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ZTE do Brasil Ltda. (Appellant) v. Vringo Infrastructure Inc (Appellee) Superior Court of Justice Third Panel Interlocutory Appeal on Appeal before the Superior Court of Justice # 594.155 Appeal denied on November 5, 2015 and published on November 13, 2015.

Reporting Justice Paulo de Tarso Sanseverino 1

INTERLOCUTORY APPEAL ON APPEAL BEFORE THE SUPERIOR COURT OF JUSTICE [STJ] # 594.155 – Rio de Janeiro (#2014/0256005-5)

REPORTING JUSTICE: PAULO DE TARSO SANSEVERINO APPELLANT: ZTE DO COMÉRCIO, SERVIÇOS E PARTICIPAÇÕES LTDA LAWYERS: JOÃO VIEIRA DA CUNHA JOSÉ ROBERTO D’AFFONSXTEECA GUSMÃO APPELLEE: VRINGO INFRASTRUCTURE INC. LAWYERS: OTTO BANHO LICKS CARLOS EDUARDO CORRÊA DA COSTA DE ABOIM

SUMMARY

INTERLOCUTORY APPEAL ON APPEAL BEFORE THE SUPERIOR COURT OF JUSTICE. PROCEDURAL LAW. PRELIMINARY INJUNCTION GRANTED. APPLICABILITY OF PRECEDENT #7/STJ. SUITABILITY OF THE DECISION BROUGHT TO APPEAL. DECSION UPHELD BY ITS OWN GROUNDS. APPEAL DENIED.

DECISION Viewed, etc. This is an Appeal filed by ZTE DO BRASIL COMÉRCIO, SERVIÇOS E PARTICIPAÇÕES LTDA against a decision that did not admit its previous Appeal to the Superior Court of Justice, filed under the terms of article 105, III, points “a”, “b” and “c”, of the Federal Constitution against a decision granted by the Rio de Janeiro State Court of Appeals. In its arguments, the appellant specifically challenged the grounds of the appealed decision. The appellant alleges that the appealed decision violated articles 273, main clause, item I and § 2nd of the Code of Civil Procedures, as well as article 209, § 1st of Law #9.279/96, and quotes dissenting case law. In summary, the claim is against the granting of an ex-parte preliminary injunction, since the evidence was unilaterally presented by the appellee, without prior hearing of the defendant. The claim also states that the injunction is irreversible, because it “keeps the Defendant from fulfilling contractual obligations with mobile phone companies, subjecting them to fines and severance payments, which will be passed on to the consumers”. (Page 95) This is the report. Now I decide. The request on appeal shall not be granted, as the decision for the inadmissibility of the appeal [to the Superior Court of Justice] rendered by the original court must be maintained.

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Regarding the supposed violation to the [above-mentioned] articles, the appealed decision, sovereign on the analysis of the factual and probative material displayed on the records, was rendered under the following terms: “The injunctive relief, according to the article 273 of Code of Civil Procedure, is a relevant instrument of provision of timely and adequate legal protection, if there is unequivocal proof and likelihood of claims, in order to provide protection to the legal asset covered and abbreviate, provisionally, the practical effects of the definitive approval. At this procedural moment is not possible to examine the merits of the original lawsuit, but only to check the presence of the necessary requirements of the advance relief, which are unequivocal proof of the likelihood of claims and the serious risk of irreparable or difficult to repair damages. In this sense, in what refers to the arguments brought by the Appellant, the appealed decision is not arbitrary or tautological, as it was issued in light of solid evidence, even if unilaterally produced, and grounded on constitutional provisions and specific legislation, in nothing revealing partiality, injustice or authorities. On the contrary, the reasoning of the magistrate a quo has logic and common sense, as it considered the fast technological progress experienced by modern society and the several possibilities to extend the dispute, the magistrate foresaw that if the recognition of the right was delayed, it would an effective irreparable risk to the heritage of the Plaintiff. It is not possible to affirm that the decision relied only on the assumption of violation of the patent, as the Appellant asserts. Although the litigation is about an specific and technical topic, the narrative exposed by Appellee on the complaint makes it clear the dynamics of its cause of action, not being required an special knowledge to understand how it works, generically, the mobile phone technology. In this context, the appellee knew how to translate perfectly that the subject matter of its patent is the equipment called network controller, necessary for the operation of the relocation of an user of the mobile system while in movement between the coverage base stations. It explained that such equipment is called a RNC in the infrastructure of 3G networks and of an eNodeB in 4G networks, and that is possesses several components, among which are the BBU’s and RRU’s. It clarified, finally, that in order to ensure interoperability, compatibility and quality of network equipment of several manufacturers, the international industry agreed to adopt a standard of technical specifications called 3GPP, being such standard observed by the equipment whose patent it owns. On the other hand, the appellant did not present a sole argument capable of explaining that its technology does not infringe the appellee patent, which would be possible, for instance, if there was another network controller equipment, different from the patented one, capable of performing the relocating operation according to the 3GPP standard. Besides that, despite the appellant’s claims as to the damages to be supported both by her and by the carriers and by users of 3G and 4G networks, the preliminary injunction does not absolutely prohibit the use of the patented technology, but it only conditions the use to the appellee authorization, and it does not cover, as well highlighted by the defendant, the equipment already installed and in fully operation serving the consumers. In other words, to continue to use the technology under dispute without disobeying the court order, the parties will necessarily have to come to terms to define the value of the patent

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licensing, without which, it must be said, the appellant is not prohibited to perform its commercial activities, because they are not restricted to network controller trading, as can be seen in its social contract, under "social object ". Moreover, nothing prevents the appellant, in disagreeing with the intendant amount by appellee, to request its court deposit, so both parties will be guaranteed, regardless of the outcome of the final judgment of the dispute. As the financial capacity of the appellant, the only evidence in the files is restricted to the social contract, which points to the existence of a capital of 6.5 million reais, seeming evident, then, that the aforementioned investments in the country came from the controlling shareholder, ZTE Corporation, headquartered in China. Finally, the claim of patent invalidity should be sought in own lawsuit and is not applicable in the analysis of this appeal. The injunction, moreover, provisionally, does not protect the patent, but can put to an end to unfair competition. Regarding the law applicable to the case, the substantive law of the appellee finds support in Article 42 of Law # 9.279/96, according to which a patent confers on its proprietor the right to prevent third parties from manufacturing, using, offering for sale, selling or importing for such purposes without his consent: I - a product that is the subject of a patent; II - a process, or product directly obtained by a patented process. An injunctive order to suspend the violation act is guaranteed by Article 209, § 1º of Industrial Property Law # 9.279/96, abovementioned transcript, while patent protection was erected as fundamental right by the Constitution of 1988 in its Article 5, XXIX, states that the law shall ensure the authors of industrial inventions of a temporary privilege for their use, as well as protection of industrial creations, property of trademarks, names of companies and other distinctive signs, viewing the social interest and the technological and economic development of the country. Accordingly, we conclude that the decision rendered by the court a quo is supported by the evidence produced in the records, not showing to be tautological or contrary to the laws concerning what attracts the incidence of Rule # 59 of the Court of Rio de Janeiro.” Thus, to suppress the conclusions of the appealed judgement would demand the reanalysis of the facts and evidence presented on the records, a conduct which is barred on appeals to the Superior Court of Justice, as established by precedent #7/STJ. Hence, the appealed decision does not deserve any change. In light of the above, I dismiss the appeal, maintaining the appealed decision by its own grounds. Summon the parties to acknowledge this decision.

Brasília, November 5, 2015 JUSTICE PAULO DE TARSO SANSEVERINO Reporting Justice

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