HomeInsightsHigh Court rules that Nokia can serve proceedings on Chinese defendants by email

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Facts

Nokia Technologies Oy owns a European Patent designating the UK relating to power amplifiers used in mobile phones (the Patent). The Patent is not a standard essential patent. Nokia issued proceedings for infringement of the Patent against two groups of defendants trading under the OnePlus and Oppo brands respectively. Two of the four defendants are Chinese incorporated companies. The other two are based in the UK. The Chinese defendants manufacture the phones, and the UK companies distribute them.

In July 2021, permission was granted for service on the Chinese defendants out of jurisdiction.

In August 2021, the UK defendants filed and served their defences and counterclaims seeking to invalidate the Patent.

In December 2021, a Case Management Conference was held, at which directions to trial were ordered. The expected due date of service on the Chinese defendants was expected to be in around eight months’ time and was factored into the directions. The trial was listed from 19 September 2022.

Nokia sought to serve the Chinese defendants under the Hague Convention. The documents, together with Chinese translations, were sent to the Foreign Process Section (FPS) at the Royal Courts of Justice on 22 July 2021. On 27 July 2021, the documents were despatched to China. However, in December 2021, the documents were returned to the FPS marked “unclaimed”.

Nokia applied for permission for alternative service by email to the legal director of one of the Chinese defendants, Julia Zhu, and by email to the UK defendants’ solicitors, Hogan Lovells.

Decision

Mr Justice Marcus Smith noted that CPR 6.15(1) provides that where there is “good reason” to authorise service “by a method or at a place not otherwise permitted by this Part”, the court can permit it.

Further, Smith J noted that in Abela v Baadarani [2013] UKSC 44, Lord Clarke made it clear that service is not a forum for the playing of technical games and that the courts must tread carefully in cases of service out, as it involves the coercive processes of the English courts being foisted upon a defendant who is out of the jurisdiction. Further, Lord Clarke said that bilateral treaties and conventions in relation to service out must be respected, and processes under such treaties and conventions can only be disregarded, set aside or circumvented where there are special or exceptional circumstances.

Therefore, Smith J said, there was a two-stage test in this kind of case: (i) there must be a “good reason” to permit alternative service; and (ii) more importantly, because the Hague Convention operates under international law, there must be special or exceptional circumstances to justify a departure from the standard rules.

Smith J said that mere delay cannot of itself provide exceptional circumstances, or good reason. Any delay occasioned by the ordinary time span of the Hague Convention service must be considered inherent in the process.

In this case, Smith J said that Nokia had “obviously tried very hard” to effect regular service pursuant to the Convention, and it now seemed likely that the Hague Convention service process could take 12 months or more. Further, there was no guarantee that the same problems would not repeat themselves. Accordingly, Smith J said that there was good reason, both because of the unusual delay and because of the lack of certainty that the process would work at all, for alternative service to be ordered.

As for special or exceptional circumstances, Smith J said that the court had to balance due administration of justice against comity between nations, and where the former outweighed the latter, special or exceptional circumstances would exist.

Smith J found that the prejudice or effect on comity here was slight or non-existent. The fact was that the Chinese defendants, although not formally engaged, were informally totally enmeshed in this litigation. They were fully aware of the proceedings and Ms Zhu had in fact already acknowledged receipt of the pleadings informally, in the context of parallel proceedings currently on foot between the parties in relation to three SEPs owned by Nokia. There was therefore an unusually high degree of confidence that the proposed methods for alternative service would formally bring the documents to the attention of the Chinese defendants.

Further, the Chinese defendants were already indirectly affecting these proceedings on account of their involvement in: (i) parallel litigation in Germany; (ii) the separate SEP proceedings on foot in this jurisdiction; (iii) the CMC hearing in these proceedings; and (iv) concurrent EPO opposition proceedings against the Patent that had been brought by one of the Chinese defendants.

Smith J also found that prejudice to the due administration of justice was considerable. The claim concerned infringement in this jurisdiction of a UK-specific IP right. Therefore, the claim could not be litigated elsewhere. In addition, a trial, which had been set down taking into account service via the Hague Convention, was going to be disrupted unless this order were made.

Accordingly, Smith J made an order in the terms sought. (Nokia Technologies Oy v OnePlus Technology (Shenzhen) Co Ltd [2022] EWHC 293 (Pat) (9 February 2022) — to read the judgment in full, click here).

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