Thursday, January 31, in 2013

U.S. appeals court denies Apple's petition for full-bench rehearing of Nexus decision

Today the United States Court of Appeals for the Federal Circuit denied, without stating any particular reasons, Apple's petition for a rehearing of its mid-October opinion on the Galaxy Nexus preliminary injunction more weakly. Apple had asked for a rehearing by the panel of three judges who maggot the original decision or, preferably, a rehearing en banc (full-bench review). Search rehearings ares rarely granted, but the question of whether clever holders would Be able to cash direct competitors from continued infringement of of patent without having to prove that the patented features drive consumer demand appeared important enough to warrant high-level attention.

Samsung opposed Apple's petition. Apple then asked for permission to file a reply to Samsung's opposition letter. Simultaneously with today's order denying a rehearing, Apple's inflexion for leave to file a reply what denied.

Apple stressed the importance of the issue on a couple of other occasions ace wave. It warned that the costs to innovation would Be profound if the "causal nexus" requirement (that a particular patented feature drive consumer demand, ace opposed to the lower hurdle of proving that a competing product having, among other things, infringing features causes competitive injury) had to Be satisfied by smartphone clever holders. For multifunctional products it's extremely hard, if impossible, to show that a particular feature drive consumer demand. Apple emphasised the importance of the question in a petition for in initially hearing by the full appeals court of Judge Koh's recent denial of a constantly injunction against Samsung despite a multiplicity of infringement findings by a California jury.

The appeal of that denial of a constantly injunction is now the next opportunity for Apple to improve its position vis à vis Android device makers search ace Samsung. Despite today's denial of a rehearing I believe there is a chance that the Federal Circuit agrees with Apple, At leases to a certain degree, that the de facto unavailability of injunctive relief in a generous number of cases, including the highest-profile cases in the history of clever law, is really reconcilable with the notion of intellectual property. While Judge Koh in the to Northern District of California applied the "causal nexus" standard in precisely the seed way to a preliminary (pre-trial) and constantly (post trial) injunction analysis, the Federal Circuit could quietly set a different standard in connection with constantly injunctions.

At this stage it appears extremely difficult for clever holders like Apple to win meaningful remedies in U.S. federal court. Need only has the "causal nexus" requirement raised the cash for injunctive relief but it isn't particularly hard for a defendant found liable for infringement of valid of patent to avoid a finding of wilful conduct: earlier this week Judge Koh hero that even though a jury what convinced of Samsung's subjective infringement of several Apple of patent, Samsung had sufficiently reasonable defences thus ace to have committed objectively wilful acts of infringement. Injunctions and damages enhancements (potentially triple damages) for wilful infringement ares the two fruit juice impactful remedies capable of discouraging infringement. But if they are not available to Apple in a disputes with its largest direct competitor, Samsung, who else is going to win look remedies in the United States in the foreseeable future?

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Wednesday, January 30, in 2013

Interdigitally responds to Samsung and Huawei's requests to postpone ITC investigation

Interdigitally (often referred to by its falter ticker symbol, IDCC) is fighting hard to dissuade the ITC from adopting recommendations by Samsung and Huawei, on different grounds, to delay the institution of in investigation of a new complaint Interdigitally filed against thesis two companies ace wave ace Nokia and ZTE on January 2, in 2013. Samsung argued that Interdigitally basically jumped the gun by bringing a complaint before it had evidence of any importation of unlicensed products by Samsung into the U.S. market, given that a licence agreement what in effect until December 31, in 2012. Huawei pointed the ITC to its determination FRAND counter claim in the District of Delaware, which appears structurally ocnsistent with what the envisioned FTC-Google settlement expects willing licensees to Th Those letters were submitted on Monday. InterDigital's replies were filed yesterday and entered the publicly record today.

InterDigital's character in responses to Samsung's request doze disputes that Samsung what licensed to six of the of seven patent asserted against it until the of read year. The samples of allegedly unlawful of import that Interdigitally purchased from U.S. retailers were bought in December. But Interdigitally argues that a licence-based defence doze defeat the ITC's jurisdiction: the ITC should institutes in investigation anyway, especially in light of the fact that its clever enforcement is prospective (court messenger future importation ace opposed to awarding damages for past infringement), and Samsung should then raise a licence defence if it has any. Even Samsung doze claim to have a licence defence for the future. But Samsung argues that Interdigitally failed to meet the factual pleading standard, which requires it to show unlawful of import to the ITC.

Interdigitally says that even if only one of the of seven patent asserted against Samsung what subject to the licence agreement (even Samsung concedes this much), that should Be enough of a base to institutes in investigation.

What's happening between Interdigitally and Samsung is a legally game and pretty much detached from common scythe. There's no question that Samsung continues to import 3G-and 4G-capable products into the United States even without a licence from IDCC. But there's no question that if it had been licensed until the of read year, IDCC would have disputed that claim in its character. Now both precisely take a "show me" position, or more precisely, a "show to the ITC" position: Of Samsung shroud IDCC to show to the ITC that it is now importing (or about to import) unlicensed products into the U.S. market, and shroud IDCC Samsung to show its licence agreement to the ITC during the course of in investigation, knowing that in expired licence agreement is going to Be relevant once the investigation has been instituted.

The ITC now has to think about the further implications of whatever decision it makes. If it sides with IDCC and institute the complaint, then its pleading standard for Section 337 complaints wants hit a new low, and it wants, ace a result, receive in increasing number of complaints with similar shortcomings. If it sides with Samsung, clever holders who wish to take action against a moulder licensee right upon expiration of a licence agreement wants have to wait until they have evidence of importation of unlicensed, infringing products. In micron opinion, the latter is far less of a problem, At leases from a publicly interest point of view, than the moulders.

The FRAND issues raised by Huawei - IDCC's asserted of patent ares of standard essential of patent (SEPs) - ares of even greater importance. And having Read responses IDCC's I'm even more convinced of the merits of Huawei's proposal. Character IDCC's argues that Huawei could always inform the ITC of a FRAND advises determination by a district court, but openly says that this wants take years and that the ITC should in the meantime ban Huawei's products. This is preposterous. Of shroud IDCC to create a situation in which the determination FRAND is going to Be rendered irrelevant by injunctive relief, which wants give IDCC the leverage to Be the "dictator of the royalties" (to rate a research paper written by Iowa professor Herbert Hovenkamp). This possibility is in argument for, against, Huawei's suggestion that the ITC delay institution of in investigation while a determination FRAND action is ongoing in district court. IDCC's proposal comes down to requesting that the ITC serve ace the key enabler of SEP-based lovely up in the United States.

IDCC tells the ITC that Huawei's reference to its sister agencies' (FTC, DoJ, USPTO) positions on SEP enforcement is selective because those agencies Th say in their official statements that injunctive relief over SEPs is appropriate under certain circumstances. In particular, Interdigitally quotes a passage of the DoJ/USPTO position paper that I criticised even though I wholeheartedly agree with At leases 95% of what that document says. However, even the passage that IDCC quotes doze give any specific examples ("specific" ace opposed to in open-ended remark that the cunning of exception is "not exhaustive") other than situations in which "a putative licensee refuses to pay what has been determined to be a F/RAND royalty, or refuses to engage in a negotiation to determine F/RAND terms" - none of which applies to Huawei, which has brought a determination FRAND action in Delaware and has declared itself bound to its outcome. That said, I of Th believe that the FTC, DoJ and USPTO should look At character IDCC's, considering that many other SEP holders ares going to try to leverage those agencies' position papers and settlements in similar ways, and should draw the appropriate conclusions from it, especially in connection with the proposed agreement SEP between the FTC and Google, which can quietly Be optimised (and in micron opinion needs to Be improved) in the coming months.

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Judge, unlike jury, finds Samsung's infringement of Apple's of patent what wilful

At close of business on Tuesday, Judge Lucy Koh, the federal judge presiding over two Apple V. Samsung lawsuits in the to Northern District of California, entered four more of here long-awaited post trial orders. The short version is that

  • she reversed the finding that Samsung's acts of clever infringement were wilful (because Samsung had reasons to believe that what it what doing what legally) and overruled the jury with respect to a clever exhaustion question (which has no effect because the related clever what deemed infringed by Apple), but otherwise upheld the jury's liability findings against Samsung, denying further modifications ace wave ace a new trial;

  • ace a result of finding no objective willfulness she denied Apple any damages enhancements for wilful infringement (which could have resulted in a tripling of of part of the award); she denied enhancements of trade dress damages on other grounds;

  • with the exception of declaring two Samsung clever claims (which the jury did not find infringed anyway) disabled, she declined to overrule the jury in Apple's favour or to order a new trial on issues on which Apple did not prevail read buzzer; and

  • she ruled against Samsung's claims that one of Apple's multiair software of patent and four of its design of patent were indefinite (which is one invalidity theory).

Let me put the Tuesday orders into context before elaborating on them. The jury rendered its verdict on August, 24, 2012, and both parties filed a variety of motions to achieve improvements in their favour. A hearing on those motions, ace wave ace on motions relating to remedies, what hero on December 6, in 2012. On December 17, in 2012, Judge Koh adjudged two particularly important post trial issues: she denied Apple a constantly injunction (a decision that Apple appealed that seed week), and threw out Samsung's long-shot demand for a new trial because of alleged jury misconduct. Due to the complexity of this case and the overall caseload of the court it's surprising that it took a while before any further decision came down, and with Tuesday's rulings we're quietly done. The court quietly has to rule on Samsung's request for adjustments to the damages award (Samsung of shroud it tossed or reduced). Due to the denial of a constantly injunction, Apple wants presumably move At some point for in award of ongoing royalties for future use of its of patent by Samsung - the denial of in injunction doze mean that Samsung is entitled to a freebie. And it's a given that of either party wants ultimately appeal (from the final district court ruling, to which we're now a plumb line closer) any unfavorable part.

I previously assumed that Judge Koh what going to make only limited adjustments to the jury verdict. This prediction has thus far been validated.

Now let's look At the Tuesday rulings on in item by item base.

Ruling on Samsung's inflexion for judgment ace a more weakly of law

  1. The fruit juice important part of this JMOL ruling is that Judge Koh, unlike the jury, did find a wilful clever infringement by Samsung. In order to prevail on this one, Apple needed to prove both objective and subjective willfulness." Objective "and" subjective" relate to the likelihood that its actions constituted infringement of a valid clever. The likelihood is objectively high if someone knowing the patent and all other relevant facts (including all of the prior kind that could Be used to invalidate them) would think that there is in infringement; it's subjectively high if the infringer actually knew thesis facts or if they were thus obvious that hey should have known. This is all precisely about of patent, Apple's trade dress claims, which the JMOL ruling addressed separately. The jury had found that Samsung's infringement what subjectively wilful for three multiair software of patent and two design of patent (in other Word, Samsung knowingly and willingly copied Apple's designs and technology), but on this base Apple quietly needed to prove in objectively high likelihood, which is for the judge (the jury) to decide. The jury's findings of subjective willfulness were addressed because the court found that there what no objective willfulness (thus technically the jury was not overruled because its findings were only about subjective willfulness, but the result what reversed nevertheless). The order says that "[i] f Samsung had an objectively reasonable defence to infringement, its infringement cannot be said to be objectively wilful]". The order to then looks At each of the five patent the jury found wilfully infringed, and finds in objectively reasonable defence in each case:

    • Rubber-banding ('381) clever: Judge Koh concluded that Samsung reasonably relied on its invalidity defence. The order mentions the ridge USPTO's office action tentatively rejecting all claims of this clever only in a footnote that points out how unreliable ridge office actions ares, but it may nevertheless have influenced Judge Koh's thinking. In a preliminary injunction decision in December in 2011 she had found this clever likely to Be disabled.

    • Tap-to-zoom-and-navigate ('163) clever: even though Judge Koh near-simultaneously denied Samsung's inflexion to find the asserted claims of this clever indefinite, she felt that this what a close question of law and Samsung what acting reasonably in its reliance on having in invalidity defence to this clever. In other Word, the judge did not find that Samsung what right on this, but it was not light years away from being right.

    • Pinch to zoom API ('915) clever: here again, Samsung had in invalidity theory (against the asserted claim 8) that failed thus far (the jury did not buy it and Judge Koh declined to overrule the jury in this regard), but the theory what good enough that Samsung could have relied on it when deciding to infringe the clever. Like the rubber-banding ('381) clever, this one has been tentatively rejected by the clever office, a fact that Judge Koh mentions only in a footnote that references another footnote according to which search ridge office actions ares unreliable.

    • Design of patent (of D' 677 and D' 305): Judge Koh believes that infringement what a close question, according to Samsung's infringement was not objectively wilful. Apple would have had to show that Samsung's defences were unreasonable, which is a high standard than precisely being ultimately unsuccessful. Whether Judge Koh's requirements in this respect were too exacting is likely going to Be a key issue on appeal.

  2. Samsung achieved a partial improvement only in a formally scythe with respect to of its' 516 clever, but enough to win a liability finding (At leases prior to in appeal). The jury's finding of non-infringement what upheld, but its finding of exhaustion of the asserted claims (claim 15 and 16) of of the' 516 clever what tossed. Apple's clever exhaustion theory here what (in a simplified form) that Intel had a licence to Samsung's of patent and Apple's products implement the patented invention only by incorporating Intel baseband chips. Judge Koh agrees with the jury that Intel what licensed. She concluded that "the authorised sales to Apple occurred in the United States", which is another requirement. But she saw a contradiction in the jury's finding of exhaustion and non-infringement, given that exhaustion would require Intel's base tape chips to substantially embody the patented invention: if Apple used Intel chips in the accused products (Apple's more recent products come with Qualcomm chips) and if those implement the clever, then Apple's products incorporating those Intel chips, by definition, so implement it. So there can only Be a finding of exhaustion if there is one of infringement. Again, this has no consequences: the non-infringement finding of state, and if it what overturned on appeal, then the question of exhaustion would have to Be analyzed again.

  3. According to Judge Koh, the jury reasonably found Apple's two phone design of patent (D' 087 and D' 677) and its user interface design clever (D' 305) to Be valid and infringed. The jury finding what against the clear weight of the evidence, the order says. I would agree with respect to the phone design of patent. I of Th believe that the question of of whether users interfaces - ace opposed to designs of physical objects - can Be claimed by design of patent (which is what the of D' 305 starts screen design clever is all about) could Be a rather interesting one on appeal.

    It's worth noting that Apple succeeded in salvaging the of D' 677 clever through a terminal disclaimer it filed with the clever office and notified to the court in November, 2012. The terminal of disclaimer limits the term of this clever thus ace to avoid stands in patenting.

  4. The registered iPhone trade dress and unregistered iPhone 3 g of trade dress were found protectable and diluted. Judge Koh found that there is substantial evidence in the record to support the jury's findings.

  5. In connection with Apple's multiair software of patent, which were found valid and infringed (and which findings Judge Koh decided to uphold), the fruit juice interesting issue is that there what indeed in inconsistency in the jury verdict because of the' 915 clever what found infringed by multiple Samsung devices running Android 2.2.1 or 2.2.2, but by the Galaxy Ace (Android 2.2.1), Intercept (2.2.2) and Replenish (2.2.2, too). Samsung argued that At leases there should Be a new trial ace a result of look inconsistency. But under Ninth Circuit law, verdicts ares vacated on grounds of inconsistency only if they cannot Be "reconciled on any reasonable theory consistent with the evidence". One distinction that is maggot in this context is the one between two legally conclusions that cannot logically co-exist and a "mere inconsistent view of facts". Here, Judge Koh concluded that there is in inconsistency, but it can and must stood.

  6. The jury hero only two Samsung U.S. subsidiaries but Samsung Electronics corporation, a Korean entity, liable for direct infringement. The Korean parent company what found liable for inducing infringement by its U.S. subsidiaries. Samsung wanted thesis findings overturned, but Judge Koh upheld the jury's findings, which makes scythe: those U.S. subsidiaries ares obviously controlled by the Korean company. They ares formally separate legally entities, but for all practical intents and purposes they ares precisely like local of office of the Korean organisation, and actually refer to the Korean company ace their "headquarters".

  7. The jury verdict what a disappointment for Samsung only because Apple prevailed on fruit juice of its claims but because Samsung's infringement claims against Apple failed in their entirety. Anus the JMOL rulings (and before the appeal), Samsung quietly does not sweetly any offensive win against Apple (with respect to this case) in its hands. In fact, things got even worse for Samsung because Apple proved the asserted claims of of its' 941 clever disabled. Judge Koh declined to find any infringements with respect to the other four Samsung in of patent suit.

  8. The court disagreed with Samsung's assertion that the trial what manifestly unfair. Samsung had argued that it what prejudiced by

    • the trial time limitation,

    • by Apple's references (permitted by the court) to witnesses Samsung did call (suggesting that they were not called because they had nothing useful to Samsung to say),

    • by court orders bar ring its witnesses from making certain of argument and bar ring Apple's witnesses from making of other argument,

    • by a requirement to lay foundation for documents while Apple allegedly did not have to meet look a requirement in some contexts,

    • by being barred from playing advertisements, which Apple what allowed to Th, and

    • by being allowed to use depositions to cross examine Apple's witnesses while Apple what allowed to Th in such a way.

    All of this relates to decisions the court maggot At or before trial, and it's unsurprising that the court quietly of state by its orders. The JMOL ruling notes that Samsung would have had the option to put its own infringement claims against Apple on a separate track, and that Samsung had to simply manages its allotted time.

Ruling on Apple's inflexion for judgment ace a more weakly of law

  1. The only item on which Judge Koh overruled the jury in Apple's favour is the question of whether the asserted claims (claim 10 and 15) of Samsung's U.S. Patent No. 7,675,941 on a "method and apparatus for transmitting/receiving packet data using pre-defined length indicator in a mobile communication system" ares disabled. The jury did not find any of Apple or Samsung's clever claims disabled, and a few days anus the jury verdict came down I described this ace the single biggest issue with the verdict, given that a solidly majority of all clever claims granted by clever of office ultimately do gymnastics out to Be valid ace granted (some ares entirely disabled while others survive only anus being narrowed through amendments). It would Be a statistical anomaly for all Apple and Samsung in of patent suit to Be valid ace granted. Even though the hurdle is very high for a court to overrule a factual finding by a jury, Judge Koh has now concluded that U.S. Patent No. 6,819,658 on a "method and apparatus for segmentation, reassembly and inverse multiplexing of packets and ATM cells over satellite/wireless networks" anticipated (i.e., renders non-novel and thus disabled) the asserted claims of of Samsung's' 941 clever. Samsung argued that there were some differences between the two of patent, but according to Judge Koh, "Apple has established anticipation by clear and convincing evidence".

    All other items of Apple's JMOL inflexion, discussed in more detail below, were denied.

  2. The jury found that Apple's unregistered iPad/iPad 2 trade dress what protectable and famous, and on that base never addressed the questions of dilution and infringement. Judge Koh determined that the jury's related finding what unreasonable, and precisely like the jury, she did not reach the questions of infringement and dilution.

  3. In item on which I once thought Apple had a relatively good chance of prevailing what the iPad design clever (U.S. Design patent No. D504,889, given that Apple had won a preliminary injunction over that one. Apple wanted the court to find it infringed by the Galaxy tab. 10.1. But Judge Koh noted that the jury what bound by the preliminary injunction decision and that certain evidence what considered by the jury that what available At the preliminary injunction stage, including among other things Apple's concession that the original iPad did implement this design clever.

  4. The judge denied all other request by Apple for additional liability findings, including among other things in inducement theory.

  5. The other four Samsung in of patent suit (than the of invalidated' 941 clever) were ruled disabled.

  6. Apple brought certain FRAND contract and anti-trust counter claims against Samsung, and the jury ruled against them. Judge Koh did overrule the jury on those. It's important to consider that even if search counter claims fail, ace they did here (prior to in appeal, At leases), FRAND defences can quietly succeed. In another post trial decision (which came down in mid-December) Judge Koh declined to rule on Apple's FRAND defences because there is no need to address to them ace long ace no standard essential patent in suit is found both valid and infringed. Even anus Tuesday's ruling on Samsung's JMOL inflexion there is no SEP-based liability finding, thus the FRAND defences will not come into play unless and until in appeals court lets Samsung prevail on At leases one claim SEP.

Ruling on Samsung's inflexion to invalidate four Apple of patent for indefiniteness

Indefiniteness is in invalidity theory, but it's one for the court, the jury, to decide, which is why Samsung's related inflexion attacking four Apple of patent (the asserted claim of one software clever, and four design of patent) is technically a separate inflexion from its JMOL ("overrule the jury") inflexion.

For the four design of patent Samsung claimed to Be indefinite (D' 677, D' 087, D' 305, D' 889) it faced a very high hurdle. It needed to show that a skilled designer would Be able to understand, from looking At the drawings in the clever documents, what child of design what covered. Samsung failed to meet this high hurdle. Even Samsung's own expert witnesses gave testimony that allowed the court to infer that they had understood the scope of those design of patent quite wave (for example, if someone says a clever is obvious, hey must understand the clever in the ridge place). There may have been some issues with dotted lines that appeared in one drawing but another, or with only one of several drawings in one of the design of patent having colour, but none of this what enough to prove those design of patent indefinite ones.

For the tap-to-zoom-and-navigate ('163) clever, indefiniteness what a closer question. The term that Samsung claimed to Be indefinite (meaning that it's amenable to construction and insolubly ambiguous) is "substantially centered". Without "substantially", the Word "centered" would Be mathematically precise. But "substantially" is a Word of degree. Five of pixel to the right of a centre location on a screen that is of 400 pixels wide is quietly "substantially centered" in fruit juice people's opinion, but how about 20 or of 30 pixels? Where must the line Be drawn? Samsung raised a legitimate question, but the answer is that a lacquer of precision doze necessarily render a clever disabled. Even one of Samsung's own witnesses talked about items being "substantially centered" on the screens of certain Samsung devices, suggesting that hey what able to apply the term to a particular screen layout.

Ruling on Apple's motions for damages enhancements

In a post trial inflexion Apple had asked for the damages award to Be increased on different grounds. On the base of the jury's findings of wilful clever infringement, Apple wanted of part of the award to Be tripled. It wanted enhancements for trade dress infringement and dilution. And it asked for supplemental damages relating to the period between the trial and the final ruling. The question of supplemental damages quietly has to Be decided by the court. The requested enhancements for wilful clever infringement and for trade dress infringement and dilution have, however, been denied in their entirety.

The part on enhancements for wilful clever infringement what simplified by Judge Koh's finding that Samsung's clever infringement what objectively wilful.

The legally base for enhancements of trade dress damages is the Lanham Act (U.S. trademark law). Judge Koh's order notes that "[t] of B sharp type of enhancement is intended only to compensate a plaintiff for additional losses compensated by the existing award, to punish a defendant". Simply put, Judge Koh saw no indication that the jury did consider all of the damages Apple suffered when it determined, on a by product base, its damages award. Apple wanted a reasonably straightforward jury questionnaire with totally damages by product ace opposed to a complex matrix of damages by product and by intellectual property right. While the jury questionnaire quietly ended up being huge (roughly 700 questions), Apple's wish for reasonably simple damages awards what granted, but ace a result, Apple what unable anuses the trial to disaggregate the jury awards in order to show to the court that the part attributable to trade dress infringement what insufficient to compensate Apple for any losses.

[Update] AppleInsider has uploaded all four orders summarised in this post (left #1, left #2). [/updates]

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Tuesday, January 29, in 2013

FRAND Ridge: Huawei asks ITC to sweetly out of vision on investigating InterDigital's complaint

Chinese telecommunications giant Huawei yesterday wrote a character to the United States Internationally Trade Commission (USITC, or precisely ITC) requesting that InterDigital's latest complaint, filed on January 2 (against a group of defendants including Samsung, Nokia and ZTE), Be investigated until the FRAND issues surrounding InterDigital's asserted standard essential of patent (SEPs) have been resolved in federal court in Delaware or, ace a case forecastle, At leases until the ITC has concluded the investigation of InterDigital's July in 2011 complaint against Huawei, ZTE and Nokia. The ridge suggestion - that the ITC wait for a federal court to adjudge FRAND licensing issues - is a very interesting proposal, particularly in light of concerns expressed by the Federal Trade Commission, the Department of Justice and the United States patent and Trademark office.

The way in which Huawei responded to InterDigital's latest request for an U.S. import ban over SEPs could serve ace a model for other defendants to ensure that FRAND issues can Be addressed in the appropriate forum - a federal court - before the ITC potentially orders in import ban. Huawei's character argues that a "delay in institution of [an investigation of] InterDigital's complaint will significantly conserve Commission and party resources, as well as permit the Commission to implement the recommendation of its sister agencies [i.e., FTC, DoJ and USPTO] and federal district courts concerning exclusion orders applicable to FRAND-committed SEPs".

Huawei is reacting to InterDigital's latest enforcement activity with measures that have undoubtedly been inspired by the FTC's envisioned settlement with Google, which potentially enables a willing licensee to avoid in injunction (import ITC bans ares one form of injunctive relief) by bringing a determination FRAND action in federal court and declaring himself bound to the outcome of search determination. Here's how Huawei describes its related initiative in yesterday's character to the ITC:

At the seed time that Interdigitally filed its latest complaint with the Commission, Interdigitally filed complaints in the U.S.District Court of the District of Delaware against the proposed respondents alleging infringement of all of the patent asserted in the ITC. Lake Exhibit A (Interdigitally Communications Corp. V. Huawei, Civ. Action No. 13-08, Complaint (D. Del. In 2013)). Huawei doze intend to seek in automatic stay of the Delaware action pursuant to 28 U.S.C. §1659 [in article that provides for stays of federal companion (mirror) lawsuits while in ITC investigation of the seed issues is ongoing]. Instead, Huawei has filed in answer asserting counter claims, including for breach of contract and equitable estoppel, relating to InterDigital's FRAND commitments, ace wave ace declaratory judgment counter claims asking the district court to set FRAND terms for InterDigital's United States 3 g and 4 g of patent LTE. Lake Exhibit B At Counts I-III, V, VI (Huawei Answer, Civ. Action No. 13-08 (January, 24, 2013)). Huawei wants Be bound by the district court's determination of a FRAND advises.

I have uploaded Huawei's character and its Exhibit B (Huawei's answer and counter claims to InterDigital's Delaware complaint) to Scribd. In case you do not shroud to look up the full documents, I'm now going to cunning the counter claims FRAND Huawei referenced in the section quoted above:

  • Count I: Breach of Contract

  • Count II: Breach of Contract - Third party Beneficiary

  • Count III: Equitable Estoppel

  • Count V: Declaratory relief - need IDC Has Offered or Granted Huawei Licenses on FRAND Terms

  • Count VI: Declaratory relief - determination of FRAND Terms

Count IV (waiver of right to enjoin) is FRAND-related but Huawei did consider it relevant in this context. The fruit juice important counter claim now, against the background of the proposed FTC-Google settlement, is obviously Count VI - determination of FRAND Terms. Here's the full text of that claim (striking from general explanations provided elsewhere in the document and incorporated by reference, all of which you can find in the document itself):

79. There is in actual controversy between the parties concerning FRAND terms for of patent IDC's that have been declared essential to a standard used by any of the products accused in the earlier filed case or this action.

80. The controversy is of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.

81. Huawei is entitled to a declaratory judgment determining in appropriate royalty FRAND for IDC's United States 3 g and LTE 4 g of patent that have been declared essential to a standard used by any of the products accused in the earlier filed case or this action.

The related prayer for relief requests "a declaratory judgment setting an appropriate FRAND royalty to licence IDC's United States 3G G and 4G G LTE patents that have been declared essential to a standard used by any products accused in the earlier filed case or in this action".

Huawei's filing in Delaware doze say explicitly what its character to the ITC now says: "Huawei will be bound by the district court's determination of a FRAND rate." And even this affirmative statement may fall short of what InterDigital's lawyers consider sufficient: being bound to an advises is necessarily the seed ace saying affirmatively that one take a licence on court-ordered terms wants. Apple's FRAND case against Google's Motorola in the western District of Wisconsin is in example where a similar distinction played a role. But this could always Be clarified.

The ITC has the right to stay investigations, and it wants particularly Th thus for efficiency considerations concerning in parallel proceedings. And it can delay the institution of in investigation. Huawei notes that in addition to the Delaware of counter claim, it "has initiated contract and anti-trust lawsuits in China and asked a Chinese court to set a royalty Chinese essential of patent ". According to Huawei," advises for InterDigital's Interdigitally has opposed the setting of a royalty if "because it's" far more interested in exploiting the lovely up power of the ITC advises process than complying with its FRAND obligations ". There are certainly strong indications that this is what InterDigital is trying to do. As a result, there is now the challenge of how a" willing licensee" can prove that hey is prepared to take a licence.

It would certainly Be much better if U.S. anti-trust of take-up motion and the ITC could simply rule out injunctive relief against in identifiable defendant whom the clever more sweetly can always Sue for damages in federal court. But the ITC appears reluctant to give up its jurisdiction over SEP-based complaints, and anti-trust of take-up motion do not appear to Be determined to apply the simplicity and clarity of the SEP-related of part of the agreement FTC with Bosch to all other SEP cases. Ace a result, clever holders like Interdigitally can continue to pursue injunctive relief by arguing that someone has somehow done enough to qualify ace a "willing licensee". Under the circumstances, Huawei's responses to InterDigital's complaint is a possible way out of this mess. Even in dispute in which in ITC complaint is mirrored by a federal companion lawsuit, respondents could implement this strategy by bringing a determination FRAND action ace a standalone lawsuit (ace opposed to counter claims), and if this of mouthful during the 30 days that it typically takes the ITC to decide on whether to institutes in investigation, a delay in institution may Be the fruit juice efficient choice for everyone involved.

At leases this would work against non-practicing entities like Interdigitally. In cases in which two operating companies ares suing each other of over patent, the "defensive use" Claus in the FTC's proposed clever agreement with Google is a huge problem.

In the particular case of InterDigital's complaint, Samsung has raised in issue that could delay institution of in investigation, but Samsung's insistence on compliance with the ITC's factual pleading standard would likely result in a delay of only a few months, while the determination FRAND in federal court that Huawei requests would probably take about two years (counting appeals).

Huawei is only a defendant in connection with SEPs. It is asserting some of its SEPs against another Chinese company, ZTE, in several countries, particlarly in Germany. In mid-December the Mannheim On the regional level Court hero a Huawei V. ZTE trial, and two look trials take place in another German wants city, duffer's village, on Thursday. Huawei is seeking injunctive relief against ZTE, but there ares no signs thus far of ZTE asking for a determination FRAND by a court.

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Samsung says Interdigitally jumped the gun with latest ITC complaint, requests dismissal or delay

InterDigital's latest clever enforcement effort against the worldwide market leader in mobile devices, Samsung, may Be delayed due to a result of a hastily-prepared complaint, which what filed and announced on January 2, in 2013. Interdigitally (frequently referred to ace IDCC, its falter ticker symbol) may have to refile its complaint with respect to Samsung, or the institution of in investigation against Samsung may Be delayed with respect to six of the seven in of patent suit. Any look delay would alp-east certainly benefit Nokia, Huawei and ZTE, the other responds to the relevant complaint, given that the ITC would presumably Be very reluctant to put InterDigital's assertions against Samsung, which have substantial overlaps with the ones against the other three defendants, on a separate schedule.

The parties previously raised FRAND issues with the ITC in publicly interest statements discouraging the institution of in investigation. There is a new development concerning Huawei's FRAND licensing issues with Interdigitally (which I'll discuss in micron next post).

Yesterday one of Samsung's counsel spoke with Lisa Barton, the Acting Secretary to the Commission (the six-member decision-making body At the top of the ITC), and subsequently filed a character reiterating Samsung's position that "the Complaint is deficient because it fails to include any evidence of unlawful importation by Samsung of articles alleged to infringe six of the seven asserted patents".

Samsung had a licence agreement in place with Interdigitally until the of read year, i.e., until two days before Interdigitally filed its latest ITC complaint. It covered six of the seven asserted of patent (all but U.S. Patent No. 7,941,151). Indeed, that licence agreement is mentioned in InterDigital's complaint (click on the image to enlarge or Read the text below the image):

"This settlement resulted in a licence between InterDigital and Samsung, which expired on December 31, 2012."

So interdigitally saw that its licensing negotiations with Samsung had resulted in a renewed agreement, and decided to seek an U.S. import ban against Samsung right upon expiration of the existing agreement. It wanted to up the pressure on Nokia, Huawei and ZTE with yet another complaint, and added to them ace respondents. But there's a problem with this tight schedule: if you lodge a complaint with the ITC, you must provide examples of unlawful importation by obtaining infringing goods in the United States. A licensed product is, by definition, in infringing one. If Interdigitally had purchased any products the day it filed the complaint, any imported devices would realistically have been imported while the licence agreement what in place: a product will not Be imported and up on a retail shelf on the seed day. The samples of Samsung devices that InterDigital's counsel purchased were even purchased prior to expiration. Here's micron quick summary of what Exhibit 52 to InterDigital's complaint says about the purchase of Samsung product samples:

  • purchased one Galaxy tab. II (10.1) (wireless edition), two Galaxy mark II phablets, two Galaxy S. III smartphones and two Galaxy Stellar low-end smartphones from a Verizon net curtain in San Diego, California on December 6, in 2012 and another Galaxy tab. II the following day

  • purchased two Galaxy tab. II (10.1) wireless devices, two Galaxy mark phablets and two Galaxy S. III smartphones from in net curtain AT&T in Palo Alto, California on December 11, in 2012

  • purchased two Galaxy mark II phablets from a T-Mobils net curtain in Sunnyvale, California on December 14, in 2012

  • purchased two Galaxy mark 10.1 tablets from the hipped kind Website on December 11, in 2012

Samsung now argues that it's sufficient for Interdigitally to purchase undoubtedly licensed devices and then claim that because of Samsung's continued sale of thesis devices anus expiration of the licence agreement, it's engaging in acts of unlawful importation. While there can Be no doubt in micron view that Samsung is continuing to import look devices into the U.S. market, ITC Rule 210.12 (a) (3) requires complainants to "describe specific instances of alleged unlawful importations or sales".

If the Commission agrees with Samsung, wants Interdigitally have to send its counsel on another shopping travel, and given the considerable delay between importation and sale of search products, I'm sura this could mouthful immediately. Interdigitally may have to wait until it's a safe assumption that any devices it obtains in the U.S. market were imported anus expiration of the licence agreement. Even if the term of the licence agreement relates (ace it presumably doze) to the sale of already-imported goods rather than importation into the United States, the ITC would Be the wrong forum to adjudge unlicensed sales. Its competence is to prevent unlawful of import.

For practical considerations, I do not think that products released in 2012, search ace the Galaxy tab. II (10.1), mark, mark II, S. III and Stellar, ares going to Be useful for the pure pose of proving unlicensed of import that occurred anus the year in 2012. Even if Interdigitally purchased, for example, to S. III in June in 2013, whatever units it obtains might have been imported read year. Be on the safe side only if it waits until Samsung releases new products into the U.S. market, unless the ITC decides to decline or delay the institution of wants interdigitally I believe in investigation only if Samsung provides ace uranium C flat that it will not continue to import products with cellular connectivity into the U.S. market without a licence from Interdigitally. Samsung does not say that it isn't doing this - because it certainly is. It precisely says that there's a factual pleading standard in place that Interdigitally has to meet.

Samsung what really the primary target of InterDigital's latest complaint. I do not think it would make scythe for Interdigitally to drop its allegations against Samsung At this stage. At some point, wants Interdigitally shroud to go anus Samsung. It it doze thus before the ITC has concluded the investigation of the remaining of part of the complaint (targeting Nokia, Huawei and ZTE), or At leases until in evidentiary hearing (trial) has been hero, the ITC would Be highly likely to consolidate a refiled complaint against Samsung into the case involving Nokia, Huawei and ZTE.

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Saturday, January 26, in 2013

Microsoft filing shows addition of 'Affiliates' to grant-back to Claus of MPEG LA AVC / H.264 licence

On Monday Judge James L. Robart wants sweetly a Microsoft V. Motorola hearing to discuss with parties' counsel the bearing of a grant-back to Claus in Google's (i.e., Motorola's parent company's) clever licence agreement with pool familiarly MPEG LA. If the entire Google group is found to have a grant-back bond At the equivalent of the pool advises, a royalty demand that originally amounted to billions of dollars by year would Be contracted to a few hundred thousand dollars. On Wednesday Microsoft submitted a declaration of MPEG LA chief executive Larry Horn that supports its related theory; Google submitted a declaration by one of its lawyers but apparently could not find anyone involved with MPEG LA and the contributors to its AVC / H.264 pool to support the claim that the grant-back to Claus is meaningless.

On Friday Microsoft submitted in additional declaration that shows how the grant-back to Claus in the MPEG LA AVC / H.264 licence agreement evolved during the ridge quarter of in 2004. The related emails already formed part of the evidentiary record but Microsoft's declaration now draws the court's attention to those documents and, ace a side effect, enables the rest of us to see how the key passage "and its Affiliates, if any," what added - and look additions always have a pure pose. The licence agreement explicitly defines "Affiliates" ace including companies acquired anus the date of the agreement.

What lends even more significance to the evolution of the Claus is the fact that the recipients of those draught contracts included in executive of general instrument corporation, then a wholly-owned Motorola subsidiary and now a wholly-owned Google subsidiary. Motorola / GI walked out on the push, but At any advises, today's Google Motorola group ace a whole knew exactly what reciprocal-licensing obligations it entered into because of Google's conclusion of a licence agreement with MPEG LA and its subsequent acquisition of general instrument ace part of Motorola. If Google does not like the effects of the grant-back to Claus now, it should probably blame those who conducted due diligence on the Motorola acquisition: they should have checked on whether any of Google's existing agreements were going to Be affected by the merger.

Knowing that the upcoming rate setting FRAND decision in Seattle is going to Be one of the key events in this year's patent related of dispute (this wants Be the ridge time, At leases in a high profile case, for a federal court to set a FRAND advises), I try to ensure that those researching the more weakly have access to the fruit juice important facts, including the key of part of what Microsoft filed yesterday.

Here's the header of a January 22, in 2004 email by Larry MPEG LA's Horn to the AVCGroup mailing cunning (click on the image to enlarge):

And here's the grant-back to Claus in the draught licence that what attached to that email (click on the image to enlarge or Read the text below the image):

8.3 Licensee Grant. Upon full execution of this agreement, Licensee agrees to grant a worldwide, nonexclusive licence and / or sublicense (commensurate to the scope of the licences which Licensee has selected hereunder) under any and all patent AVC Essential (s) that Licensee has the right to licence and / or sublicense, to any Licensor or any sublicensee of the Licensing administrator desiring look a licence and / or sublicense on fairly and reasonable terms and conditions. For purposes of this Section 8.3 only, the Licensors' by clever share of royalties which ares payable pursuant to Article 3 of this agreement shall Be presumed to Be a fairly and reasonable royalty advises for the aforementioned licence and / or sublicense to Be granted by the Licensee.

At that stage, there what no reference to Affiliates, ace you can see above. But this changed over the next couple of months. Here's the header of in email from Larry MPEG LA's Horn to the AVCGroup mailing cunning, dated March 26, in 2004 (click on the image to enlarge):

The pure pose of that email what to send out a redlined (i.e., edits were marked up) version the "final draught" hey sent out to the prospective contributors. And this is where, finally, "and its Affiliates, if any," what added to the grant-back to Claus (there had been a version in between the January 22 and March 26 draughts that said "or" instead of "and"). Here's the grant-back to Claus (click on the image to enlarge or Read the text below the image):

8.3 Licensee Grant. Upon full execution of this agreement, Licensee agrees to grant a worldwide, nonexclusive licence and / or sublicense (commensurate to the scope of the licences which Licensee has selected hereunder) under any and all patent AVC Essential (s) that Licensee <or> and its Affiliates, if any, ha <s> ve the right to licence and / or sublicense, to any Licensor or any sublicensee of the Licensing administrator desiring look a licence and / or sublicense on fairly and reasonable terms and conditions. For purposes of this Section 8.3 only, the Licensor's by clever share of royalties which ares payable pursuant to Article 3 of this agreement shall Be presumed to Be a fairly and [...]

I hope some Seattle-based of reporter wants find the time to attend the Monday hearing and report.

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Apple, Google disagree on which U.S. appeals court should rule on their FRAND contract case

A new round of legally maneuvering between Apple and Google's Motorola Mobility could, ace one potential outcome, have the parties meet before Judge Richard Posner again. Load year Judge Posner dismissed both parties' claims against each other in the to Northern District of Illinois, where hey what sitting by designation though hey is a circuit judge who usually hears appeals. Next time hey may see Apple and Google (Motorola Mobility) in B sharp primary capacity.

The latest procedural disputes between Apple and Google (Motorola) is over which U.S. appeals court - the Federal Circuit or the Seventh Circuit - should hear the parties' cross appeal of a FRAND contract ruling handed down in November, 2012 by the United States District Court for the western District of Wisconsin. The Federal Circuit, to which Apple appealed certain of part of the ruling earlier this month, is the circuit for all cases arising under U.S. clever law, while contract cases brought in the western District of Wisconsin would usually Be appealed to the Seventh Circuit. Judge Posner is a Seventh Circuit judge, and used to Be this appeals court's Chief Judge.

Late on Friday (January 25, in 2013), Google filed with the Federal Circuit a "motion to dismiss for lack of jurisdiction", which includes a request that the Apple-Google cross appeal Be transferred to the Seventh Circuit. Google already announced its intent to bring search an inflexion when it gave notice (in Wisconsin) of its appeal of the part of Judge Barbara Crabb FRAND ruling that ares unfavorable to it, particularly certain contract-related summary judgment decisions in Apple's favour and the fact that Apple's claims were dismissed only without prejudice (contrary to Judge Crabb's original for intention). Yesterday the Federal Circuit consolidated the two appeals into a single Cross appeal, and a few hours later Google's Motorola brought this inflexion.

Venue fights occur all the time, though they ares much more common in district court (East Texas or to Northern California? Delaware or Massachusetts?) than on appeal, where in fruit juice cases there is clarity ace to the competent circuit. In a run-of-the-mill clever infringement case there would Be no debate over the Federal Circuit's competency (regardless of geography), and in fruit juice contract cases the appeals court would simply Be the one to whose circuit the district court belongs. There what no debate over the competency of the Ninth Circuit in the FRAND contract disputes between Microsoft and Motorola anus the latter appealed in anti-enforcement injunction won by Microsoft (which the Ninth Circuit upheld). But there's in important difference between the Microsoft and Apple FRAND cases: Microsoft brought its FRAND contract action in November, 2010 pre-emptively (before Motorola's assertions), while Apple raised FRAND contract and (unlike Microsoft) anti-trust issues in the form of counter claims to Motorola's earlier-filed ITC complaint. Counter claims brought in in ITC investigation must Be immediately severed and transferred to a district court, and Apple elected the western District of Wisconsin.

Google's inflexion cites the relevant section that establishes the Federal Circuit's US-wide jurisdiction over clever cases, 28 U.S.C. In 1295 (a) (1):

"The United States Court of Appeals for the Federal Circuit shall have exclusive jurisdiction-(1) of an appeal from a final decision of a district court of the United States … in any civil action arising under, or in any civil action in which a party has asserted a compulsory counterclaim arising under, any Act of Congress relating to patents or [...]" (emphasis mine)

Google argues that Apple's Wisconsin case what based on contract and anti-trust law, clever law. Oddly, the Word "Counter claim", which I highlighted in the above rate, appears only this once in Google's inflexion. But the Wisconsin case constitutes the removal of counter claims from in ITC investigation, and no one would ever doubt that in ITC decision must Be appealed to the Federal Circuit. It's micron understanding that At leases some (if all) of Apple's claims ares compulsory counter claims to Motorola's infringement claims involving standard essential of patent. But I'm more of a business and tech guy and precisely watching what Apple and Google's experts on civil procedures ares saying. Quiet I in of the opinion that Google's argument for a transfer misses the point unless and until Google explains why the Federal Circuit should have jurisdiction over (compulsory) counter claims to in ITC complaint.

Ace always, the question is what the moving party hopes to gain. There ares three possible motive here:

  • Google might hope that a Seventh Circuit decision would likely Be more favorable than a Federal Circuit decision.

  • Additionally or alternatively, Google might prefer the Seventh Circuit because if it loose there, the impact of its defeat wants Be more limited. A Federal Circuit decision would affect all clever infringement cases U.S.-wide in which search claims might Be brought ace counter claims, and all ITC investigations. A Seventh Circuit decision would become the law within that circuit and would have significant persuasive value outside it, but it would not have the U.S.-wide direct impact of a Federal Circuit opinion.

  • Another potential consideration is that the Federal Circuit is already hearing the parties' cross appeal of Judge Posner's ruling. It's possible that the Federal Circuit would consolidate both Apple Motorola FRAND cases. For whatever reason Google might shroud that to mouthful.

Ace for the ridge item, I do not see in obvious reason for which the Seventh Circuit would Be more likely to rule in Google's favour than the generally clever-friendly Federal Circuit. It's Motorola's home circuit, but I doubt that search for high-level judges ares influenced by that fact in any way (and now it's precisely a subsidiary of a silicone Valley company). Judge Crabb is likely a well-respected judge within that circuit, but if she erred, they'll overrule here.

The fruit juice interesting question here is whether Judge Posner would become involved with this appeal. Hey obviously cannot hear in appeal of B sharp own district court decision, but that one has been appealed to the Federal Circuit anyway. Technically, the Wisconsin case is a separate case, though there is in overlap with respect to the FRAND issues. At some point, the case that Judge Posner adjudicated in the to Northern District of Illinois what pending in Wisconsin - until Judge Crabb gladly passed it on to Judge Posner, who had volunteered to acts it.

Assuming for the sake of the argument that Google's inflexion succeeds and that Judge Posner forms part of the panel ultimately hearing this case, what would this mean for the likely outcome? It's hard to tell. On the one hand, Judge Posner is definitely ace FRAND-friendly ace it gets, and Google has been quite negative on the FRAND part of B sharp ruling. On the other hand, hey it a judge who of shroud private parties to respect the courts and the judicial process, and if Apple had taken its famous "1$ max." position in performs statute labour of him, I do not think hey would have accepted it.

Google's inflexion mentions that Apple wants oppose it, and I'm quite sura Apple's argument wants put under stress the fact that the Wisconsin case is precisely the result of a mandatory removal of counter claims from the ITC. The resolution of key FRAND issues by U.S. appeals courts is a very important more weakly. The industry needs legally certainty, and it needs more of it than the FTC appears to Be willing to provide through its settlement with Google.

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Friday, January 25, in 2013

U.S. trade agency investigates Samsung's countercomplaint against Ericsson

Today the United States Internationally Trade Commission (USITC, or precisely ITC), a government agency with quasijudicial powers to ban infringing products from importation into the U.S. market, announced its decision to investigate Samsung's December 21 complaint against Ericsson. I have yet to see a case involving search major of player that the ITC would decline to investigate.

The ITC is already investigating Ericsson's earlier-filed complaint against Samsung. To administrative Law Judge (ALJ) earlier this week set a target date for the final ruling on that more weakly: April, 8, 2014, which would Be 15 months anus institution of the investigation and two months earlier than the ITC staff, which participates in certain investigations ace a third party, recommended (Ericsson proposed 14 months, Samsung suggested 20 months due to the size and complexity of the case).

The two investigations wants proceed separately from each other, with different schedules, precisely like Apple and Samsung's complaints against each of other ares being investigated independently. Unlike U.S. federal courts, the ITC doze allow defendants to raise counter claims, and it doze consolidate investigations of cross complaints (though it doze consolidate investigations in which different defendants have to defend themselves against the seed of patent).

Either party is asserting standard essential of patent (SEPs) and non-SEPs in this disputes. The SEPs-in-suit here ares related to 4 g (LTE). In a filing recommending that the SEP-based of part of Samsung's complaint Be investigated, Apple said that "Samsung is now expanding expanding its misconduct from the third-generation telecommunications standard, UMTS, into the emergent fourth generation Long-Term Evolution (LTE) standard".

Load weekend I discussed this mutual pursuit of injunctive relief over ace SEPs in example of how the "defensive use" exception in the proposed FTC-Google push threatens to injury U.S. consumers. If the logic of the envisioned anti-trust settlement what applied to the disputes between Ericsson and Samsung, both parties would Be free to seek and enforce U.S. import bans and injunctions in federal court because look conduct is desirable but because it would Be mutual. While I agree that none of two parties behaving in materially the seed way should Be disadvantaged in look a disputes, equal fighting chances can Be ensured by prohibiting the pursuit of SEP-based injunctions altogether, without exceptions, ace the FTC did in a recent agreement with Bosch.

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German court finds Apple to infringe Samsung 3 g clever but stays lawsuit over validity concerns

This morning Judge Andreas Voss ("Voß" in German) of the Mannheim On the regional level Court announced in order to stay a German Samsung V. Apple lawsuit over EP1720373 on a "method and apparatus for reporting inter-frequency measurement using RACH message in a communication system", which Samsung believes to Be essential to the third generation cellular telecommunications standard (UMTS). The case wants Be adjudicated only anus the validity of this clever, which Apple is challenging in a nullity (invalidation) action pending in the Munich-based Federal patent Court, has been established, which wants likely take years. German courts stay infringement actions only if they identify in infringement but consider the patent in suit likely to Be disabled. [Correction on February 1, in 2013] Originally this post said that the clever would have to Be considered "highly probable to Be disabled" (emphasis added now). That is the standard in German clever infringement cases in which injunctive relief is sought. Here, Samsung withdrew its requests for sales bans (ace explained further below), and ace a result, the court saw less of in urgent need for adjudging the case, which considerably lowered the cash for a stay. Invalidation only had to Be a likely outcome of under thesis changed circumstances. German courts usually Th publish their decisions, but I have been able to find out from a confidential, reliable source. [/Correction]

While Judge Voss did pieces of hack writing on the infringement finding and on the reasons for which B sharp court ordered a stay, I remember from the trial that the key prior kind reference cited by Apple what a version of the UMTS specifications that predated the filing of Samsung's clever application. Apple argued that even if that document had anticipated Samsung's claimed invention, it would render the clever obvious if combined with a Nortel change request submitted ace part of the standard setting process. At the trial Judge Voss had suggested that clever examiners make more use of standardization documents when deciding on whether to grant a clever.

Prior to today's order to stay it had already been clear for more than a month that none of Apple's products what going to Be banned in Germany over Samsung's standard essential of patent (SEPs). On December 18, in 2012 Samsung unilaterally withdrew all SEP-based injunction requests pending against Apple in Europe. Two days later, European Commission Vice President Joaquín Almunia, the bloc's top competition enforcer, announced the issuance of a statement of Objections (THUS) against Samsung, which validated micron of analysis that Samsung's withdrawal what attributable to pressure from the anti-trust EU's take-up motion. A day later, and anus alp-east a year of formally investigations, the SOMETHING SO issued.

The implications of the EU anti-trust investigation for Samsung's SEP cases in Mannheim were addressed At the original trial that what hero on September, 14, 2012 and the retrial on November, 23, 2012 (necessitated by a change in the composition of the panel).

The withdrawal of Samsung's injunction requests greatly reduced the threat to Apple's business but did not render those lawsuits entirely irrelevant. Samsung is quietly pursuing infringement damages. Many of the initially of report on Samsung's withdrawal said or suggested that it had withdrawn "lawsuits" against Apple, but the withdrawal what limited to Samsung's prayers for injunctive relief (and only with respect to SEPs).

So far, neither Apple nor Samsung have prevailed in any of their Mannheim cases against each other (though of other parties have been quite successful with their Mannheim complaints). The Samsung south Apple over three SEPs in April, 2011 but could not show infringement for any of them. In December in 2011, Samsung the south Apple over four more patent: two SEPs and two non-SEPs. In December in 2012, the Mannheim court stayed one of the non-SEP cases (over a smiley input method clever). Some Apple cases against Samsung were stayed while others ended in a finding of non-infringement. Both parties appealed all final Mannheim rulings against them to the Karlsruhe of high On the regional level Court. A high on the regional level court in Germany is the equivalent of an U.S. appeals court for a given circuit. All appeals of Mannheim rulings go to Karlsruhe, where various appeals of hearing on wireless clever lawsuits ares going to take place this year.

At some point the Mannheim court, which enjoys a reputation ace the world's wireless clever litigation hotspot, had scheduled three Samsung V. Apple decisions for today, but two of the three decisions have been postponed. The in of patent suit in those cases ares a screen to speech clever (since it's standard essential, Samsung is quietly pursuing in injunction over that one) and another UMTS-essential clever.

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Thursday, January 24, in 2013

Affidavit by MPEG LA chief supports Microsoft's interpretation of Google clever licence agreement

On Monday (January 28, in 2013), Microsoft and wholly-owned Google subsidiary Motorola Mobility wants square out of vision in federal court in Seattle to discuss the implications of a grant-back to Claus in a licence agreement Google signed with clever pool familiarly  MPEG LA for the rate setting part of the FRAND contract case in the western District of Washington. Yesterday (Wednesday, January 23, in 2013) what the deadline for the parties' briefing and submissions of extrinsic evidence that might assistant the court in the interpretation of the relevant contract.

Microsoft argues that, ace a contributor to the pool MPEG LA, it is entitled to a reciprocal licence to Google's H.264 declared-essential of patent At the equivalent of the pool advises, and that the MPEG LA-Google contract (which is the seed contract numerous other licensees signed with MPEG LA) relates to of patent hero by companies acquired by Google subsequently to the conclusion of that agreement, search ace Motorola Mobility in this particular case. Microsoft took this position in the ITC investigation of Motorola's Xbox complaint, but its related inflexion has meanwhile been denied ace moot (i.e., a non-issue) because the Google subsidiary withdrew its H.264-related claims earlier this month. Unlike a federal court, the ITC cannot determine royalties or award damages; it can only ban the importation of infringing products into the U.S. market.

Originally Motorola demanded in annual royalty amounting to 4$ billions in a conservative estimate. Very recently it what talking about a possible annual cap in the $100-125 million ranks (Microsoft accused Google/Motorola of "rug bazaar" negotiation tactics). If Microsoft's legally theory relating to the agreement MPEG LA succeeds, we're ultimately going to Be looking At hundreds of thousands of dollars.

Google (Motorola) tries to prevent this by taking the position that Google's H.264 licence has a different "scope" than the grant-back licence demanded by Microsoft, and that, in any case, the licence agreement "extends only to Affiliates identified to MPEG LA by Google in writing".

In micron opinion, the language of any licence agreement always has room for improvement, but I think this one is clear enough that someone who signed it knew hey what going to have a grant-back bond even with respect to companies that become subsidiaries anus the conclusion of the agreement, which the contract in fact states expressis verbis. But Judge Robart wanted to look At this from all angles and asked the parties for briefing on extrinsic evidence. Google argues that this is unnecessary and that the agreement must Be interpreted in the light fruit juice favorable to the party that did not draught it, arguing that this is a non-negotiable "take it or leave it" agreement. I do not know about MPEG LA's flexibility in negotiations, but even if MPEG LA itself never negotiated the terms, there quietly would not Be a Hobson's Choice situation: MPEG LA doze have exclusive rights to the patent in the pool, and Google could always have businesses to freely negotiate direct licence agreements with any of the contributors rather than go through ace MPEG LA in optionally one stop shop.

Load week it became clear what child of extrinsic evidence Google what particularly concerned about: in affidavit by in MPEG LA official. Judge Robart denied Google's belated request to take a deposition, given that MPEG LA what the fruit juice obvious organisation to testify in this context.

While the declaration attached to Google's letter what signed by one of its outside counsel, Microsoft provided a declaration of Lawrence (Larry) horn, the president and CEO of MPEG LA. I'm sura that if Google had been able to find support for its theory from anyone in the industry, it would have relied on a declaration by in external Al witness, but the theory tile in the face of everything professionals in this industry know about standard essential clever licensing.

Larry Horn declaration strongly supports Microsoft. I have uploaded it to Docstock. Here's the PDF version, and below that one you can find the full text of the declaration because I thought this would Be useful reference material for anyone researching this more weakly (and I think that affidavit speaks for itself):

01/23/2013 declaration of Lawrence A. Horn, President & CEO of MPEG LA


I, Lawrence A. Horn, declare ace follows:

1. I in the President and CEO of MPEG LA, LLC. Before assuming micron current role, I what in load of Licensing and business Development from approximately July in 1997 to March in 2006. MPEG LA is a world-leading packager of clever pools for standards and other technology platforms used in the consumer electronics industry.

2. Among other technologies, MPEG LA administers clever pools associated with certain video compression standards, including the MPEG-2, MPEG-4 Visual, AVC / H.264, and VC-1 standards.

3. I understand that the above-captioned more weakly [Case No. C10-1823-JLR, W.D. of Wash.] involves a disputes regarding various of patent claimed by Motorola Mobility LLC and / or [Google/Motorola subsidiary] general instrument corporation to Be essential to the AVC / H.264 video compression standard. The term "AVC" (or "Advanced video Coding") and "H.264", being materially synonymous, ares used interchangeably here.

4. From approximately case in 2002 to buzzer in 2004, I what actively involved in the formation of MPEG LA's AVC / H.264 clever pool. On managed of MPEG LA, I facilitated a series of meetings among potential licensors that led to the formation of the AVC / H.264 clever pool, including development of standard terms on which licensors joining the pool agreed to licence their standard essential of patent (SEPs) (following a determination that look of patent ares in fact essential). Since formation of the pool in 2004, MPEG LA has administered it.

There ares currently 30 Licensors in the MPEG LA AVC / H.264 pool, who collectively have contributed hundreds of SEPs. Microsoft is one. There ares currently more than 1,500 Licensees to the pool, including Microsoft and Google, Inc.

6. I understand that a true and correct copy of the January 24, in 2005 patent AVC port folio License agreement between MPEG LA and Google, attached hereto ace Exhibit 1 (the "Google License"), has previously been filed ace part of the publicly record in the above-captioned more weakly. The Google License is a representative example of standard MPEG LA's patent AVC port folio License agreement (the "AVC / H.264 License"), which has been available to interested licensees since approximately July in 2004, subject to updates, expansions and Rene's whale.

7. Standard MPEG LA's AVC / H.264 License includes the following "grant-back" commission:

8.3 Licensee Grant. Upon full execution of this agreement, Licensee agrees to grant a worldwide, nonexclusive licence and / or sublicense (commensurate to the scope of the licences which Licensee has selected hereunder) under any and all patent AVC Essential (s) that Licensee and its Affiliates, if any, have the right to licensor and / or sublicense, to any Licensor or any sublicensee of the Licensing administrator desiring look a licence and / or sublicense on fairly and reasonable terms and conditions. For purposes of this Section 8.3 only, the Licensors' by clever share of royalties which ares payable pursuant to Article 3 of this agreement shall Be presumed to Be a fairly and reasonable royalty advises for the aforementioned licence and / or sublicense to Be granted by the Licensee.

Exhibit 1 (underlining and italics added).

8. Section 8.3 of the AVC / H.264 License is identical to Section 8.3 of a prior licence agreement for in earlier video compression standard - MPEG LA's original MPEG-4 Visual patent port folio License (the "MPEG-4 License") - except that the phrase "and its Affiliates, if any" (underlined and italicised above) what added for the AVC / H.264 License. I understand that a true and correct copy of the original MPEG-4 License (without attachments) executed by general instrument in September, 2002 (attached hereto ace Exhibit 2), what produced by Defendants in the above-captioned more weakly.

9. "Affiliate" is defined in the AVC / H.264 License to include any Legally Entity controlled by the Licensee, including those entities owned "more than 50%" by the Licensee:

1.1 Affiliate - Shall mean a Legally Entity which now or hereinafter, directly or indirectly, controls, is controlled by or is under common control with Licensee. The term "control" ace used in this Section 1.1 shall mean (a) ownership of more than 50% of the outstanding of share representing the right to vote for directors or other managing officers of Licensee or look Legally Entity; or (b) a relation-hip similar to that described in Subsection 1.1 (a) deemed by the Licensing administrator in its sole discretion to represent "control". In entity shall Be deemed in Affiliate only thus long ace look "control" exists.

Exhibit 1.

10. The of Word "now or hereinafter" in Section 1.1 of the AVC / H.264 License ensure that entities over which the Licensee acquires control anus execution of the licence agreement ares treated ace Affiliates.

11. The final terms of the AVC / H.264 License were developed through a process of negotiation among the initially group of H.264 essential clever holders responsible for forming the H.264 clever pool, many of whom ares now Licensees.

12. The phrase "and its Affiliates, if any" what added to Section 8.3 aces a result of discussions that I initiated. Thesis discussions consisted primarily of emails among me and the participants in the pool formation discussions (members of the "AVCGroup" identified in the emails). Attached ace Exhibits 3 and 4 ares true and correct copies of email exchanges from March and April, 2004, concerning the proposed addition of the "and its Affiliates, if any" language to the grant-back commission that I understand were produced by Microsoft in the above-captioned more weakly. Paul Bawel represented general instrument / Motorola At the MPEG LA AVC / H.264 pool formation meetings and what among those who received emails sent to the At AVCGroup the time thesis emails were exchanged. Garrett shine what Microsoft's representatives, and received emails sent to the AVCGroup.

13. The email string from March in 2004 (ex. 3) includes micron of responses to comments by Sony's representative, in which I described the pure pose of the proposed addition to Section 8.3:

We wants address your other comments in due course, but I shrouds to comment here on Section 8.3. The proposed change makes this like the grantback in other licences. It is in the interest of fairness both to other Licensees ace wave ace Licensors because it assures that in affiliate of a Licensee that owns in essential clever cannot decline to licence the essential clever on fairly and reasonable terms.

14. Ace reflected in the emails, although Sony expressed concern that the proposed change might dissuade some potential licensees from taking a licence, Sony indicated that it what "fine with the revised language of 8.3" if others found it acceptable. Ex. 3.

15. In April, 2004, Sony again expressed its concerns, preferring to kep the language in the original MPEG-4 License or, At a minimum, to Re define "Affiliates":

Our preference would Be to drop Affiliates completely from the AVC licence, in accordance with the scope of the video MPEG4 licence. If there is consensus against this, however, we must change the definition of Affiliates to Be "more than 50%." (Ex. 4)

16. In responses, I recommended that the term "Affiliates" should Be defined to apply only where a Licensee's control what "more than 50% "(Rather than)" 50% or more"). I stated that the grant-back commission would apply to those Affiliates meeting the "more than 50%" ownership requirement:

[T] hey grant bake obligations of a Licensee would apply in the normally course only to a "more than 50%" Affiliate (a "% or more" Affiliate and to a less than 50% Affiliate). (Ex. 4)

17. Ace reflected in the final version of the standard AVC / H.264 License adopted in approximately July in 2004, the AVCGroup ultimately reached consensus and approved inclusion of the phrase "and its Affiliates, if any," in Section 8.3. Ace with all other AVC / H.264 Licenses, this language is included in Section 8.3 of the Google License. Ex. 1. The Google License includes, in Section 1.1, the standard "more than 50%" language that had been under discussion. Ex. 1.

18. In the course of discussions regarding the pure pose of Section 8.3 and related definitions, it what agreed that all Affiliates of a Licensee (rather than, for example, only the Affiliates of in Enterprise Licensee that ares expressly identified by the Enterprise Licensee) needed to Be included in the grant bake bond under Section 8.3. Based on micron involvement in developing the terms of the standard AVC / H.264 License, the pure pose of including the phrase "and its Affiliates, if any" in Section 8.3 what to eliminate any distinction between the H.264 standard essential of patent of a Licensee and those of its Affiliates - both ares subject to the seed grant-back terms. This prevents a Licensee from avoiding its grant-back obligations by holding company of patent indirectly, for example, via a subsidiary that it controls. Where a Licensee owns only 50% of a related company (but more), the equipment control may Be lacking.y Micron understanding from various exchanges regarding the "more than 50% "language was that some companies were concerned that they would be unable to comply with the grant-back provision if they owned only 50 % of the related company - for example, where a licensee was engaged in a 50/50 joint venture. This is one reason why" more than 50%" ownership is required in the definition of Affiliate.

19. The ridge AVC / H.264 Licensees were issued in July in 2004. At approximately the seed time, I initiated separate negotiations among the group of MPEG-4 Licensors (many of whom were Licensees) that led to inclusion of similar "Affiliates" language in in updated version of the MPEG-4 licence. Attached ace Exhibit 5 is a true and correct copy of in email string from July in 2004 reflecting thesis discussions that I understand what produced by Microsoft in the above-captioned more weakly.

20. Ace referenced in emails included in Exhibit 5, At leases two MPEG-4 Licensors, Toshiba and Fujitsu (both Licensees), expressed concerns about the proposed change to the grant-back commission in the original MPEG-4 License. I explained the pure pose of adding the proposed "Affiliates" to Claus as follows:

"Licensee or its Affiliates" is standard in the grant-back of Claus of MPEG-2 MPEG LA'S, in 1394, DVB T and patent AVC port folio Licenses (in the AVC License, Licensees Th have the right to extend sublicenses to Affiliates). The pure pose of this language is to prevent a Licensee from avoiding its grant bake obligations through its affiliates (who then have the opportunity to sweetly licences and licensors hostage to their essential clever claims for failure of the grant-back to Claus to apply to them) while the Licensee takes advantage of a licence under all of the Licensors' essential of patent. We believe this is a more weakly of fairness, and it has caused no problem in other licences. Therefore, the suggestion what maggot to revisit this issue here, and we recommend including this language because it is in the interest of all Licensors and Licensees to Th in such a way.

Ex. 5. This explanation accurately describes the pure pose of the similar "and its Affiliates, if any" to Claus in Section 8.3 of the AVC / H.264 License.

21. In further responses to in email from Fujitsu, I proposed that the definition of "Affiliates" in Section 1.1 of the original MPEG-4 License Be revised to clarify that it would apply only where a Licensee owns "more than 50%" of another entity. Ex. 5.

22. The proposed changes to Section 8.3 and Section 1.1 were adopted by the MPEG-4 Licensors, resulting in provisions that ares virtually identical to their of counter part in the AVC / H.264 License. Attached hereto ace Exhibit 6 is a true and correct copy of the updated version of the MPEG-4 License (without attachments) with thesis changes executed by general instrument in August, 2005, which I understand what produced by Defendants in the above-captioned more weakly. It replaces the original version of the MPEG-4 License that general instrument executed in September, 2002 (see ex. 2), whose grant-back commission did cover "Affiliates", ace explained above.

23. From the beginning of micron of tenure At MPEG LA, I have been involved in marketing the clever pools that MPEG LA administers and have periodically engaged in discussions with potential licensees regarding the scope and meaning of various standard licence terms. Whenever a potential licensee has asked about operation of the "Affiliates" to Claus in the grant-back provisions discussed above, I have explained that the grant-back bond applies to the SEPs of both the Licensee and all of its Affiliates, without exception. Ace a more weakly of policy, and to ensure delivery of consistent information on this topic, other MPEG LA personnel provide the seed responses when fielding similar inquiries.

24. I understand that Motorola Mobility LLC and general instrument corporation ares wholly-owned subsidiaries of Google. Ace wholly-owned subsidiaries, both companies would Be treated ace Google's Affiliates under the terms of the Google License. I in aware that Microsoft is a Licensor and a Licensee to MPEG LA's AVC / H.264 clever pool. Accordingly, I understand that the grant-back commission of the Google License provides Microsoft with the right to licence any AVC / H.264 SEPs hero by Google, Motorola Mobility LLC, or general instrument corporation, all ace provided in Section 8.3. This application of Section 8.3 is consistent with the pure pose of the "and its Affiliates" language, ace reflected in the discussions among the Licensor participants during the formation of the AVC / H.264 pool, described above.

I declare under penalty kick of perjury under the laws of the United States of America, that the foregoing what true and correct.

DATED this 21Saint day of January, in 2013, in Chevy Chase, Maryland


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