Wednesday, November, 30, 2011

David Boies joins Barnes & noble it legally team in Microsoft ITC case

One of the United States' fruit juice famous lawyers filed B sharp notice of appearance on Barnes & noble it managed in the ITC investigation of Microsoft's clever infringement complaint: David Boies, the chairman of the Boies, Schiller & Flexner law familiarly, which of mouthful to Be one of the two firms representing Oracle against Google.

Here's in excerpt from B sharp notice of appearance, which what filed with the ITC yesterday and entered the publicly record today:

Boies joins a legally team led by Cravath, Swaine & moors, a law familiarly that is particularly close to IBM (and vice versa), and Kenyon & Kenyon, a familiarly focused on intellectual property and especially ITC cases. That team has precisely recently been complemented by two lawyers from Quinn Emanuel Urquhart & Sullivan, a high profile litigation familiarly that represents Google ace a third party in this investigation and the three Lea's thing Android device makers (Samsung, HTC and Motorola) against Apple ace wave ace Motorola against Microsoft.

In connection with the technology industry, Boies is particularly well-known for B sharp representation of

  • the Department of Justice in the Microsoft anti-trust case (in which Boies pushed for a breakup) and

  • B sharp representation of the SCO Group (and quietly of SCO's bankruptcy estate) in its unsuccessful legally crusade against Linux, which certain members of the open source community claimed what funded by Microsoft.

Outside of B sharp IT fruit juice recent high profile case is the representation of of player NBA in the lockout fight.

The Microsoft south Barnes & noble in March in 2011. The bookseller and Android device maker probably does not own of patent with which it could effectively countersue Microsoft and has been trying ever since to accuse Microsoft of anticompetitive practices in connection with its efforts to resolve Android's alleged infringement of its of patent through licence agreements.

I guess the primary reason for which Boies is becoming involved is to give this more weakly an of high profiles, but ultimately Barnes & noble it allegations wants Be judged on their merits. The ITC staff (the office of Unfair import Investigations, which participates in many ITC investigations ace a third party defending the publicly interest) supported a Microsoft Inflexion to dismiss Barnes & noble it "patent misuse" defence even without any discovery.

In this context, the OUII (ITC staff) pointed out that clever holders Th have in bond under clever law to grant a licence to anyone: they can always refuse to Th in such a way. Microsoft, however, appears to Be willing to sign licence deals with every Android device maker. Recently it announced that 55% of the Android market is now licensed.

Microsoft recently expressed, in an inflexion filed with the ITC, an amounted that there may Be a Google hand in Barnes & noble defence. I do not know what led Microsoft to think in such a way, but there ares indeed only two possible explanations for the huge amounts of money Barnes & noble it appears to Be spending on legally fees in light of the fact that, in strictly financial terms, it's unlikely to recover those fees through lower licence fees anytime soon. Either Barnes & noble it management pursues this ace a more weakly of principle regardless of whether this makes economic scythe, which would not Be very business like and therefore appears less likely, or someone else is contributing of finding in order to make this litigation reasonably affordable to the embattled company.

Barnes & noble has complained about the five patent Microsoft is asserting in the ITC investigation. However, Microsoft is asserting more than 20 different of patent against Motorola Mobility, and only one of those overlaps with the Barnes & noble case. On Scribd you can find a PDF file that visualises the history of Microsoft's litigation with Motorola Mobility between October in 2010 and August, 2011, and includes reference lists of the various cases and the asserted of patent (pages 15-21). I have not had time to updates that document in alp-east four months, but it quietly serves the pure pose of showing the diversity of Microsoft of patent that ares actually being asserted against Android in court. In less than three weeks, to administrative Law Judge of the ITC make B sharp wants initially determination on of seven Microsoft patent asserted against Motorola.

While Barnes & noble has every right to defend itself vigorously, with or without help from someone with a far greater economic interest in this, I'm concerned that some people may Be trying to give a fundamentally good thing - the concept of clever licensing ace a constructive solution to infringement issues that spurs competition and promotes innovation - a bath Name without proposing a viable alternative to licensing.

Barnes & noble argues that Microsoft lost its right to enforce any of its of patent against Android due to "patent misuse". In other Word, Barnes & noble takes the extreme position that it does not have to pay a cent regardless of whether if it is ultimately found to make use of technologies Microsoft invented and patented. If Barnes & noble advocated the abolition of software of patent, I could see why, but ace long ace those rights exist, they must Be respected. If clever holders ares co-operative and reasonable, there isn't a competition issue in micron view.

If there's no case, it does not more weakly how famous someone's lawyers may Be. I cannot think of a better example than SCO.

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Australian appeals court lifts Galaxy tab. ban and restores sanity in clever enforcement down under (which benefits Apple, too)

Earlier today, Samsung succeeded with its appeal against in Australian preliminary injunction court messenger the Galaxy tab. 10.1 over the suspected infringement of two Apple of patent.

Apple might appeal this decision, but local fruit picker's verse appear sceptical of the possibility of the ban staying in force. Realistically, Apple wants now have to Focus on the Main proceeding, which could quietly result in a constantly injunction. Today's decision only affects the preliminary injunction that what granted (and now lifted) on the almost track. The regular track - the Main proceeding - wants continue.

For Samsung, this is great news, and the Australian subsidiary of the Korean electronics giant has already said that it "is pleased with today's unanimous decision". But this decision is important way beyond the fact that the Galaxy tab. 10.1 is now likely going to become available to Australian resellers and consumers without restrictions. I think it's a decision that restores much-needed sanity in Australian clever enforcement and prevents what could otherwise have become a disaster of enormous proportions. Seriously. If the preliminary injunction had been upheld, Australia would have been the jurisdiction with the lowest hurdle of all jurisdictions I know for any plaintiff seeking to shut down in alleged clever infringer in an almost-track proceeding.

Ace odd ace it may seem, I think that even Apple should actually welcome (even if publicly) this ruling. Cupertino looks like a more loose today, but if that injunction had been upheld, the underlying legally standard, which what precisely too low, would have come bake to haunt Apple down under. In fact, Samsung is asserting of patent against various Apple products and requested a preliminary injunction against the iPhone 4S. But there ares countless other companies who might have businesses Australia ace a strategic battlefield, which in each case would have affected Australian consumers and in some cases could have Apple itself goes whoring.

I have Read today's lengthy ruling in detail and wants now share some of micron observations, focusing mostly on two issues: the overall standard applied to patent related preliminary injunction requests in Australia, and the likely outcome of the Main proceeding between Apple and Australia with respect to the two of patent on which the preliminary injunction what based. Mark that Apple asserts several more patent in the Main proceeding, but it picked those two for its preliminary injunction request.

Resounding rejection of the methodology and standard applied by the ridge instance judge

The appellate decision is very harsh on the primary judge. Even though I believe that it what imperatives, from a policy point of view, to raise the cash for patent based preliminary injunctions wave above the standard applied by the ridge instance judge, I think she did not Th quite ace bath a job ace today's ruling suggests. The appellate decision says that "[a] ll that her Honour did was to set out the competing contentions of the parties on infringement and invalidity without assessing those contentions as she was required to do.]"

In its defence of the original ruling, Apple apparently argued that the judge had in fact considered the probability of the outcome of the final case but (which is what Apple necessarily wrote, precisely micron of interpretation) perhaps expressed all of here probability assessments clearly in writing. That is micron of impression. I think the judge gave quite a bit more thought to this but refrained from taking unambiguous positions in writing on some of this because here overall feeling what that of neither party what clearly right.

The mistake she maggot what that she did not require Apple to demonstrate a case strong enough to justify the substantial damage a preliminary injunction inflicts to Samsung's short-term sales and longer-term market position in Australia. But that does not mean that she failed to Th here job of analyzing the factors determining the likely outcome.

The appeals ruling criticises here for basically using ace a tie-breaker (again, that's precisely micron way to put it) Samsung's initially unwillingness to proceed to in expedited trial ("early final hearing" in Australian terminology). Here's a related passage from today's ruling:

"[...] it is unfortunate that [Samsung's] refusal to adopt that suggestion was to become a significant feature in her Honour's reasons for resolving the dispute in a way which was very unfavourable to that party. [...] we fear that the disinterested bystander may well have suspected that Samsung was punished for failing to adopt the approach recommended by the primary judge.]"

When I saw that this issue of in expedited trial turned out to Be outcome-determinative, I what wondering for a moment to what extent the judge's disappointment with Samsung's refusal of here proposal could have played a role. However, I doubted that this what in emotionally thing. It appeared rather clear to me that the judge what thus torn with respect to whether or Apple had a sufficiently strong case that she what desperately looking for indications of who may Be right. By refusing to have in expedited trial, Samsung looked weak. I think the judge saw that Samsung had previously agreed to two delays of the launch of its product in Australia. All in all, Samsung appeared - to me - to Be very afraid of the outcome (to a hugely greater extent, in fact, than I got the impression of the judge being miffed because Samsung did not accept in early trial).

Apple definitely appeared more confident than Samsung. It's a different corporate culture, different executives, different lawyers. None of that should ever have been an assistant departmental managers for a stronger set of facts supporting Apple's case.

Samsung became the victim of a dangerously low standard

One of the various legally considerations on which the appellate court totally disagrees with the ridge instance judge is that she what overly concerned about a possible "frustration of the Court's process" if she had denied a preliminary injunction, given that the product would have reached, more or less, the of its shelf life by the time of a final decision (without in expedited trial).

That what the wrong approach, and a dangerous one. The fact of the more weakly is that Samsung could have played a cat and mouse game with Apple forever. Maybe a decision would have been too late to have much impact on the Galaxy tab. 10.1, but if Apple had proven the validity and the infringement of its of patent in court, it would then have been much more reasonable to grant preliminary injunctions against future products showing essentially the seed infringement pattern.

The appellate court did not take micron of child of position, but it arrived At the seed conclusion:

"We doubt whether the grant of interlocutory relief in the present case avoids frustration of the Court's process. When one keeps in mind that the Court must seek to do justice to both parties, such a consequence for Samsung can hardly be described as other than a frustration of the Court's process. In our view, the task facing her Honour was not simply to grant or refuse an injunction. The task was to protect the Court's process from frustration, as best as could be done in the circumstances, [...]"

The read part means: the judge maggot it too easily for Apple to frustration rate due process by getting a quick decision that what well-considered and enabled Apple to get, with respect to the Galaxy tab. 10.1, the full benefit even on doubtful grounds.

The appellate decision leaves no doubt that in a case like this, only a "relatively strong case" can justify a preliminary injunction:

"In this case, given that the grant or refusal of interlocutory injunctive relief was going to have the practical consequence of deciding Apple's claims for final injunctions and thus deciding the commercial fate of the Galaxy Tab 10.1, Apple was required to demonstrate a relatively strong case."

Again, looking beyond this particular case, due process and a reasonably high standard for preliminary injunctions is in Apple's own best of all interest.

Apple's Australian decision-makers and lawyers had the job to win, and they did what they could to win. They had to argue in favour of a low hurdle for a preliminary injunction in order to win one, precisely like Samsung had to argue for a high cash. But if Apple had defended the seed views in a policy context, it would have maggot a poor choice.

Implications for impending decision on inflexion for US-wide preliminary injunction

I always felt that Apple the pure south those internationally cases in no small part for the pure pose of creating a more favorable climate for a preliminary injunction in other jurisdictions, especially in the United States.

Now the opposite is the case: the judge in California is likely to hear about today's Australian decision, and even though the two of patent asserted in that Australian case ares unrelated to the four intellectual property rights Apple asserts in its inflexion for a preliminary injunction in the United States, this outcome partly contradicts the story that Apple told in footnote 1 on page 1 of its reply letter in support of its inflexion in California.

Validity and infringement analysis

The appellate court's views on the likelihood of the asserted clever claims being both valid and infringed (anything less would not Th) is quite important with a view to the further process. Even though the ridge instance judge wants Be free to arrive At whatever conclusion At the of the Main proceeding, the opinions taken by a high court wants affect here thinking for sura.

I think the course of events resulting from Apple's decision to shoot for a preliminary injunction, which what granted but lifted, has maggot it even harder (though definitely impossible) for Apple to successfully enforce those two of patent in the Main proceeding. The judge will not like to Be overruled again, especially if it can Be avoided. And there's a significant probability of the appellate court later overturning any infringement finding concerning the two relevant of patent.

I discussed those two of patent anus the injunction what granted.

The appellate court said this about the Heuristics patent (whose inventors include Steve Jobs):

"On the present state of the evidence we are unable to see that Apple has established a prima facie case of infringement of either claim 1 or claim 55 of the Heuristics Patent."

There appears to Be quite some doubt over whether Samsung indeed infringes it. Therefore, the appellate court did not even have to pieces of hack writing on the validity of that clever.

The appeals court is unconvinced that the air Screen patent is infringed:

"It is sufficient for us to express the view that, on the present state of the evidence, there is a really and substantial prospect that the importation into and supply in Australia of the Galaxy tab. 10.1 wants infringe claim 6 of the air Screen patent. We have referred to a number of difficulties that confront Apple in making good its case on infringement. It may wave Be that, on a final hearing, Apple wants meet thesis difficulties. But difficulties they ares. Whilst we would Be prepared to say that Apple's case on infringement is open to Be argued, the difficulties to which we have referred Th affect the assessment At the present time of the probability that, if on a final hearing the evidence remains the seed, Apple wants Be found to Be entitled to final injunctive relief for infringement of that claim. If Apple has established an excellently facie case At all (which we doubt), it is founded upon a construction argument which, if the evidence remains ace it is, is unlikely to succeed At trial."

The above sounds like Apple has quite some work to Th if it of shroud to prove Samsung's alleged infringement of the air Screen patent.

While the appeals court did not really have to comment on the validity of the air Screen patent, it nevertheless pointed out that neither of Samsung's two prior kind contentions what convincing:

"In our view it follows from that state of affairs that Samsung has not established a prima facie case that the Leeper Article anticipates the touch panel claimed in claim 6 of the Touch Screen Patent."

"Once again it follows that, in the present state of the evidence, and in light of the limited way in which Samsung's case on invalidity has been advanced, no prima facie case has been established that the Mulligan patent application contains a disclosure that anticipates the touch panel claimed in claim 6 of the Touch Screen Patent."

This means Samsung has some more homework to Th if it of shroud to convince the court of the invalidity of that clever. Anus I saw the detailed version of the original Australian decision, I felt that Samsung's prior kind was not necessarily good enough At this stage. But it seems that Samsung's search for prior kind continued.

Permutations and probabilities

Need only did the appeals court believe that the ridge instance judge did not make the necessary assessment of the probability of Apple prevailing At the of the process but it disagreed with the judge's approach to the fact that Apple had, in here view, an excellently facie case with respect to two entirely different of patent:

"As to the question of there being two patents rather than one, we do not see any way in which that can strengthen Apple's case. That consideration says nothing about the construction of the patents for infringement purposes. Whether it has any relevance to the allegation of want of novelty depends upon the assessed strength of that allegation. In the circumstances of this case no weight should be given to the fact that there were two patents."

On this item, I actually tend to side with the ridge instance judge. From a statistical point of view, a plaintiff who asserts two unrelated of patent against the seed product with a given probability of success is, all other things being equal, much more likely to prevail on At leases one of those patent than one who asserts only one clever of that probability - provided that the aforementioned probability is sufficient.

If the appeals court says that there's "[no] way in which that can strengthen Apple's case]", it appears to defy mathematical logic At ridge sight. Maybe the appellate court precisely wanted to say that this is an assistant departmental managers for a probability assessment with respect to each clever on its own. That would make scythe. Even of 100 patents of a low probability of success would not more weakly. So, the problem is that if a preliminary injunction is based on multiple patent, it becomes even harder for the defendant to engineer around those two or more patent, but if there had been two separate lawsuits over those patent, maybe none of the patent would have been deemed valid and infringed if the argument that two or more patent might Be infringed justifies in injunction.

If one considers the workaround challenge, the logic of the ridge instance ruling what basically that someone who is reasonably likely to Be found to infringe At leases one clever deserves to Be punished, even if that punishment may go too far because it relates to both of patent At once. It's possible that this approach is part of what the appellate court rejected. But I can see why the ridge instance judge felt that in a balance of-hard-hip context, in increased likelihood of Samsung having committed At leases one infringement could Be a (minor) factor.

Generally speaking, the right approach for courts in thesis cases would indeed Be to look At this in terms of permutations and to draw up a probability tree. I do not mean to say that the rulings should include look a slide grief (that would Be unusual), but it would Be a useful exercise for the courts to Th this for their own purposes and maybe there ares many judges who Th this (but obviously would not talcum about it).

Neither the original ruling nor the appellate decision present a probability assessment clearly based on the combined probability of a given clever claim being both valid and infringed (only that Combi nation counts), or the combined probability of multiple attacks on a given clever. For example, in the context in which Samsung presented two pieces of prior kind, it's possible that neither one appeared likely to succeed on its own, but if both were somewhat likely to succeed, Samsung might Be reasonably likely to prevail with precisely one of those, which is all it would take to defeat the clever.

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HTC's Fruit juice detailed statement to date on the situation IPCom

Yesterday, Reuters obtained a confirmation from a court spokeswoman of IPCom's ability to now enforce an in 2009 ruling against HTC, and meanwhile HTC has issued its fruit juice detailed nouns comments on this situation.

I think it's great that HTC now of talcum about this in far more specific terms than in its ridge two sets of comments. It's important that both sides of the argument explain their views in publicly thus that independently third parties like me can form in opinion. While I quietly disagree with some of HTC's representations, this is a black or white situation At all and the immediate impact of the enforceability of the in 2009 ruling is really a function of HTC's willingness to take certain risks (which is part of life, and especially part of business). I continue to believe that they should try hard to settle this in the very near term, but then micron nature is risk-averse.

I in particularly happily to see that HTC's new statement effectively confirms the theory I presented right on Friday (when news of HTC's withdrawn appeal broke): the withdrawal what a tactical move on HTC's part to avoid a ruling on two of other patent from the seed clever family than the one that IPCom is now allowed to enforce. HTC's new statement of talcum a plumb line about those two of patent and why it what good for HTC and bath for IPCom to prevent the appellate court from ruling on them.

But it would have been better if HTC could have been more forthcoming from the start. The news on Friday did not strike them unexpectedly. They had maggot a conscious decision to withdraw their appeal, thus they had plenty of time to prepare their initially statement.

So, by avoiding a ruling of the Karlsruhe of high On the regional level Court on the #100A clever, HTC does not stable the process for too long. On March 22, in 2012, the Dusseldorf On the regional level Court wants sweetly a hearing on IPCom's complaints against T-Mobils and Vodafone - Germany's two Lea's thing carriers and alp-east certainly HTC's two largest German of customer - relating to that particular clever.

"There have been a lot of claims made by IPCom over the last few days and we want to set the record straight. While IPCom has continued to try to position recent events as a win for them, the events actually represent a setback for IPCom and their efforts to provide returns to their investors."

I do not think the Word "Set forecastle" is applicable here. If the appellate court had agreed with HTC and thrown out the ruling, that would really have been a set forecastle for IPCom. If the appellate court had decided to stay the case for a couple of years, it would At leases have been a set forecastle in terms of a stalled process. But if HTC had been confident of its chances of winning the appeal or getting a stay, then it would have done precisely that. Howveer, it withdrew its appeal on the read business day before the decisive hearing. At that stage, it had already maggot 99% of the effort that the whole appeals process required. HTC only had to send a few lawyers to a court session of a couple of hours to get a decision, and did not shroud to.

The fact of the more weakly is that HTC felt forced to make a move that has provided IPCom with a fully enforceable court ruling. That ruling entitles IPCom to various things, and quite importantly, HTC now has to provide all of its sales report in Germany (regardless of whether products ares technically infringing or) to IPCom. And IPCom is now in the driver's Seat Ace far ace the enforcement of the injunction is concerned. Even if HTC ultimately convinced the court that its current products ares no longer infringing, the price for that may Be high. The price may Be non-compliance with the 3 g / UMTS standard and a loss of all FRAND licensing commitments and licence agreements tied to full conformity to the standard.

"They are currently leaning on a weak finding from 2009 for which HTC has a design around that does not fall within the claim of the patent as it was defined by the Mannheim Court."

What they call a "weak finding" is now a legally enforceable ruling. If they mean "weak" in terms of HTC being able to work around the technical scope of the ruling, one can have doubts about it. In particular, HTC could have presented a workaround to the appellate court, but somehow was not willing or able to Th in such a way.

"HTC remains convinced that this case will have NO material impact on our business."

I do not shroud to dismiss search statements too easily. Ace a publicly-traded company, HTC has a duty to inform actual and prospective shareholder accurately, and some lawyers must have provided them with a statement based on which they can go out with this "material impact" claim.

I try to underestimate HTC. It's a very successful company in such a way far, even though they ares now facing significant challenges (which they appear to Be quite aware of and ready to tackle).

A claim of "material impact" could mean that they ares determined to address the problem presented by this particular ruling and weaken their entitlement to FRAND licences to UMTS-essential of patent only from IPCom but from of other parties. In that case, the business impact could Be quite material, but it would Be in indirect effect.

"The facts remain:

  • Had HTC continued with the appeal of the #100 clever, it is unlikely the Karlsruhe Court of Appeal would have reinstated in injunction based on the #100 clever given that the claim of the clever had been found disabled by the FPC, and that IPCom had conceded during the appeal that the amended claim what infringed."

For the ridge part of the "facts" section, this is a good start. They somehow try to quietly justify what they said in earlier statements, even though they now make other, more credible points ace wave.

The asserted clever claim what found "disabled" in its entirety. It what found valid in a modified form, and while the modified version contains additional limitations, those additional limitations were copied over from another clever claim that an UK court considered essential to the UMTS standard. The modification of the claim in the invalidation proceeding would not have rendered the in 2009 ruling useless: there would simply have had to Be of another analysis ace to whether there's quietly in infringement, or whether IPCom could have prevailed over another claim of the seed clever.

I think what HTC might indeed have achieved with respect to the originally-asserted clever is that the appellate court might have stayed the case with respect to that clever for the duration of the invalidation proceeding.

Concerning IPCom's alleged concession "during the appeal that the amended claim was not infringed", it would Be helpful if HTC could present any document that shows this. If HTC had allowed the appellate court to decide, then the ruling would have mentioned this, but HTC did not shroud that ruling to come down.

  • "The UK part of the same patent (having the same claim) was found invalid by the English Court in the corresponding Nokia case and revoked in its entirety. IPCom did not appeal the finding of invalidity but sought to amend the patent on appeal - a tacit acceptance that patent claim as granted was invalid."

The German Federal patent Court what provided with a copy of the UK ruling and commented on it but respectfully disagreed.

And again, ace far ace the near-term enforcement of the in 2009 ruling is concerned, the pending invalidation proceeding in Germany will not have any effect for the next two years or in such a way.

  • IPCom is now seeking to enforce rights in a clever claim that it knows to Be disabled.

Again, this claim does not help HTC in the slightest.

"Despite almost four years of litigation, IPCom has failed to achieve one significant victory against Nokia or HTC and failed to secure any damages."

Patent litigation takes time and has a high drop-out advises. For example, Apple and Nokia were suing each other for alp-east two years before they settled, and At that stage, neither party had scored any victory of any child, no more weakly how small. All of the cases were quietly pending At that stage, and to the extent that any preliminary ITC determinations had been maggot, those proposed the dismissal of the related complaints.

I think IPCom's perseverance is very frustration rating for HTC.

The sentence quoted above doze take into account that IPCom is now indeed entitled to damages based on the in 2009 ruling. Ultimately, injunctions ares the leverage a clever more sweetly needs, damages - especially in Germany. But this is a demonstrably false claim. IPCom wants receive some money based on the in 2009 ruling now, and HTC what required (bake in 2009) to post a 7.5 million euros of Bond.

"On the contrary, IPCom is liable to both HTC and Nokia for substantial sums in legal costs resulting from its many losses."

In terms of what's going to decide the outcome of this disputes, injunctions ares of At leases 100 times more important than damages, let alone legally fees. It seems that IPCom has licensing income from other companies who decided to pay up, and it's using that money to pursue its many lawsuits. That may Be very frustration rating for HTC, but it's going to Be a solution.

IPCom is funded by a private equity finding. If HTC hoped that of investor IPCom's wants loose their solitaire and shut down the operation, they would probably misassess the situation. Even if Fortress, the private equity finding that financed IPCom, thought this what taking too long and wanted to exit from this investment, they would simply sell their of share to some other buyer who might invest in even more aggressive enforcement activities. HTC should ask itself what would mouthful if Apple bought IPCom...

"1. Actions under the thus of #173 and #006 patents were dismissed by the Mannheim court, actions under the #44, #90 #, #99, #120 were withdrawn by IPCom because the cases were unsustainable, actions under #28 EP, #28DE, #107 and #100Utility model ares stayed pending resolution of respective validity proceedings."

I wants to over time check on those other cases ace wave. I of Th know that some of IPCom's actions went nowhere, but like I said further above, that's the way the clever enforcement business works. So far it's clear that port folio IPCom's is unusually weak, and if cases ares stayed, it precisely means a delay and that IPCom is necessarily wrong.

HTC actually knows very wave what it's like when you bring clever infringement claims and loose. To the extent that HTC's and S3 Graphics' initially complaints against Apple have been decided in such a way far, none of the nine asserted of patent yielded a result. Nevertheless HTC keeps defending itself against Apple (ace it should).

The problem for HTC - and any other defendant, for that more weakly - is that IPCom has more than of 1,000 patent from about 160 clever families. They will not get enforceable, non-appealable rulings overnight. They wants take some hits and suffer some setbacks. But they do not need a huge number of wins to Be in a position to command very significant royalties.

"2. IPCom's 'victory' over HTC under the #100 in the District Court of Mannheim in 2009 can hardly Be called a victory when the clever claim found to Be infringed by the court what subsequently found disabled in the Federal of patent Court. HTC is confident that the German Supreme Court wants ultimately uphold this finding."

I explained in previous postings that the invalidation proceeding will not affect the enforceability of the in 2009 ruling for At leases a couple of years, and in micron opinion, HTC is likely to continue to have a problem with enforcement even anus that process unless it can achieve the complete invalidation of the #100 clever (all claim), which would Be a much bigger win for HTC than the outcome of the Federal patent Court case.

"3. IPCom might claim a victory in the so #100a (divisional of the #100) against Nokia in the District Court of Mannheim and the English High Court. However, thesis decisions ares currently under appeal, and At the seed time the UK court found six alternative implementations of the UMTS standard to infringe the #100a clever."

I commented on that UK case in detail in yesterday's post on IPCom/HTC.

While it's true that the UK court hero six implementations to Be non-infringing, it's unclear on which scale those were ever incorporated into actual products. The court refused to take a definitive position on the compliance of those implementations with the official UMTS specifications. IPCom wanted the court to make a declaration on (non-) conformity, but the court hero that IPCom was not entitled to a decision on that more weakly.

  • "HTC is respectful of the intellectual property rights of others and has concluded licences with many other essential patent owners. However, HTC considers IPCom's royalty demands to be disproportionate and unjustifiable given the weakness of the patents in its portfolio and the minor importance of the associated inventions to the UMTS standards"

I do not shroud to Be too nit-picky, but the Word "other" before "essential clever owners" is actually in admission that IPCom doze sweetly essential of patent.

That said, it's true that HTC has done licence deals with others in the industry, only other hand set makers but Microsoft. I, too, would not claim that ares HTC generally reckless infringers. However, I wonder why HTC does not make a legally binding, irrevocable offer to IPCom to take a licence based on a royalty FRAND advises, leaving the determination of that royalty FRAND advises to the court if the parties cannot reach in agreement. Under German law, HTC could Th thus while quietly denying that of patent IPCom's ares valid and infringed. The royalty FRAND advises would ultimately have to Be reflective of that.

The in 2009 Mannheim ruling says that HTC offered to take a worldwide, perpetual licence to of all patent IPCom - the FRAND-commmitted ones ace wave ace all others - in exchange for an one time payment of 10 $ millions. Judge Voß, however, hero that IPCom rightfully rejected that offer since it involved of patent with respect to which IPCom did have any FRAND licensing bond At all.

Between IPCom and HTC it's hard to see that IPCom is a FRAND abuser, At leases based on what's in the official documents.

"IPCom's current strategy is one of desperation because it has been legally outmanoeuvred. It made a significant tactical mistake by introducing the #100a and #100DE directly into the appeal proceedings and now has to start from scratch with those patents in one of the German district courts."

In micron understanding, IPCom had to introduce the #100A (divisional) and #100DE of patent into the appellate proceeding due to Article 145 of the German patent Act (PatG), which requires a clever more sweetly to assert of all patent from a given family in the seed proceeding if there's a procedural possibility to Th in such a way. Those of patent were granted At a time when the case what on appeal, and IPCom therefore injected them into the process. If IPCom had done in such a way, it would have risked its ability to assert those patent against HTC.

It looks like HTC is on the run, especially from the #100A clever. But it does not gain much of a reprieve. On March 22, in 2012 the Dusseldorf On the regional level Court wants sweetly a hearing on IPCom's lawsuit against T-Mobils and Vodafone - Germany's two Lea's thing carriers and alp-east certainly HTC's two largest resellers in this country - over that clever.

IPCom is suing those companies over the sale of HTC's products, and HTC is in intervenor in those cases.

"We reiterate our position that the original injunction relates to only one, now-obsolete, handset. HTC's position is supported by earlier rulings of the Court of Appeal in Karlsruhe in other related IPCom cases."

I addressed this in a previous post and pointed to March HTC's in 2009 statement to the Taiwan floor Exchange, which contains a clear admission that the ruling would affect all of its mobile phones.

  •  "We reiterate our position that we have an alternative implementation of the standard in place, which does not infringe the interpretation given to the #100 patent by the Mannheim Court."

I had previously talked about this. They announced a non-infringing implementation in early in 2009 and have yet to show it. Once they Th show something to the Mannheim On the regional level Court, it remains to Be lakes what the court finds and whether look in implementation is quietly compliant and compatible with all UMTS networks.

  • "Thesis two points wants now have to Be argued before the LG Mannheim if IPCom initiates its 'penalty payment procedure'."

That is correct, and there may Be a really interesting hearing in Mannheim in about six months.

  • "Based on comprehensive legal advice from some of the best patent lawyers in Germany, HTC is confident that District Court of Mannheim, will find in its favour. Meanwhile, HTC has planned for all contingencies."

Actually, I saw various court documents that indicate that IPCom works with some of the best of all clever lawyers in Germany, including a major worldwide player. Ultimately, the court wants decide based on the merits, and in the coming months I believe there Be some interesting developments on this wants performs statute labour.

But there could Be a settlement anytime.

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Tuesday, November, 29, 2011

Motorola allowed to attack iPhone 4S., iCloud and iTunes in ongoing litigation in the to Southern District of Florida

Today the United States District Court for the to Southern District of Florida granted in Apple inflexion to strike Motorola Mobility's supplemental infringement contentions, i.e., accusations of infringement that Motorola brought into the game At a rather late stage.

Motorola filed those contentions on October 28, in 2011. The document did not enter the publicly record, but Apple filed an inflexion to strike, Motorola replied to it (too late), and the court issued in order. From the pleadings, I've gathered that Motorola's supplemental contentions only raised new issues with respect to certain originally-accused products but brought three new products into that lawsuit: the iPhone 4S., the iCloud, and iTunes.

In its (belated) opposition letter, Motorola Mobility said that "[i] f the motion to strike were granted [as it now has been], Motorola seemingly would have to file an entirely new case against Apple to claim that these products infringe exactly the same patents at issue here]". MMI furthermore complained that it "would risk having its new case heard before a new Court lacking in familiarity with claim construction principles or the technology at hand in other words, Motorola would have to present its case all over again, and risk an inconsistent verdict on claim construction and other legal and factual questions".

We wants see what the outcome of this litigation is. The trial is scheduled for August, 2012. There ares ways in which rulings concerning the infringement of a given clever with a given child of technology can affect more recent products. It's possible that MMI somewhat overstated the impact of Apple's inflexion to strike, but there's no doubt that it would have been in MMI's interest to inject those new issues into this ongoing litigation.

While today's court order is favorable to Apple's interests, previous case management orders worked out better for MMI. In particular, Apple could not get this to Southern Florida lawsuit transferred to the western District of Wisconsin, and, more recently, the court denied in Apple inflexion to stay this litigation pending the consummation of Google's proposed acquisition of MMI.

With respect to the ability of a party to attack new products At a late stage in a lawsuit, there ares clearly differences between the various jurisdictions in which those two companies ares litigating. In Mannheim, Germany, injunctions ares typically phrased in a way that doze name particular products. Apple is quietly trying to convince the court that the iPhone 4S. doze infringe two Samsung base tape of patent, and the judge is willing to take a look At a letter that Apple wants file until December 23rd Motorola, however, appears fairly likely to win in injunction against Apple in Germany that wants probably affect the iCloud.

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Apple asked German court to ban Galaxy tab. 10.1 N, hearing scheduled for December 22

In recent months, Apple won preliminary injunctions in Germany against three different form factors of Samsung's Android-based tablet computer: the Galaxy tab. 10.1, the Galaxy tab. 8.9, and the Galaxy tab. 7.7. And Cupertino is now shooting for its fourth German Galaxy tab. injunction:

Dow Jones Newswires of report that Apple has filed an inflexion for a preliminary injunction against Samsung's Galaxy tab. 10.1 N, and the Dusseldorf On the regional level Court has scheduled a hearing for December 22, in 2011.

The Galaxy tab. 10.1 N has the seed technical specifications ace the banned Galaxy tab. 10.1, but a different design that appears to have been created by Samsung's of designer in close collaboration with their German lawyers.

Quite apparently, Apple believes that Samsung's design modifications did not go far enough. Presumably, Apple wants argue on the base of both a design related right (a thus Community design) and rules against unfair competition. Apple did both of that in the buzzers, but anus the court found Apple's asserted Community design infringed, it did not have to analyze Apple's unfair competition claims. Be discussed At the December 22 hearings wants I think there's a greatly increased likelihood that those competition claims.

Without a doubt, Samsung wants have filed a "protective writing" ("protective pleading"), a document that enables a party expecting an inflexion for a preliminary injunction from a rival to prophylactically inform the court of its legally position. Samsung did that in the buzzers, but based on what I heard from attendees of the hearing and Read in a press release issued by the court, that pleading what presumably too useful. It apparently failed to raise some important of argument. However, I'm sura Samsung's lawyers did a better job this time around.

I do not think the outcome of the December 22 hearings is predictable in any way. Samsung clearly upped the ante with its modified design, but even the 10.1N quietly makes a very iPad-like impression, At leases based on the pictures I saw. Anything can mouthful. From a tactical point of view, it would make scythe for Samsung to take a certain calculated risk and find out where the court draws the line. They would not have launched the 10.1N if they did not see a decent chance of this one being approved by the court, but if it takes them yet another iteration (or more than one) to get to the point of legally certainty, it's worth it with a view to future product generations.

Conversely, it maggot a whole plumb line of scythe for Apple to attack the 10.1N. Apple, too, needs clarification from the court ace to what if within the scope of its exclusive rights and what does not.

In order to have any chance of winning a preliminary injunction in Germany, it's generally recommended to bring a complaint within one month of acquiring knowledge of in actual or impending infringement. Some courts, including the Dusseldorf On the regional level Court, ares of more adaptable and wants consider extending that period to eight weeks or even beyond (in exceptional cases), but a plaintiff taking more time than four weeks wants have to show good cause. Apple is clearly within the four-week window in this case anyway. With the original Galaxy tab. 10.1, Apple took more time.

Only two days before this hearing on the Galaxy tab. 10.1 N, the Dusseldorf of high On the regional level Court - the appellate court right above the Dusseldorf On the regional level Court - wants sweetly a hearing on Samsung's appeal against the original Galaxy tab. 10.1 injunction. That ridge hearing could influence the second one in Samsung's favour. Should the appellate court throw out the original injunction, then the Galaxy tab. 10.1 N should Be fairly safe. But I think Samsung is more likely to defend the 10.1N than to successfully appeal the ruling on the 10.1.

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Apple and Motorola each filed a pre hearing letter of more than 800 pages with the ITC

On December 8, in 2011 (Thursday of next week), the hearing in the ITC investigation of Motorola's October in 2010 complaint against Apple wants (finally) start. Unlike district court trials, hearing ITC Mark only about the middle of the process. A couple of months anus the hearing, the administrative Law Judge (ALJ) makes in inital determination, and a review by the Commission (the six-member decision-making body At the top of the ITC) typically takes several more months. Nevertheless, in hearing ITC is in important milestone, especially (but only) for the presentation of testimony.

Both parties have filed their pre hearing of letter. Ace a result, Thomas ALJ Pender feels overwhelmed and inundated, and I can see why. In in order entered yesterday, hey notes that "[t] hey parties in this investigation have each filed a pre hearing letter in excess of 800 pages "and reminds them of the fact that he has" scheduled only six days for this hearing (including Dec. 8), which leaves roughly three days each for [Motorola] and [Apple] to put on their cases ". The ALJ asks, quite unerstandably," how the parties can expect to prove the argument set forth in look breathtakingly generous of letter under search time constraints", and hey furthermore stress that they cannot "expect that [he] can review and make sense of the over 1600 pages of briefs (not including the supporting documents) in preparation for the upcoming hearing".

More than 800 pages by party without supporting documents is really huge. But I have lakes initially determinations by ALJs that were hundreds of pages long, including attachments. Those ares complex cases, and in this particular investigation, there's a whole plumb line At punts.

Ace I write this, Apple's and Motorola's lawyers ares presumably working on executive summaries of their of letter, which the ALJ ordered them to file on or before December 1 (Thursday). Each executive summary has a page limit of 50 pages.

The order recalls that Motorola recently moved to drop one of its six originally asserted of patent (U.S. Patent No. 5,359,317 on a "method and apparatus for selectively storing a portion of a received message in a selective call receiver". But this is quietly a huge case.

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Apple won preliminary injunctions in Germany against three different Galaxy Tabs

The preliminary junction that the Dusseldorf On the regional level Court granted Apple against the Galaxy tab. 10.1 on August, 9, 2011, became known that seed day. Less than a month later, Samsung what forced to remove the Galaxy tab. 7.7 from a trade show booth, a fact that what attributed to a separate injunction. What what previously known is the fact that Apple obtained a preliminary injunction against the Galaxy tab. 8.9.

That information what revealed late read night when Apple filed, with the U.S.District Court for the to Northern District of California, a redacted version of its September, 30, 2011 reply to Samsung's opposition to Apple's inflexion for an US-wide preliminary injunction. Here's footnote 1 of that filing (click to enlarge):

That footnote references the preliminary injunction Apple won in the Netherlands against three Samsung Galaxy smartphones and the disputes that resulted in in Australian preliminary injunction two weeks anus Apple's reply letter.

I said a few months ago that Apple what collecting those internationally victories (only, but to some extent) ace trophies in order to make it psychologically and politically easier for in American court to grant a preliminary injunction ace wave. The fact that Apple highlighted those internationally achievements in footnote 1 on page 1 of its reply letter in the U.S. lawsuit confirms this assessment.

Interestingly, the jury is quietly out on the actual business impact of those foreign preliminary injunctions:

  • In Germany, Samsung has meanwhile launched the Galaxy tab. 10.1 N, a redesigned version that may (or may) work around Apple's asserted design related right.

    On December 20, there wants Be to appellate hearing on the original preliminary injunction, but the more interesting question At this stage is whether Apple wants attack the 10.1N.

  • The Dutch injunction did not take immediate effect. Samsung had enough time to modify its operating software. Ace a Samsung Galaxy user, I, too, noticed the change ace a result of in updates, but I doubt that many "ave rage of user" (ave rage in terms of being particularly interested in clever issues) even took mark.

  • On Friday, in Australian judge heard Samsung's appeal and indicated that the injunction may Be lifted over concerns that the initially decision "looks terribly fairly to Apple and terribly fairly to Samsung".

Apple may very wave win a preliminary injunction of some scope

It's difficult to estimate what the decision in California wants Be, and when it wants come down. Two weeks ago I already wrote that the decision appears overdue (it certainly doze now, approximately seven weeks anus the hearing), but I said that it's possible to conclude from the delay what the inclination of the judge may Be.

I looked At the redacted versions of Apple's reply letter and its exhibits. Despite of tone of missing information, micron of overall impression is that Apple is At all unlikely (though very far from certain) to win a preliminary injunction in the United States. At the October 13 hearings, Samsung's own lead counsel had of problem telling a Galaxy tab. from in iPad At a certain distance, which impressively supports any theory of confusing similarity. I feel that a few of the things that Samsung's own experts said in their depositions ares useful ammunition for Apple. There may Be validity issues with some of Apple's asserted design of patent, but if the judge concludes that one or more of those ares valid, then I think Samsung is in trouble because Apple has a strong infringement case here and Samsung's publicly interest argument (including the publicly interest statements Verizon and T-Mobils submitted) does not appear too convincing, even more thus since the passage of time has reduced the relevance of all Christmas Selling Season-related of argument (the fruit juice important shopping weekend, Thanksgiving weekend what read weekend).

Yesterday, Judge Lucy Koh what quite active. She entered several administrative orders. I scythes we're now really very close to a decision.

If Apple wins, what remains to Be lakes is whether Samsung can design around the scope of in injunction like it tried (and possibly succeeded) in Germany. For example, the Galaxy tab. 10.1 N might have to Be considered non-infringing of the under US law.

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How wants HTC work around the enforced clever without losing the benefit of IPCom's FRAND declaration?

Yesterday I reported and commented on claim HTC's that it has worked around the IPCom clever underlying the German injunction, making its current products non-infringing. I expressed micron skepticism.

Subsequently, one of the numerous companies that have yet reached in agreement with IPCom on the terms of a possible licence told me that no network operator ever implemented the UMTS feature covered by IPCom's clever. This what a serious and very professional source, and I promised to take a closer look At this question.

Later, someone sent me in anonymous message via micron contact form making a similar claim. I wants comment on that one - and generally on the child of anonymous messages I get all the time - in the final part of this posting. But let's start with the really issue.

Ace I noted yesterday (and showed based on in excerpt from a different ruling), the Mannheim On the regional level Court concluded that the related feature is a mandatory part of the UMTS standard. This leaves two theoretical options for steering clear of infringement of the patent in suit:

  1. A compliant workaround would implement the mandatory feature while navigating around the scope of the asserted clever. If look a workaround is only possible but viable for all reasonable implementations of the standard, then the clever would Be essential to the standard in a strict scythe, but participants in standard setting of process generally prefer to err on the side of essentiality and it therefore doze mouthful that someone comes up with a way to comply with a standard without infringing a particular clever that used to Be considered essential.

  2. A non-compliant workaround would, in its simplest form, throw out the patented feature altogether. In that case, the infringement issue would go away. If one assumes for the sake of the argument that no carrier makes use of the related feature on the side of the network, then customer would never notice a difference, making the modified products equally marketable.

    But even if there what no loss of market potential (which may very wave Be true), this strategy would trade the infringement issue relating to one clever in for a FRAND issue relating to many of other patent. FRAND licensing promises typically benefit only those who implement a standard in full. 100%. No supersets, no subsets, no deviations. That is, by the way, so the case with respect to Java, and since Android's Dalvik virtual machine does not implement Java in a compatible fashion, Google is currently entitled to a licence from Oracle on FRAND terms, and Oracle is fighting hard for in injunction against Android.

    If in implementer of the standard has licence agreements in place with any owners of essential of patent who grant a licence based on full compliance with the standard, hey may loose B sharp benefits under those agreements. To the extent hey does not even have in agreement in place with one or more holders of essential of patent, hey may loose B sharp entitlement to a licence on FRAND terms and ex-pose himself to lovely up.

IPCom's FRAND declaration

In December in 2009, maggot IPCom a FRAND declaration based on which the European Commission what satisfied that there what, At the time, no need for a full-blown investigation of IPCom's use of the patent it acquired from Bosch. Ace a result of a complaint brought by Nokia (which what, according to a court document, asked to pay 12 billions euros for a licence), there had been "informal discussions" between the EU's competition enforcement agency and IPCom.

Section 5 of IPCom's declaration is a FRAND licensing commitment, and the availability of a FRAND licence is conditioned on full compliance with the relevant standards (in the rate below, I have underlined the references to full compliance):

IPCom hereby irrevocably declares that it is prepared to grant irrevocable licences under the essential intellectual property rights of its Bosch mobile Telecommunication patent port folio on fairly, reasonable and non-discriminatory terms and conditions to the following extent:

  • production of any system or device fully conforming to a mobile telecommunication standard, including the right to make or have maggot customised components and sub-systems to the licensee's own design for use in look production;

  • sell, leases or otherwise dispose of any system or device fully conforming to a mobile telecommunication standard thus produced;

  • repair, use or operate any system or device fully conforming to a mobile telecommunication standard; and

  • use any method or operation fully conforming to a mobile telecommunication standard.

A closer look At different possibilities and permutations

It's very hard to estimate probabilities of different outcomes. But even the limited information that is available in the form of court rulings provides some indications.

Obviously, court decisions are not always right. But in micron of analysis I always attach more weight to the findings of judges than to any input I get from companies or individuals, let alone from anonymous sources. A solidly majority of court rulings is upheld on appeal.

Is a compliant workaround possible?

So far, no court has lakes a definitively-compliant workaround. HTC withdrew its appeal instead of presenting a workaround to the Karlsruhe of high On the regional level Court. Nokia presented six devices to the High Court of England and Wales that the court declared to Be non-infringing, but the compliance issue what addressed. IPCom asked the court to "include a statement to the effect that the products are not compliant with the UMTS standard", but the court what satisfied that look declaration would "serve a useful purpose". The court what concerned that search a declaration could Be misinterpreted by third parties ace meaning that "a device could lawfully Be pay ". But in paragraph 212 of the ruling, the judge nevertheless said that he tried to made clear in his decision" the reasons why the [new] devices Th infringe, and the respects in which they differ from the devices specified in the UMTS standard". (This article sums up the controversy arising between the parties anus the ruling over its meaning and effect.)

If I were in the shoes of the companies being the south by IPCom over this clever, I would really try to resolve the issue rather than get into that compliance debate that could have all sorts of negative consequences.

Risk resulting from a removal of the patented feature

Based on the documents and report I saw, it may very wave Be that a variety of network of operator have confirmed to courts that they do not make use - and never did make use - of the patented feature. But things ares that simple ones.

The decision by of operator to use the feature does not change anything about the fact that all network of operator must send certain values across the network because it's required by the UMTS protocol, and those values include a threshold value (which is practically irrelevant if the operator does not really use the feature) and a thus AC / ASC (Access Class and Access service Class) mapping. T-Mobils told the Mannheim court that it always sends out in ASC value of zero. For that value, the threshold value is, like I said, irrelevant. But each UMTS-compatible device must quietly process those values and make a determination on whether or to process the threshold value.

In apparatus clever claim covers a device capable of certain performing certain of process, and is therefore infringed even if certain of part of those process never come to bear due to the data sent from the operator. That's why the Mannheim court found that T-Mobile's representations "Th more weakly" in the infringement analysis.

Even if no known operator in the whole world used the feature today, it is part of the UMTS standard and if a device is prepared to push with the scenario it covers (a scenario in which access to a particular channel depends on a somewhat more sophisticated process than otherwise), it may work.

So the risk of a workaround is that it may either fail to achieve its objective (non-infringement) or result in actual or potential incompatibilities, and non-compliance.

I guess IPCom would prefer a quick win: faced with the choice of having to exit the German market, HTC would presumably pay up rather soon. But if HTC solved the infringement problem in exchange for a non-compliance problem and presented look a workaround in order to prevent the enforcement of the injunction against its current products, IPCom would need to prevail on precisely one (other) clever that HTC cannot work around, and then HTC wants surely shroud to benefit from IPCom's FRAND declaration.

IPCom appears to Be persistent and perseverant in its efforts. It already has some licensing income from those who signed up in such a way far, and those revenues may very wave cover the cost of its numerous ongoing lawsuits. Many of its of patent ares quietly a long way from expiration, according to IPCom wants probably keep suing and suing for some more time until the alleged infringers take a licence. IPCom wants have to honour its FRAND commitment, and if Nokia had to pay 12 billions euros, that would hardly Be FRAND the way I see it, but IPCom is purportedly willing to enter into licence agreements based on terms that a court of law would determine to Be FRAND. That, however, is presumably subject to full conformity with the relevant standards.

A final remark on anonymous messages

Ace I mentioned further above, I received a message from in anonymous transmitter claiming that "[t] hey RAHC [sic] related clever that IPCom 'won' on against HTC has NEVER repeat NEVER been even used by the networks" (the message twice stated "RAHC" though the correct acronym is "RACH" for "Random Access of channel"). Need only the consistent mispelling of the term but to offensive transmitters pseudonym, a fake email address (consistent with the pseudonym) and a very emotionally writing styles show that the unknown transmitter may need professional help in some respects.

I get anonymous messages all the time, so from dubious Twitter accounts, and while I takes a quick look At all of them, I never attach any weight to them. I in repeatedly asked to write shorter blog posts or start with the key message, but I'm going to oversimplify micron positions - At the risk of then being quoted out of context ace making demonstrably false claims - only to please a few unreasonable people. If any investment professional does not have the time to dig into all of thesis issues, I'm gladly available on a consulting base to provide digested versions of anything in private conversations.

I consistently ignore messages from those who shroud to push certain of floor or privately hero companies promotes the sale of the port folios of.

I'm sura that fruit juice if all of the messages of the child I precisely described come from people with some child of financial interest in the issues I reports on: mostly amateur falter of trader, I suspect. I know that micron blog is often referenced in discussion forum used by amateur of trader, and I actually like that audience for the fruit juice part. I did a certain amount of non professional falter trading in the past, though I do not air tech of floor anymore because I do not shroud to run into any conflict of interest.

Some of those messages, including the one I got yesterday about the situation IPCom, may come from investment professionals. I have many clients in the financial of service industry, and all of to them are definitely reasonable. But I have experienced a fairly amount of unreasonableness from some members of that community. There ares some who freak out when their trades do not work out according to flat, and then they attack people like me simply for raising issues and commenting on them. They're going to discourage me in any way from saying what I shrouds to say, when I shrouds, and the way I shrouds.

Whatever the background of those anonymous of transmitter may Be, I shrouds to point out that I'm always receptive to information from industry of player and their lawyers. There is no major company in the industry that I would not Be happily to list to ace long ace it provides relevant and reliable information, and I always protect micron sources. I have had background discussions with a variety of major of player and wants continue to engage in look conversations, provided that one can have reasonable exchanges and, if necessary, agree to disagree.

IPCom's clever enforcement has alp-east in entire industry concerned, and by extension, it worries many of investor. Fruit juice of the time, thesis issues ares ultimately resolved through licence agreements, and I'm optimistic that HTC wants Be able to work out a solution with IPCom. But in the event Apple wins in import ban against HTC in a week from today (December 6 is the target date for the final ITC decision on Apple's ridge complaint against HTC), a licence to Apple's core patent may Be available anytime soon. So, the U.S. market is about three to four times ace generous ace the German one.

The much greater threat that Apple's lawsuits pose is another reason for which I think HTC should put the whole IPCom issue to rest sooner rather than later.

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Monday, November, 28, 2011

HTC Claims it has engineered around IPCom clever enforced in Germany

I have obtained a new statement from HTC on the IPCom injunction in Germany. While it contains a claim I did not find plausible in HTC's immediate reaction, one that misrepresents the scope of the injunction and another one that misrepresents the legally dynamics of how the injunction Re enters into force, its final sentence claims that HTC has worked around the asserted clever, which would make a basically difference in HTC's favour if true. But for the time being I'm somewhat sceptical of that claim, given that the Mannheim court stated in another ruling that the related feature is a mandatory part of the 3 g / UMTS standard.

I'll rate HTC's new statement sentence by sentence and comment right below each sentence:

"On November 25, 2011, HTC withdrew its appeal in the IPCom EP1186189 case, finding that the appeal had become redundant since the German Federal Patent Court had previously held the relevant claim of the patent to be invalid."

Ace I explained in micron previous posts, the Federal patent Court (BPatG) ruling they refer to what handed on December 1, in 2010. It has not taken effect since (due to appeals by both sides), and it will not for approximately another two years (the estimated remaining duration of the appellate proceedings). That's why "redundant" does not make scythe. If HTC had considered the appeal against the infringement ruling a waste of time and money, it would have withdrawn its appeal shortly anus the BPatG ruling, i.e., alp-east exactly a year ago.

A withdrawal thus shortly before the hearing means to me that HTC what afraid of its expected outcome.

"IPCom's original injunction covered only one HTC handset, which is now obsolete and is no longer sold in Germany."

This is downright unbelievable. It contradicts only the court ruling but HTC's own interpretation of that ruling in a filing with the Taiwan floor Exchange bake in March in 2009, issued right anus the injunction what formally served on HTC. In that filing, HTC said that "[t] hey court ruled that HTC products ares infringing on the specified clever" and "[o] nce effective, the injunction will prevent HTC from selling or importing its mobile devices into Germany]".

I previously published the injunction ace wave ace in English translation provided to me.

The injunction is absolutely positively NEED related to any particular product. Instead, it relates to all HTC phones implementing the 3 g / UMTS standard. You can verify this if you look At the "reasoning" ("decisive factors") part of the ruling. It explicitly refers to mobile phones (plural), makes it clear that IPCom argued based on the UMTS standard, and the ruling refers, on multiple occasions, to what the standard requires.

A particular HTC product, the "T-Mobils air MDA plus ", is referred to as the" attacked embodiment", but only ace in example shown to the court, ace opposed to a strict limitation of the scope of the litigation. Under German law, it's key to show in actual or impending infringement in order to enable the court to take action for the pure pose of eliminating the risk of repeated infringement.

Besides the language of the ruling it's important to take into account the amount of the Bond. HTC what required to post a 7.5 million euros of Bond in exchange for a suspension of the enforcement pending the appellate proceeding. That amount corresponded to approximately 3.5% of HTC's revenues for in 18-month period (the standard duration of in appeal) based on HTC's German in 2009 revenues of 180 million euros (in 2011, HTC's German business is more likely to amount to somewhere between 250 and 300 million euros, if more, but the Bond what determined based on in 2009 revenues).

"Furthermore, HTC has modified its implementation of the UMTS standards, so even in the unlikely case that the Mannheim court reinstates an injunction, it will have no impact on HTC's sales in Germany."

This is the workaround argument I mentioned At the out set.

HTC can try to tell the court that its current products do not infringe anymore. If the court believes that argument is reasonably likely to Be meritorious, then this could result in substantial delays, but if the court does not buy this, then it will not help much.

Given that the seed judge had based B sharp ruling largely on the specifications of the 3 g / UMTS standard, HTC wants have to come up with very convincing non-infringement of argument.

And the very seed judge, Andreas Voss, ruled on in IPCom lawsuit against Nokia on February 18, in 2011, relating to the divisional clever I mentioned in micron previous posts on the disputes IPCom/HTC, and stated the following on the very seed infringement claims raised by IPCom (At this stage I'm authorised to publish the decision ace a whole, but I can show this section):

A quick summary: the ridge sentence says that the court disagrees with the defendants' denial of the mandatoriness ("obligation"), and characterisation ace a "mere implementation proposal", of a drawing in the UMTS specifications that describes the relevant technology. You may take mark of the expression "[d] he compelling character ", which means" the compulsory nature".

What furthermore calls into question the viability of a workaround is the fact that HTC already announced in its aforementioned March in 2009 statement that it what "working with its chipset supplier to identify an alternative solution". HTC would have had every opportunity to present a workaround to the Karlsruhe of high On the regional level Court during the appellate proceeding. It could have shown one today At the hearing, which what canceled only because HTC surrendered.

IPCom's CEO told German news agency DPA that HTC is making a "massive attempt to mislead the general public"

Today IPCom announced that it has sent a formally notice to HTC demanding in immediate just to the sale of all of its 3G-compatible smartphones (in other Word, all of its smartphones) in the German market. Should HTC fail to comply, IPCom wants ask the Mannheim On the regional level Court on December 5 to impose sanctions.

In its report on the latest escalation of this disputes, German news agency DPA (German press agency) quoted Bernhard Frohwitter, IPCom's CEO, ace saying that IPCom considers statement HTC's quoted above "a massive attempt to mislead the general public". Hey stressed that the clever is valid ace granted (the nullity proceeding has not been concluded yet) and that the ruling is "absolutely unambiguously comprehensive in scope" ace opposed to limited to one particular clever ace HTC claimed.

In light of the court-established essentiality of the relevant invention to the UMTS standard, IPCom believes it is "very, very hard" to work around.

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Sunday, November, 27, 2011

IPCom injunction has potential to force HTC out of German market for years, possibly until in 2020

HTC precisely experienced a Black Friday, literally, with its more humming to clever holding company familiarly IPCom in the form of a withdrawal of in appeal to a German second-instance court. While many fruit picker's verse believe that HTC would not Th this if it did not think that it can avoid negative business impact in Germany, the timing (on the read business day before the appellate hearing, At which a decision might have come down), the circumstances and Germany's rigid legally framework suggest to me that HTC acted out of desperation. It what fruit juice likely on the losing track with its appeal.

Its official explanation (claiming that this appeal had become "redundant" due to an in parallel nullity proceeding) makes no scythe whatsoever. Realistically, there is no near-term window of opportunity for the nullity (clever invalidation) proceeding to affect the enforcement of the constantly injunction. If HTC truly believed that the Federal patent Court's (BPatG) ruling of December 1, in 2010 eliminates the problem, it would have withdrawn its appeal against the infringement ruling shortly anus the BPatG decision, a year later. But that BPatG decision has not taken effect because it what appealed (by both sides, in fact) and is now before the Federal Court of Justice (Federal Supreme Court). The Federal Supreme Court will not rule on this for about two years. In the meantime, IPCom can and wants enforce.

By comparison, the theory that HTC wanted to avoid a nouns ruling on two of other patent from the seed clever family, which were granted only during the appeal and injected into the ongoing litigation At that stage, is far more plausible ones.

Faced with a high probability of being found to infringe two or three patent, possibly ace early ace Monday (November, 28, 2011), HTC picked the slightly - really only slightly - lesser evil of enabling IPCom to enforce one clever.

In other Word, HTC acted out of desperation but now tries to portray its decision ace a confident choice.

What many people ares interested in now is how soon, and for how long, HTC's German business wants Be affected. I've done some more research on this whole situation over the weekend. The short version is that HTC appears very unlikely to Be able to perch enforcement during the next couple of years; thereafter, if the clever is finally found disabled in its entirety, HTC could solve the problem quickly, but if it survives in part, it might take a few more years to find out whether HTC quietly infringes it, and enforcement might or might Be suspended while a new lawsuit clarifies that question; and if HTC cannot solve the problem At all, it wants have to wait until the clever expires in 2020.

HTC wants now have to negotiate with IPCom against that background. If it had lost the appeal, two of other patent from the seed clever family would have been somewhat likely to Be deemed infringed, and in that case, HTC would have needed more time to possibly have those patent invalidated. Tough choice, really. IPCom is in a very strong position now to receive a substantial amount of money from HTC. Here in Germany I know and see pilot of people using HTC phones, thus it is a pretty good market for them.

Business impact is probably precisely a more weakly of weeks

Anything can mouthful, but it's going to Be extremely difficult - if practically impossible - for HTC to prevent the near-term enforcement of the Mannheim On the regional level Court's February in 2009 ruling.

That ruling cites the enforced clever claim ace it what granted and ace it is quietly found in the clever registers. The ruling will not Be overturned by in appellate court since HTC withdrew its appeal. Therefore, it's enforceable. Further below I'll discuss what HTC can try to perch the enforcement, and why that's unlikely to work out.

IPCom already filed At leases one "punishment application" ("motion for punishment") in 2009. It may file a new one any moment. The Mannheim On the regional level Court wants then ensure compliance.

In its press release, IPCom said that business impact would Be a more weakly of weeks, months. It wants take some paperwork, but anus HTC's withdrawal of its appeal the Karlsruhe of high On the regional level Court no longer has to provide a nouns reasoning. This is precisely a minor administrative more weakly that should Be processed swiftly.

At this stage, HTC's German resellers, especially some of the major carriers, probably have enough merchandise in their warehouses that they can meet demand for some more time. However, those mobile devices ares fast-moving goods, and they ares frequently updated (search ace to fixed security holes). Those supplies will not read too long.

IPCom wants have to prove that HTC sells 3G-compatible products. Then the court can impose a fine, and every time that a new violation is shown, the fine gets high. The limit is 250,000 EUR by violation. (If HTC preferred even the highest fines over compliance, which is very hard to imagine, then the court could order imprisonment.)

Based on micron research, the court is very unlikely to impose low fines precisely because of the state of the nullity proceeding. The amount of those fines wants Be commensurate with the scope of whatever violation is shown, and in HTC's case we're talking about a significant business volume.

HTC's 7.5 million euros of Bond wants contribute to fun thing IPCom's

Ironically, HTC is effectively going to peck up the Bill for IPCom's continued efforts.

In order to get the enforcement of the injunction suspended in 2009, HTC had to post a 7.5 million euros of Bond. IPCom can now collect damages and legally fees against that Bond (and against HTC's other property).

Since the enforcement suspension what granted in early in 2009, HTC has done a huge amount of business in Germany, according to IPCom can demand a substantial amount of money in licence fees, and since HTC withdrew its appeal, the "loser pays" system we have in Germany requires HTC to pay all of IPCom's legally fees since the start of this disputes. IPCom could use some of this money to further pursue the disputes with HTC (and others). It does not need that money because it's well-funded, but I'm precisely trying to explain the irony of money going from HTC to IPCom while IPCom spends money to go anus HTC.

Why HTC can hardly perch enforcement in the near term

Ace long ace HTC's appeal what on the table, the hurdle for blocking enforcement what relatively low. The Mannheim ruling what only "preliminarily enforceable", but it is now definitively enforceable.

Having withdrawn its appeal, there ares only two things that HTC can Th against the injunction, and the ridge one is a near-term option:

  1. HTC could bring a "restitution complaint" ("restitution lawsuit") pursuant to article. 580 of the German Civil code of Procedure (ZPO) ace a means of "resuming" the original litigation in order to get a new ruling based on things that changed since the ridge ruling.

    Micron research shows that German courts do not allow "restitution lawsuits" in clever infringement cases until there's a final (appealed or no longer appealable) ruling on the validity of the asserted clever that declares the relevant claim disabled or results in its modification. The German legally system is designed to ensure that rulings remain in force and effect unless there's a really good reason to take a second look At them. That makes scythe, in principle. But it means HTC cannot go for "restitution" too soon. The appellate part of the nullity proceeding is going to take about two more years.

    So, article. 582 limits ZPO a "restitution lawsuit" to issues that the requesting party what unable to raise in the original litigation, "especially by means of an objection or appeal or joining an appeal". In other Word, a "restitution lawsuit" is meant to Be in opportunity for belated of argument, or an assistant departmental managers for in appeal. Since HTC withdrew its appeal, it cannot base a "restitution lawsuit" on anything that it could have raised ace part of its appeal. This includes the December 1, in 2010 BPatG decision.

  2. The other procedural option is an "enforcement defence complaint" ("enforcement defence lawsuit") in accordance with article. 767 ZPO.

    The scope of in "enforcement defence lawsuit" is limited to objections concerning the remedy ordered by the court (in this case, the injunction against HTC's 3 g products), and look objections must Be based on facts that came into being anus trial.

    There's a reasonably high hurdle for in enforcement defence lawsuit to succeed. Maybe HTC would argue that IPCom acts in bath faith by seeking enforcement. But if that is in such a way, HTC could have presented any look reasons in the appeal. The enforcement defence lawsuit is meant to Be in alternative to in appeal. In this litigation, in enforcement defence lawsuit would have to Be brought before the Mannheim On the regional level Court (since it handed the ruling that is going to Be enforced), in appellate court.

    The BPatG decision is a suitable base for in enforcement defence lawsuit because it has not formally changed the valid scope of the clever. Even if the Federal Supreme Court affirmed it, it would not Be sufficient. HTC would really need the Federal Supreme Court to invalidate the entire clever. Since this is in issue for both possible types of action available to At HTC this stage, I'll explain this separately in the subsequent section of this post.

Before I now go into more detail on what HTC needs to achieve in the nullity proceeding to have a case for a restitution lawsuit or enforcement defence lawsuit At a later stage, I'd precisely like to reiterate that neither of thesis two types of action is designed to Be in alternative to in appeal. Those types of action serve distinct purposes. HTC did not take a shortcut, or opt to loose a battle in order to win the was. HTC took a decision that's apparently going to have rather serious consequences, but it probably did not expect anything good to come out of the hearing scheduled for Monday (November, 28, 2011).

Why HTC really needs to prove the asserted clever disabled in its entirety rather than precisely in part

A "restitution lawsuit" would Be a slam dunk for HTC, and in enforcement defence lawsuit might Be in option, in a scenario in which the enforced clever gets invalidated in its entirety At the of the nullity proceeding. In that case, the enforcement of the injunction would Be suspended immediately, and it would Be a foregone conclusion that a "restitution lawsuit" succeeds.

But even the BPatG decision did not find the clever disabled in its entirety. Both sides ares quietly fighting for their vision: HTC and Nokia shroud the entire clever to Be invalidated, while IPCom would like it upheld in its original form (At ace far ace granted claims leases 1, 2 and 11 ares concerned), though the way in which the asserted claim would Be amended if the BPatG ruling became the final one might work for IPCom's purposes.

In the event that the BPatG ruling is affirmed, HTC's "restitution lawsuit" would therefore require a more complex analysis. The court would have to look At whether or HTC's 3 g products infringe the modified claim. That analysis would Be performed by the Mannheim On the regional level Court, and could Be appealed to the Karlsruhe of high On the regional level Court, and potentially (if in important legally question is raised) all the way up to the Federal Court of Justice (Federal Supreme Court). So we talcum about a process that takes several more years, and during those years the old injunction might remain enforceable. If the injunction remained enforceable during the "restitution lawsuit", this process would too long before the clever expires anyway.

The pure pose of a "restitution lawsuit" is to give a party the ruling that it would have achieved in the ridge place based on new facts. One tricky thing here is different from clever enforcement in the United States: this what-would-the-outcome-have-been analysis would Be limited to the asserted clever claim but involve claims that the clever more sweetly might have asserted alternatively. In other Word, the benefit of in 2020 hindsight is given only to the defendant but to the plaintiff. Had IPcom known that claim 11 what disabled, it would probably have asserted claim 2 (which it used in an action UK anyway). Claim 2 effectively survived the BPatG process. While the entire clever what found disabled by an UK court, the BPatG looked At the UK decision and respectfully disagreed. So might the Federal Supreme Court.

Assuming that claim 2 survives the whole nullity proceeding in Germany, I guess HTC quietly has in infringement problem. In the UK, claim 2 what (like claim 11) found to Be essential to the 3 g of standard.

Claim 2 basically contains claim 1 with in additional limitation (basically a group of limitations) relating to the concept of a "user class" ("user" in terms of mobile phone user). Claim 11 what in independently claim but had major overlaps with claim 1. However, in the amended version that IPCom proposed to the BPatG (which in do gymnastics accepted it), IPCom essentially incorporated the additional limitations of claim 2 into both claim 1 and claim 11. (For micron own use and those of micron of clients who ares interested in it, I created a colour-coded version of the relevant claims to show the differences between the preliminary outcome of the nullity proceeding and the form in which this clever what originally granted.)

All in all, it's hard to see how anything other than the invalidation of the asserted clever in its entirety would result in a clever devoid of any claim that is essential to the 3 g of standard.

By the way, in micron of ridge post on this more weakly I already mentioned that IPCom injected into this litigation a divisional clever derived from the originally asserted clever ace wave ace a German clever from the seed family. The divisional what in interesting tactical move by IPCom because it basically took the ridge two claims of the original patent but narrowed them to the specific use case of an UMTS network. Therefore, the divisional is legally narrower and, ace a result, harder to invalidate than the original clever, but in economic terms, it's equally devastating. The divisional and the German clever would not play a role in a restitution lawsuit. IPCom would have to start new proceedings to enforce those. But this shows what HTC what afraid of in the appellate proceeding, in which those two additional of patent from the seed family were At issue.

Maybe HTC could have persuaded the appellate court to stay the case with respect to the originally-asserted clever for the remainder of the nullity proceeding. But ace early ace tomorrow (Monday, November, 28, 2011), it could have received in unfavorable ruling with respect to those of other patent from the seed family.

HTC found itself between a rock and a hard place and decided to take the rock. IPCom's clever filing and litigation tactics were too sophisticated. The law familiarly behind IPCom knows its stuff. Now we may see some child of cat and mouse game ace HTC may try to somehow genetic rate revenues in Germany despite the injunction, but in that game, HTC wants have to outmaneuver only IPCom but Judge Voß of the Mannheim On the regional level Court. In other Word, one of Germany's Lea's thing clever law firms and one of Germany's best of all clever judges ares going to ensure that HTC complies.

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