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8 UNITED STATES DISTRICT COURT
9 SOUTHERN DISTRICT OF CALIFORNIA
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11 U-BLOX AG, U-BLOX SAN DIEGO, Case No.: 3:19-cv-001-CAB-(BLM)
INC., AND U-BLOX AMERICA,
12 INC.,
ORDER DENYING PLAINTIFFS’
13 EX PARTE APPLICATION FOR
Plaintiffs,
14 TEMPORARY RESTRAINING
v. ORDER AND ORDER TO SHOW
15 CAUSE RE PRELIMINARY
16 INJUNCTION
INTERDIGITAL, INC.;
[Doc. No. 2]
17 INTERDIGITAL
Judge: Hon. Cathy Ann Bencivengo
COMMUNICATIONS, INC;
18 INTERDIGITAL TECHNOLOGY
Courtroom: 4C
19 CORPORATION; INTERDIGITAL
PATENT HOLDINGS, INC.;
20 INTERDIGITAL HOLDINGS,
21 INC.; and IPR LICENSING, INC.
22 Defendants.
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Case No.: 3:19-cv-001-CAB-(BLM)
ORDER DENYING MOTION FOR TRO and PRELIMINARY INJUNCTION
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1 Before the Court is a motion for preliminary injunction1 filed by plaintiffs u-

2 blox AG, u-blox San Diego Inc., and u-blox America, Inc., (collectively “u-blox”)
3 against defendants InterDigital Inc., InterDigital Communications, Inc., InterDigital
4 Technology Corp., InterDigital Patent Holdings, Inc., InterDigital Holdings, Inc., and
5 IPR Licensing, Inc., (collectively “InterDigital “). [Doc. No. 2.] InterDigital opposed
6 the motion. [Doc. No. 33.] u-blox filed a reply. [Doc. No. 42.] A hearing on the
7 motion was held on January 31, 2019. For the reasons set forth on the record at the
8 hearing [Doc. No. 48] and below, the motion is DENIED.
9 I. Background

10 InterDigital has a portfolio of patents in 2G, 3G and 4G wireless technology.

11 There was no dispute, in the context of this motion, that the InterDigital patents are
12 standard essential patents (“SEP”) and subject to fair, reasonable and non-
13 discriminatory (“FRAND”) licensing. From 2011 to 2016, u-blox had a license to
14 practice the patents in InterDigital’s portfolio under FRAND terms. Two original
15 design manufacturers (“ODMs”) made devices for u-blox under a “have made”
16 provision of u-blox’s license with InterDigital. These ODMs also have license
17 agreements with InterDigital for the same SEP portfolio. While u-blox paid the
18 license fee, the ODMs were covered and owed no royalties.
19 At the end of 2016, the license between u-blox and InterDigital expired.
20 InterDigital notified the ODMs that they would be responsible for royalty payments
21 in accordance with the terms of their licenses with InterDigital, as u-blox was
22 unlicensed. u-blox then negotiated with InterDigital for a new license, which was
23 entered in August, 2017, retroactive to January, 2017, and with an expiration date at
24 the end of September, 2018.
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The motion was submitted as an Ex Parte Application for a Temporary Restraining Order and
26 Order to Show Cause re Preliminary Injunction, however u-blox provided notice to
27 InterDigital as required by CivLR 83.3(h)(2) and the parties briefed the motion according
to a schedule they jointly submitted. [Doc. No. 20.] Consequently the Court proceeded on
28 the motion as a request for preliminary injunction.
1 Case No.: 3:19-cv-001-CAB-(BLM)
ORDER DENYING MOTION FO R T RO and O SC RE PRELI MINARY INJUN CTION
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1 As the 2017 license was reaching expiration, u-blox sought to renew on new

2 terms, as it asserted the current terms were not FRAND licensing terms. The parties
3 extended the 2017 license agreement to December 31, 2018 to continue negotiations,
4 but they had not reached terms by that date and the license again expired.
5 On January 1, 2019, u-blox filed a complaint seeking the Court declare FRAND

6 terms for the license to InterDigital’s SEP portfolio. [Doc No. 1.] u-blox also filed its
7 motion for a preliminary injunction to enjoin InterDigital during the pendency of the
8 action
9 from contacting u-blox’s customers and downstream manufacturers,
demanding royalty payments from them for products incorporating u-blox
10 technology, or otherwise disrupting or interfering with u-blox’s relationships
11 with its customers and downstream manufacturers.

12 InterDigital responded that it has never demanded royalty payments from u-blox’s
13 customers, nor does it intend to. It also indicated that it is willing to negotiate with u-
14 blox to renew its license. InterDigital however responded that it has the right to
15 enforce its license agreements with its licensees and will do so during the pendency
16 of this action.
17 II. Legal Standard
18 The grant or denial of a preliminary injunction under 35 U.S.C. § 283 is within
19 the sound discretion of the district court. Amazon.com, Inc. v. Barnes and noble.com,
20 Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001). “A preliminary injunction is an
21 extraordinary remedy never awarded as a matter of right.” Winter v. Natural
22 Resources Defense Council, 555 U.S. 7, 24 (2008). “A plaintiff seeking a preliminary
23 injunction must establish that [it] is likely to succeed on the merits, that [it] is likely
24 to suffer irreparable harm in the absence of preliminary relief, that the balance of
25 equities tips in [its] favor, and that an injunction is in the public interest.” Id. at 20.
26 The district court must weigh and measure each factor against the other factors and
27 against the form and magnitude of the relief requested. “[A] movant cannot be
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1 granted a preliminary injunction unless it establishes both of the first two factors, i.e.
2 likelihood of success on the merits and irreparable harm.” Amazon.com, 239 F.3d at
3 1350.
4 To demonstrate irreparable harm is likely in the absence of a preliminary

5 injunction the movant must show more than speculative concerns that the non-moving
6 party will engage in some activity. “An injunction will not be issued simply to prevent
7 the possibility of some remote future injury.” Winter, 555 U.S. at 22, citing 11A C.
8 Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2948.1, p. 154-55
9 (2d ed. 1995). Issuing an injunction based only on a possibility of irreparable harm is
10 inconsistent with the characterization of injunctive relief as an extraordinary remedy
11 that may only be awarded upon a clear showing that the plaintiff is entitled to such
12 relief. Winter, 555 U.S. at 22.
13 III. Likelihood of Success on the Merits

14 u-blox asserts two causes of action to support its request for injunctive relief, a

15 request for declaratory judgment and a breach of contract claim. [Doc. No. 1] Both
16 are based on u-blox’s assertion that InterDigital refuses to license u-blox at FRAND
17 rates in violation of its contractual obligations with the European
18 Telecommunications Standards Institute (“ETSI”). The parties have not reached a
19 license agreement, however, u-blox has not demonstrated the InterDigital refuses to
20 license it. To the contrary, InterDigital has engaged in licensing negotiations and
21 affirmatively represented its willingness to continue to do so. The parties appear to
22 be at an impasse as to the rate.
23 The declaratory judgment claim requests the Court set the FRAND rate.
24 Absent an agreement between the parties, the Court will issue a judgment that sets the
25 applicable FRAND terms and conditions. u-blox therefore contends it necessarily
26 will prevail on its declaratory relief claim because a rate will be set by the Court.
27 u-blox however has not demonstrated that the terms it proposes as FRAND are
28 more likely to be accepted than the terms InterDigital proposes. The motion does not
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1 even discuss the actual terms in dispute. That an order will issue in a declaratory
2 relief action may be inevitable, but that does not demonstrate that the moving party
3 will get the order it seeks. The motion makes no effort to demonstrate the likelihood
4 that the Court will adopt u-blox’s preferred rate over the rates offered by InterDigital.
5 Nor has u-blox demonstrated that InterDigital has breached its contract

6 obligation with ETSI to license at a FRAND rate by simply asserting that InterDigital
7 will not license u-blox on the terms u-blox demands. No evidence was presented to
8 support u-blox’s assertion that InterDigital is demanding rates that cannot constitute
9 FRAND terms. It is not sufficient for u-blox to make a blanket allegation that the
10 rates InterDigital is proposing are unfair and therefore in breach of InterDigital’s
11 contract obligations. The motion is full of conclusory characterizations but woefully
12 deficient on specifics as to the actual proposed rates and any analysis as to why those
13 rate are FRAND or not FRAND.
14 The Court therefore finds that u-blox has not met its burden to establish a

15 likelihood of success on the merits.

16 IV. Irreparable Harm

17 Having failed to establish a likelihood of success on the merits, u-blox’s motion

18 fails. The Court however will also address u-blox’s contentions of irreparable harm.
19 A movant must make a clear showing that it is at risk of irreparable harm, which
20 entails showing a likelihood of substantial and immediate irreparable injury. Apple,
21 Inc. v. Samsung Electronics Co, Ltd., Inc., 678 F.3d 1314, 1325 (Fed. Cir. 2012). “An
22 injunction will not be issued simply to prevent the possibility of some remote future
23 injury.” Winter, 555 U.S. at 22.
24 Without a current license to InterDigital’s patents, u-blox contends that
25 InterDigital will try to extract extortionate royalty rates from u-blox’s customers and
26 threaten them with injunctions. These anticipated actions are purportedly intended to
27 force u-blox to enter into an unreasonable license agreement to avoid disruption to its
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1 business and loss of goodwill. No evidence however has been presented that
2 InterDigital has taken any such steps or intends to.
3 In the past when u-blox’s license expired, InterDigital contacted the ODM

4 licensees to put the ODMs on notice that they were no longer covered by u-blox’s
5 license terms. According to the terms of the ODMs’ licenses, the ODMs then became
6 subject to the royalty payments. u-blox offers no legal justification for barring
7 InterDigital from enforcing its license agreements with its other licensees. The claims
8 that InterDigital threatened u-blox’s customers with injunctions was not supported by
9 any evidence and the argument that InterDigital will do so in the future is purely
10 speculative.
11 The Court therefore finds that u-blox has not met its burden to establish a clear

12 risk of irreparable harm.

13 V. Conclusion

14 Having failed to establish either a likelihood of success on the merits or

15 irreparable harm, the Court does not find it necessary to address either InterDigital’s
16 First Amendment argument or the argument that the proposed injunction is vague and
17 overbroad. The motion for Preliminary Injunction is DENIED.
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19 IT IS SO ORDERED.
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Dated: February 12, 2019
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