Vodafone GMBH v IV International Leasing

JudgeMr Justice Max Barrett
Judgment Date10 March 2017
Neutral Citation[2017] IEHC 160
CourtHigh Court
Docket Number[2016 No. 5102P]
Date10 March 2017

[2017] IEHC 160


Barrett J.

[2016 No. 5102P]

– and –



Intellectual Property – Infringement of patent – Infringement litigation in foreign court – Treaty on the Functioning of the European Union – Recast Brussels Regulation – Forum non conveniens – Fixation of fair and reasonable and non-discriminatory ("FRAND") royalty rates – Market – dominant position – German Patent Act – O. 11 of the Rules of the Superior Courts 1986

Facts: The plaintiff, a company incorporated in Germany, sought various declarations against the defendants in the present proceeding instituted in Ireland ("Irish Proceedings"). The plaintiff primarily sought a declaration that an offer made by the first defendant for use of certain patents in Germany was not an offer on the FRAND terms. The plaintiff contended that the proper place to commence the present proceedings against the first defendant was Ireland as the first defendant was an Irish company. The defendants, too, sought various reliefs against the plaintiff. The defendants argued that the continuation of the Irish proceedings was not appropriate as they had instituted infringement litigation against the plaintiff for claiming damages in Germany ("German proceedings"). The plaintiff contended that the defendants had abused the dominant position by making an unreasonable offer, which was denied by the defendants. The defendants also sought an order for declining jurisdiction in relation to the Irish proceedings on the basis of forum non conveniens and non compliance with o. 11 of the Rules of the Superior Courts 1986.

Mr. Justice Max Barrett refused to grant the desired reliefs to the parties. The Court, however, granted a stay on the Irish proceedings pending the outcome of the final judgment of the German Court in relation to the German proceedings. The Court gave liberty to the parties to make appropriate applications after the conclusion of the German proceedings. The Court held that the defendants were not entitled to the plea of forum non conveniens as the Recast Brussels Regulation ousted any attempt to rely on forum non conveniens. The Court observed that the reliance on provisions of the Recast Brussels Regulation by the plaintiff formed the basis of jurisdiction in Ireland. The Court found that though there was no risk of irreconcilable decision in relation to the FRAND between the German court and the Irish court, yet the probability of the German court deciding the FRAND issue could not be ignored. The Court opined that since the methodology for determining the FRAND rates was the same, there could be a conflict of judgments if the present proceedings came up for hearing before the delivery of the judgment in the German court. The Court upheld the applicability of o.11 of the Rules of the Superior Courts in the present case as in the opinion of the Court, the second defendant was the proper party being the registered owner of the patents, which the first defendant intended to license to the plaintiff. The Court observed that the Irish proceedings were founded on a tort committed in Ireland, and thus, the provisions of o.11 (1) (f) were attracted in those proceedings.

JUDGMENT of Mr Justice Max Barrett delivered on 10th March, 2017.

I. Technical Background


Vodafone GmbH, a company incorporated in Germany, is part of the well-known Vodafone telecommunications group. It is engaged in the provision of communications services, including DSL broadband services.


IVIL is a private limited company incorporated in Ireland. It is engaged in the business of patent licensing. IV II is a limited liability company incorporated in the US State of Delaware and is the registered owner of, inter alia, the German designations of various patents.


To allow patents owned by IV II to be licensed to other entities, IV II has granted IVIL a sub-licence, thereby vesting it with the non-exclusive right to grant non-exclusive licences in respect of such patents.[1]


There has been some suggestion in the submissions made as part of the within application that there is an agency relationship between IV II and IVIL. This is not borne out by the evidence. So, for example, Ms M Finocchio, the Chief Counsel of Litigation for Intellectual Ventures Management LLC (the entity that manages the parent entity to IV II) avers in her second affidavit that 'To allow patents owned by [IV II]...to be licensed to other entities...[IV II]...grants IVIL a sublicense...vesting it with the non-exclusive right to grant non-exclusive licenses with respect to such patents.' There is no mention in this of any agency arrangement arising. As will be seen hereafter, the offer-letter of 25th March, 2016, commences 'On behalf of [IVIL]...I am writing to extend a formal ITU xDSL (F)RAND offer to Vodafone Group Services Limited (VGSL) and Vodafone GmbH...'. Again, there is no mention of IVIL acting as agent of IV II. And in the proposed patent licence agreement appended by IVIL to its offer-letter, IVIL as "Licensor" represents and warrants in the proposed cl. 8.3, inter alia, that 'Licensor has full power and authority to grant the rights hereunder and to perform its obligations hereunder, such rights including any and all necessary rights held by...IV II', and also that 'No other permissions or licenses are or at any time will be necessary to effectuate the licenses or covenants granted in this Agreement to any Licensed Patents'. So again there is no suggestion that IVIL cannot act without the say-so of IV II as principal. Thus, on IV's own evidence, IVIL has its own separate standing as a legal person and as sub-licensee, and is not in an agent of IV II.


In the affidavit grounding the ex parte application to serve notice of the plenary summons in the within proceedings on IV II, an affidavit sworn by Ms J Paschen, the Head of Legal in Vodafone GmbH, it was asserted that the IV family of companies (generally referred to hereafter as "IV") is an entity 'well known for its significant patent portfolio acquisitions and attempts to extract licensing fees from other companies, including via litigation'. IV views itself rather differently. Thus Ms Finocchio avers in her grounding affidavit that the IV 'family of companies' is 'deeply involved in the business of invention by creating and filing patent applications covering their own inventions...collaborating with other entities to develop and patent inventions....[and] purchasing important inventions embodied in patent rights from individual inventors and institutions and then licensing the patent rights to those who use them....[thereby allowing] inventors to reap a financial reward from their innovations...which is frequently difficult for individual inventors to do'. Thus far IV has amassed some 70,000 patent assets and earned close on €3bn in licensing income. So IV, though not perhaps as well-known to the general public as the Vodafone group of companies, comprises a substantial enterprise engaged in a legitimate and successful line of business.


In the within proceedings ("the Irish Proceedings") Vodafone GmbH seeks, inter alia, the following reliefs:

(1) a declaration that an offer made by IVIL in a letter of 25th March, 2016, for use in Germany of certain patents referred to therein, was not an offer on fair and reasonable and non-discriminatory ("FRAND") terms;

(2) a declaration that the process followed in relation to and arising out of the said offer amounts to an abuse of dominant position contrary to Art. 102 of the Treaty on the Functioning of the European Union ("TFEU");

(3) a declaration that the terms and conditions of the offer aforesaid were not FRAND and amount to an abuse of dominant position contrary to Art. 102 TFEU;

(4) a declaration that the terms and conditions of a counter-offer made by Vodafone GmbH to the defendants by letter to IVIL on 9th June, 2016, ("Vodafone's Counter-Offer") were FRAND;

(5) further, or in the alternative, insofar as neither the offer nor counter-offer aforesaid were FRAND, a declaration as to the terms and conditions between the parameters of those offers upon which the licensing of the patents in issue for use in Germany would be FRAND;

(6) further, or in the alternative, a declaration that the licensing of the patents aforesaid to Vodafone GmbH on a revenue-based royalty basis could never be FRAND.


Vodafone GmbH maintains, inter alia, that Ireland is the proper jurisdiction in which to commence the within proceedings against IVIL, given that IVIL is an Irish company which has its registered office in Dublin and is engaged in the business of patent licensing from Dublin. By contrast, IV does not consider that the commencement and continuation of the within proceedings in Ireland at this time is appropriate. IV is concerned that the proceedings have been commenced for the purpose of frustrating or delaying the ongoing infringement litigation in Germany ("the German Proceedings"), which litigation is being managed on the IV side by US-based employees of the IV family of companies interacting with German counsel and so, Ms Finocchio avers, with 'no legal management of the litigation or the FRAND offer from Ireland'. She acknowledges that the FRAND offer was ultimately communicated to Vodafone GmbH through IVIL (being the licensing arm of the IV family) but avers, somewhat unconvincingly, that 'this is not evidence of leadership, but rather the preference for using pre-existing communication channels'. IV maintains that the matters at issue in the Irish Proceedings are already being addressed in Germany. IV denies that there has been any abuse of a dominant position by it in making the offer that it did; indeed it suggests that such a contention is entirely untenable. Thus counsel for IV asserted...

To continue reading

Request your trial
1 firm's commentaries

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT