Sisvel Victorious in High Court Competition Litigation

Cleary Gottlieb successfully defended Sisvel S.p.a. (Società Italiana per lo Sviluppo dell’Elettronica), a licensor of MP3 technology, against a High Court action in England seeking a permanent injunction and damages for alleged breaches of EC and UK competition law in relation to the licensing and enforcement of certain patents relevant to MP3 technology, and an interim injunction in respect of Sisvel’s actions to enforce the patents in various EU countries.

The action was commenced by SanDisk Corporation, a U.S. manufacturer of consumer electronics that supplies products incorporating MP3 technology without a licence from Sisvel, against both the patent holders (Koninklijke Philips Electronics N.V., France Télécom S.A., TDF and Institut für Rundfunktechnik GmbH) and the exclusive licensee, Sisvel.

The alleged breaches of competition law related to (i) Sisvel’s licensing activities on behalf of the patent holders, and in particular, an alleged refusal to license on appropriate terms, and (ii) Sisvel’s enforcement of the patents in an allegedly vexatious and abusive manner. The defendants challenged the jurisdiction of the High Court in England to hear SanDisk’s claim and its application for an interim injunction. The defendants also disputed the substance of SanDisk’s application for an interim injunction.

The High Court held that it had no jurisdiction to hear the claim or to grant the interim relief requested, and struck out both SanDisk’s claim and its application for an interim injunction.

The European Commission and the UK competition regulator have both encouraged greater use of private enforcement before the courts to pursue alleged breaches of EC or UK competition law. This case highlights the fact that the UK courts are becoming an increasingly preferred forum for antitrust litigation, even where there is no obvious connection to the UK.