HTC Corp v Nokia Corp

A stay of a permanent injunction pending appeal is a discretionary risk-management exercise. The court should ordinarily avoid ranking the parties’ merits once permission to appeal has been granted. It should weigh the likely consequences of granting or refusing a stay, including hardship, delay, adequacy of damages and the ability to do justice after the appeal. Where the risks are relatively balanced, the status quo should generally be preserved. After trial, failure to contingency-plan for an adverse judgment is ordinarily not a proper reason to refuse a stay, particularly where no interim injunction altered the pre-trial position. A partial stay may be inappropriate if it causes commercial disruption or complicates later damages inquiries.

Nokia alleged that components in HTC smartphones infringed its European Patent (UK) No. 0 998 024. After trial, Arnold J found the patent valid and infringed and granted a permanent injunction and delivery-up order. He stayed the injunction for the HTC One pending appeal but refused a general stay covering the HTC One Mini and other phones.

HTC sought permission to appeal against that refusal. The application concerned only the interim position pending the main appeal, not validity, infringement or the appropriateness of the permanent injunction. The central issue was whether the partial stay should be replaced by a general stay.

1. Disposition. Permission to appeal was granted and the appeal was allowed. A general stay of the injunction was ordered pending judgment in the main appeal or further order.
2. A stay pending appeal is discretionary. Its purpose is to minimise loss and inconvenience to the party who ultimately succeeds and to arrange matters so that the appellate court can do justice whatever the outcome. Once permission has been granted, the court should generally avoid attempting to rank the relative strength of the parties’ cases. The relevant inquiry is the practical effect of granting or refusing the stay, including the time before the appeal, the balance of hardship and any available safeguards. The approach in Minnesota Mining & Manufacturing Co v Johnson & Johnson (No. 3) [1976] RPC 671 and the summary in Novartis AG v Hospira UK Limited [2013] EWCA Civ 583 were applied.
3. Where the consequences are relatively evenly balanced, maintaining the status quo is ordinarily the best available course. The court should not limit a stay to cases where refusal would render the appeal nugatory.
4. The judge had placed undue weight on HTC’s failure to arrange a non-infringing chip earlier. Contingency planning may be relevant to a pre-trial interim injunction, but after trial it will ordinarily be wrong to refuse a stay principally because the appellant should have assumed that it would lose. Nokia had not obtained an interim injunction, so the pre-trial state of affairs should generally have been replicated pending appeal. The decisions in SmithKline Beecham plc v Apotex Europe [2002] EWHC 2556 and [2003] EWCA Civ 137 concerned a different issue.
5. The injunction threatened HTC’s market participation, reputation and ability to re-enter the market, with losses that could not be adequately quantified. A partial stay also risked complicating later inquiries into damages or the cross-undertaking. There was no sufficient basis for excluding new models from the general stay; Nokia’s remedy was to seek expedition of the appeal.

1. Court of Appeal (Civil Division) allowed HTC’s appeal, granted permission to appeal and ordered a general stay of the injunction pending the main appeal or further order.
2. High Court (Chancery Division, Patents Court), Arnold J, found Nokia’s patent valid and infringed, granted a permanent injunction and delivery-up order, stayed the injunction for the HTC One pending appeal, and refused a wider stay.