 3GPP standard.

Sun Cupid Technology (HK) Ltd is the parent company of Sun Cupid (Shen Zhen) Electronic Ltd., Nuu Mobile (HK) Limited, Nuu Limited, Noetic Inc., Nuu Mobile UK Limited, Pyramid Ltd.  None of those companies are located in the Netherlands but they import and sell 4G smartphone products implementing the LTE standard in Europe.  Sisvel notified Sun Cupid Technology (HK) Ltd. on 22 March 2015 about its licensing program.  Sun Cupid did not want to enter into a license.  Sisvel therefore sued Sun Cupid et al in the Netherlands for infringement of the Dutch designation of the patent. 

The Court's decision

The decision of the Court addressed the following issues: competency, contradictory judgment, injunction in solidum, unfair handling claims, information and notification to third parties, calculation of damages. Curiously, no defence or counterclaim was submitted on behalf of the defendants.  Sun Cupid et al's lawyer had also earlier withdrawn his representation and the defendants did not appoint a new lawyer.  Sisvel then requested that the Court issue a judgment against the defendants as soon as possible.    

The Court found infringement on the basis that the products implemented and/or supported the LTE standard.  Sisvel had requested an injunction against all of the defendants on the basis that they were individually and jointly liable.   However, the Court said that they were all separate legal entities and Sisvel had not explained on what basis these separate entities would and should be liable to ensure that any one of them would comply with a court order.  The Court therefore dismissed the claims insofar as they related to, in the words of an English lawyer, joint and several liability of the defendants, but granted an injunction against each of the entities of Sun Cupid group.

The Court also rejected Sisvel’s claim that notice of the infringement be sent to "market participants".  Indeed, Sisvel did not clarify who were the market participants and any notification to third parties about patent infringement to recall products would mostly target resellers. However, the Court ordered that the defendants remove any information about the infringing products in the Dutch language, and notify Dutch newspapers and resellers about the decision. They have also to recall infringing products, destroy them and provide evidence of the recall and destruction to Sisvel.

What is Cupid up to this time? 
(Cupid in a Landscape, Il Sodoma, 1510)

The Court also refused Sisvel's request to have an independent accountant prepare and sign a statement setting out the profit made by Sun Cupid entities.  By making this request the Court inferred that Sisvel was looking for an accountant to provide "a form of guarantee or assurance with regard to the correctness of the report".  The Court justified this decision on the grounds that accountants have to comply with rules that prevent them from drawing conclusions that could provide Sisvel with any security over the accuracy of their report. 

The Court did not calculate the compensation due by the entities of Sun Cupid Group: it left the choice to Sisvel to elect to either be compensated for the damages accrued or be paid based on the profits made by the defendants.  The Court ordered that the defendants have to inform Sisvel about the profit made since 22 May 2015, and send a list of products, prices and resellers to Sisvel.

Conclusion

Given the lack of evidence in support of a number of the claims made by Sisvel (and the lack of defence from the defendants), the decision seems quite favourable to the patent-holder: the finding of infringement is based only on the standard implementation, it provides for the notification, recall and destruction of products (subject to certain limits) and gave the patent owner the election as to how to calculate damages. "